Tuesday, 18 May 2021

TUESDAY, 18 MAY 2021

TUESDAY, 18 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.]

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

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

SPEAKER: No bills have been introduced.

Petitions have been delivered to the Clerk for presentation.

CLERK:

Petition of Juliana Carvalho requesting that the House recommend to the Government that it comply with the Convention on the Rights of Persons with Disabilities in relation to immigration

petition of Jan Logie requesting that the House urge Minister of Finance and the Minister for the Public Service to support the Public Service and reverse the decision to suppress wages, and

petition of Sophie Handford requesting that the House urge the Government to deliver an immediate increase in funding to Kāpiti Youth Support, and sustainable funding for all Youth One Stop Shops nationally.

SPEAKER: Those petitions stand referred to the Petitions Committee.

Ministers have delivered papers.

CLERK:

New Zealand Māori Arts and Crafts Institute report for the period ended 24 June 2020

Te Tumu Paeroa Māori Trustee annual report for 2020, and

reports of the Electoral Commission on the 2020 general election and referendums, and enrolment voting statistics from the general election and referendums held on 17 October 2020.

SPEAKER: I present the Register of Pecuniary and Other Specified Interests of Members of Parliament: Summary of annual returns as at 31 January 2021, and the report of the Controller and Auditor-General entitled Preparations for the nationwide roll-out of the Covid-19 vaccine. Those papers are published under the authority of the House.

Select committee reports have been delivered for presentation.

CLERK:

Report of the Education and Workforce Committee on the briefing into the 2019-20 performance and current operations of Education New Zealand

report of the Finance and Expenditure Committee on the petition of Andrew Bayly

reports of the Health Committee on the petition of Kate Cormack and the petition of Pamela McIlwraith

report of the Justice Committee on the Arms (Firearms Prohibition Orders) Amendment Bill (No 2), and

report of the Primary Production Committee on the petition of Frances Baker.

SPEAKER: The bill is set down for second reading and the briefing is set down for consideration.

Oral Questions

Questions to Ministers

Question No. 1—Finance

1. 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): Westpac has released its latest quarterly review on the economy. The bank’s economists note that New Zealand’s recovery is gaining traction, underpinned by continuing increases in household spending, lower than expected unemployment, stronger construction sector, and firmer activity in the manufacturing sector. They expect economic activity will continue to strengthen over the year ahead, with a continued support from fiscal and monetary policy. However, Westpac warns that the economy is expected to take time to recover as vaccines are rolled out around the world and conditions are set to remain uneven across sectors. Global activity is on the mend, but the recovery is uneven there too.

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

Hon GRANT ROBERTSON: Securing the economic recovery in New Zealand has been supported by the manufacturing sector. The BNZ-Business New Zealand Performance of Manufacturing Index remains in expansion mode, at 58.4 in April. This is 5.2 points down from that record all-time high in March, but it’s still the second-highest result since July 2020, when New Zealand came out of lockdown. The main drivers of this result continue to be production and new orders, with manufacturers seeing an increase in inquiries and orders, particularly in the building industry.

Dr Duncan Webb: What reports has he seen on other sectors of the economy?

Hon GRANT ROBERTSON: The BNZ-Business New Zealand Performance of Services Index also expanded, up 8.3 points to 61.2 in April, to reach its highest level since the survey began in 2007. The improvement was widespread, with increases in activities and sales, new orders, and employment. Indeed, the employment component in the index hit a record high of 60.8. Along with the above average employment reading in the Performance of Manufacturing Index, the BNZ’s economists say it suggests a rapid pick-up in job growth.

Question No. 2—Prime Minister

2. 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 recent announcement that Budget 2021 will help deliver on the Government’s commitment to a carbon-neutral public sector by 2025. Budget 2021 delivers a total of $67.4 million over four years, including a significant boost of $19.5 million to the successful State sector decarbonisation fund and $4.18 million for leasing low-emissions vehicles. These policies will see an additional 76,000 tonnes of carbon emissions saved over 10 years. These policies build on the last three Budgets, where we made significant investments in New Zealand’s low-carbon future.

Hon Judith Collins: Why did the Department of Internal Affairs (DIA) present as a preferred option to 23 South Island mayors and iwi a document proposing co-ownership of South Island drinking water?

Rt Hon JACINDA ARDERN: They did not.

Hon Judith Collins: Is the Prime Minister now telling the House that this document here, that was presented to 23 mayors and iwi and says, “Owners are the Canterbury councils and Ngāi Tahu, who are responsible for appointing representatives to the JGG.”—is that not what it says?

Rt Hon JACINDA ARDERN: I’m happy to correct the member. I’m advised that that piece of work was commissioned by Ngāi Tahu. It was prepared by PwC, and it is not something that Ngāi Tahu or, of course, the Government, who did not commission it, have been pursuing.

Hon Judith Collins: So when the Prime Minister is now telling the House that this document is the fault of Ngāi Tahu, is she now saying it was not presented by the Department of Internal Affairs at the hui that were being conducted by it?

Rt Hon JACINDA ARDERN: I’m actually rejecting the content of the question. I’m advised that it was commissioned by Ngāi Tahu. It’s not a question of blame.

Hon Judith Collins: Who presented the document to the 23 South Island mayors and iwi?

Rt Hon JACINDA ARDERN: It was prepared and commissioned by PwC. It has not been pursued, I’m advised, by either Ngāi Tahu or, indeed, by the Government.

Hon Grant Robertson: Has she seen reports from Ngāi Tahu to say that the Leader of the Opposition’s claims have been deceptive and wrong?

Rt Hon JACINDA ARDERN: Yes, and I would really just encourage the member to engage directly with Ngāi Tahu on this issue, because I understand they’ve had to correct some of the statements that have been made, more than once now. Or, simply, if the member chooses not to do that, feel free to engage directly with local government members, particularly in the South Island, who have been engaged in these conversations either directly with DIA or alongside Ngāi Tahu. But again, I say to the member, if the member wishes to have a discussion over the fact that we have billions of dollars that need to be invested into our water infrastructure in the coming decades, and how we can best do that to protect the health and wellbeing of New Zealanders and ensure it remains in public ownership, which is a bottom line, I’m happy to have that debate. The member instead is choosing to turn this into a discussion it is not.

David Seymour: Will the Prime Minister rule out joint ownership of water infrastructure in the South Island between Ngāi Tahu and councils, as suggested in this document?

Rt Hon JACINDA ARDERN: Public ownership has always been a bottom line, so not only have we ruled that out; Ngāi Tahu have ruled it out.

Hon Grant Robertson: Can the Prime Minister confirm reports that the chair of the Ngāi Tahu freshwater group said, “The only person proposing a co-ownership model is Judith Collins.”?

SPEAKER: Order! That is not the Prime Minister’s responsibility.

Hon Judith Collins: Is the Prime Minister telling the House, as she just said before, that PwC commissioned this document; in which case, who paid for it?

Rt Hon JACINDA ARDERN: That is not what I said. [Interruption]

SPEAKER: Order! I think the member knows that there are—[Interruption] Order! I think the member knows there are ways of pursuing that. Probably the first is to listen to the tape.

David Seymour: Will the Prime Minister rule out co-governance of water infrastructure between Ngāi Tahu and councils, as also suggested in this document, under her Government?

Rt Hon JACINDA ARDERN: We have been very clear on ownership structure. When it comes to the issue of governance of water services, the Government, local government—and, yes, alongside local government there has been good engagement with iwi, and local government themselves have been driving that, too. Those decisions are yet to be made, but we are very clear on ownership.

Hon Judith Collins: What does the Prime Minister believe is co-governance of drinking water in the South Island?

Rt Hon JACINDA ARDERN: Ultimately, this has all been driven by the fact that in Havelock North we had people who got extraordinarily sick, and some who died, as a result of us not having consistent provision around either water regulation, making sure that regulations are upheld, or that our water infrastructure is sufficient. Currently, we have over the next 30 to 40 years $120 billion to $185 billion worth of investment required in infrastructure. What we are starting is a discussion with local government around how we deal with that significant infrastructure gap and investment when currently $1.5 billion, or $45 billion over the next 30 years, is how much local government is likely to invest. That is the problem we’re trying to address, and I would welcome the member’s engagement on that issue.

Hon Judith Collins: Is she concerned that the Government saying that Ngāi Tahu needs to exercise rangatiratanga over drinking water could influence the present High Court case where Ngāi Tahu is claiming full ownership of South Island fresh water?

Rt Hon JACINDA ARDERN: No.

Hon Nanaia Mahuta: Will it surprise the Prime Minister that Ngāi Tahu has consistently advocated for clean, safe, reliable drinking water, as well as improved freshwater outcomes, for all New Zealanders in the South Island?

Rt Hon JACINDA ARDERN: That is exactly what they’ve been advocating for, and not just around drinking water. Of course, they’ve been engaging on the freshwater reforms, as well. That is something that surely we all can agree on and all have an interest in.

Hon Chris Hipkins: Does the current Government continue to honour the co-governance arrangements signed up to by the previous Government for natural resources, including, for example, parks?

Rt Hon JACINDA ARDERN: Yes, and it’s actually been in this House that we’ve discussed at some length the fact that it was the last Government that engaged in, particularly, Te Urewera Act of 2014; the Waikato River Authority of 2010, which is an independent statutory body under the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act, something I thought that previous Government was proud of; and, of course, governance around Little Barrier Island and Tūpuna Maunga o Tāmaki Makaurau Authority, 2014. My point here is that in Government these were areas in which members not only actively engaged; they encouraged and changed the law around. Now that they’re in Opposition, they appear to be taking their party backwards by decades. I wonder whether every member of that party is entirely comfortable with this significant repositioning.

Rawiri Waititi: Has the Prime Minister seen any reports on a water authority for the South Island that gives Ngāi Tahu iwi co-ownership of water, as alleged by the Leader of the Opposition?

Rt Hon JACINDA ARDERN: No, because ultimately neither Ngāi Tahu—and they have been very clear on this—are pursuing that, and, of course, we’ve ruled it out as a bottom line. So they are attributing a position to Ngāi Tahu that they do not hold.

Hon Judith Collins: Then why are they suing in the court to own all the fresh water in the South Island?

Rt Hon JACINDA ARDERN: Ngāi Tahu are rightly raising issues around fresh water, and it is up to them—[Interruption]—around freshwater quality—and they have every right to access the court, as does any other iwi.

Question No. 3—Prime Minister

3. DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori) to the Prime Minister: Does she stand by all her Government’s statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Yes. In particular, I stand by the work we’ve been doing around child and youth wellbeing and the release of the Child Poverty Related Indicators Report. These reports highlighted how Government action has started to improve the lives of children and their whānau. As a Government, we’ve invested in measures to support families, such as free trades training and expanding Flexi-wage, which has already resulted in a drop in unemployment to 4.7 percent. The report does identify that 20 percent of children live in households where food runs out, and we know this is higher for Māori and Pacific children, which is why we’re taking immediate action with initiatives like, for instance, our free Healthy School Lunches programme. We will build on this programme by continuing to put the needs and wellbeing of children and young people at the heart of our recovery.

Debbie Ngarewa-Packer: How will the Prime Minister guarantee that the Māori Health Authority is independent and will be funded proportionate to the Māori per capita health spend when her Government said its funding would be determined by the Ministry of Health?

Rt Hon JACINDA ARDERN: Yeah, and as we’ve always said, of course, it will still be for the Government of the day to determine health priorities. Then, of course, what we’re expecting is that Health NZ and the Māori Health Authority are involved in operationalising and developing the plans to roll out those priorities. One thing I would say in the nuance around the way that the funding—and I obviously can’t say too much more on the way that will be divided, but one of the questions around funding that I would ask all members to keep in mind is that whilst we’ve said we want commissioning powers for the Māori Health Authority, there will still be, of course, the provision of healthcare through Health NZ that reaches Māori populations too. So it won’t be the case that every single dollar spent on someone who identifies as Māori within the health system will go entirely through the Māori Health Authority. It’s just a nuance worth being aware of.

Debbie Ngarewa-Packer: Will the Government at least double funding for Pharmac to ensure that New Zealanders have access to lifesaving cancer medicines, as called for by 100,000 people in a petition that was movingly delivered to MPs last week?

Rt Hon JACINDA ARDERN: We, of course, since we’ve been in Government, recognise the need for an increase in Pharmac funding. My recollection is that, of course, we’ve boosted Pharmac funding to now over a billion dollars—well over 20 percent increase in their funding. They then will make a call as to which medicines are a priority for them, and I think it’s often lost on all of us that they have the difficult decision of not just funding what can be lifesaving medical interventions; they also have to fund everyday, routine over-the-counter drugs: contraceptive pills, even cold sore treatment. They are the ones then that make the decision, once they are funded with additional funding, where that funding goes. As for any future funding, obviously that’s up to the Government of the day and the Budget of the day.

Hon Peeni Henare: Does the Prime Minister have confidence in the leadership of Sir Mason Durie to ensure that the authority is independent while also working collaboratively with the broader health reform agenda?

Rt Hon JACINDA ARDERN: Yes, and whilst we’ve set out the broad parameters on how we wish the Māori Health Authority to operate, there of course are further questions that we need to work through collaboratively in the design of the Māori Health Authority, and Tā Mason Durie, I think, is the perfect person to lead that work.

Question No. 4—Finance

4. Hon MICHAEL WOODHOUSE (National) to the Minister of Finance: Will the Government deliver on all of its past Budget commitments?

Hon GRANT ROBERTSON (Minister of Finance): Budget 2021, Securing our Recovery, will be this Government’s first Budget in which we will appropriate the first Budget commitments of this Government.

Hon Michael Woodhouse: Will the Government deliver on its 2017 commitment to spend $2 billion on the KiwiBuild programme; and, if so, when?

Hon GRANT ROBERTSON: If I recall correctly, the appropriation for that was done in Budget 2018. That is being rolled out over a period of time. The programme has been subject to some reorganisation, obviously, since then.

Hon Michael Woodhouse: Will the Government spend all of the funds appropriated in Budget 2018 for the billion trees programme; and, if so, how many trees have been planted under that programme?

Hon GRANT ROBERTSON: Obviously, Governments have hundreds of Budget commitments. If the member wants a specific answer, he should put that question down on notice.

Hon Michael Woodhouse: Well, has the Government delivered on its Budget 2018 commitment to spend $300 million on 1,800 more police, given they’re still 578 officers short?

Hon GRANT ROBERTSON: In respect of the first part of the question, we’d have to check on the dollars. In respect of the second part of the question, we’re very proud of the fact that we have put more than those 1,800 police through their training and out there on to the beat.

Hon Michael Woodhouse: Will the Government deliver on its commitment to spend $1.8 billion on seed funding for Auckland light rail, wherein not even a business case has been completed?

Hon GRANT ROBERTSON: The member is well aware of the fact that that money was allocated and that the work is ongoing on that. Obviously, the Government intends to make significant progress on addressing the incredible deficit in Auckland transport funding that we were left when we came in.

Hon Michael Woodhouse: Does the Government now have around $19 billion for reprioritising from previous Budget commitments that haven’t been fulfilled?

Hon GRANT ROBERTSON: With respect to the member, I’d definitely need to check his numbers on that one.

Question No. 5—Housing

5. TĀMATI COFFEY (Labour) to the Minister of Housing: What recent announcements has the Government made about responding to housing need in Rotorua?

Hon Dr MEGAN WOODS (Minister of Housing): Last week, the Minister for Social Development and Employment and I announced a plan to shift the way in which emergency housing is provided in Rotorua. Along with the Associate Minister of Housing with responsibility for homelessness, we’ve worked alongside council, iwi, and NGOs to develop solutions that will provide better support and outcomes for people living in emergency motels and the community. We are signalling a shift from the model that was introduced under the previous Government, by directly contracting motels for emergency accommodation and boosting the support services. Alongside these measures, we’re continuing to address the need for more permanent accommodation with our published plans to deliver 190 additional public houses in Rotorua by 2024. We are also working alongside locals to identify further land options for additional public and transitional places.

Tāmati Coffey: What are the benefits to contracting motels?

Hon Dr MEGAN WOODS: By contracting motels, we can ensuring families with children have accommodation—[Interruption]

SPEAKER: Order! Order! It’s very early in what is going to be a very long week, and I think people just need to show a bit of respect so that we can hear the answers.

Hon Dr MEGAN WOODS: Thank you, Mr Speaker. By contracting motels, we can ensure families with children have accommodation separate from other groups that is better suited to their needs. Contracting these motels also means more intensive wraparound support service can be delivered, and bring certainty to the Rotorua accommodation sector by having motels used exclusively for emergency housing motels.

Tāmati Coffey: Why is it important to provide emergency accommodation?

Hon Dr MEGAN WOODS: Because we will not accept people living on the street, or children living in cars. While we do not see motels as a long-term solution for housing, we need to deal with the immediate crisis that has built up over the last decade. Over the coming months we’ll be working to roll out the model across the country. We’re looking at how it is working in Rotorua and we will take a place-based approach to ensure that we get the right support in place that reflects local needs.

Nicola Willis: Can she confirm she received advice from her housing officials more than a year ago warning that emergency housing in Rotorua was creating risks to public safety and not providing people enough support; and, if so, why has it taken her so long to do anything about it?

Hon Dr MEGAN WOODS: The issue that the member raises relates to the use of a night shelter in Rotorua, which subsequently ceased operation alongside two other shelters at the beginning of April 2020, when Visions of a Helping Hand moved into the COVID emergency response motel space. I note that the three people previously supported by this site, and the two other shelters, were relocated to COVID-19 motels.

Nicola Willis: Point of order, Mr Speaker. I seek leave to table a document not previously available to this House, that states that “The concentration of some lower-end emergency housing motels”—

SPEAKER: Order! Order! The member describes a document; she doesn’t read it out. Where it comes from, the date, and its title, and that’s all.

Nicola Willis: The document was provided to the Minister of Housing by the Ministry of Housing and Urban Development on 13 March 2020, and refers to emergency housing motels in Rotorua.

SPEAKER: Is there any objection to that document being tabled? There appears to be none. It will be tabled.

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

Question No. 6—Finance

6. Hon JULIE ANNE GENTER (Green) to the Minister of Finance: Does he stand by his statement that “better than expected economic recovery” gives him “more scope to keep a lid on debt and look towards a faster reduction in that debt”; and if so, why is he proposing paying down debt faster at a time of record low interest rates, rather than investing that money in ending child poverty and reducing emissions?

Hon GRANT ROBERTSON (Minister of Finance): I stand by my full quote, which is “Our better than expected economic recovery does provide us with more options. There will be a careful balance here, too. There is a bit more space in our operating and capital allowances to support the recovery in line with the approach I have outlined today, focused on the areas where we can accelerate progress and in tackling our long-term challenges. At the same time, there is some more scope to keep a lid on debt and look towards a faster reduction in that debt once the recovery is secure.” In answer to the second part of the question, I would note that the Half Year Economic and Fiscal Update released in December in fact shows debt increasing into the middle of the decade. This Budget is about striking the right balance and securing our recovery.

Hon Julie Anne Genter: Why did he consider that the Pre-election Economic and Fiscal Update debt track was responsible and balanced in October and is now proposing a lower debt track instead of spending that money on tackling the long-term challenges the Government’s facing?

Hon GRANT ROBERTSON: Well, overall, in answer to that question, I’d ask the member to wait until Thursday to see how all of those numbers fall. What I did say in the speech that the member is quoting from last Monday was that New Zealand’s better than expected recovery does give us more options, and I outlined that we would be taking a balanced approach to those options.

Hon Julie Anne Genter: Is it good economic management to try and keep a lid on debt when interest rates are low, we are emerging from a recession, and more economic stimulus is needed?

Hon GRANT ROBERTSON: Again, I refer the member to my answer to my primary question. In fact, the Half Year Economic and Fiscal Update released in December notes that debt will keep rising, both in real terms and, obviously, as a percentage of GDP, well into the middle of the decade.

Hon Julie Anne Genter: Does he acknowledge that the less fiscal stimulus he does now, the more pressure there is on the Reserve Bank’s monetary stimulus, which is helping fuel the housing crisis and wealth inequality?

Hon GRANT ROBERTSON: Again, in the speech that the member’s primary question comes from I talked about the fact that given that we are not through COVID yet, it is important that the Government continues to stay involved in the economy and to stimulate the economy.

Hon Julie Anne Genter: Has he considered that the results of the latest child poverty related indicators report that there’s not been improvement to hospitalisations, housing conditions, or food security suggest that, to date, the Government’s so-called balanced fiscal approach is insufficient to address child poverty?

Hon GRANT ROBERTSON: I think I would challenge some of the statements in the member’s question about exactly what that data does say. Where I do think the member and I would agree is that there is always more to do in terms of improving the wellbeing of our children.

Question No. 7—Education

7. JO LUXTON (Labour—Rangitata) to the Minister of Education: What progress has the Government made in supporting schools with property maintenance projects?

Hon CHRIS HIPKINS (Minister of Education): In December 2019, I announced a school investment package as part of the Government’s New Zealand Upgrade Programme. Nearly every State school received a one-off cash injection of up to $400,000 to deliver property projects that had been deferred or delayed. I’m pleased to be able to report that a thousand of those projects have been completed so far, across 639 schools. This is a significant milestone and a fantastic achievement for those schools. It’s good for the schools and for the builders and builders’ merchants in towns up and down the country. These projects have helped to keep our economy ticking over during a challenging period.

Jo Luxton: Why was it important for the Government to deliver this special package of funding?

Hon CHRIS HIPKINS: The package has given every school the ability to undertake property projects that had been otherwise put off, and it came alongside the significant funding that the Government’s been investing in schools. Schools have been able to use this funding, among other things, to upgrade classrooms and learning spaces, install energy-efficient heating and lighting, resurface outdoor courts and paved areas, install shade sails and covered areas, and upgrade playing areas and sports facilities.

Jo Luxton: Where was the 1,000th school investment package project completed?

Hon CHRIS HIPKINS: A very good question. It’s very fitting that the 1,000th project to be completed was in Whanganui, which is, in fact, where we announced the package 18 months ago. Whanganui Intermediate received $399,861 in funding, and they put this towards a number of projects, including relocating a two-classroom block to another area of the school and installing fencing, heat pumps, and new signage throughout the school.

Jo Luxton: Is he satisfied with schools’ progress in rolling out these projects?

Hon CHRIS HIPKINS: Yes, indeed, I am. More than 3,800 projects across New Zealand are in the various stages of delivery. Hundreds of schools have been re-clad or had insulated walls. They’ve had improved heating systems, landscaped play areas, and resurfaced courts, just to name some of those projects. It’s also important to remember that not long after we announced the money and just as schools were starting to get under way, we had lockdown—the COVID-19 lockdown—which did delay a number of these projects, and schools have done a very good job of catching up and making up for lost time.

Question No. 8—Health

8. DAVID SEYMOUR (Leader—ACT) to the Minister of Health: When the Ministry of Health engaged with the board of the Laura Fergusson Trust, did it offer any funding?

Hon Dr AYESHA VERRALL (Associate Minister of Health) on behalf of the Minister of Health: I have been advised by the Ministry of Health that they were informed on 1 November 2019 that the Laura Fergusson Trust was exiting its contracts with the Ministry of Health. Following this, the ministry had two formal engagements with the trust in the two weeks following, including a meeting with the trust board on 11 November 2019. Before the ministry was advised of the trust decisions, there were no formal requests to discuss financial matters. After the trust made its decision, all types of support, including funding, were on the table and were able to be discussed. The trust declined to engage further and informed the ministry that its decision to stop providing these services was final.

David Seymour: When the Minister says that all options, including funding, were on the table, were the trust board told that the ministry would consider additional funding in order to allow them to continue operating?

Hon Dr AYESHA VERRALL: I have been advised that a discussion was had in which all types of support were offered, and, in fact, a range of supports are offered to other providers—yes, financial, but also assistance with meeting quality assurance requirements or workforce development. However, no discussion was able to be entered into because the trust informed the Ministry of Health that its decision was final.

David Seymour: Is the Minister satisfied that those previously reliant on services from the Laura Fergusson Trust have been satisfactorily reaccommodated with replacement services?

Hon Dr AYESHA VERRALL: I am aware that this type of transition would be very difficult because the residents were asked to move from their home. However, we have gone through a process to relocate every resident to accommodation, and I am told that it is satisfactory.

DAVID SEYMOUR: Why, then, does the Minister think that over 200 people, many with disabilities, came out to protest the closure and threatened sale of land from under the Laura Fergusson Trust Auckland this Sunday?

Hon Dr AYESHA VERRALL: As I mentioned, I am aware that it must be very distressing to be asked to leave your home, and that is why I understand so many people came to the protest. However, that decision was precipitated by a refusal to engage with the ministry over an extension of the contract by the trust.

David Seymour: Would the Minister or his officials be open to meeting with the board of the Laura Fergusson Trust to have further discussions about how the organisation might be made sustainable, were the trust board willing to come back to the table?

Hon Dr AYESHA VERRALL: It has always been our position that we would like to have further discussions with the Laura Fergusson Trust; and yes, we remain in that position—we’d be open to that discussion.

SPEAKER: Order! Before I call the next question, I want to make it clear to the person operating the camera in the gallery that he appears to be operating it in a way which breaches our Standing Orders. I know that we have an offshore group here who might not understand the New Zealand rules; to use that footage would be a breach of privilege and would result in the loss of accreditation.

Question No. 9—Social Development and Employment

9. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development and Employment: Does she have confidence that all people staying in taxpayer-funded emergency housing are safe; and if so, why?

Hon Dr MEGAN WOODS (Minister of Housing) on behalf of the Minister for Social Development and Employment: I am confident that the vast majority in receipt of an emergency housing Special Needs Grant are in appropriate and safe accommodation. I draw the member’s attention to the changes that we announced last week to address some of the issues in Rotorua, and, as the Minister of Housing mentioned in an answer to an earlier question today, we are looking to roll these changes out more widely. But where people don’t feel safe, we do encourage them to make immediate contact with the Ministry of Social Development (MSD) or the police, and appropriate steps will be taken.

Hon Louise Upston: Exactly how many people are in unsafe emergency housing and when will the announced changes to Rotorua be rolled out across New Zealand?

Hon Dr MEGAN WOODS: As I indicated in the—sorry, on behalf of the Minister, as the Minister of Housing indicated in questions that she answered today, we did start with Rotorua, with very good reason, but we expect in the coming months that we will be looking to roll this approach out across the country. We have seen that the process that was put in place by the previous National Government isn’t working and we’re taking moves to fix it.

Hon Louise Upston: Does she acknowledge that there wouldn’t be thousands of Kiwis living in emergency housing if the Government had delivered its 2017 promise to build 16,000 KiwiBuild homes?

Hon Dr MEGAN WOODS: On behalf of the Minister for Social Development and Employment, I’d like to point out to that member that the people living in motels were unlikely to become first-home buyers. What I would like to also point out to that member is that, actually, we’d have far fewer people—in fact, no people—living in motels if the previous Government, of which that member is a member, hadn’t sold off public housing and failed to build them. They finished Government with 1,500 fewer public houses than they started with. They failed to build. If they built at the rate we are, we would have around 15,500 more public houses in this country.

Hon Louise Upston: How can she have confidence that children are not being placed next to gang members when MSD still do not know who is staying at which motel?

Hon Dr MEGAN WOODS: On behalf of the Minister, as I’ve indicated in previous answers, we are looking at an approach where we can contract. The way in which the previous system was set up—that MSD can legally not go out and contract motels, because it’s a demand-driven appropriation. By working with the Ministry of Housing and Urban Development, we can now contract, which means we can do placement. We are starting this in Rotorua and it is something we will be rolling out across the country in the coming months.

Hon Louise Upston: Can she guarantee no aspect of information-sharing arrangements between MSD and the gang intelligence unit were suspended during COVID-19, given her eventual acknowledgment that data-matching between MSD and the Inland Revenue Department was suspended for more than a year, from March 2020?

Hon Dr MEGAN WOODS: On behalf of the Minister, I ask that member to put that question in writing.

Question No. 10—Transport

10. TERISA NGOBI (Labour—Ōtaki) to the Minister of Transport: What recent announcement has he made about pathways to a net zero emission transport sector?

Hon MICHAEL WOOD (Minister of Transport): Last week, I released Hīkina te Kohupara - Kia mauri ora ai te iwi: Transport Emissions: Pathways to Net Zero by 2050, a Ministry of Transport green paper outlining potential policies and pathways to a net zero emissions transport sector, as part of our work to develop an emissions reduction plan in response to the draft recommendations of the independent climate commission. We’ve already taken steps to reduce emissions with policies like the Clean Car Standard and increased investment in public transport, walking, and cycling, but Hīkina te Kohupara shows that we have much more work to do.

Terisa Ngobi: Why is decarbonising the transport sector a focus for the Government?

Hon MICHAEL WOOD: Tackling the climate emergency is a priority for our Government. The transport sector produces 47 percent of New Zealand’s carbon dioxide emissions, and between 1990 and 2018 those domestic transport emissions increased by 90 percent. Reaching New Zealand’s goal of net zero carbon by 2050 would unclog our cities, clean up our air, support the creation of new businesses in low-carbon industries, and create sustainable jobs across the country.

Terisa Ngobi: What are the next steps?

Hon MICHAEL WOOD: While the pathways outlined in Hīkina te Kohupara are not Government policy, we want to have a national conversation about the changes that we all need to make. Some of the potential changes are potentially significant, but we cannot meet our emissions reduction targets without change. We want to hear from New Zealanders over the coming weeks on the suggestions in Hīkina te Kohupara, and I ask for all New Zealanders to engage in this important national debate with an eye to our shared future, not simply to the partisan politics of the day. This work will feed into our emissions reduction plan, which will be released by the end of the year.

Hon Paul Goldsmith: On your bike!

SPEAKER: Mr Goldsmith, do you have another comment to make to me?

Question No. 11—Police

11. SIMEON BROWN (National—Pakuranga) to the Minister of Police: Is she concerned gang membership in New Zealand is continuing to increase; if so, does the Government have a target to reduce the number of gang members?

Hon POTO WILLIAMS (Minister of Police): It would be more accurate to say that the number on the national gang list has increased. However, I would note the comments from the Police Commissioner that the list was created for intelligence purposes, not to give us an accurate statistical picture of gang membership or activity. I also note that he has expressed a lack of confidence in the accuracy of these numbers. The Government is committed to combating the harm caused by organised crime through a variety of measures, including introducing firearms prohibition orders; amending the Criminal Proceeds (Recovery) Act to hit the gangs in their pockets, where it hurts the most; investing record amounts into our police service; committing to recruiting an additional 1,800 police officers; and ensuring that we now have the largest police workforce ever.

Simeon Brown: Point of order. There were two parts to that question. I believe the Minister addressed the first part, but I didn’t hear anything about whether the Government has a target to reduce the number of gang members.

SPEAKER: I think the Minister, effectively, answered the question when she said that there wasn’t a statistically valid way of counting them.

Simeon Brown: Does she accept that gang membership is now over 8,000 members; and, if not, why not?

Hon POTO WILLIAMS: I would note the comments from the Police Commissioner that the list was created for intelligence purposes, not to give us an accurate statistical picture of gang membership or activity. I also note that he has expressed a lack of confidence in the accuracy—[Interruption]

SPEAKER: Order! Some of us actually want to hear the answer.

Hon POTO WILLIAMS: The Government has committed to combating the harm caused by organised crime. Already as part of Operation Tauwhiro police have seized 350 firearms, $2.46 million in cash, 8.6 kilograms of meth; arrested 378 people; and conducted 291 search warrants.

Simeon Brown: Does she accept that gang membership is now over 8,000 members; and, if not, why not?

Hon POTO WILLIAMS: I have said twice now that those numbers are not statistically correct. The gang list is an intelligence tool only. It is not an accurate measure of gang numbers in New Zealand.

Simeon Brown: Does the Minister have no confidence in the police intelligence which says that gang membership is now over 8,000 in New Zealand?

Hon POTO WILLIAMS: I’ve answered this question three times now, and I will repeat it for the benefit of the member. The comments from the Police Commissioner were that the list was created for intelligence purposes, not to give us an accurate statistical picture of gang membership or activity.

Simeon Brown: What is the number of gang members on the gang intelligence list?

Hon POTO WILLIAMS: The total number of people on the national gang list is 8,006.

Question No. 12—Commerce and Consumer Affairs

HELEN WHITE (Labour): Kia ora, Mr Speaker. My question is to the Minister of Commerce—

Chris Bishop: Oh, oh, she’s not happy!

HELEN WHITE: —and Consumer Affairs.

SPEAKER: Order! That’ll happen for tomorrow. Helen White, start again.

12. HELEN WHITE (Labour) to the Minister of Commerce and Consumer Affairs: What recent announcement has he made about changes to KiwiSaver?

Matt Doocey: Point of order, Mr Speaker. You’ve just taken two questions off the Opposition for tomorrow. You’ll remember that at the start of question time today, the Government interrupted the Leader of the Opposition when she asked her question, and you didn’t do anything then.

SPEAKER: Yes, and that was because I was allowing for something which had happened last Thursday, to balance it off then.

Chris Bishop: Point of order, Mr Speaker. I didn’t realise you’d taken two supplementaries off. I didn’t actually hear what you said before. But I’d just note that the reason why there was a bit of a hubbub during the asking of that last supplementary from the member was in response to a provocation from the Minister making a reasonably sarcastic and mocking signal to my colleague, and that’s why there was a bit of a hubbub.

SPEAKER: Well, I’m not sure if there was a hubbub. I heard that member yelling loudly.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Last week, the Minister of Finance and I announced changes to the default KiwiSaver scheme, which will result in hundreds of thousands of New Zealanders getting far better bang for their buck, with lower fees and increased savings at retirement. On the advice of an investment panel, BNZ, Booster, BT Funds Management, Kiwi Wealth, Simplicity KiwiSaver Scheme, and Smartshares have been selected as default providers. These six providers were selected because they offer Kiwis more bang for their buck in terms of lower fees and higher levels of service.

Helen White: How many Kiwis stand to benefit from these changes?

Hon Dr DAVID CLARK: Good news: around 381,000 members are currently in the default fund they were automatically allocated to when they started a new job, because they did not make any active decisions about their fund. The changes will also mean that those joining the scheme at 18 could have an extra $143,000—

Angie Warren-Clark: How much?

Hon Dr DAVID CLARK: —in their balance—$143,000—at retirement through lower fees and higher investment returns.

Helen White: What other changes have been made to the KiwiSaver default provider settings?

Hon Dr DAVID CLARK: As part of the new default provider arrangements, we’ve moved the default investment fund type from a conservative to a balanced setting, to increase the likelihood of higher returns over the long term. We also know that many Kiwis care about where their money is invested, so we’ve excluded any investments in fossil fuel production. This reflects our Government’s commitment to addressing the impacts of climate change and transitioning to a low-emissions economy.

Chlöe Swarbrick: Will the Government build on this important decision to exclude fossil fuel investments from default KiwiSaver funds, as the Greens have long campaigned for, by requiring public investment funds to divest, perhaps by adopting my member’s bill in the ballot right now, which would do exactly that?

Hon Dr DAVID CLARK: We are certainly committed to moving towards responsible investment. In fact, as one of the changes to default provider settings, they will now be responsible for providing a responsible investment policy, which will be lodged on their website. Of course, consumers, with more active choices and with products like Mindful Money, will be able to see where their KiwiSaver funds are being invested and make those ethical decisions themselves.

SPEAKER: Order! But before we move on to the next item of business, I’ve been contemplating what occurred before, and I want to ask whether a Minister made an offensive gesture or a gesture likely to lead to disorder.

Hon Poto Williams: Mr Speaker, I applauded.

SPEAKER: Frankly, in fact, I’d assumed it was the member next to her, just on the basis of form, and it might have actually been an offensive gesture to cause that sort of reaction. I think members on this side need to be a bit less sensitive. That concludes oral questions. I declare the House in committee for consideration of the Overseas Investment Amendment Bill (No 3), the Holidays (Increasing Sick Leave) Amendment Bill, and the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill.

House in Committee

House in Committee

CHAIRPERSON (Adrian Rurawhe): Ā, kāti rā, tēnā rā tātou katoa. Can I ask members congregating across the Chamber to please leave the Chamber if you are leaving. Thank you very much.

Members, the House is in committee on the Overseas Investment Amendment Bill (No 3), the Holidays (Increasing Sick Leave) Amendment Bill, and the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill.

Bills

Overseas Investment Amendment Bill (No 3)

In Committee

Part 1 Amendments to Overseas Investment Act 2005

CHAIRPERSON (Adrian Rurawhe): We come first to the Overseas Investment Amendment Bill (No 3). The question is that Part 1 stand part.

Hon DAVID PARKER (Associate Minister of Finance): Mr Chairman, if I might just assist the committee by putting this bill into the context of the other pieces of legislation that have recently been passed. There have been a number changes made to the overseas investment regime since 2017. The first was to ban overseas buyers of existing New Zealand homes, with some exceptions, including an exception relating to new builds that are going to be rented out. There was at the same time a revised letter of direction that was provided to the relevant ministry, by the then Minister responsible, that tightened up how the different competing regulatory criteria for investments in rural land would be dealt with.

The next change was a change to bring within the purview of the Overseas Investment Act forestry investments in the form of forestry registration rights, which until that time were outside of the regime. The next change of significance that was made was an emergency bill that was passed in response to COVID, which introduced a national interest test and took the threshold for screening to zero whilst we saw how things rolled post-COVID.

And then the next piece of legislation is the bill that we now have, the effect of which is to provide a national interest test, which I am sure we’ll go into in a bit more detail, that is enduring and doesn’t rely upon the COVID powers legislation. The other major change that is made by this bill is to put in the primary legislation similar provisions to that which were in the letter of directive so that the more restricted regime that we have in respect of overseas investment and sensitive farmland is slightly more narrowly defined than previously, but that those provisions carry forward into the primary legislation so that any future change relies upon this House changing the law rather than a future ministerial directive letter.

Hon MICHAEL WOODHOUSE (National): Thank you, Mr Chair. I think we can have a reasonably straightforward committee of the whole House. There are, as far as I can tell, no amendments by the Minister—is that correct?—coming out of the Finance and Expenditure Committee. The select committee I think made some sensible changes to the bill, particularly around the application of the national interest test that the Minister just referred to.

I think there are two objects for this bill. One is to appropriately manage our sensitive assets in a manner that doesn’t undermine New Zealand sovereignty, but also to make the process of applying for approval under the Overseas Investment Act more straightforward and more easy. I think largely we’ve done that—we’ve certainly made progress towards that—but I think there is more in that area that we can do.

The particular issue I want to raise is in respect of farmland, because there are three aspects of the bill that relate to rural land—farmland. One is a recognition that there are different types of farmland, essentially—that some farmland is more equal than others, if you like—that that which is designated from a zoning perspective is actually not very good land, it’s not productive, it’s not being used for farming, but there is a quite significant test that needs to be met before it can be used for something else. I think these changes are really sensible. On the other hand, for that which is genuinely farmland, the requirements to advertise farmland transactions in New Zealand before the agreement to sell the land to an overseas person is entered into—to the degree that one might believe that there are significant risks in that area, I think that is a safe enough amendment.

What worries me and the National Party about this bill is that in our attempts to protect farmland, we haven’t addressed the significant change that was made by this Government in—I think it was—about October 2018 for farmland being converted into forestry if it was 999 hectares or less. We, in our second reading speech and in the select committee report, expressed our concern that that wasn’t the case. Now, I think it’s really important to stress that our concern is not around forestry, per se. Forestry is going to have a very important role to play, as it already has, and certainly from a climate change and net zero perspective there’s no doubt that both native and exotic trees will continue to have an important role to play. The question is whether the market is distorted by the ease with which overseas investors can purchase farmland for converting into forestry, and I think we’ve seen significant changes in that practice since the 2018 amendment was made.

Where we’re concerned about that—if the goal of this bill, at least in part, is to protect farmland, then we should be considering an amendment to the bill to do just that. So I have just tabled an amendment in my name that, effectively, deletes the relevant section in the Overseas Investment Act that does that. I’ll just let the committee know what that is—that is the insertion of a new clause 8A of the bill that, effectively, deletes section 16C of the Act—that was the “Conditions for consents relating to sensitive land that will be used for forestry activities”. That was the amendment that was made to the Act in 2018. If we are genuine about both ensuring that our very highly productive land is used in the best manner it can be and also providing the appropriate protections for New Zealand farmland from overseas investors—if that is indeed what one wants to do—then we shouldn’t have this sort of carve-out for a transition of use from farmland to forestry.

So with those comments, as far as I can tell there isn’t anything that I particularly want to amend, and I want the committee to consider this, because if we are, as I say, keen to protect farmland, this amendment is necessary.

Hon EUGENIE SAGE (Green): Thank you, Mr Chair. Following on from the Hon Michael Woodhouse, it is of concern to the Green Party that this streamlined regime for forestry has led, since the law was changed, and it was in October 2018—that there have been significant purchases by overseas companies of farmland for forestry purposes. There is a Supplementary Order Paper in my name on the Table to reverse the change that was made in 2018 so that if an overseas company or person is seeking to buy farmland for forestry, that has to go through exactly the same benefits test and assessment that buying farmland for other purposes would.

I point to the case of New Forests Asset Management. They have acquired some 77,000 hectares in less than four years. They started in 2015 with no land for forestry, and now they’re New Zealand’s, as I understand it, third biggest private landowner. Of our top 10 private landowners in terms of area in Aotearoa New Zealand, four of those are forestry companies.

In terms of forestry investment, ensuring that it does have a benefit, particularly with the difficulty that some processors have had in ensuring that logs are supplied to them for the creation of jobs locally—that could be part of the benefits test if land being purchased for forestry had to undergo exactly the same assessment that farmland being purchased for other purposes did. It would put everything on an even playing field.

The change was made in 2018 because of the representations of New Zealand First. It was seen as encouraging more forestry to meet the billion trees objective, but given that there has been, under this Government and the last, quite a significant expansion in forestry, in our view it is past the time for these special privileges to be given to overseas companies. Given that 70 percent of our forestry industry are overseas companies, we just question the need for this privileged pathway and would ask the Minister in the chair, David Parker—there was the suggestion in the last term that this regime would be reviewed. If the House does not support the Supplementary Order Paper, when is that review likely to occur, and what would be the scope for that review?

Hon DAVID PARKER (Associate Minister of Finance): This has got quite an interesting and somewhat convoluted history.

Hon Michael Woodhouse: It’s called a coalition agreement.

Hon DAVID PARKER: The member said “It’s called a coalition agreement.” Actually, not quite. We discovered, when the prior National Government signed up to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), that they were locking New Zealand into the screening of asset classes that were already in the Overseas Investment Act regime, as at the time the agreement came into effect, not at the time the agreement had been agreed in principle.

When we came to power, we found that the screening regime did not, in effect, cover forestry, as it did not cover residential housing. And unless we change the Overseas Investment Act quickly, New Zealand would, effectively, have had to pay a very high price to fix that, because we would have found ourselves in breach of not just CPTPP but other agreements that leveraged off it that had been signed in earlier years, including the free-trade agreement with China and various other free-trade agreements, under the most favoured nation clause, which carries the best investment protocols from subsequent agreements into earlier agreements.

So we had two issues that we needed to resolve urgently. One was the inclusion of house sales, because if we hadn’t included that in the investment screening regime, we, in effect, wouldn’t have been able to later, and we did that quickly. And the other gap was in respect of forestry. Now, purchasers of freehold and leasehold interests in forestry were already included in the Act, but forest registration rights, under the Forestry Rights Registration Act, were not. And by that time, it was already clear that in order to avoid the Overseas Investment Act requirements relating to freehold and leasehold, some overseas investors were already using the forest registration right path, which was not regulated. A forest registration right can last for multiple rotations. It’s not limited to a 30-year period or anything like that. So unless you had forest registration rights in the overseas investment screening regime for forestry, there was, effectively, no control of it.

The Government then moved to close that loophole, and the member is right that there were negotiations with other coalition partners at that time. There were also discussions with the industry, because the industry and other members have been right to point out that the forest-growing industry is dominated by overseas owners in New Zealand and has been for some decades. They were nervous that we were, effectively, going to close down that investment industry, and they came to the Government and said, “Look, OK, we accept you need forest registration rights within the new system, but in order for us to agree that, can you have a relatively light-handed approach to how you do give effect to the regulations under the Overseas Investment Act, once they are put in there?”

We agreed to that, as a Government, then, and we brought forest registration rights within the ambit of the Overseas Investment Act. But then we had, as the Hon Eugenie Sage noted, a relatively light-handed approach, and still have a relatively light-handed approach, to their ability to get an approval under the Overseas Investment Act.

Now, because we’ve got them in the regime, under our free-trade agreements, we can change the rules about that in the future. We have actually preserved policy space for this Government or any future Government to address those issues. At the moment, we aren’t proposing to tighten those rules and we will be voting against the amendments that are on the floor here, in respect of those issues. There are some other issues which have arisen since we introduced that, relating to both carbon forests and the use of highly productive lands for forestry. And sometimes those overlap; mostly they don’t. But if members want me to go into that more, I’m very happy to give a more fulsome explanation of some of those other complexities, but I won’t do it on this particular call.

Hon TODD McCLAY (National—Rotorua): Mr Chair, thank you, and I thank the Minister as an explanation of what happened through the Trans-Pacific Partnership (TPP) that the National Government signed up to, and then an agreement that largely was the same, without the US and a couple of very minor provisions in it, that went through the House.

He’s conflating two issues, however. He is correct that actually unless the Government had given itself the ability to control various things through the Overseas Investment Act when the revised TPP came into effect, it would not be able to do that in the future, and so the Government went and did that. We had long debates about that previously, but the issue around the settings of forestry compared to other classes of land are contrary to that view. In fact, it has nothing to do with that at all.

I hear that the Minister has said that it happened because of their negotiation with New Zealand First. But the Minister is aware, as is everyone else in the country, that New Zealand First is no longer here. So the question that the Government needs to answer, in deciding not to support the amendment put up by the National Party or indeed the Green Party, who, by the way, in deciding to take this provision away—one must remember they voted for it, or it wouldn’t have been there previously in the previous Parliament. But the question that the Minister must answer is: what is the difference between 999 hectares of dairy land and 999 hectares of sheep and beef and 999 hectares of forestry land?

Because my understanding of the way that the law has changed by the last Government with the Greens, who now want to reverse it—they can yell over there, but it only happened because they voted for it in the previous Parliament. So, to the Minister, the only difference is that if somebody from overseas wants to come and buy a dairy farm of 999 hectares, they don’t need approval as long as they put it into forestry and they’re going to. So all this amendment put forward by the National Party does is say that all land should be treated the same in this situation, whether it’s dairy or whether it is sheep and beef or whether it is for forestry or the intended use thereof. The Minister may want to take another call. We’d be interested in: is my interpretation of the Act as it is in place correct; and, if so, what is the difference and why are the Government now not changing it if this was done merely because New Zealand First was there?

Hon DAVID PARKER (Associate Minister of Finance): Well, I think I already said that it wasn’t solely because of New Zealand First. It was partly because of a discussion that we had with the industry. But other than that, the member’s description is broadly correct, and there is a proper policy debate to be had in the future as to whether forestry should be in there on the same basis as other rural land or on some intermediate position between where they are currently in the law and where the amendments that have been proposed by the National Party and the Green Party would have us. But we’re not proposing to do that on the fly in the committee stage of the House. That’s quite an important policy question and, therefore, we’ll be voting against that.

I would, though, note that this is not about carbon forests. It was actually intended to be! It’s just one of the ironies in life sometimes that we got it right, perhaps, in respect of carbon forests accidentally. I was always concerned that if we gave the same—as the Minister, the Hon Shane Jones, used to say—primrose path to consent to carbon forestry, we would be giving an inappropriate leg-up to overseas investment in carbon forestry at a time when New Zealand carbon markets were not mature. And partly because of some problems that there have been in carbon markets in the prior decade, I was worried that New Zealanders undervalued what we had in our carbon potential in our forests and we might see that rapidly transferred to overseas owners, as we had seen investment in forestry, per se, in the prior decades. So I personally didn’t want carbon forests to have the primrose path.

Now, for reasons of coalition at the time, we actually thought we were, but then we discovered that the legislation referred to a “crop of trees”, and Crown Law advised the Government that because the way in which the forestry rules under the Overseas Investment Act referred to a “crop of trees”, a crop of trees is cropped just like a field of wheat is cropped. If you have a permanent forest that is a carbon forest, it isn’t cropped, and therefore, despite what we thought we were doing, we actually didn’t include carbon forests—

Hon Michael Woodhouse: Oh, don’t you love lawyers!

Hon DAVID PARKER: Ha, ha! Well, I do love lawyers, actually. Yeah, I do love lawyers.

Chris Penk: The first sensible thing he’s said.

Dr Duncan Webb: Most lawyers—most lawyers.

Hon DAVID PARKER: Most lawyers, yeah. So the issue has already narrowed to production forests rather than carbon forests.

The final point I’ll say, before I sit down, on this particular issue is that there is also a concern expressed that some forests, be they carbon forests that haven’t gone through the easy consent pathway or production forests, and be they carbon forests or production forests that are New Zealand owned or overseas owned—there’s a proper concern as to whether it’s too easy to plant them on higher classes of land.

This is partly a socioeconomic question. There are some districts in New Zealand where councils want more controls on where forests are planted. The answer to that issue actually doesn’t lie under the Overseas Investment Act. It lies under the Resource Management Act and under the National Environment Standards for Plantation Forestry. And we in the Labour Party at the last election said that we are going to address that community concern by making it clear or clearer that councils can have controls in their plans on where forests are planted so that they can make a planning decision that they don’t want trees on the more highly productive lands.

In truth, the statistics show that some of that concern was misplaced because, you know, not many people plant trees on more valuable horticultural land, for example, or good dairy land, because it’s not an economic decision to make, but the solution to that issue lies in planning laws, not the Overseas Investment Act.

Hon MICHAEL WOODHOUSE (National): Thank you, Mr Chair, and I thank the Minister for his explanation. I just want to start on that last point about the economic benefit stuff, because, actually, whereas the Minister said he hasn’t seen a lot of examples of that, where it is happening is with overseas purchasers, because the bar to investment is lower with forestry and, therefore, it may be—and it is, it’s proven economically viable for the conversion of highly productive farmland into forestry if the barrier to investment is lower, and that’s what section 16C does.

The question I have about the explanation in respect of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is why, if that were necessary—and I’m still confused about why this was, sort of, partly a coalition agreement if we needed to comply with a certain trade agreement, why a coalition partner would be relevant at all. But why is it that we comply with the CPTPP when the land is 999 hectares? Would we be, therefore, in breach of the CPTPP if the land being considered for purchase was 1,001 hectares, for example? The last part of that question is actually related to other free-trade agreements (FTAs). We’ve got China, we’ve got South Korea, we’ve got the Regional Comprehensive Economic Partnership, we’re in negotiations with Europe and the UK. What do those FTAs say about this issue?

Hon DAVID PARKER (Associate Minister of Finance): In respect of the first point that the member made about overseas investment in forest, the extent that they’re carbon forests, there is no primrose path. They aren’t getting the easy route through, so they have to go through normal processes as they would do for farmland. Officials can tell me if I’ve got that wrong, but I think that’s correct. In respect of the member’s question about would it make a difference whether it’s 999 hectares or 1,000: no, not pursuant to our trade agreements. That rule is actually found in our overseas investment legislation, not in our free-trade agreements. What the free-trade agreements say is that, at the date of the agreement, existing classes of investment that are screened can be screened but no new investment classes. So if we didn’t have forest registration rights being screened, they could never be screened, but they are now in there to be screened, whether it’s freehold, leasehold, or forest registration rights, because they’ve been added. The Government of the day can change the threshold as they see fit, because that is within the parameters of our free-trade agreement, whether it’s the CPTPP or any other earlier agreements.

Hon Michael Woodhouse: So we could lower it to 10 hectares, potentially.

Hon DAVID PARKER: Could do.

NICOLA WILLIS (National): I find it richly ironic that here we are in the Chamber debating a bill that is supposed to be about improving the Overseas Investment Act framework, and it does some good steps in that regard, but the Minister in the chair refuses to acknowledge the significant issue we have emerging in rural communities throughout New Zealand in relation to forestry. The premise of the Overseas Investment Act is that investment in New Zealand should occur where it can be demonstrated that it is of benefit to New Zealand, and there are a series of rather complex steps that overseas investors must go through in order to demonstrate that benefit. The counterfactual test is to compare what will this investment mean versus the status quo, and yet with that set of rules—that set of ground rules—there is also an exemption for one class of investment. The playing field is tipped very heavily toward forestry investment by exempting overseas investors who wish to invest in exotic forests—in pine trees—from those same tests.

The impact of this in rural communities throughout our country has been clear, because when you say to investors around the world, “Actually, you can’t just come in and buy up our farmland. We’re going to make that pretty tricky for you. We’re going to put in a lot of restrictions, but, by the way, if you want to buy farmland and convert it to pine trees, then we’ll make it pretty easy.”, well, it’s pretty obvious what’s going to happen. It’s pretty obvious what has happened, which is that overseas investors who want a slice of our country have purchased land for the purpose of converting it to forestry, and the impact of this matters.

It matters to rural communities, who impress upon me and my colleagues that they are seeing a very changed environment in which they are living. They are seeing that lands that have been used for productive farming for generations, farming and producing food, is now no longer being used for that purpose, but it is being planted in pine trees. All of that might be OK—it might be OK—if we could honestly say that the same rules apply to everyone, but the problem is the same rules don’t apply to everyone. The playing field is tipped towards this kind of forestry investment, and what rural community leaders say to me is, “We are very worried that the current Government doesn’t see the impact this is having.” They don’t see that we now don’t have enough people to allow for rural schools, in some instances, because the labour force needs of this land converted to pine trees is so much less than the farms that were there previously. They’re not allowing for the significant environmental effects these sorts of pine tree plantations may have in the future.

What I think people hoped was that when Labour campaigned at the last election, saying that they would put in some allowance for communities to restrict where this sort of conversion might happen, they thought Labour might follow through on that, and they thought that Labour might actually see this problem. But, of course, Labour haven’t followed through on that, and so the vehicle that remains is this Overseas Investment Act and the exemptions therein.

Now, the Minister has alluded to the coalition arrangements in the last Government that led to this clause, and what I would put to this committee is that there is an opportunity on the Table right now, in the form of Michael Woodhouse’s amendment, which would allow us to relevel the playing field, and no one need go to Winston Peters nor Shane Jones for permission. In fact, we now have Eugenie Sage, for the Greens, acknowledging the perverse impact that this unbalanced playing field is having.

So, in fact, the only defenders of the exemption in this Act to encourage mass conversion of productive farmland into pine trees are the Labour Party, and I stand in this Chamber on behalf of the rural communities throughout New Zealand who have contacted me and said that it’s not fair. Well, we agree with them. It’s not fair, and the Minister should do something about it. He has that opportunity.

Hon DAVID PARKER (Associate Minister of Finance): I think the irony for most people from rural communities who speak to that member would be for them to reflect on the fact that her party first of all denied there was any need to change the Overseas Investment Act in advance of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership being signed and weren’t planning to change it before it came into effect, and they would further find it ironic to know that the National Party voted against the changes to the Overseas Investment Act which brought forestry registration rights within the ambit of the Act. Had we not done that, there would be no limit at 999 hectares or 1,000 hectares, there would be no ability to reduce it in the future or increase it to any other number, and the effective ability of the Government to deal with these issues would have been constrained.

So although I hear the loud calls from Nicola Willis saying “Oh, woe is New Zealand!” in respect of this issue, we’ve actually preserved the ability of any future Government to do exactly that, and I don’t need to say anything more about the other issues. I’ve already covered the other issues in full.

CHAIRPERSON (Adrian Rurawhe): The question is that the Hon Eugenie Sage’s amendments set out on Supplementary Order Paper 37 be agreed to.

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

Ayes 53

New Zealand National 33; Green Party of Aotearoa New Zealand 10; ACT New Zealand 10.

Noes 65

New Zealand Labour 65.

Amendments not agreed to.

CHAIRPERSON (Adrian Rurawhe): The question is that the Hon Michael Woodhouse’s tabled amendments, deleting clause 25 and inserting new clauses 8A and 25A be agreed to.

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

Ayes 43

New Zealand National 33; ACT New Zealand 10.

Noes 75

New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.

Amendments not agreed to.

Part 1 agreed to.

Part 2 agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Progress to be reported.

Bills

Holidays (Increasing Sick Leave) Amendment Bill

In Committee

Clause 1 Title

CHAIRPERSON (Adrian Rurawhe): This bill will be debated in clauses. We come first to clause 1, the debate on the title. The question is that clause 1 stand part.

Hon PAUL GOLDSMITH (National): Thank you, Mr Chair. So we’re debating this Holidays (Increasing Sick Leave) Amendment Bill and the National Party has been opposed to this bill, not because—I mean, everybody would like anybody that is sick not to have to go to work. We’re very conscious of the implications around the COVID situation that we’ve had, that we don’t want sick workers at work.

In a perfect world there would be no restrictions on sick leave. But we also live in a practical world, and when we think of business operations, I don’t think of the very small number of very large business operations that operate in New Zealand. We recognise that by far and away most businesses in New Zealand are small, with fewer than 10 employees—in fact, fewer than five employees. And if you put yourself in the shoes of those business owners, little cafe owners, small-business owners right across the country—in the tourism space, in the hospitality space, or a small forestry group—many, many thousands of small little businesses in this country, run by mum and dad owners, often having mortgaged their own house to fund the company and the business, are struggling from GST payment to GST payment. It’s that context where we are conscious of the fact that this Government has been very quick to add substantial costs to those businesses, with what appears to be an insouciant shrug of the shoulders by the Minister, Michael Wood—oh well, it’s not a big deal, they can soak it up.

So I suppose the key question I have for the Minister is: what impact do you think it will have on the small-business owners’ ability to remain in business by adding these costs, which is—

CHAIRPERSON (Adrian Rurawhe): Sorry to interrupt the member, but we’re on clause 1, the title. It wouldn’t take much for him to bring what he’s said so far into relevancy on—

Hon PAUL GOLDSMITH: Are we having a strict debate just on the title?

CHAIRPERSON (Adrian Rurawhe): Yep, yeah. So unless some honourable member—

Hon PAUL GOLDSMITH: We don’t usually start with the title, we usually start with the broader thing so we can actually debate the topic before—

CHAIRPERSON (Adrian Rurawhe): As I started off at the beginning, it’s clause by clause, unless some honourable member would like to seek leave to debate it as one, then we’ll do that.

Hon MICHAEL WOODHOUSE (National): Point of order. I seek leave for the Holidays (Increasing Sick Leave) Amendment Bill to be considered as one debate, with questions on clauses put separately.

CHAIRPERSON (Adrian Rurawhe): Leave has sought for that purpose. Is there any objection? There is none. Given that situation, I’m going to restart the clock for the member.

Clauses 1 to 6 and the Schedule

Hon PAUL GOLDSMITH (National): That’s very decent of you, Mr Chair. As I was outlining to the committee, in a perfect world there would be no restrictions on sick leave and everybody would be able to take whatever leave they felt they needed. In the real world, where you have a couple of hundred thousand small businesses operating in this country, surviving in a tough trading environment day to day, there do need to be rules and restrictions. So, for a very long time, we’ve had five days of sick leave. On average, across the country, the average take-up of that sick leave is 4.7 days. So the experience is that employees do use the sick leave fully. There are some, not all, who see it as, essentially, an entitlement, as part of their business arrangements, or their employee arrangements.

Now, this bill doubles that to 10 days. So there’s no magic or there’s no money tree or anything like that. What will happen is that there is a very likely outcome that more sick leave will be taken, and it may well be that people will expand to take the full entitlement of 10 days—who knows? There’s been no evidence put forward, and maybe if the Minister knows of any detailed research that’s been done by his officials estimating the likely outcome of this, I’d be very interested to hear from him on that.

I’d be interested to know what the Minister thinks will be the consequences for those small-business owners for this extra cost imposed, and in combination with higher minimum wage costs and so forth, what impact that will have on the ability of some businesses to stay in business, and whether or not we’re going to make it more difficult for those little companies, those family companies, to survive. I was at a celebration—well, a fund-raiser, actually—on Sunday night with the Indian community and there was real anger amongst people there, small-business owners, primarily, about the way that this Government keeps on adding substantial costs to those businesses without, apparently, any thought of how that is going to be paid and how the businesses are to stay in business—white hot anger to the Government. So a related question I have to the Minister is: what does he say to those small business operators, who are the backbone of our economy, and, ultimately, the employers?

Now, it may well be that some companies will be able to pass on the costs, and so it will be consumers that ultimately pay. But there are, of course, many, many industries where those costs can’t, effectively, be paid on, and if you think of the simple cafe, if it does become too expensive to buy a coffee, then people always have the choice not to buy the coffee. So they’re discretionary businesses and they fold up if it all becomes too expensive.

So the question that we have is around timing, given that at a time when the economy does continue to struggle, and we hear how wonderful things are—well, the economy is struggling and many businesses are struggling. Is this the time to be doing it? Then when it comes to any trade-off in terms of productivity, where is that? What research is being done to indicate that if you have fewer days worked, there will somehow be a quid pro quo and higher productivity levels because of it?

The other issue that came up during the select committee process that I’d be interested to hear from the Minister about is the decision not to pro-rata the entitlement. So if you happen to be like a woman I was talking to a couple of weeks ago who owns a bookshop and employs a number of people who work one day a week—so they, effectively, work 50 days a year. Now, it’s quite possible that in theory they could take 10 days of sick leave out of those 50 days a year, if they were to take their full entitlement, as well as the holiday leave. And this Government’s added an extra public holiday. So if it happened to fall on that day, if they were working Fridays or Mondays, one day a week, then it is very significant. The Government refused to consider making this entitlement pro-rata as well. So I’d be interested to know what his thinking was behind that. Thank you very much.

JAN LOGIE (Green): Thank you, Madam Chair. I’m keen to take a short call in the committee stage of the Holidays (Increasing Sick Leave) Amendment Bill, which is not one of the larger bills that this House has seen. In fact, it’s a very simple piece of legislation that extends the minimum sick leave entitlement from five days to 10 days, and recognises, I think, after coming through a pandemic, all of the adjustments that the Government has had to make to support businesses and staff to be able to ensure that people can stay home when they’re sick. This bill feels timely, at the very best, and, ideally, this would have happened 10 years ago, I would say. We hear continually from working people, particularly those with caregiving responsibilities or public-facing jobs where they’re in contact with a lot of other people, that if people have only the minimum entitlements, quite often, actually, they are turning up to work sick because they can’t afford to take unpaid time off work, and that, actually, parents and caregivers are leaving employment to be able to manage sickness of others in the family.

When we hear from the Opposition their concern around the impact of this on employers, I would again say that losing good staff because they’re not able to care for their families or their own health is a greater cost than an additional five days a year maximum, for that minimum of sick leave, and that we have a problem with presenteeism, which is people turning up to work sick and actually being compromised in their work and not being as productive as they could be. We all know that feeling, in this House, of turning up when we’re actually sick and struggling to make decisions and get our words out. In some workplaces, that’s actually a risky thing, not just the transmission of disease to others but also impaired decision making puts your colleagues and yourself at risk. So this is an incredibly important conversation for us as a country, and the Greens are very pleased to be seeing this.

We would have liked to have seen the transitional arrangements in the legislation—bringing this in over time that means that some workers won’t get access to this increase for, like, over a year away, and we’re a bit disappointed in that, because there is such an urgent need, and people that have been talking to me are expecting it, because they desperately need it for managing their health and their family.

We’ve also put up a couple of Supplementary Order Papers (SOPs) responding to submissions that we heard through the select committee phase, around people talking about how difficult it is with the many employers—and we heard this reflected in submissions from some employers—assuming that people are ripping the system off and making an assumption that they’re doing that and requiring them to get a medical certificate to prove that they’ve been sick. And, actually, it’s quite difficult to get into a lot of doctors’ surgeries. I was talking to a family member recently who was saying it was a month before she was going to be able to get in to see her doctor. So we’re putting additional pressure on our health system for no benefit. And so our SOP is to return our law to the state it was pre-2010, that would enable employers to request a medical certificate if they have reasonable grounds to believe the person or their family members were not sick. So it’s, actually, to me, about restoring good employment relationships. It doesn’t create a good workplace environment if you are assuming that your entire team is seeking to rip you off. That’s a really negative employment relationship. Being able to have honest conversations with people when you’ve got reasons to have concerns is how we actually resolve problems that can work out for both parties.

So we’ve got this SOP in place, also to ensure that we don’t reduce the amount of accrued leave that people are able to gain, which is in the legislation at the moment—it would keep it at the status quo and not get the benefit of the increase to 10 days, so I hope there will be support for those amendments.

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): Can I just offer a few comments in response to the members who have spoken to date, Mr Woodhouse and Ms Logie—

Hon Michael Woodhouse: No, it was Mr Goldsmith.

Hon MICHAEL WOOD: Mr Goldsmith, sorry—I didn’t mean to imply that all National Party members are the same, by any stretch, and didn’t mean to cause offence to either of the members. But if I can respond to Mr Goldsmith and Ms Logie, Mr Goldsmith raised a series of concerns, some of which related to the bill and some of which were more general in nature, but they focused on the question of the costs that might accrue to employers as a result of an increased sick leave entitlement. This has been one of the main topics of debate over the course of this legislation.

The first thing that I would say is that any minimum statutory entitlement in terms of employment rights by definition probably does create some costs. If we had the view that that was inappropriate, we wouldn’t have a minimum wage, we wouldn’t have any minimum statutory sick leave or holiday leave entitlement. I don’t think that many or any members of the House hold the view that that would be satisfactory, so it’s a case of trying to balance up the public good and work out what is appropriate in terms of a minimum entitlement that should apply in these situations. Just the evidence, for me, over the course of the past year has been so clear that there is such a value for workers, for workplaces, and for society at large for there to be an adequate sick leave entitlement in place that I do believe that the balance of 10 days’ sick leave per year is a justified one. We have seen the evidence over the past year of the risks that are posed not just to the person themselves but to others if people do come into workplaces when they are unwell and spread sickness. That has a significant impact on the wellbeing of the person themselves because they are not recovering, and it has a significant impact on the workplace more broadly because other people become sick.

I note this point: at the moment, we are in the process of going through the Estimates of Appropriations, and the Opposition have asked a range of questions of Government agencies as part of the normal course of events. One of the very interesting questions that pops up across those is the number of sick leave days that have been taken at various Government agencies year on year. The number has actually dived significantly over the last year—no doubt in part because of some of the lockdown periods, but I think it has also been down to the fact that people have been more encouraged this year to look after themselves, to stay at home when they are sick, so they have not been spreading illness into the workplace more generally, which affects other people and, obviously, has a productivity impact on the workforce more generally.

Over the course of this debate in the House, I have quoted American studies which show a 20 percent productivity decrease if workers do, for one reason or another, come into the workplace when they are unwell, and that is because illness does spread in the workplace. I also note that the work that has been done with the Ministry of Business, Innovation and Employment in preparation for this bill identifies that around about 50 percent of workplaces already have an entitlement of 10 days’ or more sick leave per year, so this is not something completely out of the box. It is not something that is completely unreasonable. It is creating a minimum entitlement that, actually, many New Zealand workers do already have available to them.

Further to that, I note that the people who currently miss out the most tend to be people in relatively vulnerable employment situations. So we have a situation in which a large number of workers—probably those in professional roles, probably those with the benefit of collective agreements—have 10 days of sick leave or more, and it’s those workers in more vulnerable positions who don’t. I note that within that, the workers who are worst affected by the relatively low provision of five days at the moment are those who have dependants, because under New Zealand’s sick leave requirements, people need to use their sick leave in most cases, unless they have a separate entitlement in their agreements, for care of their dependants as well. So it’ll be those mums and dads who have significant requirements in terms of looking after their kids—and we all know how many bugs kids pick up in the workplace—who are disadvantaged by the five days at the moment.

So, taken as a whole, I think the justification for 10 days is strong in terms of the health and wellbeing benefits for the individual, in terms of productivity at the workplace level, and in terms of reducing risks across our society of the spread of illnesses. It’s also justified on the grounds that we want to have an equitable playing field for people in the workplace. I note as well that there are a significant range of supports that the Government has been offering to small businesses to ensure that they do get through the current challenging periods.

Turning to Ms Logie’s comments, I note her support for this piece of legislation and thank her for her advocacy for it over the passage of the bill so far through the House. She does note the position of the Green Party in respect of the transitional provisions in clause 6, where Ms Logie and the Green Party have advocated for transitional provisions that will, effectively, allow people to gain the additional benefit of 10 days’ minimum sick leave per year more quickly than they do under the provisions of the bill. That is something that we have tried to carefully balance up in the bill. We do want New Zealand workers to have the facility of 10 days, for all of the reasons that I have outlined, but we also do want it to be done in a way that is manageable for employers and manageable for payroll systems. For those reasons, we have settled on the provisions of clause 2, giving a two-month commencement date, and clause 6, which allows for the additional days of sick leave to come into effect, effectively, when a worker gets to either the six-month point after employment, when sick leave provisions kick in, and thereafter on the anniversary date of that date each year. So I do understand the reasons why Ms Logie has argued for those provisions to come into place more quickly, but we have tried to strike a balance here, and that’s why we’ve landed where we have in respect of clauses 2 and 6.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. I’d like to thank the Minister for his comments because they go to some of the broader issues that we on this side of the House are concerned about in terms of this legislation. I want to pick up on a couple of things that the Minister has said and pose some questions, which I suspect he will take an opportunity to answer in the course of this debate.

The Minister mentioned that his driving rationale for pushing through this legislation at this time was twofold. Firstly, it’s in response to the COVID situation where the world has been thrust into an incredibly unusual health and also business and economic situation, and New Zealand businesses, like those around the rest of the world, have struggled in some cases to come to terms with the situation that has confronted them. But to use the cover of COVID as, essentially, an excuse and a methodology for bringing in what I suspect has been long-time Labour Party policy, driven from trades hall—that an extension of paid sick leave should come through in a legislative framework—I think, in some ways, is to devalue the seriousness of the COVID situation.

The Minister made the point that those employees who have dependants are likely to be the big beneficiaries of this legislation. As a parent myself, I can well recall having to take the occasional day of sick leave when my own children were not well, but that obligation falls disproportionately on employers who employ people with dependants. The perverse net outcome of this piece of legislation is likely to be that in a candidate interview scenario where a new job is being created or a job being is being filled, and there are, let’s say, two candidates with equal skill and ability and background and competency but one of those candidates has no children and one candidate has a number of children—I put it to the Minister that in many cases it will never be stated by the employer, but the employer is going to be thinking, “What is the risk to my business of taking on the candidate who has a number of children?” Because, effectively, what this piece of legislation is doing is asking employers to underwrite the good health of their employees’ dependent children. I don’t think that’s a good basis for making legislation, and I don’t think it’s a good basis for encouraging job creation. I don’t think it’s a good basis for encouraging economic growth. I think it will have, actually, the perverse opposite impact of what the Minister is looking for.

I want to talk—and maybe I will do so in a later call, Madam Chair—but when the bill was introduced, the Minister actually asked the select committee to consider a range of items. Members will remember that the bill was introduced under urgency, with a truncated select committee process where select committee submissions were sought over the summer break. The Minister then asked the committee to look at a whole range of things. So submitters put thought and consideration into those matters, and then subsequently the Minister has accepted the recommendations in relation to the Holidays Act per se. So some of those things that were considered by submitters and also by the select committee are now almost of no value, except, I guess, if further legislation comes into the House at some future point in time. So that was a bit of a waste of the committee’s time, it was a bit of a waste of submitters’ time, and I don’t think it helped focus submitters’ or the committee’s thinking on what the real impacts of this legislation would be. One of them is about the prorating, or the lack of ability to pro-rata, sick leave entitlements to those people who are part-time employees. So there’s a Supplementary Order Paper in my name, and I will take a call further on in this debate to go through the pros and cons of that.

JO LUXTON (Labour—Rangitata): Thank you, Madam Chair. It’s a pleasure to stand and take a call as a business owner and employer who currently allows staff more than five days’ sick leave currently. It’s a real pleasure to take a call on this piece of legislation here in the committee stage.

We’ve heard from members opposite—Mr Goldsmith and Mr Simpson—about the timing of this piece of legislation and that we’re using COVID as some kind of an excuse to push some weird agenda that they think may have been going on here for some time. But, actually, I say that what we’ve seen with COVID has shown us just how important this change is and how much this change is needed.

Actually, the timing of this legislation, I believe, couldn’t be more perfect, because what we don’t want is people who are ill coming to work because they don’t have the ability to take paid sick leave, because they do need to keep their income coming in. We don’t want them to come to the workplace while they are ill, passing on whatever illness it may be, because, let’s face it, some people work in very close proximity to clients and customers that come into the workplace, so there is an extremely high risk of passing on whatever it is that they may have. So I say that this is the perfect time to bring in this legislation in order to allow people who are unwell to take the time to be at home, to get well, before coming back to the workplace.

We’ve heard from members opposite that when people have more sick leave, it will cost the company more. And, yes, to a certain degree, it will cost more, but I would also counter-argue that if we have people coming into the workplace sick, passing on their illness, then we will have more and more and more staff members having to take time off because they are ill.

Mr Simpson mentioned that as a business owner, if a person is faced with a prospective employee who has no children and one who has children, they would choose, potentially, the person that doesn’t have children. Well, I say that I can’t fathom that, because it assumes that employers don’t take into consideration, potentially, the type of person and the fit that they would be for their business over the fact that they have children and they might take more sick leave. I find that unfathomable.

I did want to ask the Minister earlier on a question around incrementally introducing the 10 days’ sick leave and whether that would really help the transition for business. The Minister did answer that, but there was another question I wanted to bring up with the Minister, and others have mentioned it. They’ve been talking about the prorating in terms of people that work part time. We hear this argument from members opposite that if someone works part time, they’re essentially going to get a whole lot—a whole lot—more sick leave than anyone or someone that works full time.

I would like to ask the Minister the question: if there is somebody that works part time, it is correct, is it not, that they would be entitled to sick leave for the days that they would ordinarily work and need to take off as sick leave? So they’re not taking additional days to what they would ordinarily work; they would simply be given sick leave to cover the days that they would ordinarily work. So that’s a question that I have there for the Minister. I think that I will leave that at that. Thank you.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. Just starting up where the last speaker, Jo Luxton, finished off, the advice that the Education and Workforce Committee was provided right back at the start made it clear that there were potential problems around employers discriminating against potential employees who have childcare responsibilities that could result in greater use of sick leave. This isn’t something that we made up; this was advice that was given to the committee at the beginning, and something that we wanted to flesh out, and something that I don’t think, during the course of this bill so far, has actually been properly discussed, because all we get from the other side—and maybe again today—is, “Oh, well, how could this possibly be a problem? I can’t fathom it.” Well, it’s actually in the advice that we got, and so we take that very seriously and we’re entitled to ask the questions: has that been considered, what evidence is there to suggest that it won’t happen, and what considerations has the Minister taken into account? So that was why we’re going there. It’s not something we made up just to antagonise members opposite. It’s something that was in here and that we do take seriously.

What I want to ask Minister Wood about specifically is the claims around productivity gains, because we heard a lot in first reading speeches from the Minister and others about the increase in productivity to businesses, and we posed the question: well, if it was so great for productivity, why don’t businesses already do it? Some big, big businesses do that can afford it, but the very small ones don’t do that, for the most part, and if it did lead to such a great gain in productivity that would make up for the costs of having 10 days’ sick leave, then I guess the question is: why don’t businesses already do it?

I think the answer to that lies in the fact that there is actually no evidence that we were supplied—and it is in the committee report that we did ask for some reports that were mentioned in relation to Australia’s minimum sick leave requirement and how that’s increased their productivity; that was never supplied. A lot of the advice and a lot of the speeches that we’ve heard talk about anecdotes and stories that they’ve heard, but actually I want to ask the Minister a specific question: what reports or evidence has he relied on that he can point us to, that we can go and look at, that show a substantial increase in productivity that would offset the costs of the extra sick leave? So that’s somewhere I wanted to go today, to ask him about that. I’ve got a few more questions, but I’ll let the Minister answer that one first, and then perhaps we can carry on.

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): I thank the various members for their questions and discussion on a range of points. I’ll start with Ms Luxton’s discussion about her experience as a small-business owner and some of the benefits of providing appropriate sick leave for her employees. She asked a very specific question of me, which is that if someone works part time, is it correct that sick leave will only apply on the days that they ordinarily work? The answer to that is yes. This is quite an important point in respect of the prorating argument that we’ve had a little bit of dialogue around so far. Because the reality is that a part-time worker only works on a certain number of days per week, and so the incidence of sick leave that they will need to call upon is going to be less than the incidence of sick leave that a full-time worker will need to call upon. Because, on average, that person, when they become sick, will become sick on days that they are ordinarily working less than the number of days that a full-time worker becomes sick on a day that they are ordinarily working. So I do think it’s just simple maths that some of the rhetoric that we have heard about a blowout in sick leave from part-time employees, that every part-time employee is going to rack up the full entitlement, simply isn’t borne out—either by the maths or the facts.

I do have to take issue with Mr Simpson’s characterisation of small-business owners as apparently being widely willing to discriminate against people who have children. I think that is an unfair characterisation of the way that most small-business owners approach their employment relationships, around their ethics, quite frankly, and around their willingness to engage legally in employment relationships, because that would be an entirely illegal approach to take.

I also put it to Mr Simpson that if that was the case, we’d see it now. Because we don’t have a prorating arrangement for sick leave entitlement as things stand, either under the statutory minimum or under most entitlements in employment agreements that I have seen, where people get a higher than statutory minimum entitlement. So if there was going to be widespread abuse, if people were not going to be hired—because they had dependants—for that reason, we would see it happening now, and there is absolutely no evidence of that. I certainly do not expect that many—or any—small-business owners would behave in that way, and I suspect some will be offended by the suggestion that they would.

I do also want to take issue—sorry, there was one other point, just on the prorating issue. No, I’ll come back to that later. I’ll touch on the other point raised by Mr Simpson, which is that COVID has in some way been used as an excuse for this piece of legislation, and again I certainly wouldn’t characterise it in that way. COVID has been a very revealing period for New Zealand, and I think that any Government would be foolish if it didn’t try and draw some lessons from the experience of a global pandemic: the strengths in our society that it highlights, but also some of the weaknesses and some of the things that we need to improve. For our Government, the experience of a global pandemic has brought to the fore the question of workers having adequate sick leave so that their health is taken care of when they simply need to stay at home to get better, and also the value of that in terms of not passing on bugs to others in the workplace.

Here I want to come on to one of Ms Stanford’s points, which was an obsessive focus on what’s the productivity argument here. Well, I’ll come to that in a moment—productivity is important, but productivity is not the only reason why we have minimum entitlements in place for people in the workplace. We have minimum entitlements, such as decent sick leave and good holiday leave and the minimum wage, in the workplace because it’s about how we want to treat people. When it comes to sick leave, we want to ensure that when Kiwi workers are unwell they have a reasonable opportunity to stay at home and get better. I believe that it’s very clear that that will support productivity, because workers who come into the workplace and are unwell are unlikely to perform at the level that an employer would wish them to, and they are very likely to pass that on to others in the workplace.

In the second reading debate, I did refer to a relatively substantial United States study—which I am happy to get the details of for Ms Stanford—which did show a 20 percent impact on productivity from workers coming in when they were unwell. But, at its core, we want workers to stay at home not just for the productivity gains but so that their health and their wellbeing can be looked after. It also stands to reason that a worker who is able to take sick leave to stay at home and get better will recover more quickly, and therefore, when they do return to the workplace, are more likely to be back at peak performance in terms of the duties that they undertake.

I think those are probably most of the key questions that have been raised by members to date, and I’m happy to answer any further that come up.

RACHEL BOYACK (Labour—Nelson): Thank you, Madam Chair. It’s a privilege and a pleasure to take a call in the committee stage of this important debate. I just want to begin by responding to some of the comments raised from the other side around dependants, because I feel like I took a step back about 60 years into the 1960s around those comments, and I wasn’t even born in the 1960s but I’ve heard enough about that time to know that it felt like I was going way back in time. Because it kind of felt and it kind of sounded like employers wouldn’t hire women, and I know that wasn’t stated explicitly but it was certainly implied in the debate. And actually, what I want to talk about is the number of men I’ve worked with over the years who have campaigned to increase the sick leave for them in their workplaces. In one of my previous roles, I worked as a union organiser, proudly.

Hon Scott Simpson: Ah!

RACHEL BOYACK: I know, I know Mr Simpson. I know it’s hard to hear that there’s people here who understand working people—over here. Look at us over here. And so—

Hon Scott Simpson: The great aspiration.

RACHEL BOYACK: Absolutely, and these men were very aspirational for their families. In particular, they always were lobbying for increased sick leave in their workplace. And one of the arguments they would use around that was actually about caring for dependent children—and these were sawmills, male-dominated industries, and the men, when we were doing our collective bargaining, would always put a claim up to significantly increase their sick leave because they would tell me that when their children were sick, often their wives—if they were married to a woman—would have used up their sick leave, their five days of sick leave, to look after sick children, and that it would then fall to them. So actually, I want to counter the implied argument from the other side that somehow it’s people of a certain age or women who are the ones that actually take care of their children when they’re sick. And I know that the Minister in the Chamber tonight is actually one of those fathers that has modelled that and so understands exactly what I’m talking about.

I want to particularly talk about supermarkets, because in the second reading debate there were comments made around supermarkets being unable to afford this. I used some time in that debate to talk about my experience working alongside supermarket workers. The first thing to note is that Countdown already have eight days of sick leave, and they already accumulate more than the 20 days alongside other benefits. So for a large Australian-owned company like Countdown, it will not be much of a stretch to move from eight days to 10 days a year. The other main supermarket chain we have in New Zealand is Foodstuffs that owns our Pak ’N Save and New World supermarkets, and the majority of those supermarkets do not have a collective agreement in place and only pay the minimum of five days a year.

Hon Michael Woodhouse: What a lazy union that must be.

RACHEL BOYACK: These supermarkets are owned by multimillionaires, Mr Woodhouse, and they can afford to pay 10 days a year. They certainly can. And so—

Hon Michael Woodhouse: Sounds like the trades hall.

RACHEL BOYACK: Isn’t it a great thing? Trades halls are great places. So look, the point is is that for those employers, they can and they should be paying more. And as many commentators have pointed out today, it’s actually critical for the community, for the customers of those places. How would you feel going into a supermarket knowing that there was somebody there who should have stayed at home but did not have enough sick leave and actually was pressured and felt obligated to go to work and then they’re serving you food across the counter?

That’s the risk that we take, because if workers don’t have access to sick leave, they will either use annual leave, which is a bad thing to do because annual leave should be used for proper rest and relaxation; they’ll take leave without pay, which will impact on their ability to pay the rent or the mortgage; or they’ll go to work, and when they do that, they put their own health and safety at risk, they put the health and safety of their colleagues at risk, and their customers. But workers are often placed in these incredibly difficult situations. So increasing sick leave for these workers, I’ll just finish up by reminding everyone, will have a positive impact on the wellbeing of workers and the wellbeing of our community, and it’s the right thing to do. So thank you, Madam Chair.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair, for the opportunity to speak to the Holidays (Increasing Sick Leave) Amendment Bill. I’ve got a number of points and, in many cases, associated questions for the Minister. So I’ll just get right into it with a query around the number that’s involved. So an increase from five to 10 is being contemplated, but I wonder if there was consideration given to any other number—any other number greater than five, presumably, to be consistent with the Minister’s intention with the Act. Was it contemplated, for example, that—in fact, looking at the regulatory impact statement, I understand there’s a sort of strangely specific example in the negative. They’ve said that eight or 15 days per year were not contemplated. But I wonder if there was any particular rationale for the calculation of 10, other than it’s just a nice round number, I suppose, and double the current one.

Also, actually, more fundamentally, taking into consideration and taking in good faith—although the argument’s sort of been advanced in favour of the bill—do these arguments not also apply to a scenario of unlimited sick leave? If productivity increases the more that a person is able not to be present when they are sick, then is there any good rationale for drawing the line at 10, as opposed to any other number or, indeed, any number other than, say, 365 days per year?

Just to be clear, for the sake of the record, I’m not advocating that there be an unlimited amount.

Marja Lubeck: Sounds like it.

CHRIS PENK: Indeed, on this side of the committee, we are pretty clear, I think, to most people who are listening and paying attention, Ms Lubeck, that, in fact, we’re not arguing for any change in the status quo at all. But in terms of the Minister’s rationale, why should there be a limit at all and why should it not be the case that an employee, or worker, I suppose, in general—I should check the language of the Act, but, in any case, I’d love an explanation as to where (a) the line should be drawn at 10 as opposed to any other place, or (b) be drawn at all. So that’s the first point and associated question.

The second is, I wonder if the Minister can advise me and, not having been particularly involved at previous parts of the passage of the legislation—it’s a genuine question and I don’t know the answer; it might have been contemplated. I wonder if there was a scenario where the Minister has considered a half-way house whereby a person might be well enough to work, in their own right, but presenting to a physical workplace would represent a risk to their colleagues. That spectre has been raised by the Minister and others in proposing the bill. But I wonder if there will be a more nuanced approach, particularly in the light of COVID-19, which, again, has been referenced quite extensively across the committee, whereby there might be a scenario where a person is willing and able, indeed actively would rather not—excuse me, I’m confusing myself here, Minister and Madam Chair. I’m thinking of a scenario where a person is willing and able to work and would actively rather not have time off—and, believe it or not, those situations do arise. It can be difficult and stressful not to turn up to work and to have deadlines missed or obligations to third parties not fulfilled and so on. Is there a scenario in which a person, under this proposed legislation, might be able to be absent from work, work from home, but not be taking sick leave as such? I don’t know if that’s in the scope of the bill, so a genuine question there as to whether that was part of the Minister’s consideration in putting forward this proposed law change.

Finally, just really more of a comment in terms of the way that the debate has sort of played out so far. I wonder if members opposite might acknowledge that given some employers do already offer 10 working days—10 days of sick leave, rather; non-working days, I suppose. Given that that’s already in some cases in place already, might it be the case that employers who are able to afford to do so are already doing so? I don’t think we should think the worst and expect the worst and assume the worst of employers any more than we should assume the worst of employees when it comes to these matters.

Finally, we’ve heard about absenteeism and presenteeism, and, clearly, the message must be that balance is needed. It is possible to get too much of a good thing, so I think I better conclude my remarks at that point.

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): Thank you, Madam Chair. Can I start by acknowledging and agreeing with the member Chris Penk’s final comment there. In answer to his other questions, he asked a couple of questions effectively related to what is the appropriate point at which to draw the line, and what did we contemplate in respect of this legislation?

He asked about the prospect of unlimited sick leave, which, in the trade, is often called “flexible sick leave”—and, actually, a surprisingly large number of employers, in my observation, an increasing number of employers, do offer what is called flexible sick leave, whereby employees don’t have a fixed cap on the number of days that can be taken, but the number of days is effectively managed based on the employee’s need and the ongoing employment relationship. There’s relatively good evidence out there to show pretty good health outcomes and also to show that, actually, if taken in the round, it doesn’t increase the overall number of sick leave days that are taken. So it’s not an unreasonable prospect.

For the purposes of this legislation, though, we wanted to keep it a reasonably simple piece of legislation that could be interpreted relatively easily by employers. It was, broadly speaking, within the current framework that met our objective of ensuring that New Zealanders do have adequate sick leave and that struck a reasonable balance. Taking all of those things into account, taking account of the fact that around about half of employees in New Zealand do currently have 10 days or more, 10 days in the end is a place that we have settled in terms of the legislation.

In respect of the member’s second question, which he termed a “half-way house” option—the working from home option—we don’t really need to make any changes to this legislation to contemplate that, because it is something that can be worked through in the normal course of employment relationships at the moment. An employee in that situation who did not feel that it was appropriate to come into work, because they were worried that they might spread an illness, but is still willing to carry out their work, but to do so from home, can arrange that currently under the terms of their employment agreement and in discussion with their employer, and that would be considered a day at work under those circumstances.

So I think we do need to allow for a bit of flexibility and for the employment relationship, to some degree, to deal with those sorts of circumstances, and I’ve observed in recent times, in fact, in this complex, some colleagues who have, effectively, done that—have taken a more precautionary approach to perhaps a common cold—where, in past years, they might have come into work and spread it around, but because of the heightened awareness around COVID have taken a precautionary approach, stayed at home, Zoomed in, and done their work from there. We can do that within the existing employment provisions that are in place.

MARJA LUBECK (Labour): Thank you, Madam Chair. I think the Minister in the chair, Michael Wood, put it quite succinctly in one of his responses where he said it is about how we treat people. That’s exactly what it is. People should be able to take sick leave when they are unwell. They shouldn’t have to worry about their jobs or their incomes when it comes to that regard. That is something, as has been pointed out a few times now, that COVID has taught us—the really quite detrimental potential consequences if people do turn up to work sick, and especially during a worldwide pandemic.

Now the Minister did mention, I think it was called, flexible sick leave. At Air New Zealand, in fact, when I was there, we had what was called “undefined” sick leave, and it was quite interesting to see that despite people having an unlimited number of sick leave days available to use when the need would arise, sick leave numbers didn’t go up. In that aspect, I think it is quite sad to hear from the Opposition a lot of statements on hearsay; in theory, when people have more sick leave, they are going to take more sick leave. It shows a very dim view of how they view working people, and I think that’s quite sad to see. I would like to ask the Minister if there’s perhaps any data on corroborating those statements from the Opposition. Is there, in fact, any data available that shows that workers see sick leave as an entitlement and hence take this entitlement in greater numbers if sick leave is increased?

Now, what we did hear all through our submission process in select committee is that five days of sick leave really isn’t sufficient, and we have seen that our sick leave in this country is low when you compare it to other countries, for example Australia. But the other thing that we really need to point out is the fact that not only will it make people hesitant calling in sick if they may perhaps have detrimental consequences by calling in sick, perhaps even losing their jobs, but there is a culture in New Zealand where people just toughen it out, where they soldier on, and we did hear that in particular from some of the submitters during our select committee process.

The Public Service Association (PSA) told us that members told them that there is a predominant attitude in New Zealand to “man up” or soldier on, especially when it comes to paid work commitments. The PSA did tell us—and this goes back to that productivity argument and what is termed “presenteeism”—that they had research available that showed that healthy employees are nearly three times as productive as people that potentially come to work not feeling quite up to the job and feeling a little bit ill. So it is a logical conclusion to say that people who continue to work whilst they are sick is risking also getting more people sick, and then, again, that that productivity argument just continues on, not only for the person themselves but, again, for their workmates.

In general, I think fostering a long-term culture of employees using sick leave rather than soldiering on—so using that sick leave when they need it rather than soldiering on—is a good thing, and it’s something that we should, as a Government, absolutely enforce and say not only is it about the productivity aspects but it’s also about the fact that people shouldn’t be able to take their germs and their bugs into the workplace. So I think, yeah, as the Minister already also said in one of his responses, it is really about simple maths—but, of course, we do know that the Opposition isn’t very good at adding up and mathematics, so perhaps that’s where they got it wrong. But I would like to conclude my contribution with that. Thank you, Madam Chair.

Hon MICHAEL WOODHOUSE (National): I found myself in the very rare if not unique position in the first 30 seconds of that contribution by Marja Lubeck to be strongly agreeing with her. She then went on and said some rather interesting things that I strongly disagreed with, but the one point she made at the very start of that contribution was that we have very little data on this. Indeed, the regulatory impact statement and the departmental disclosure statements have a paucity of information about what problem we’re trying to solve. Are we trying to solve a problem that there is insufficient sick leave to manage appropriate absenteeism? Are people, as many contributors have said, exercising presenteeism? We’ve heard anecdotes of that but we have no data about it.

The Minister has referenced in previous speeches on this topic the Southern Cross and Business New Zealand report, the latest of which was in 2018, which demonstrated that, I think, there were 7.4 million days of time lost through illness in New Zealand in 2018, and that that constituted on average per full-time worker equivalent, I think, of 4.7 days per year. Now, the Minister has also said that half of our workforce actually already have 10 days, and so at a macro level there is an entitlement on average of 7.5 days per year. If workers are on average taking 4.7 days a year, it seems at least on the face of it that the case for change hasn’t been made.

So my questions to the Minister are these. Firstly, what evidence is there that there is abuse of sick leave? I think that’s important. There’s no point throwing epithets out that suggest that there is widespread abuse of sick leave provisions—certainly, I can give anecdotes as well, as an employer of some long period of time, but I would resist the temptation to draw a conclusion about the New Zealand workforce more broadly on the basis of anecdote. But similarly, I don’t believe, and I have searched, that there is evidence yet of the phenomenon of presenteeism on a widespread basis and the data from the Southern Cross Business - New Zealand report would back that up.

Now, Marja Lubeck then went on to talk about sick leave entitlements being low. I don’t think that’s the case, and the so-called culture of “soldier on” is not evidenced by the data. Indeed, I would be very interested in seeing the 2020 data, and I encourage the Minister to look into that when it’s available, because last year illness fell off a cliff. We were all worried about a pandemic. That is true. But when normally 400 people a year die of seasonal influenza—more than 400—and thousands are hospitalised, the death toll last year from seasonal influenza was zero. So we had a cold and flu season that was completely wiped out virtually by the fact that we started at home, we didn’t import influenza—because we were keeping COVID out we actually kept seasonal influenza out. And one would imagine that as a consequence of that, the total number of days taken, time lost, through illness last year should have dropped as well, quite significantly. So it will be interesting to see, particularly given our productivity went down—we actually worked at work fewer days—whether or not the case for change, the case for this legislation has been made.

So my question to the Minister is twofold, effectively. Am I correct in saying that there is no evidence of abuse of the sick leave process on a widespread basis but it’s equally no evidence of presenteeism going on, and does he think that that would be good data to collect? Because it seems to me that in order for us to consider whether this has been a success or whether we need to do more or less or something else, actually we need a much better evidence base, because, as far as I can tell, it doesn’t exist.

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): I thank the member for his questions. In respect of the evidence the member speaks about, I have not seen widespread evidence of abuse of sick leave across the workforce. There will, of course, in any large-scale group be isolated examples that people will come across from time to time, but certainly that’s never been presented to me. In respect of evidence of presenteeism, I would point the member to the evidence that’s been presented to the select committee in the course of submissions. We have very clear evidence that has come through there of people with minimal sick leave entitlements who have come to work when they’re unwell.

Hon Michael Woodhouse: Clear anecdotes.

Hon MICHAEL WOOD: The committee receives evidence as part of its hearings on a piece of legislation. This is real-world evidence from people. It is manifestly clear to me that there are workers who, through no fault of their own—they do their very best in their workplaces—will face situations where due to their own illness or the illness of dependants, they need to access more than five days of sick leave per year and do not currently have that. That is the fundamental problem that this bill is attempting to resolve or mitigate, and I just challenge any member to seriously mount an argument that we don’t have workers in our society who need more than an entitlement of five days per year given those realities of life.

In respect of the second set of questions that Mr Woodhouse asked, he rightly noted that a range of factors over the course of the year of COVID have resulted in a range of measurements in relation to communicable diseases being significantly reduced, and he noted influenza as being one of them that’s of sentinel measure in our society. Of course, a big part of that were the heightened public health measures, but I think a very big part of it was the fact that people have had a much, much greater awareness of the need to stay at home when they’re unwell to prevent spreading illnesses. Now, the main driver of that has been COVID, but I have absolutely no doubt whatsoever that it’s had significant flow-on benefits.

In my first comments in this debate today, I did note that there is some early evidence emerging from Government departments which is coming through, I think, in the answers to Estimates questions, that the number of sick leave days taken over the course of last year in those Government departments has decreased significantly. So bringing those two things together in answering the member’s question, it is my view that where we have provisions that mean that workers don’t come into work and don’t spread their bugs, there is some positive outcome there in terms of not increasing the need for sick leave across other workers in the workplace.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. We’ve learnt quite a bit, actually, in this debate, so it’s useful and I thank the Minister for his indulgence in giving us an insight into his thinking on some of these subjects. But I want to come back to this question of prorating because it is an issue, and it is an issue that exists currently, but is only going to be exacerbated by these changes that are being proposed by this piece of legislation. Notwithstanding that the Minister has made the point that sick leave for a part-timer under this legislation is available only on the day that that part-timer would normally work, the simple reality is that that 10 days is available and there will be cases and instances where it will be used. I know from my own personal experience as an employer and a business manager that there are some employees who manage, every year, to use every single day of their entitlements, and there are some, equally, who manage simply not to use any of it. The balance probably is somewhere in the middle, and that’s the practical reality. But what this legislation does is it upsets that balance disproportionately against smaller businesses.

I want to draw the committee’s attention to a submission made by Retail New Zealand. At select committee, their chief executive, Greg Harford, made, I think, a very good point that the vast majority of part-timers in their sector choose to work part-time for a whole lot of reasons. They don’t want to be full time as it suits them to be part-timers. They think that up to 20 percent of people working in the retail sector are actually employed on a part-time basis. What this bill will do is actually encourage retail employers—instead of employing part-timers, they will be encouraged, by dint of this legislation, to employ full-timers. The simple reason for that is that if a business employs three part-timers, they face a potential sick leave liability per annum of 30 days, but if they employ and were to convert those three part-time jobs to a full-time job, then their sick leave liability risk is just 10 days. So that’s the simple maths of the situation, and notwithstanding the views of those that have come to this Parliament from the trades hall, that’s the practical situation that exists in business. Businesses will adapt, adopt, and modify their business in the face of Government-imposed costs and legislation, and they will adapt, adopt, and reconfigure their businesses to be profitable and to be competitive. If this is just another cost on a business, albeit with good intention, then businesses will adjust the way they employ and the way they hire and the way they take on people and their businesses.

So a helpful solution to this is actually my proposed Supplementary Order Paper 36, which the Minister may like to consider, which would effectively provide an opportunity to achieve a prorating concept that would simply and easily be adopted. So I would like the Minister to give that some consideration and to give it some thought, because prorating and the issues around prorating are deeply significant. As I say, this is something that is already an issue, only exacerbated and made far worse and far more front of mind, particularly for small-business operators. Members on the Government side are very quick to cite large, sometimes internationally owned, corporates who actually can have the bandwidth—if I can put it that way—to accommodate these extra costs that are being foisted upon them. But it’s the small-business operators who don’t have that flexibility. They don’t have the flexibility that the large businesses do. So I would commend my Supplementary Order Paper to the Minister and look forward to him and his party supporting it.

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): Look, I have commented on this a number of times already, but just to make another comment in terms of the point that Mr Simpson is making around prorating. It is good to know that he does have a relatively balanced view of things, because not only does he have such a dim view of employers that he thinks that they might discriminate against people who might have dependants in their hiring decisions; he also thinks that employees are just sort of primed and waiting to take advantage and play hooky and use all of their sick leave when they’re not already sick. I have a much more optimistic view of human nature and the way that Kiwi workers and employers treat one another, on the whole.

I do note that in respect of his Supplementary Order Paper 36, and I don’t know if he’s actually realised this, it would actually reduce—literally reduce—the sick leave entitlements below what many New Zealand part-time workers currently have. The number two effect of the Supplementary Order Paper would mean that any worker in New Zealand who works less than 2½ days per week would receive less than the current statutory minimum of five days’ sick leave per year, and I’m certainly not going to support a Supplementary Order Paper that actually reduces the currently available sick leave entitlements of New Zealand workers as we’re coming out of a global pandemic, which really points to the need for workers to have adequate sick leave.

DAVID SEYMOUR (Leader—ACT): Well, that was an extraordinary statement from the Minister we heard just a moment ago. He said that he takes an optimistic view of workplace relations, and I think that’s certainly true. Optimistic—hopeful, perhaps. He said that he doesn’t think that there would ever be discrimination based on people having dependants. Well, here’s a bit of reality: the more laws the Government makes that entitle people to extra leave, the more expensive it is for employers to employ people who are more likely to take leave. If his view of human nature is really that no employer has ever looked at an employee and thought “Is this person more or less likely to take leave?”, then, first of all, there’s a whole range and manner of statistics in the employment literature he won’t be able to explain, but also he’s just out of touch with basic reality.

Then he said “Ah, such a dim view that Scott Simpson has”—that nobody will ever take advantage of sick leave when they aren’t sick. Has he spoken to the employers in his electorate even? To the hairdressers who say “Actually, I know that my employees will take advantage of this.”? That’s what they’re saying out there. That’s because this Minister, as he says, has an optimistic view of human nature when it comes to workplace relations. Well, actually, if it was true that all people were angels, we wouldn’t need to be here making rules to try and restrain undesirable behaviour. It’s a totally illogical construction that he’s put on the way workplace relations actually work.

So here’s a couple of realities. The Minister can say that he wants this law because he thinks it’s important that there’s more sick leave, for any number of reasons, but it’s also important to confront the reality that employers are concerned that employees will take advantage of it—not all of them, not most of them, not even many. But the idea there’s not a concern among employers that people are going to take advantage of this—and you watch: sick leave rates will go up at the margins because of this law—is a denial of reality, and the reality that people trying to run small businesses face needs to be put on record in this committee.

Here’s the next thing. The Minister says he doesn’t think that there would ever be discrimination based on circumstance. He thinks that it’s possible to regulate up the cost of people taking leave, and he doesn’t think that’s going to have a cost for people more likely to take leave in the view of some employers. You know, we’ve got to acknowledge the reality that that will happen. So I say to the Minister that there’s people watching—actually, no, there won’t be, because they’ll be out working. But people who are actually out working, if they hear about this later, will say to him “Let’s have some reality.” It’s nice that the workplace relations Minister has an optimistic view of human nature and employment law, but if he was right, we wouldn’t need employment law.

JO LUXTON (Labour—Rangitata): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

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.

A party vote was called for on the question, That clause 1 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.

Clause 1 agreed to.

A party vote was called for on the question, That clause 2 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.

Clause 2 agreed to.

A party vote was called for on the question, That clause 3 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.

Clause 3 agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Hon Scott Simpson’s amendments to clause 4 set out on Supplementary Order Paper 36 be agreed to.

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

Ayes 43

New Zealand National 33; ACT New Zealand 10.

Noes 75

New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.

Amendments not agreed to.

A party vote was called for on the question, That clause 4 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.

Clause 4 agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Jan Logie’s amendments to clause 5 set out on Supplementary Order Paper 34 be agreed to.

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

Ayes 10

Green Party of Aotearoa New Zealand 10.

Noes 108

New Zealand Labour 65; New Zealand National 33; ACT New Zealand 10.

Amendments not agreed to.

A party vote was called for on the question, That clause 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.

Clause 5 agreed to.

CHAIRPERSON (Hon Jenny Salesa): Jan Logie’s amendment inserting new clause 5A as set out on Supplementary Order Paper 33 is out of order as being outside the scope of this bill.

A party vote was called for on the question, That clause 6 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.

Clause 6 agreed to.

A party vote was called for on the question, That the Schedule 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.

Schedule agreed to.

Bill to be reported without amendment.

Bills

Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill

In Committee

Part 1 Amendments to the Building Act 2004

CHAIRPERSON (Hon Jenny Salesa): The question is that Part 1 stand part.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Chair. I thought the Minister might have been jumping to her feet to enlighten us all on this lovely piece of legislation passing before the House. But that’s quite all right. I’m happy to delve in and ask a few questions on it. Broadly, we’re pretty supportive of this. Ultimately, the building industry has huge potential at the moment to contribute to our economic recovery.

Having said that, there are a few little constraints that are holding back businesses—compliance, red tape bureaucracy; typical things that every business, every industry, faces, actually. But this is an encouraging step to look at streamlining some of that. So, broadly, we’re supportive of that. We have supported the stages so far, and haven’t seen any particular amendments proposed in the committee stage that would alter that for us.

But there were a few questions I had of the Minister, because some of the concerns raised by submitters, particularly in the definition of “building products” and “building methods”—that’s one of the key areas that I just wanted to get a bit of clarification from the Minister on, because it, to me, seems like one of the most critical areas. Again, the concept of this bill is good. But, as with most things, the devil is in the detail. So how do we have confidence, or what confidence does the Minister have, around the accuracy of the definitions in terms of—we heard from some submitters, actually, that they were too broad, but other submitters said they were too narrow. Then other submitters, again, said they were actually defined adequately elsewhere so didn’t need to be included in this bill.

I’m really keen to get the Minister’s take on how she’s landed where she has with those definitions, and any particular concerns she had around whether the wording of that was ambiguous or might lead to a slowing down or overburdening of the process by adding red tape into it, if people are actually taking longer to navigate through what is or isn’t a building product or method in their particular instance. Then, ultimately, we’re trying to streamline the process here. The risk is that we don’t if they don’t have a clear picture on that. So if we could start with that one, that would be wonderful.

Hon POTO WILLIAMS (Minister for Building and Construction): Thank you, Madam Chair, and I thank the member for his question, and I thank members in the House. I just want to make a few opening remarks, and then I will come to answering the question that’s been posed by the member.

This is, as you will appreciate, part of the wider reform—as you, Madam Chair, will appreciate—programme to improve the efficiency and quality of building work, and to provide fairer outcomes when things go wrong. It is a matter of wanting to ensure that there is trust and confidence in the system and it also lends itself very well to the Government’s programme to speed up the supply of housing and create an economy that grows and works for all New Zealanders.

The bill amends the Building Act in three main ways. Firstly, a new system for building product information, the requirements for that, and to support better and more informed decision-making, particularly around what may happen within the building consent authorities (BCAs); secondly, it introduces a new voluntary scheme for modular component manufacturing, to provide faster, more consistent building consent approaches for manufacturers who are able to meet the quality and performance standards that we’re setting; and thirdly, to introduce new registration requirements for product certification bodies. That allows, also, the Ministry of Business, Innovation and Employment to have greater oversight over the product certification scheme.

To speak directly to the question posed by the member with regards to building product information requirements, it is really important that manufacturers, suppliers, and distributors set a minimum set of information about building products, and make that publicly available. There is a lot of information in the wider sector, and it’s about us accessing information that has already achieved requirements and has already met standards in other jurisdictions. So allowing us to leverage off that work is part of the issue—that we are ensuring that product information that’s already available, that is already part of another jurisdiction, is readily available so that when it comes to making decisions about the use of products, someone can make a much more informed decision about that, and also providing evidence that that product and the product claims are accurate and up to date.

Around the comment that the member made with regards to ensuring there is some confidence about that, we are asking building consent authorities to look at their building decisions much more quickly, and to be much more better-informed of product information, because they will have access to information that is publicly available which hasn’t been in the past. So building owners will benefit from having better-quality building work, saving time and money on less re-work, and much more efficient consenting. That’s where this piece of work really sits. Providing certainty and much more consistency across the BCAs is a really important part of this work—it’s actually what we all want, isn’t it, at the end of the day, because there is variance in BCAs and how they address this. So if we have some consistency around product information, that’s more readily available, people can make great decisions, much more better-informed decisions, about that, and build a level trust and confidence in the system.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Chair, and thank you, Minister, for that information. I guess where I’m wanting to go with it is just to delve into a bit more around the definition as well. I agree that, yes, having that product information at hand is very useful and trying to streamline or get more consistency across the numerous building consent authorities that we have would be fantastic. I don’t think there’s many industry players that wouldn’t wish for that.

But I’m just mindful of the submission from the Frame & Truss Manufacturers Association of New Zealand and their view around building products versus building methods. So they’re putting together a wall frame or a truss system by utilising a number of different products in terms of the nail plates and the timber, for example, that they might be using to build that, but they are then producing a separate building product, even though they’ve gone through a method, and they’re saying, “Well, is what we’ve produced a building product or a building method because of the system in which we’ve done that, and how is that being considered from a definition perspective in relation to this bill?”

Particularly, they were concerned around new section 9B(1)(a) of clause 7 just being a bit vague, and that’s where it comes back to that first comment I’d made around having consistency or certainty that we aren’t just getting ourselves into a bit of an ambiguous space. That particular clause specifies that “(1) In this Act, building method means a method—(a) for using 1 or more products or things as part of building work;”, but “products or things” has no definition under this bill. Whereas what they’ve proposed in their submission was actually to change that to “for using building products as part of building work;”, which just gave it a little bit—it felt like it was a bit tighter.

I wonder if the Minister has any comment specifically around that proposal from them but also around the broader concern, then, around the variance between building products and building methods, how that sits for businesses who are going through that pipeline or different aspects of the supply chain and merging some of that together and then creating something else, and how that sits under the certification process.

Hon POTO WILLIAMS (Minister for Building and Construction): Thank you. I just want to confirm with the member: we’re talking clause 7, inserting new section 9A and 9B?

Tim van de Molen: Yes. Yeah. It was 9B(1).

Hon POTO WILLIAMS: Yep, cool. Thank you for that. I just want to let the member know that new section 9A defines the building product as a product that “could reasonably be expected to be used as a component of a building;”—the definition of a building product. But new section 9A also outlines the matters that must be considered when determining whether something could reasonably be expected to be used as a component of a building, and these are the components of that: “(3)(a) the purposes for which the thing is ordinarily used: (b) the purposes for which the manufacturer or supplier intends the thing to be used: (c) the purposes for which the thing is represented as being used for: (d) the purposes for which the thing is likely to be used (because of the way in which it is presented or for any other reason).”

In terms of building method, this is defined as “a method—(a) for using 1 or more products or things as part of building work;”. The bill allows for specific products and methods to be or not to be declared building products and building methods by Order in Council, should this be necessary. I also want to just advise the member—who will be aware of this anyway, I’m sure—that there is, sitting alongside this, a set of regulations which are currently out for consultation, and that will allow much more specificity and assist in the definitions and the purposes which this bill intends to effect.

Hon Julie Anne Genter: Madam Chair.

Tim van de Molen: Madam Chair.

CHAIRPERSON (Hon Jenny Salesa): I call—

Tim van de Molen: Madam Chair, just on that same topic, if I may.

CHAIRPERSON (Hon Jenny Salesa): OK, if it’s on the—I call on Tim van de Molen.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Chair, and I appreciate the member there. Just to finish on this particular topic, just exploring the regulations side of it, because there was a bit of concern that was raised by the Regulations Review Committee in relation to the “Henry VIII” power in terms of the outline under the Order in Council being made, around that particular definition. So just wondering if the Minister in the chair, Poto Williams, can give a bit of confidence to the committee in terms of that—how we can ensure that we’re getting that balance right between, obviously, wanting to enable innovation with new products coming on board, to adapt to that, but also ensuring that we’re still able to have confidence in that underlying legislation. Of course, then, sitting alongside that, a question of, well, are we then proposing that every building product will be clarified or named under that process or not? And the time frame—what is her expectation of how long it would take to have a product certified, coming back to that original question of are we actually producing a more timely system here? Thank you.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Chair; tēnā koutou e te Whare. The Green Party is supporting this bill, but I want to raise a really specific issue that I know I’ve discussed with the Minister in the chair, Poto Williams, before, and that has to do with the submission from Master Plumbers and specifically on how this regime could help ensure that people can be assured that their tapware for drinking-water is safe. My understanding is that some tests that have been undertaken of random products in New Zealand have shown that there are tapware products for drinking water that are leaching unsafe levels of lead, sometimes as high as 18 times higher than what the Ministry of Health currently deems is safe. But on top of that, what is deemed safe and our current tolerable limit for lead is, arguably, way too high. You know, the United States, Canada, parts of Europe, and now Australia are moving towards a zero-lead or a lead-free standard for all drinking-water tapware products. Within Australia, my understanding of the way that their compliance regime works is that there has to be mandatory third-party testing to ensure that the products are safe.

Minister, what I’m concerned about is that this is somewhat voluntary, the system that it’s setting up. So the purveyors of certain products can provide a certificate saying that it’s safe, but there’s no requirement or regime set up by which there’s an independent third-party body that’s responsible for testing that. The reason I raise this is—I mean, we don’t talk about it enough here in Aotearoa New Zealand, but there is no safe level of lead exposure for young children, and there’s no way of remediating it once they have been exposed to lead. It has irreversible impacts on brain development. So it’s extremely concerning, and I don’t think that consumers are aware of just how random it could be that they could be purchasing a product or have a contractor who’s purchasing a product off Trade Me that they’re using in their kitchen to fill up water glasses to drink from, and it could be leaching unsafe levels of lead. I think it’s definitely worth addressing, and so I’m wondering if the Minister can comment on that.

Hon POTO WILLIAMS (Minister for Building and Construction): I thank the member for the question. I guess, like myself, the Master Plumbers have been huge advocates of this work in ensuring that lead is not in our drinking water. Some of the recent issues that have happened across the country would lead us to have sympathy for that point of view. I do have to say that the process we’re hoping to initiate here will give the Ministry of Business, Innovation, and Employment (MBIE) much more opportunity to monitor and then consider whether to take prosecutions or penalise those suppliers and those manufacturers of that tapware that doesn’t meet standards.

With regard to having a voluntary code as opposed to something that is far more regulated and monitored, we’ve decided to go for a balance here. We believe that there is lots of information out there that is available for people to make the rights kinds of decisions for the tapware and the products they use. However, the balance we need to have here is about having a fully regulated system where all products are put through a particular process, and that would be hugely onerous and would not meet our intentions of being able to build quickly and build quality in as well.

I think with regard to the discussion that I had with the Master Plumbers, and you may have had this conversation with them as well—apologies, Mr Chair. This may have been a conversation that the member had with them as well, in that some of the products that they talked to me about were products that they purchased over the internet, not through what we would call the usual supply market, and we know that our suppliers and our manufacturers are self-regulating in the way they produce their products. So in this regard, if they are not, then our process puts in a level of ability for MBIE to then do the work they need to do to ensure that those products are no longer available for purchase.

That’s the impression I got from them in the discussions. They were quite concerned about the product standards for products that come from overseas for plumbers that were purchasing over the internet and did not have the normal safeguards you would have going through a normal process.

Hon JULIE ANNE GENTER (Green): I thank the Minister. Just in slight reply, my understanding is that 80 percent of the people supplying into New Zealand are supplying into Australia, where they would be required to get the third-party independent testing to show that it’s safe. So I’m just curious about the assertion that it would raise costs in some way to ensure that we’re eliminating from our market any products that might be leaching lead into drinking water. I don’t know a single parent who would say that they prefer to save money and cause their child irreversible brain damage by having public health impacts.

So I really question whether or not this is striking the right balance when there is no safe level of lead and it’s impossible to remediate once someone’s been exposed. Arguably, the most vulnerable people in our community are the ones who are least likely to know the products and to have the means to ensure that the products that are being installed in their homes are to the standard that we would expect. I hear what the Minister is saying—that this regime will enable the Ministry of Business, Innovation and Employment to do more—but I would argue very strongly that we are far behind the rest of the world on this and that we need to move towards a lead-free standard for all drinking-water products. Of course, there are other issues around lead and drinking water which might be the responsibility of councils, but there are very widespread, long-terms public health impacts from lead that we have to confront and do something about.

Hon POTO WILLIAMS (Minister for Building and Construction): I completely concur with the member on that. With regard to the products that come through the Australian system, we will leverage off that system in terms of product safety.

With regard to lead in the water, you’re absolutely right, and I completely agree that there is no safe level of lead in our drinking water. I support local authorities, local councils, in their testing of water. I think there is a co-relation the member is wanting to draw with some of the products that are used by plumbers that may then lead to leaching of lead into drinking-water supplies. I have to say that some of the information that I have seen with regard to resting doesn’t demonstrate that, doesn’t prove that.

However, I think that part of the issue is the selection of products that people put into their homes, and there’s no way—I’m wanting to say to the member—that the balance is cost versus health. That is not the argument here. The argument here is ensuring that we get the best product information, that people can make well-informed decisions, and that we have systems set up that leverage off all the information that is available that can then be put out to the public so they can make the best choices that they can in terms of the products that go into their homes.

STUART SMITH (National—Kaikōura): Thank you, Mr Chair. I just want to explore what my colleague Tim van de Molen talked about in clause 7, which inserts new sections 9A and 9B. I want to draw the Minister’s attention to new section 9A(3), which says, “In determining whether something could reasonably be expected to be used as a component of a building, the following are relevant considerations: (a) the purposes for which the thing is ordinarily used: (b) the purposes for which the manufacturer or supplier intends the thing to be used: (c) the purposes for which the thing is represented as being used for: (d) the purposes for which the thing is likely to be used (because of the way which it is presented or for any other reason).” But it goes on into subsection (4), saying that “The matters listed in subsection (3) are relevant, but not determinative, considerations and do not limit what may be considered.”

The Regulations Review Committee, as the Minister will be aware, was very concerned about the “Henry VIII” powers in this particular clause. My question to the Minister is: how can this be justified? While we’re supporting the bill, I certainly have concerns about this. Always the officials would like to expand their ability to make regulations and do it, and the regulations won’t have the same scrutiny that this bill has. I certainly have concerns about this, because overreaches are something that happens over time. I think this is a relatively small but actually quite important step down that path, and it’s something I’m not that comfortable with. I don’t understand how that can be justified in this bill to that extent.

The Regulations Review Committee recommended that it be much more strictly defined than in this iteration of the bill, and I think that’s a very fair observation from the Regulations Review Committee. I’ve not been a permanent member on the committee, but I have sat on it from time to time—and I note one of the members on the other side who is on the committee. It is a good committee, and they, quite rightly, spend a lot of time on the stuff that, quite frankly, would bore most people to tears. But it’s really important, and it’s important because the overreach in these things—these bits of legislation are around for a long time, and the justification for this being in here is that building methods and components will change over time; therefore, they need the flexibility. I accept that to a point, but the devil is going to be in the detail of those regulations, and we aren’t debating that. We’re debating the overarching legislation, and the Regulations Review Committee said it needed to be tighter.

I would just like to hear the justification as to why it doesn’t meet the standard that the Regulations Review Committee thinks it should.

DAVID SEYMOUR (Leader—ACT): Thank you, Mr Chair. I also would like to talk about clause 7 inserting new sections 9A and 9B into the Act.

In particular, I wonder if the Minister could explain the thinking behind having two pathways for a thing becoming a building product or a method becoming a building method. If we look at the new section 9A(1)(a), it says, “In this Act, building product means a product that— … could reasonably be expected to be used as a component of a building;”. It then goes on in section 9A(3)(a) to (d) to say, “In determining whether something could reasonably be expected to be used as a component of a building, the following are relevant considerations: … the purposes for which the thing is ordinarily used: … the purposes for which the manufacturer or supplier intends the thing to be used: … the purposes for which the thing is represented as being used for: … the purposes for which the thing is likely to be used (because of the way in which it is presented or for any other reason).” It then goes on to say that that list is “relevant, but not determinative, considerations and do not limit what may be considered.”

So, so far, what the law tells us is that a building product is something that could reasonably be expected to be used as a component of a building. It then goes on to give quite a list of possible considerations, and says these are “relevant, but not determinative,”—we could ask anything else—and then it goes on to say, “An Order in Council”—well, actually, we’ll get to that.

Then it says that in section 9A(1)(b), it could also be that a building product is something “declared by the Governor-General by Order in Council to be a building product.” Now, this leads to a very interesting conundrum. So a building product can be something that fits the definition of being expected to be used as a component of a building, according to the list that is relevant but not determinative, and, presumably, that would ultimately be interpreted by the courts.

But if something doesn’t fit that criteria, then the Governor-General, by Order in Council—which really means “the Minister”—can override all of those judgments and say that something is a building material after all. Logically, the second method of becoming a building material—having the Governor-General determine that something is a building material—could only be relevant if there was a will to define something as a building material that, according to all of the other considerations listed in the Act, wasn’t a building material. So something is a building material unless it’s not, but if it’s not, the Governor-General can still say that it is, and one has to ask what sort of criteria would be used in the Order in Council to decide that something was a building material, other than the definition that’s in the law.

The difficulty with this is that people already face enormous difficulty with confusion caused by regulation, and I know that people who look at this are going to say, “Well, how do you actually know whether something is a building product or not?”, because if it’s normally expected to be a building material, well, that sounds sensible. Then there’s a list of things that might form your expectation. Then it goes on to say, “But it’s not just those things. It might be something else.”, and then it goes on to say, “Actually, forget all of that. A Minister can just decide that something’s a building material.”, but it’s not clear why the Minister would want to do that if something wasn’t already a building material according to the first set of criteria.

So if the Minister could explain that, I think it would be inordinately helpful to people out there who are just trying to build houses and work out what they can legally use to do it—to have her explain it. I know I would certainly appreciate it, and I hope that she can.

New section 9B talks about what a “building method” is, and we face a similar level of confusion over what a building method is. It says that a building method is something that, of course, is a method of “using 1 or more products or things as part of building work;”, and that sounds like a sort of self-evident definition of building work. So it sounds as though something for using one or more products or things as part of a building work would be a building method. It’s really putting one or more things together. That is almost a definition of building—very helpful.

Then it says, “(b) for carrying out building work that is declared by the Governor-General by Order in Council to be a building method.” So there could be something that’s not using one or more products or things as part of building work, but, nevertheless, the Governor-General declares that it’s a building method after all, and it’s difficult to know what sort of criteria the Governor-General—or, at least, through the Minister—would use to decide that something was a building method, even though it didn’t fit the definition that’s already being given in the law.

It then goes on to say, at new section 9B(2), “However, a method that would otherwise be a building method under subsection (1)(a) is not a building method if it is declared by the Governor-General by Order in Council not to be a building method.” So it seems that a building method is putting one or more things together, and if it’s not, the Governor-General can say that it is. But if it is, the Governor-General can say that it’s not, but it’s not clear why the Governor-General would say that or on what grounds they would use, other than the law that people can actually read before them.

Now, I think it’s incredibly important that people who are trying to get on with the business of solving the housing crisis have some clarity about what the law is so that they know what a building method is that they’re allowed to use and they know what a building product is that they’re allowed to use, because at this point they certainly don’t seem to get much guidance from the law. If they did, then it wouldn’t be necessary for the Governor-General to be able to override them. On the other hand, if the Governor-General can just decide that something is or isn’t a building product or a building material, without any of the criteria that they use being defined, then one has to wonder why we bother putting any definition in the law in the first place.

So if the Minister could explain why her Government did the initial drafting this way—it’s been changed very little by the select committee—I think it would be enormously helpful for her to put it on record so that people can get a common-sense view of what a building product or a building method actually is. Thank you, Mr Chair.

Hon POTO WILLIAMS (Minister for Building and Construction): Thank you, Mr Chair. I find it curious that the member who’s just resumed his seat, David Seymour, wants to place impositions upon people who build houses that won’t allow them to build in innovative and creative ways. Perhaps that member knows something about the future of building that the rest of us don’t know? I’m not sure that he does. I don’t know whether that member has built a house or not, but I know that over the course of my lifetime, the way we build houses, the things that go into them to make them warmer and drier and healthier for us, has changed over time. Now, part of this discussion is about ensuring that we don’t close off opportunities for innovation and creativity into the future. I mean, you know, I think about things like the options of the way we do things with regards to technology—being able to 3-D print major components of things as well. I know the member is shaking his head, but it is an important point to note that we should not close off our options to innovation if we are wanting to make sure that we build for climate change, that we build for futureproofing.

David Seymour: Ha, ha!

Hon POTO WILLIAMS: And the member mocks and laughs, but that’s the whole point—that the select committee did very little to change this, because they were sure that there is an appropriate amount of scrutiny within this. Because, let me just say to the member, the safeguards within this bill include the obligation to consult and, as a disallowable instrument, may be reviewed by the Regulations Review Committee and disallowed by Parliament. Now, if that’s not scrutiny in terms of the definition that would be appropriate to people, I’m not entirely sure what is.

Now, before I go any further, I didn’t say this beforehand, but I do want to thank the committee for the work that they have done on this and I want to thank the officials who’ve worked on not only this part of the building reform but other pieces of work to ensure that at the end of the day, we build safely; we build buildings that we can futureproof, buildings that actually don’t cost us a lot to heat, buildings that, in terms of their maintenance and energy costs, help us to meet our obligations, and at the end of the day help us to build more homes for Kiwis.

DAVID SEYMOUR (Leader—ACT): That is a very good example, for people watching, of how not to answer a question in committee. The question was put. It was fair. I thought it was reasonable; it just wasn’t answered. Instead we got a Minister engaged in personal attacks, saying that maybe I had some intention to not support innovation and questioning whether I myself had built a house. I’m not sure how that’s relevant to actually reading the law. Many members haven’t built a house but they still have to vote on laws. Then she talked about a range of things such as climate change, which are completely irrelevant to the question.

The question is simply: if the law that we have defining a building product and a building method, as set out in this legislation that the Minister has brought to the committee, is adequate, why does the Governor-General need the ability to change it? If, on the other hand, the Governor-General has the power to define by Order in Council, then why is it that we have these definitions put in place? It is a simple question. It’s either one or the other. People will look to this and they’ll say, “Well, I actually want to know by reading the law what a building method or a building product is.”, and we don’t want to see that a building product can be defined in one way but then that definition can be cancelled. We don’t want to see that a building method can be defined in one way except if it’s not, and even if it’s not, the Governor-General by Order in Council can say that it is. People who read this law are really none the wiser as to whether it’s the courts or the Governor-General that decide, and if it’s the Governor-General, what criteria they use.

The questions are not complicated. I think it would be really helpful if the Minister, rather than attacking me in the Chamber, could just get up and not impugn any motives and not talk about innovation or climate change but just say how people who want to build houses in New Zealand should understand this law. I’ll give the Minister another chance to do that.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Chair. I actually thought that was a reasonably fair question from Mr Seymour, and had hoped for an answer on that. It actually comes back to the area I’d been seeking some clarity on earlier, as well, and I didn’t have answers on that, either—the two of those being in relation to new section 9A and around how someone can have certainty of their building product. Is there going to be a comprehensive or exhaustive list of all products? Because, based on what has just been canvassed by Mr Smith and Mr Seymour, if there is some uncertainty—and, as it’s written, there is—around the confidence someone can have in whether or not a product or a method complies, if there was an exhaustive or a comprehensive list of all products or all methods that they could use to then rely on instead, then that would be one way to provide some clarity. Obviously, part of the reason for having it written as it is is to allow for that flexibility for innovation, as the Minister has touched on, and that’s great. Innovation in the industry is fantastic, and I do want to ensure we support that.

So then my other question which I didn’t get an answer on was around what would be the likely time frame for actually having a building product or a building method determined as such. If a particular innovative product or method came up, how long would it take to have that determined to be, under this, as either being or not being a product?

Hon POTO WILLIAMS (Minister for Building and Construction): Thank you for that question. I just perhaps want to clarify one thing, and that is the extensive set of regulations that sit alongside this piece of work—130-something pages of regulations that will help the member in terms of determining some of the answers to those questions. In terms of how long it will take to determine products, I cannot say that with any definition. My hope and my desire with this piece of legislation is that we make it easier and that we allow also for that innovation to come into the process, as well.

TIM VAN DE MOLEN (National—Waikato): Excellent, thank you for that. Just a couple of other areas I just wanted to touch on briefly were in relation to the need for the modular component manufacturer certification body (MCMCB). This was one area that was touched on. I mean, we have the Ministry of Business, Innovation and Employment—“MBIE”. That then comes down to the MCMC—so the modular component manufacturer certification accrediting agency. Then we have the MCMCB, which comes down from that, and then we have the modular component manufacturer, “MCM”, below that.

Stuart Smith: Wouldn’t want to say that quickly.

TIM VAN DE MOLEN: No. It is quite complex, actually, and that was one of the things that came up from submitters: the different levels, the different acronyms, whether that was all necessary. I think I’ve just got that right going through there, but do we actually need to have that middle step of the MCMCB? There are a few submitters that said, “Well, what is the point of it?” I’d be really interested to get Minister Williams’ insight into why that particular aspect of it is critical.

But then I might also just delve into the next question. I feel there’s some desire to move on from the Chair, so while I’m on my feet, in regards to the levy use—so a separate topic—there was broad support for altering the ability of MBIE or the chief executive to utilise the building levy for different purposes to allow wider scope. I’d be really interested if the Minister could give some insight into some of the things that she would expect would be priorities for utilising that under the broadened scope that this bill provides for. What are a couple of the things that the Minister would see at the top of her list for utilising some of that additional building levy on? Thank you. [Bell rung] Mr Chair, whilst the Minister’s having a quick rummage through there, I’ll just give her a moment, if that’s helpful, perhaps?

CHAIRPERSON (Adrian Rurawhe): Tim van de Molen.

TIM VAN DE MOLEN: Thank you, Mr Chair—very good. So just in relation to the MCMCB aspect, basically what I’m looking for there is to try to understand: are we actually complicating this a bit more? It comes back to those initial comments I made at the start that the support we have for this bill is on the premise that we’re trying to streamline and improve the industry, make things easier, speed up the process so we can just get stuff done. And broadly, that is fantastic. My concern is whether or not that is actually a part of that, aligned with, also, those other questions I’ve asked. I think the Minister looks ready to leap to her feet with some enlightening answers, so I shall allow for that. [Interruption]

CHAIRPERSON (Adrian Rurawhe): Are you seeking a call?

David Seymour: No, I’m waiting for an answer to the last question.

CHAIRPERSON (Adrian Rurawhe): No, there’s someone behind you.

SIMON COURT (ACT): Thank you, Mr Chair. To the Minister: we certainly are still waiting for an answer to the last one from Mr Seymour, but I’d like to add a further question. During the discussion at select committee, the issue was raised about the modular component manufacturer having the opportunity to certify their own product as complying with the design. There was an issue raised by Engineering New Zealand and councils that having the designer check that the manufactured product actually met the design intent was an important safeguard. We were assured by officials that the auditing and checking functions included in this amendment bill were sufficient, yet there must still be a concern amongst stakeholders that, unfortunately, there is no role for the designer in checking whether a product they’ve designed and which is manufactured by an approved organisation actually meets the design intent and looks like the product they designed. So could the Minister provide some assurance that the controls in the bill are sufficient?

Hon POTO WILLIAMS (Minister for Building and Construction): I’ll come to the building levy that Mr van de Molen raised as an issue. The intent of this is to allow for, you know, a broadening of the scope that the levy can be spent on, and I guess, in terms of top of mind, monitoring, overseeing, and improving the performance of the building sector is probably right up there at the top of the list.

Debbie Ngarewa-Packer’s amendments set out on Supplementary Order Paper 26 be agreed to.

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

Ayes 12

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

Noes 108

New Zealand Labour 65; New Zealand National 33; ACT New Zealand 10.

Amendments not agreed to.

CHAIRPERSON (Adrian Rurawhe): The question is that

Part 1 agreed to.

Part 2 agreed to.

Clauses 1 and 2

CHAIRPERSON (Adrian Rurawhe): Members, we now come to the debate on clauses 1 and 2. These are the title and commencement clauses. The question is that clause 1 stand part.

TIM VAN DE MOLEN (National—Waikato): Yeah, thanks. Just a quick one on this, around the commencement date. We’d seen part of it being pushed out from 12 months to 15 months for a number of the clauses there, and there was some concern that the 12-month time frame wouldn’t be sufficient to enable the detailed regulations to be put in place. I’d be really interested to hear from the Minister which particular regulations she feels wouldn’t be able to be met within the 12-month time frame. Just really excited about getting this started as soon as possible, I suppose. So why the need for pushing it out that extra three months? What aspects does she fear will be particularly complex that require that additional three months?

Hon POTO WILLIAMS (Minister for Building and Construction): I think 130-odd pages of regulations and wanting to ensure that we get this absolutely right is the answer to that question.

Clause 1 agreed to.

Clause 2 agreed to.

CHAIRPERSON (Adrian Rurawhe): I will report this bill without amendment.

House resumed.

Report of Committee of the whole House

Report of Committee of the whole House

CHAIRPERSON (Adrian Rurawhe): Madam Speaker, the committee has considered the Overseas Investment Amendment Bill (No 3) and reports it without amendment. The committee has also considered the Holidays (Increasing Sick Leave) Amendment Bill and reports it without amendment. The committee has also considered the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill and reports it without amendment. Madam Speaker, I move, That the report be adopted.

Motion agreed to.

Report adopted.

Bills

Regional Comprehensive Economic Partnership (RCEP) Legislation Bill

First Reading

International Treaty Examination of the Regional Comprehensive Economic Partnership Agreement

International Treaty Examination of the Regional Comprehensive Economic Partnership Agreement

Debate resumed from 13 May.

VANUSHI WALTERS (Labour—Upper Harbour): Tēnā koe, Madam Speaker, and thank you for the opportunity to take a call in relation to the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill, as well as the report of the Foreign Affairs, Defence and Trade Committee on the international treaty examination of the Regional Comprehensive Economic Partnership agreement.

I’ll start my call today with a quote from the Secretary-General of the UN, Antonio Guterres, who said, “I am a multilateralist. I am deeply convinced that there is no other way to deal with global challenges than with global responses, and organised in a multilateral way.” Now, I’m not a member of the Foreign Affairs, Defence and Trade Committee, but I am delighted to be able to speak to what I consider is a significant moment in our COVID economic recovery by way of progressing our trade recovery strategy, which will broaden and deepen our trade connections in the region. Ultimately, this is about having a single rule book for all 15 signatories, which should significantly reduce complexity and therefore compliance costs for exporters.

I just want to take a moment to think about the impact that COVID has had on trade across the region. In April, the International Labour Organization issued a brief titled COVID-19 and multinational enterprises: Impacts on FDI, trade, and decent work in Asia and the Pacific. They acknowledged in that report the impact of COVID on small, medium, but also large businesses in the regions, as well as in terms of cross regional trade, and they noted that COVID had required some businesses to put in place stringent measures to prevent the spread of COVID, others had temporarily closed, and some others had had to really shift or repurpose their production processes. There were significant disruptions to supply chains, all of which, of course, had a really significant impact on trade. But the brief also makes the point that, against this backdrop, Governments are faced with a dual duty both to keep COVID out but also to sow the seeds of sustainable recovery, and that’s really what this agreement is about.

So what does the bill do? Well, the bill is really an omnibus bill that makes the required legislative amendments to give effect to New Zealand’s signing of the Regional Comprehensive Economic Partnership. It’s a free-trade agreement signed by 15 countries which are home to almost a third of the world’s population, including seven of our 10 trading partners who take over half of New Zealand’s total exports and provide more than half of our direct foreign investment. It is significant.

The difference RCEP will make is shown through some modelling work that’s been done which shows that once RCEP is fully in effect, New Zealand’s annual GDP will be between 0.3 percent and 0.6 percent larger than if RCEP had not existed at all, which is, in dollar terms, equal to a range of $1.5 billion to $3.2 billion. It is extremely significant for New Zealand. What it means for New Zealand is that we’ll have a seat at the governance table of this globally significant regional economic agreement. Essentially, this keeps the goods flowing and services moving across Asia Pacific. It builds our relationship with, as I said, seven of our top 10 trading partners, including Australia, China, Japan, Singapore, South Korea, Thailand, and Malaysia. And here I just note that New Zealand exported over $36 billion worth of goods to RCEP countries and nearly $12 billion of services in the year ending December 2019. This sends a strong message that the region is open for business and will make such a practical difference to our exporter industry in the coming years as we recover from COVID.

Just in terms of the numbers, RCEP will cover around 61 percent of New Zealand’s goods exports and 45 percent of our service exports. But, of course, it’s not just about us, it’s not just about New Zealand, so I do want to reflect on some of the words of our partners as we continue on with our obligations towards this agreement. Mohamed Azmin Ali, the Minister of International Trade and Industry of Malaysia, said that RCEP would encourage local businesses to enter global markets and would increase Malaysia’s exports. He stated that RCEP signatories would enjoy preferential treatment due to the removal of tariff and non-tariff barriers. Joko Widodo, the President of Indonesia, talked about the signing of RCEP as a historic day that signalled Indonesia’s strong commitment to multilateralism. And Moon Jae-in, the President of South Korea, has praised RCEP as an unprecedented mega regional trading agreement and expressed confidence that it will contribute to the recovery, multilateralism, and the development of free trade around the world and actually beyond the region as well.

In terms of the report of the select committee on the international treaty examination, while this is a first reading of the bill, it’s also, in effect, the debate on the report of the committee on the RCEP agreement, so I do also want to reflect briefly on some of the comments noted in the March report. Specifically, the committee noted that, actually, most of the obligations in RCEP are already met through current legal frameworks and policy regimes. But there are a small number of legislative changes that do need to be made, which I’ll mention here.

The first is amending the Tariff Act 1988 to enable the identification of RCEP countries and changes to the definition of tariff through Order in Council. The second is an amendment to the Act to provide for eight years of transitional safeguard mechanisms. These really aim to provide temporary relief to domestic industry from unfair competition or an unexpected surge in imports. And the third is changing the Customs and Excise Regulations 1996 to implement the agreed rules of origin and product-specific rules for goods imported from RCEP countries.

At this stage, I might just pause and speak briefly to the exceptions clause in RCEP. As in New Zealand’s other international agreements, RCEP contains an exceptions clause that aims to preserve the pre-eminence of Te Tiriti o Waitangi in New Zealand. Now, essentially, this means that nothing in RCEP will prevent the Crown from implementing domestic policies to meet its obligations to Māori under Te Tiriti. What it means is the Government’s interpretation of the Treaty of Waitangi cannot be subject to disputes settlements. While I understand that some members of the committee expressed concern about this clause in particular, this is a clause that’s present in all of New Zealand’s trade agreements. And I understand that the advice from the ministry is that the clause is effective, not to mention, in my view, consistent with the State’s obligations under Te Tiriti.

The committee also made inquiries into the effect of RCEP on intellectual property rights. I understand the advice was that RCEP reinforces the standards that already exist as set out in the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights. Those standards, essentially, cover copyrights, trademarks, geographical indications, industrial designs and patents, amongst other things as well.

So, just in conclusion, I’d like to thank the committee for its report in relation to the treaty examination, and I do commend this bill to the House.

GOLRIZ GHAHRAMAN (Green): Thank you, Mr Speaker. It’s a pleasure to rise as a member of the Foreign Affairs, Defence and Trade Committee to speak on the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill. It is not a pleasure, however, to look at what this bill and what the agreement itself entails; it’s actually quite a disappointment.

Let’s start with what it does well. We know that we came out of the last term of Parliament and Government with a comprehensive list of recommendations by our Trade for All agenda commission. And we’d spent a lot of time engaging with the public, with experts, and with sectors to come up with that. We recognised that trade as it had been done for decades was failing us as an international community. In fact, it had very clearly led to the last global economic crisis, whereby traders—big, multibillion-dollar, multi-national traders—had set the agenda for global policy, trickling down into domestic policy. They had decided that their profits would sit above our environmental concerns, our workers’ rights, our human rights, and our indigenous people’s rights. So we decided, as a Government last term, that we would do things differently. One of the recommendations, and one that I acknowledge is actually reflected in this agreement, is that it doesn’t contain those controversial investor-State dispute settlement clauses whereby international—multi-national, I should say, because these aren’t actually traders that have any kind of allegiance to any one State party, they are just multibillion-dollar corporates—can’t sue us as a Parliament or successive Parliaments for passing legislation that would uphold the interests of us as people above their profits. That’s good. Also, it doesn’t include pharmaceuticals, that’s also good.

That’s about where it ends, because this agreement, in fact, in a way represents a regression of the position that we were so upset about and New Zealand was so deeply hurt by when our Government last term signed on to the Trans-Pacific Partnership agreement (TPPA). It doesn’t include any environmental chapter. Now, the criticism of the TPPA was that it included a novel environmental chapter but that it wasn’t termed in enforceable terms and that 86 percent of cases failed where Governments tried to enforce their environmental rights and protections against the profit margins of a multi-national. It wasn’t good enough. This agreement doesn’t include any environmental protection. We sit in the midst of a global climate crisis. We as a Government apparently see this as our nuclear-free moment. We as the Green Party are deeply concerned that a trade agreement like this sits above our commitments in the climate justice arena. It sits above what our Climate Commission is doing, the work that all of our ministries have committed to. It doesn’t include an environmental chapter at all, and that, actually, has become routine. So that’s a huge failure.

It doesn’t include a workers’ rights chapter. Again, even the TPPA had a loose—and I would argue unenforceable for the most part—workers’ rights chapter, a recognition that inviting multibillion-dollar traders into our world would impact on workers’ rights and that those rights should be protected. This agreement regresses from that position, and that’s scary. It’s scary in the age of COVID. It’s a scary move in our Asia-Pacific neighbourhood. We know that manufacturing happens on a massive scale in some of these nations that have signed on to this. So what have we negotiated? What have we undermined? Whose interests are we protecting when we sign on to trade deals? Whose interests are we privileging over who? So the most marginalised are the most threatened by this agreement, be that the environment or workers.

Now I come to the rights of indigenous peoples. A commitment that this Government makes over and over again to partnership with Māori, to upholding the values of Te Tiriti o Waitangi, and actually, in fact, meeting our obligations, because they are enforceable obligations. We’ve heard that this agreement does include a clause on the protection of our obligations pursuant to the Treaty of Waitangi. We’ve also heard from the only independent expert arbiter of what, in fact, fulfils our obligations pursuant to Te Tiriti, the Waitangi Tribunal, that this exact clause is a breach, falls short. Why is it still in here? Why has the Government continued to use the exact words that were ruled to fall short of meeting our obligations pursuant to Te Tiriti o Waitangi? Of course, the Ministry of Foreign Affairs and Trade came to select committee and said that, in their opinion, it meets our obligations. They wrote it. That judgment was a finding against them. So the Government can’t hold up their opinion that’s already been ruled to fall short as meeting the obligation, as evidence that the obligation’s being met. It’s an absolute failure.

Then we come to a broader issue, which is the way that we actually sign on to trade agreements and a way that this particular agreement, again entrenched in breach of the recommendations of our Trade for All agenda. Why did we do it if we’re going to keep doing trade the same old way? They recommended that there be independent national impact assessments of trade agreements. There isn’t one here. They recommended that trade agreements be negotiated in a more transparent and democratic way. We as the House of Representatives are now bound by a trade agreement that was negotiated in secret, that had the input of multi-national, multibillion-dollar agents that sit here benefiting from the terms of the agreement behind closed doors while we were shut out, and now we are bound to implement the agreement as elected officials. Well, we should have had input at a different stage. The people of New Zealand should have known what’s going on, what’s in the mandate for this negotiating team, what is being negotiated, and had a say on whether or not this is, in fact, a good trade agreement.

New Zealand needs trade. We’re a small island nation, we absolutely need trade. We need trade to be sustainable, to be fair, to uphold our workers’ rights, to uphold our obligations pursuant to the climate treaties that we signed on to, our obligations to our indigenous people pursuant to Te Tiriti o Waitangi, and this agreement, unfortunately, falls short. So I don’t commend this bill to the House.

DAVID SEYMOUR (Leader—ACT): If I may transport this House back to the year 2016, it was before 5G; it was before Bill Gates became a conspirator; it was before COVID; it was before the vaccines. It was back in the day when the craziest political operators in New Zealand—and the Greens, but why repeat yourself—were campaigning against the Trans-Pacific Partnership (TPP), the big, scary agreement that would take away our sovereignty. And guess what! It was negotiated in secret—because who negotiates out in the open and tells everyone what their bottom lines are before they go into the negotiation? Those were the days.

There was a woman at Waitangi that year, and she threw her sex toy at Steven Joyce’s head to make the point. Those were the days. I wish we could go back to those happier, simpler times when all the conspiracy theorists in New Zealand were just focused on the TPP. But just momentarily, just for a wee moment, Golriz Ghahraman transported me back to those wonderful times, when she talked about how terrible the Regional Comprehensive Economic Partnership will be. People will have to have rules so that they can understand each other and trade and exchange goods with people from other countries, and we’re going to get richer doing it, because we have things they want and they have things we want. By exchanging them, trading value for value, we can get stronger together. That’s what trade is about. It is voluntary cooperation amongst adults who are different actually making a virtue of their differences to exchange things and be better off than they would be alone.

One has to wonder why the Green Party are so comprehensively opposed to free-trade agreements. They’re certainly not opposed to free-trade agreements when it comes to their personal consumption. Do you see Green MPs with New Zealand - made cell phones? No. They all have Apple—designed in California, made in China. Do they come up and down from Auckland, where most of them live, to Parliament, here, in New Zealand - made aeroplanes? Has anyone seen a Richard Pearse special going up and down the North Island, transporting Green MPs to the Parliament? No. No, the Green Party are more than happy to believe in free trade for their own choices, but they somehow have a phobia when it comes to making agreements with people from other countries for everyone else.

Then we hear from Golriz Ghahraman “This doesn’t comply with our Treaty of Waitangi obligations.” What on earth? Was there a promise from the Crown to iwi that we would all be mercantilist xenophobes from 1840 onwards? No, there wasn’t. Māori at that time were some of the most enthusiastic traders that there were, and still are. The idea that to honour the Treaty is not to want to interact with the rest of the world is not only wrong; it’s frankly paternalistic and a little bit insulting. I say this as tangata whenua myself. Don’t you know? I’m Ngāpuhi.

Now, what this legislation is really about, now that we’ve got our points in rebuttal out of the way in the first four minutes, is actually creating an agreement and giving it legislative intent or legislative approval by this House so that we can trade more easily, with a wider range of people. It’s important at this particular point in New Zealand’s history that we are able to diversify the range of trade opportunities that New Zealanders have for selling their goods from their farms and their firms to provide for themselves and their friends and their families.

It’s critical that we have a range of options for selling our goods and services. The more diverse the better, because diversifying our markets here in New Zealand means that we have more options and fewer countries—and, specifically, fewer Governments—have the opportunity to blackmail New Zealand by threatening to turn the tap off. For the geopolitics alone, trade is a wonderful thing. This agreement is a wonderful thing. It is people coming together and creating value but having more people to come together with so that New Zealand is less vulnerable to geopolitical manoeuvrings of certain countries. That could only be a positive thing.

But perhaps the Green Party and other opponents are somehow opposed to what trade has done for the world. They talk about poor people. Well, let’s have a bit of reality. There are fewer poor people in the world than there have ever been, and the reason for that is trade. Over the last 40 years, the evil neoliberal era, billions of people have had jobs, have had capital investment, have gained skills, have had opportunity to do what people in New Zealand would like to do: to exchange value for value, get stronger together, to have somewhere to sell the goods from their farms and their firms, to provide for their friends and their families. Billions of people have come out of poverty.

Just two years ago, for the first time in human history, less than 10 percent of humanity lived in absolute poverty. It’s swept through China. It’s sweeping through Vietnam, who are part of this. Before that, it swept through South Korea. Let us hope that one day the North Koreans stop practising so much Green Party policy and they are able to live free and trade and become wealthier and escape absolute poverty too. Let’s hope that it sweeps through Africa, and all those impoverished people that we see on the World Vision ads with the distended bellies are able to trade and create value and get the things they need to live better lives, and that we reduce poverty on the dark continent as well.

This is the future. It is not only a good thing that we are trading for ourselves; it’s actually a power of good for the world. You have to ask yourself: why would the Green Party be opposed to that? Well, I can only guess that it’s simply about control. You see, the defining characteristic of the left in New Zealand is not kindness or a will to do better. People on this side of the House have those values, thank you very much. What defines the left in New Zealand and beyond is a will to have control.

They don’t like free trade. They don’t like a framework and a set of rules that means that someone with a firm producing a product has a wider range of people to sell to. They don’t like the fact that we have a wider range of goods to purchase. They don’t like the fact that we can make choices in our lives about which adults we do business with, even if they’re in other countries. They don’t like it. They like to be able to control the goods and services that New Zealanders consume and the customers that New Zealanders serve. Free trade is bad news for big Government because it gives people options and alternatives that the Government, which evolved to control the nation State, cannot dominate. It gives us options and opportunities outside our borders, and that is what the left in New Zealand hates. In a word, it is freedom.

But don’t worry too much. Don’t worry, colleagues in this House, because we know from the Green Party’s own behaviour that they don’t really believe it. Thank you, Mr Speaker.

DEPUTY SPEAKER: Members, it’s come time for me to leave the Chair for the dinner break.

Sitting suspended from 6.04 p.m. to 7 p.m.

DEPUTY SPEAKER: Ā, kāti rā, tēnā rā tātou katoa. The House is resumed. Members, before the dinner break we were debating the first reading of the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill and also noting the international treaty examination of the Regional Comprehensive Economic Partnership Agreement. The next call is a Labour Party call.

NAISI CHEN (Labour): It’s a pleasure to start tonight’s session with my contribution on the bill before us, the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill. Can I start by sharing something that I read on the Prime Minister’s Instagram on the morning of 15 November. She posted saying “Trade is so important to us. A huge number of jobs in New Zealand are reliant on exports. That’s why it’s so important that while our borders are closed, we keep co-operating with others to make sure our goods can keep moving and don’t face costly barriers. Today, after years of negotiating, we signed the Regional Comprehensive Economic Partnership. It covers 15 countries, and the largest population of any trade agreement in the world. It means our exporters will have a single set of rules across the region, and it will improve some of the rules our exporters face too. In all, this agreement will increase New Zealand’s GDP by $2billion, and still protects things that matter to New Zealand. Today we signed the agreement ‘virtually’. I hope that didn’t lessen the sense of achievement for all those [that] worked on this project for so many years!” Can I just echo that sentiment, to thank all of the officials for whom I know this agreement has been, indeed, a very long work process for them.

I was really proud to see our Prime Minister, the Rt Hon Jacinda Ardern, and our current Minister of trade and enterprise, the Hon Damien O’Connor, on the chequerboard screenshot, joining leaders from all the other countries who represent just under one-third of the world’s population.

As my colleagues have already—and even Opposition MPs who have contributed before the dinner break—outlined, trade is extremely important for a small economy like ours. This agreement was signed to modernise the way we do trade. Tonight I’d like to draw the House’s attention to particularly the e-commerce chapter of this agreement. E-commerce—or electronic commerce, we call it—offers important opportunities for a small country like ours that is distant and also a trading country that we call New Zealand; a really, really important opportunity for us to connect with the rest of the world. Through the negotiations, we’ve constantly been trying to balance that with the need to include adequate safeguards for legitimate public policy purposes, including to protect the privacy and the interests of consumers, and that, I believe, we have.

This agreement gives New Zealand exporters increased business opportunities by outlining the importance of frameworks that promote consumer confidence in electronic commerce and the importance of facilitating the development of the use of e-commerce. E-commerce may, to most people just simply mean internet shopping—something I definitely enjoy participating in. But this is much more beyond that. As COVID hit the whole entire world, we know that a lot of our businesses, especially our small to medium enterprises, had to move to online in order for them to survive. So this agreement, what it does is it sets up the framework for New Zealand to be able to participate, our small and medium enterprises are able to participate in this online world of e-commerce to better the infrastructure so that they can actually survive. I think COVID has highlighted the incredible importance that all of our small to medium enterprises have that capacity and that capability to participate in the digital economy.

The parties to this agreement have given the agenda to work together to assist these small and medium enterprises, to overcome the obstacles used in e-commerce, whether that’s infrastructure that we’ve mentioned before, or whether that’s just simply by upskilling the people in business, or whether that is to knock down barriers in terms of their participation in e-commerce, those are all things to be applauded because, at the end of the day—New Zealand, as a small island nation—we need to rely on trade, and through the internet, to close that distance between us and the rest of the world.

This agreement couldn’t have come at a better time. During the global pandemic, we saw the importance of connecting with each other and how reliant we were on technology to do that for us, and for us to maintain that connection, whether it was with whānau domestically in New Zealand or whether that was with the rest of the world through digital commerce and other ways. I think this agreement will now facilitate that connection for us as New Zealand.

It was also reflective of the time that this was signed that the signing ceremony itself was done virtually and online. I think this goes to reflect the new and modern world that we live in and the changes that we have had to make in order to accommodate the changes and the disruptions that we are facing on a day-to-day level.

As we eagerly await the Budget on Thursday, we know that the Government’s priority is extremely clear, securing on recovery. Securing on recovery to me, and in this context that we’re debating today, is—one of the important pillars to that recovery is our trade recovery strategy. This agreement contributes to that by broadening and deepening our trade and investment links with the rest of the world. On that note, I commend this bill to the House.

DEPUTY SPEAKER: This next call is a split call. I call Nicola Grigg—five minutes.

NICOLA GRIGG (National—Selwyn): Since I’ve had the privilege of being the member of Parliament for Selwyn, I have watched this Government slowly but surely turn the screws on our productive sector. Our primary industries and our manufacturers are subjected daily to regulatory requirements and scrutiny that only serve to reduce their ability to grow and expand, to employ more people, and to earn a living. It’s therefore a small concession, I suppose, that the Government is still seemingly interested in pursuing a free-trade agenda, and that, no doubt, will be a small consolation to those producers looking for markets for their products and services. I must say, it is with some relief that I’ve learnt the Minister for Trade and Export Growth is actually going to get on a plane and visit the EU and the UK to advance those much-needed free-trade agreements.

The National Party has a long, proud history of pursuing and securing high-quality, comprehensive trade agreements, and this is no exception. This House has the Hon Tim Groser to thank for that. Therefore, I join my colleagues in supporting this Regional Comprehensive Economic Partnership (RCEP) Legislation Bill and extend my warm greetings to the peoples of those RCEP nations. I do this because trade is about people, people who like us, who like our products, and who want to do business with us. We have come a long way from sending shiploads of frozen mutton from Port Chalmers to London in the 19th century, and that’s in part due to this country’s liberalised trade agenda but also to the agility and ambition of our exporters, particularly our primary producers. We now export about $82 billion in goods and services every year, and trade supports 600,000 Kiwis into jobs.

In opening up access to 15 countries in the Asia-Pacific, RCEP will bring tremendous opportunities to those manufacturers and producers that I’ve mentioned. It will cover trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, and dispute settlement. It also recognises ASEAN as an emerging regional economic architecture. While the great nation of India is not currently a signatory, we stand willing and ready to welcome them if and when they wish.

As a former agri-portfolio manager at New Zealand Trade and Enterprise (NZTE), I’ve witnessed first-hand how difficult it is to achieve both market access and market traction, let alone see sales and profit. Export is a long, hard graft. The Productivity Commission’s recently reported on how the so-called select group of frontier firms have achieved traction and growth, but this House should be under no illusion it’s been done easily; those wins are hard-fought. NZTE research shows that the five major challenges for our exporters are building brand awareness, finding the right partners and channels, strong overseas competition, understanding how offshore markets differ from New Zealand markets, and determining the right export pricing strategy and product-related costs to remain competitive and profitable. Historically, our economies relied heavily on a few primary commodities for exports, and I disagree with this volume-to-value mantra that the Government’s using, because I think it devalues the high-quality products that we have historically exported. We are, however, increasingly seeing offshore consumers becoming more discerning.

As I’ve previously said in this House, Selwyn is an economic powerhouse, underpinned by the work of our local exporters, especially our food producers. But in my travels across the electorate, I’ve met regularly with businesses screaming out for both better business support and more business opportunity. That opportunity will come with the RCEP agreement. It’s expected to significantly reduce complexity and compliance costs for exporters through a single rule book for 15 markets. I hope that perhaps the Government would apply that same ethos back here at home. Thank you.

Dr GAURAV SHARMA (Labour—Hamilton West): Kia ora, Mr Speaker. It’s my pleasure today to take a call on the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill, or, in short, the RCEP bill. While I’m not on the Foreign Affairs, Defence and Trade Committee, I’ve had a bit of experience working on a project related to the Trans-Pacific Partnership agreement with Vietnam around exporting Vietnamese agriculture products to other countries. The RCEP bill is an omnibus bill that amends the Tariff Act 1988 and the Customs and Excise Act 2018 in order to give effect to the RCEP agreement, which New Zealand signed on 15 November 2020.

The bill will enable the application of preferential tariff rates under the RCEP. The RCEP free-trade agreement has been signed by 15 countries. Ten of those are part of the ASEAN network, and the other five are part of the extended free-trade agreement with ASEAN. Together these countries are home to almost a third of the world’s population. That is 2.3 billion people. And these 15 countries represent 30 percent of the global GDP and include seven out of 10 of our top trading partners.

RCEP will cover around 61 percent of New Zealand’s goods exports and 45 percent of our services exports. These countries take over half of New Zealand’s total exports and provide more than half of our direct foreign investment. New Zealand exported over $36 billion worth of goods to RCEP countries and nearly $12 billion of services in the year ending December 2019. Our existing free-trade agreements (FTAs) with the RCEP countries already provide high levels of goods market access, and the larger commercial gains are therefore in services and investment, progress on non-tariff barriers, and the benefits of a single rule book covering 15 countries. RCEP will therefore establish a consistent framework and a single set of services for the entire RCEP region. This will improve regulatory certainty and transparency for New Zealand service suppliers across the RCEP region as a whole and give them greater confidence to enter the markets.

The existing FTAs can be very complicated to use compared to RCEP. Businesses with global supply chains might face tariffs even within a FTA because their products contain components that are made elsewhere. A product made in Indonesia that contains New Zealand parts, for example, might face tariffs elsewhere in the ASEAN free-trade zone. Under RCEP, parts from any member nation would be treated equally, which might give companies in RCEP countries an incentive to look within the trade region for supplies. It means that a table made with New Zealand wood, Japanese bolts, and steel legs from China can be sold in Thailand or Indonesia under the same rules of origin certification, reducing compliance costs for businesses and incorporating New Zealand exporters into these supply chains.

New Zealand business has highlighted its concerns about the non-tariff barriers and RCEP will address these concerns through improved rules for goods trade, especially on customs procedures and some rules of origin, and sanitary and phytosanitary measures, and a specific mechanism to handle non-tariff barriers in future. This establishes a single set of trade and investment rules across all 15 countries, rather than a range of different rules which separate FTA partners, which has the potential to significantly reduce complexity and therefore compliance costs for exporters—for example, RCEP creates an expectation that the customs authority will release perishable goods, such as seafood, within six hours of arrival. RCEP will also improve existing market access for goods and especially services beyond those in our concluded FTAs.

RCEP also includes new services in investment market access commitments by some RCEP countries that go beyond existing FTAs. New Zealand’s approach to services in our FTAs recognises how much services matter to our economy. New Zealand will benefit from new commitments by some RCEP countries that go beyond existing FTAs. Like other regional trade agreements, RCEP will create more security and certainty for New Zealand exporters and make the trading environment more predictable.

I just want to briefly say that instead of just looking at what we get from this agreement, if we were not to join the RCEP agreement, we may see that our exporters will be precluded from participating in the regional supply chain network and this would mean loss of economic growth and opportunities and therefore relatively lower wellbeing and living standards for all New Zealanders. Having said that, I highly recommend this bill to select committee.

KIERAN McANULTY (Labour—Wairarapa): Thank you very much, Mr Speaker. It gives me great pride to stand here tonight as the MP for Wairarapa, a region that is heavily dependent on the primary sector, and as their representative in this House, it gives me great pride to stand in support of this bill.

This bill is not so much just about the primary sector. It is about the whole economy, because we are a trading nation and the Labour Party is a party that stands proudly on its record of signing us up to trade agreements. That side of the House may laugh. They may giggle and they may joke amongst themselves, but they know that under the previous Labour Government, we signed us up to the China free-trade agreement. They know that this country is reaping the benefits of that free-trade agreement, and they also know—as they begrudgingly admit tonight—that this bill allows us and sets us up as a nation to take advantage of the economic benefits that this agreement and the bill that allows this partnership to come into force will bring to this nation.

By opening up our trade to, essentially, a third of the world’s population, it sets us up to achieve the goals that this Government has set for our economy. This is a part of the plan to increase export value by $44 billion over the next decade—a plan that this party took to the country at the last election—and, as part of a wider manifesto, it was resoundingly supported in every single rural electorate in the country. So while that side stands up here and says that this Government is placing huge impediment on the primary sector, that is the sector that backed us to deliver for them, and it is through that bill. They laugh. Let them laugh. Perhaps they need a reminder: 50 percent of the vote—50 percent of the vote—in every single rural seat.

So I can stand here with pride to say that we are delivering for those regions, and we are delivering for New Zealand manufacturers and we are delivering for New Zealand producers, because how else are we going to get $44 billion in increased export value? When we proposed that, they also laughed. Where was their plan? We’re getting on with the job, and this is part of that, because we know the future for economic prosperity in this country is based on increasing the value of our exports.

They criticise our plan around environmental sustainability without offering an option of their own, but they know deep down that our economic prosperity is in terms of giving consumers what they want, and the consumers in the markets that this bill allows us to sign up to—they don’t want to buy the cheapest product. We have never sold our products to those that want to buy the cheapest. We have always sold our products to the most discerning consumers in the world, and this bill gives us more access to those consumers, but those consumers don’t want agricultural products that impact on the environment. Those consumers do not want to buy primary products from a country that is not doing their bit for climate change.

We have to export—that’s the guts of this bill and the guts of this agreement. But if we were producing products in a way that doesn’t live up to our obligations—obligations that that Government signed us up to and that we’re happy to actually deliver—then we know that the value will not be reached.

We also know that consumers care more and more about animal welfare. They care more and more about other aspects like the way that industries in countries treat their staff. We are at the top of the world in so many areas, but we mustn’t be complacent, and the measures that we’re bringing in are setting us up to take advantage of the agreement that this bill sets us up for.

So I say to the other side, which—I note they’ve stopped laughing. I say to them, carry on as you are—carry on as you are. Make the news by your distractions. Make the news by arguing amongst yourselves and focusing on things that people don’t actually care about. We will carry on with the things that they care about. This bill is a big part of that, and when this bill comes through and we’re signed up to this partnership, exporters will know that it is this Government that’s set it up and delivered for them.

SIMON O’CONNOR (National—Tāmaki): I actually came in expecting sort of a quiet night, but that’s been some great entertainment; I think it’s what you call a modular speech. The member who’s resumed his seat, Kieran McAnulty, had no idea what he was talking about, but, basically, just slotted in a few words every so often about trade on top of, as I say, a modular speech.

Look, fascinatingly, actually, it’s illustrative of three initial points I want to make. Isn’t it fascinating that we have the Government, effectively, filibustering itself all afternoon? They’ve got no other legislation to talk to, that they’re taking full calls on a very simple bipartisan trade bill.

The second part, which is really important about trade, because they wax lyrical—or, perhaps, wax boring—that the last trade deal that this House had to deal with, the member who resumed his seat and the whole lot of them, were out there protesting. That was called the Trans-Pacific Partnership, which was far more substantial than this. So I just think it’s absolutely fascinating, it’s quite “rich”, one would say.

The third part—

Hon Phil Twyford: CPTPP.

SIMON O’CONNOR: That’s right, it’s now called the CPTPP. The great contribution of the Labour Party was to discover the letters “C” and “T”; rather than communism and Trotskyism, it was “comprehensive” and “partnership”. That was a good learning.

The third element is—it’s what’s really important for people to understand at home—this is a domestic piece of legislation to bring into effect a treaty, a trade agreement that was started by Tim Groser, and has been agreed to. So, look, it’s good—it’s good. OK. Thirty percent of the world’s population’s covered by this. About 30 percent of the world’s GDP, and over about, I think, 56 percent of New Zealand’s exports go into the area that the Regional Comprehensive Economic Partnership (RCEP) covers.

But let’s be clear, let’s not overcook this. OK. It’s good—it’s good. It’s a good agreement, but let’s not overcook this as some amazing free-trade agreement. This is bringing together existing bilaterals. New Zealand has relationships with all the countries in ASEAN, and through this RCEP agreement, that’s really good. So this builds on it, but I want the Government to be really clear—as it should be with the public—that this is not some amazing new trade agreement from scratch. It is building on existing bilateral agreements. So, as I say, let’s not overcook it. All trade’s positive. Build on it. But you would have thought from some of the speeches from the other side that this is an enormous breakthrough. Those breakthroughs already happened.

Probably what’s going to be the best coming out of this is a consistent approach to things like intellectual property, services, and investment frameworks. This is really, really good. So, look, a positive there. I think we want more of it. And that’s where I’m probably going to finish, you know, because the whole thing about trade is removing tariffs—let’s say, symbolically, I’ll remove time of me speaking, which is probably a great favour to the House. But, fundamentally, let’s celebrate RCEP. But the challenge to the Government is to actually get on with more bilateral agreements, which this House will endorse, and particularly with the UK and particularly with the EU. The message is simple: get on with it or, as the Labour Party might say, “Let’s do this.”

LOUISA WALL (Labour): Tēnā koe, te Māngai o te Whare. It is my pleasure as a member of the Foreign Affairs, Defence and Trade Committee to speak at this first reading of the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill. For those who are listening from home, RCEP is a treaty-level trade agreement agreed by 15 countries, 10 of those members belong to the Association of Southeast Asian Nations (ASEAN). They are: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, plus five countries which ASEAN has free-trade agreements with. They are: Australia, China, Japan, South Korea, and New Zealand.

I think it’s important that the House and the members of the public understand what the implications of this treaty are. An estimate has been made that it will add between $1.5 billion and $3.2 billion to our GDP. Now, we shouldn’t scoff at anything that adds to our GDP, because actually that means more jobs, more opportunities for New Zealanders to contribute to the global economy. I think what also has to be shared was that, before this bill was introduced to the House, the select committee had an opportunity to look at this treaty-level free-trade agreement. We actually wrote a report that was released in March, and, really, there are four things that I want to highlight from our select committee report on the treaty that has then led to this bill being introduced to the House.

The first, really, is to highlight that this was supposed to include a 16th country, this RCEP agreement, and that was India. Unfortunately, India chose to withdraw, and for us in New Zealand that was a huge loss, because we saw that as an amazing opportunity to partner India and to allow our dairy products to infiltrate their market in a way that added value to the agreement that we had before us. They chose that this wasn’t the right time for them, they were worried about other products from other competing countries flooding their market and potentially having a detrimental effect on their domestic market. So they have chosen to withdraw, but I guess there’s hope for them to be included in the future, and I think the pathway going forward for us and India is to go to a bilateral agreement. I think everyone would like to have one, but as a small nation we could partner them and look at other opportunities to add value—I think that, going forward, there is hope that that is able to be had.

The reason that I’ve said that is that within trade agreements, there has been an insertion of an agenda called Trade for All. We saw that in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and, actually, we see that more and more in trade agreements globally. We’re starting to question trade for what purpose. It isn’t just about increasing our GDPs; it is about the environment. One of the other issues that was highlighted within our treaty examination was the fact that there is no environmental chapter in RCEP. We said that was incredibly disappointing, because if we don’t have a sustainable environment, then everything that we’re wanting to do is going to be more and more difficult to achieve.

In trade agreements, there has and has started to be a focus on indigenous peoples, and, again, that was one of the issues that we highlighted within our treaty examination. That is, is the Treaty of Waitangi exception clause fit for purpose? It’s an historic treaty clause that we, when we did propose it, broke ground, and now we’ve seen other jurisdictions add treaty clauses into their trade agreements, such as Canada. We also are aware that the UK is very cognisant of their responsibility, as an historical coloniser, of ensuring that indigenous peoples in these free-trade agreements have an opportunity for specific trade opportunities. So I’m highlighting that I think this will continue to be an issue and that, as we noted in our select committee report on the treaty, there are different perspectives on the treaty exception clause, it is before the Waitangi Tribunal, and I’m sure there will be submitters who again highlight that it is not fit for purpose as we venture into the future.

One of the other issues that was highlighted in the treaty examination was the use of geographic indicators (GIs), and I actually think geographic indicators are going to provide a really interesting pathway for New Zealand businesses. They do in the wine sector, and we have stunning wines that are marketed from the different regions of New Zealand. But within the dairy sector, I don’t think that’s quite taken off. We heard from Fonterra, for example, who have trademarked Kāpiti Kahurangi Creamy Blue cheese. So we’ve used trademarks as opposed to GIs, but I actually think kupu Māori going forward, such as mānuka—mānuka honey—or other indigenous terms for our product, I actually see developing in the future a real niche opportunity for particularly our Māori producers.

I also want to highlight the issue about trade agreements also benefiting workers and workers’ rights, and creating minimum standards for workers. We have those standards here and we have great developments by our Minister for Workplace Relations and Safety, Michael Wood. Obviously, we’ve seen recently his announcement around fair pay agreements. Now, in these treaties, in these trade agreements, I think embedding workers’ rights is fundamental, actually, to making sure that trade is conducted in an ethical way. I think more and more, around the world, people are starting to look at how products are produced, who are producing these products, and are they being treated in a manner that enables them to have full participative lives. Because we are now realising that trade for trade’s sake actually isn’t the purpose of trade. The purpose of trade is to grow an economy that provides good quality jobs for our people, that enables them to be housed, that enables them to be clothed, that enables their children to go to school, and enables them to have a quality life, which means that they can participate in other ventures that society offers, whether it be sport or theatre or whatever it might be.

I think the examination that this piece of legislation provides about how this particular RCEP agreement is going to add value to the lifestyle that we not only enjoy in New Zealand but in those other countries, is something that we should note. Because we have moved into a space where we’ve seen the weaponisation of trade, and the dependency of some economies on particular countries in terms of our export markets, and that’s actually unsustainable in a world that’s focused on global peace and security.

That actually is a big philosophical change for the purpose of trade agreements. Creating a trade agreement that alleviates poverty and that creates a world that’s focused on peace and global security, I think is the challenge of our time. So we have to make sure that when we enter these trade agreements that we are very clear about the key performance indicators that we will create to measure how successful the implementation of these trade agreements are, not only within our own countries but within the partner countries that we choose to have these types of relationships with.

The reason I bring that up at the end of my speech is because issues such as modern slavery exist. Other jurisdictions have addressed issues of modern slavery. It remains legislative reform that is yet to be led in this Parliament, but I think it’s incredibly important that we have those tools and we have the knowledge to be able to mitigate what could be detrimental aspects of trade if we get it wrong. Kia ora.

DEPUTY SPEAKER: The question is, That the report of the Foreign Affairs, Defence and Trade Committee on the International treaty examination of the Regional Comprehensive Economic Partnership Agreement be noted.

Motion agreed to.

A party vote was called for on the question, That the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill be now read a first time.

Ayes 108

New Zealand Labour 65; New Zealand National 33; ACT New Zealand 10.

Noes 12

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

Motion agreed to.

Bill read a first time.

DEPUTY SPEAKER: The question is, That the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill be considered by the Foreign Affairs, Defence and Trade Committee.

Motion agreed to.

Bill referred to the Foreign Affairs, Defence and Trade Committee.

Instruction to the Foreign Affairs, Defence and Trade Committee

Hon PHIL TWYFORD (Minister of State for Trade and Export Growth): I move, That the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill be reported to the House four months and one day after it has its first reading.

Motion agreed to.

Bills

Drug and Substance Checking Legislation Bill (No 2)

First Reading

Hon PEENI HENARE (Associate Minister of Health (Māori Health)) on behalf of the Minister of Health: I present a legislative statement on the Drug and Substance Checking Legislation Bill (No 2).

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

Hon PEENI HENARE: I move, That the Drug and Substance Checking Legislation Bill (No 2) be now read a first time. I nominate the Health Committee to consider the bill and, at the appropriate time, I will move that the Health Committee report the bill to the House by 29 October 2021.

The purpose of this bill: in December last year, when we passed the Drug and Substance Checking Legislation Act, we did this so that the drug-checking organisations could operate with legal certainty over the summer period. That bill was for a temporary Act, which will self-repeal this coming December. At the time that last year’s bill was passed, we said that we would develop a permanent regulatory system for drug checking. This bill will enable that system.

Under the current drug-checking Act, the Director-General of Health appointed KnowYourStuffNZ to carry out drug-checking work at festivals and other locations across Aotearoa. Over the past summer, KnowYourStuff found that a lot of the drugs that had been sold as MDMA were actually a dangerous synthetic cathinone called eutylone. Eutylone can result in seizures, paranoia, and other serious effects. During the new year period, KnowYourStuff asked people who used their services whether they still intended to take a drug once they knew it was a synthetic cathinone. Three-quarters of those people said that they would not take that drug. These are people who had already purchased the drugs and had intended to consume them, but once they were informed about what they actually had, they chose to say no.

If drug-checking services had not been available, most of those people would have unwittingly consumed eutylone, and it is likely that some of them would have ended up in hospital. Because KnowYourStuff was able to operate legally and openly, they were able to warn people about the eutylone circulating in the community. We know of many people who chose not to take their drugs or who take extra precautions because of those particular warnings.

There are strong benefits from drug checking, even when a drug is as expected. If drug checking shows that a person has MDMA, for example, they are told about the risks of MDMA. They are told how to reduce those risks—for example, by not taking other drugs at the same time. They are never told that MDMA is a safe drug.

It can be difficult to get health advice to people who consume drugs. They don’t always trust official advice. They can be afraid to ask for help because they are afraid of prosecution. Drug-checking services provide honest and non-judgmental advice which can reduce risk and help people avoid serious trouble.

This bill will enable a licensing system for drug-checking service providers. The licensing system will make sure that anyone providing drug checking has accurate tests and is providing good, sound advice. There will be oversight provisions so that we can be confident that everything is fit for purpose. If there are significant problems, the licence can be suspended or cancelled, if necessary.

This bill is similar to the current drug-checking Act in most regards. What we have seen so far is that the current Act works reasonably well, and so, many elements of it will be carried over.

Like the current Act, the bill amends the Misuse of Drugs Act and the Psychoactive Substances Act to allow drug checking to take place with legal certainty. It also provides that it is not an offence to host a drug-checking service.

The biggest difference between the current Act and this bill is the licensing system. This will provide more oversight and a mechanism to suspend or revoke a licence if the provider is not doing their job properly. Another important difference is that there are no repeal provisions in this bill, because it enables a more permanent regulatory system.

This bill also amends the Medicines Act. This is because people may bring in a substance which turns out to be a prescription medicine. The amendment means that it can be checked in the same way as a controlled drug or an unapproved psychoactive substance.

Finally, this bill contains transitional provisions to ensure that there is no gap between the current system and the new one. Organisations appointed under the current Act will be able to legally operate while they are waiting for a licence decision. The bill will ensure that these providers are not back in a legal grey area during their busiest time of the year. I commend this bill to the House.

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

Hon SIMON BRIDGES (National—Tauranga): This bill makes permanent, as Minister Peeni Henare has said, the temporary bill that was passed in this Parliament at the end of last year—in December, from recollection—under urgency. National with regret—because I do think this bill and this Parliament indeed is well intentioned—opposed the bill then, and we continue to oppose it now. I’m not going to speak for long. National’s arguments—

Hon Members: Oh!

Hon SIMON BRIDGES: Well, you know, I’ve got nine minutes 22 left. We’ll see how I go! National’s arguments were made fully at the earlier bill, and you can check me out on Facebook and a bunch of other media if you want to see those positions.

David Seymour: Down with the kids!

Hon SIMON BRIDGES: That’s right. Not on TikTok, though, David Seymour. That’s just a bit too much for me.

This bill and the Minister’s position on it is that it’s evidence-based. But the evidence globally—in my view, having gone through this in quite some detail for the earlier bill—indicates quite the opposite to the other parties in this Parliament’s positions. This is a case of those parties being in sync, I’d suggest, with the zeitgeist of the times but not with the best global studies. I referenced several studies—

Chlöe Swarbrick: Which I debunked.

Hon SIMON BRIDGES: Well, Chlöe Swarbrick says she debunked them. She didn’t come up with a skerrick of evidence in her rather strong speeches last time. I referenced several studies in the last bill, I’m not going to do so again, but—

Chlöe Swarbrick: Which you misused.

Hon SIMON BRIDGES: If the member keeps doing this, I will get to 10 minutes, and I am trying to do this in about five. I referenced several studies before. What they, in summary, indicate is, firstly, that by pill testing we provide a false confidence and encourage a view that the pill taking is safe and that use goes up; and that, secondly, because that use goes up with that false confidence around the safety of the pills, fatalities will increase. I said I wouldn’t go into studies, but I’m getting challenged here from members around the House. UK—my recollection is from around 40 fatalities per year pre-legalised testing to around 90. Its use went up, and inextricably fatalities went up in the United Kingdom, and that is but one study in this regard. After all, as the studies also show, and this is something that I defy members to successfully challenge, it’s not the additives or the compounds—give it a variety of names—that kill; it is the core component of the substance. So, for the most part with this bill, we are talking about the MDMA the illegal, illicit substance within those E pills. And, of course, no MDMA or E pill is safe with or without impurities. It’s that MDMA that kills.

David Seymour: MDMA doesn’t kill you.

Hon SIMON BRIDGES: So if this is an evidence—well, the member David Seymour, who’s somewhat rational, on these, says, “It doesn’t kill you.” Well, there’s been a number of fatalities in New Zealand, where people have, effectively, as a result of taking MDMA, overdosed and drowned. It’s simply the reality of that.

David Seymour: They drank too much water.

Hon SIMON BRIDGES: He’s blaming the water now! David Seymour is blaming the water. I mean, that’s fundamentally what we’ve got to, the level of this debate. So my simple point is that if this is an evidence-based harm-reduction issue, which I suggest most of those around me say it is, well, actually, we shouldn’t do this. Use goes up, fatalities go up, and there is a false confidence, when no MDMA—even if someone comes along and says, “Well, it’s got no impurities”, or it has—is safe.

And, of course, this is a health reduction issue, but when those around us say that that’s all it is, and that’s what Minister Andrew Little, the senior Minister here in charge of this bill, has said, I respectfully, entirely disagree. It is a health issue but it is also, clearly, a criminal issue. And, if it’s not, well, actually the party in Government at this time, the Labour Party, should do away—and this is, effectively, we’ll give her some credit, Chlöe Swarbrick’s position—with the Misuse of Drugs Act and the various other laws in this Parliament that make it criminal law. They won’t do that because they know New Zealanders don’t believe that, but they come back to this tripe about it only being a health and not a criminal law matter. Of course it’s both, and to say it isn’t means that the Government and the police are ignoring those laws.

I want to just touch on the wider position and picture here. Soft peddling of illicit drugs seems to be the position of the Government today. This part of that agenda is one that they run despite, and, I would say, in disregard of, a referendum result New Zealanders had last year. I believe the tragedy will be played out on those youths over the next few years, as this, in my view, experiment rolls out.

Finally, I just want to touch on, because this should be an evidence-based picture that we’re presenting, the “evidence”—and I say that in quotes, for Hansard—that the Government relies on. Well, there’s been nothing, and Peeni Henare actually got up and said something along the lines of “Well, it’s all been great since we passed this law. Wonderful, isn’t it? Fantastic.” There’s been nothing since the law change at the end of the last year that comes anywhere within cooee of giving us an evidential picture in New Zealand that somehow this is safe. I want to be careful, but I do say, and I raised this issue over the Christmas period, there have been fatalities—more than I’ve ever seen—in and around summer festivals.

Chlöe Swarbrick: Where there was no drug checking.

Hon SIMON BRIDGES: The member says, “Where there wasn’t testing.” Minister Peeni Henare says quite the opposite. I’ve asked written questions. I’ve lodged Official Information Act queries on these issues. I have been unable to receive anything from the Government, Police, or any other agency that gives me anything about those facilities, and I don’t make any big point on that other than to say, simply, we should actually, if we’re trying to be evidence-based in this House and debate these laws, have the full picture, including what’s actually happening in this regard.

Then, there’s the Victoria University study. I know colleagues of mine will mention it. I say quite clearly to the media who keep trotting it out for the left, who keep trotting it out: it is not robust evidence; it is a self-selecting survey. In the report’s own words—I would say it’s written by a professor who is known for drug advocacy—says, “The sample was a purposeful, focused, non-random sample.” Well, I say respectfully: that gets us nowhere. And I would say to Stuff in particular, Stuff, the New Zealand Herald, and other media: stop quoting it as decisive evidence that somehow this is all OK and it’s safe.

Secondly, in relation to this Victoria study, even the results themselves, when you go through the graphs, are not at all promising. Despite the spin of the Government, the reality is that half in the survey would or might take the pill even if it was not as presumed—that is, even if it did have a compound in it. About 80 percent would take it, even if the pill or the drug was only partially consistent with presumed. And more than 90 percent, according to this self-selecting survey, would take it if the drug was confirmed as illegal. And I come back to it: how good is that? I’d say it’s pretty poor given that no MDMA or E is safe.

We should be evidence-based. We should be careful in this area. I say, actually, this bill is an experiment we will regret at our leisure.

Dr LIZ CRAIG (Labour): Thank you, Mr Speaker. It doesn’t seem so long ago that we were here in this House debating the previous, time-limited Drug and Substance Checking Legislation Act, and it’s really wonderful to be here debating a more permanent solution. Because when I first talked about the previous bill, I talked about the number of young people that were turning up in emergency departments because the substance that they’d taken wasn’t what they thought it was. I talked about the challenges for health professionals, as they were working alongside young people trying to figure out what it was that they’d ingested, and often young people having quite severe symptoms, so just trying to work out how to resolve those symptoms when you weren’t sure what they’d ingested. So when we passed the temporary Drug and Substance Checking Legislation Act in 2020, what it meant is that last summer, a number of those substance-checking services could operate with legal certainty over summer and were available to provide that testing and identify some of those substances that, indeed, weren’t what people thought they were. But what this bill does is it makes a more permanent approach.

I want to talk a little bit about why drug checking is important and recap on that, because it’s not just the drug checking itself—and when I’m talking about drug checking, I mean people surrendering a portion of what they’re intending to take so that they can ascertain what’s in it—but it’s also the conversations that go alongside that. I think it’s important that advice about staying hydrated, about not mixing substances, about not taking the drugs with alcohol or other illegal drugs, those are the conversations that are all so important. Also, when the results of that testing come back, talking about what’s in it and, if it isn’t what people thought it was, then providing that advice so that the person can make an informed choice.

I think the research has been already talked about from Victoria University of Wellington. What they did find is that 68 percent of those who had used the KnowYourStuff drug-checking service had changed their behaviour. Either they’d decided not to take the substance after it had been checked or they listened to some of that harm reduction advice. And 87 percent of those who used KnowYourStuff said that their knowledge of harm reduction had improved. But also for those festival organisers who had KnowYourStuff at their events, they noticed fewer serious incidents related to illicit drug use. But also the medical personnel that were working at those events because, you know, they noted that often it was difficult to tell what substance someone had ingested—so if you were having drug-testing services there, then you had a better knowledge about what was circulating at the event for future treatment.

So just thinking through: what does this bill do? I think basically what it does is it follows on from the previous Drug and Substance Checking Legislation Act, which is due to expire 12 months from when it came into force, and it’s similar in many of the respects. But there’s one main difference, and that is rather than the Director-General of Health appointing service providers under the previous Act, in this bill the director-general is able to issue licences for substance-checking services so they can carry out specified functions, and it’s reasonably prescriptive what those functions are. So the first one is providing that information so that you can actually do harm minimisation and talk to those people that are potentially seeking the advice through decisions about the usage. Then the second part of it, obviously, is testing the substances and ascertaining what’s in them. And then, once you’ve done that, having that conversation with the person that handed over the substance to say this is what’s in it, and then having that responsibility to dispose of that, if that person decides to surrender their drug and also for the samples that they’ve tested.

So there are some very clearly described functions there. But just why this permanent change is necessary is because, prior to the temporary legislation coming into place, if you were an event organiser and you allowed a drug-checking service to operate on your premises, you could be prosecuted under section 12 of the Misuse of Drugs Act, because the sense was that you were knowingly allowing someone on premises and it actually identified that you had knowledge that drug use may be happening on your premises. So what this permanent solution does is it means that it’s no longer an offence under that Act if you’ve got a licensed drug-checking service operating on your premises. It also allows those drug-checking services to operate with legal certainty.

So this is an incredibly important bill, because what it means is we’re going to have more drug-checking services available at more events, and that means we’ve got more harm minimisation for those attending those events. So I commend this bill to the House.

SIMEON BROWN (National—Pakuranga): Thank you, Mr Speaker—

Chlöe Swarbrick: Here we go!

SIMEON BROWN: —and thank you, Chlöe Swarbrick—for the opportunity to take a call on the Drug and Substance Checking Legislation Bill (No 2). Yes, now she can save her woke rage till a little bit later, when I’m sure she’ll get a chance to be able to speak on this piece of legislation. National continues to oppose this legislation. I think it is fair to say that everyone coming to this debate wants to keep New Zealanders safe, and particularly younger New Zealanders, but there are also sound reasons why it is logical not to support the legislation and what it is doing here. It is a consistent approach from the National Party, which takes a view that drug policy is both a health issue and a criminal issue.

This bill is not based on strong evidence. That’s the first point. The departmental disclosure statement, which has been provided to this House, says here that “There are no inquiries, reviews or evaluation reports specifically about regulation of drug … services. However there is research from New Zealand and overseas on the effectiveness of drug checking services.”, and quotes only one report. That one report is a report from the Victoria University, which seeks to provide some rationale as to why this should be put in place. That report, Drug Checking at New Zealand Festivals (Final Report), was issued last year in November.

This report, which the Government has relied on, is in my opinion not worth the paper that it has been written on. Firstly, you go to the page on acknowledgments where it says here on page 2: “Thanks also go to the politicians and ministry staff who supported this project. The use of illegal drugs is a politically sensitive topic”—fair point—“so it was very welcome that Hon Stuart Nash, Chlöe Swarbrick, and Hon Dr David Clark openly supported the research.” Well, I’m pretty sure that sounds like a pretty objective bunch of people helping to support this research! “[The] research would also not have been possible without the support of ‘Know Your Stuff’ ”—another completely unbiased organisation trying to put forward some evidence around this particular issue.

I then turn to the executive summary, where it says here that “Four groups of people were interviewed: festival/event organisers; medical personnel who worked at … events; volunteers working for [Know Your Stuff New Zealand]; festival attendees/wider New Zealand public … Overall 66 people were interviewed … 911 surveys were completed, with the final survey sample after cleaning totalling 861. The sample was a purposeful, focused, non-random sample.” Now, for an organisation such as the Victoria University of Wellington, which prides itself on its academic inquiry, its independence, and its ability to try to really understand the issues, this seems to be one of the most biased documents I’ve seen, which has used what is called “purposeful, focused, non-random samples”, which I think pretty much means asking people who you think will agree with you and getting a result which they wanted.

And then you look at the findings. They interviewed 66 people. Well, guess what? “All 66 people who were interviewed … thought drug checking was a good idea”. Oh, my goodness! You ask people who agree with you, and guess what? They agree with you. Amazing. You go to the methodology—amazing—“The key aims of the research were to gather … a [wide] range of views.” Well, they didn’t do a very good job at doing that. There was an online survey which was distributed via social media—whose social media? “the lead researcher’s Twitter account”—she’s very well known for her views—“ ‘Vic Deals’ and … Facebook pages of ‘JustSpeak’ ”—very independent lobby group—“the ‘New Zealand Drug Foundation’ ”—they don’t have an interest in this at all—and “ ‘Know Your Stuff’ ”—another organisation with no interest in this particular topic.

So here we are looking for an evidence-based approach, which is what the Green Party and the Labour Party will try to tell us, and the one New Zealand document which they have based the rationale for passing this legislation on is anything but rational, anything but independent and impartial. That piece of document, as I said, is not worth the paper it’s written on, and I believe Victoria University should be ashamed to have their name on that piece of document.

The other overseas piece of research was Andrew Groves in the Harm Reduction Journal, which says that there have been “no studies [which] have fully tested in a controlled way, whether pill testing reduces harm.”

Chlöe Swarbrick: Maybe because it’s illegal?

SIMEON BROWN: Well, there have been plenty of opportunities in other countries where it has been legal, and he looked around the world and came to the conclusion that there have been no studies—

Chlöe Swarbrick: Give us a citation, Simmo.

SIMEON BROWN: Andrew Groves in the Harm Reduction Journal; you’re most welcome to look it up.

The next point is that this bill goes wider than previous legislation. This bill allows for much wider testing than just at music festivals. I think we can put aside the issue of music festivals, but the public then need to ask the question of whether they want to see drug testing like this more widespread around New Zealand. Do we want to see drug-testing services in the main street of our local town centre? There’s some in the House who might think that’s a good idea. There are others who would see and remember what happened during the whole issue of the Psychoactive Substances Act. I was on the Manurewa Local Board at the time, and I remember when a legal high shop opened in the main street of Manurewa, and because it said “legal highs”, everyone thought, “Well, they must be OK, so therefore we’ll use them.”, and we saw the enormous social consequence and devastation caused by those substances. This is something which will also see that mission creep as these drug-checking services open up.

And it’s already happening. The New Zealand Drug Foundation has already started drug testing out of their offices in Wellington and recently started doing it out of their office in Auckland. The question the public need to ask is whether they wish this to happen in more localities, other town centres, and near other places where their children may go—all of those questions, and those are issues which I don’t believe the public have been asked to give consideration to. Those are something which I hope, if this bill does go through select committee—which I hope it doesn’t, but assuming it does—the public put their voices forward on that very point: should this just be limited to music festivals, or is the public actually happy with drug-checking services popping up on main streets up and down our country? That, I think, is a very serious issue.

Another significant issue here in this piece of legislation is that the legislation makes it explicit that the results of testing by drug and substance checking services will not be admissible in criminal proceedings against the person who supplied any controlled drug or unapproved psychoactive substance for testing. Now, this is something which we need, in some way—the police need to have some ability to hold to account those supplying drugs which are harmful and which are causing major, major harm in our communities.

The final point I want to make is that it needs to be put on the record that the reality is it doesn’t matter how many times you test MDMA; it’s still a dangerous drug. This bill does not make MDMA safe—doesn’t matter how many times you test it; it’s still not going to be safe. It doesn’t matter how many times you have a conversation about it; it still doesn’t make it safe. This legislation doesn’t have the evidence basis that the Government claims it does, and the National Party will not support it.

Dr TRACEY McLELLAN (Labour—Banks Peninsula): Thank you, Mr Speaker, and thank you for the chance to rise in support of this bill, the Drug and Substance Checking Legislation Bill (No 2), to take a call, add a contribution, and make two or three points perhaps a little bit clearer. The single broad aim of this legislation is, again, and I think we need to remind ourselves, to minimise the harm by allowing checking services to operate legally in New Zealand within a permanent regulatory sort of system, and I don’t think we can lose sight of that.

So there’s three points that I just want to emphasise. Firstly, the drug-checking Act was implemented, obviously, as many people have already said, as a temporary piece of legislation to allow for drug checking to take place over this past summer. But as it is in its current form, it’s not best practice, particularly because there isn’t that access to oversight of the appointment decisions or oversight of the provider activity, and there are no provisions for appointments to be revoked. So this piece of legislation is more robust and can address at least those shortcomings. I think, as Minister Henare said, the biggest difference between the current Act and this bill that we are talking about tonight is in the licensing system, which provides much more oversight and gives us that mechanism to suspend or revoke a licence to test, if the provider is not providing their particular service properly.

The second point is that checking a drug or a substance allows a person, essentially, to make a lifesaving decision not to consume it should it turn out to be not what it says on the box, so to speak. That’s actually incredibly important and nothing to be scoffed at or taken lightly. It doesn’t need to happen every day. It doesn’t need to happen in every community. For every time that happens and a person is able to negotiate their way out of a potentially risky situation, then that’s worthwhile.

As Minister Henare stated earlier, it was common over this past summer—and I think we’ve all heard various permeations of it—for synthetic cathinones to be sold as MDMA, and they’re so much more risky. Although it’s temporary, the current Act has already been shown to have an impact. I’m just going to go back a little bit and talk about that Victoria University research and repeat: 68 percent of surveyed festival goers who used the drug-testing services reported—that’s all right; self-reported. That’s what a survey is. They reported a change in their behaviour as a result. The study never claimed to look at or demonstrate the safety of drug taking, because guess what? Taking drugs isn’t particularly safe. It wasn’t providing evidence and shouldn’t be slurred in that way in this House. The previous “contributor”, Simeon Brown—perhaps we should put that in quotes for the Hansard—who talks about false confidence, smugly dismissed research for not being robust in an area or with regard to findings that it never claimed to make in the first place.

Thirdly, the permanent regulatory system for drug checking would help crucial harm education, as my colleague Liz Craig talked about, to be disseminated to people who are at risk of drug harm, remembering that that is a very real risk. People who consume illicit drugs tend to be hard to identify and tend to be quite hard to reach within health messaging. So drug checking brings people who consume drugs into contact with people who have, and can provide them with, information and advice and potentially connect them to those broader health services as well. This is usually provided in a peer sort of situation, so it has a much stronger influence generally than from official sources.

Now, it’s also worth noting that there is often limited information about which drugs are currently in circulation in New Zealand. This makes it more difficult for police and health services to anticipate, prevent, or respond to drug harm, particularly if it’s from novel substances. I think given some of the contributions tonight, it’s probably only fair that Dr Fiona Hutton gets a bit of a name check here when she concludes that “The research detailed in this report and the international literature support drug-checking services and demonstrate the effectiveness of drug checking as a harm reduction measure.”, adding that “There is no evidence that drug checking increases drug use or encourages those who do not use illegal drugs to begin using them.” In making this quote, she cites international literature from various places overseas including the UK, Portugal, Netherlands, Canada, Switzerland, and Australia.

So, in summary, if the drug checking Act provisions are repealed, which they will be in December 2021, we are left without a system in place. Drug checking will revert to that legal grey area, which is not ideal. I don’t think now is the time to go backwards on this issue. This bill is in line with Labour Party policy to treat drug use and drug abuse as a health issue and not a criminal issue, and on that basis, therefore, I’m happy to commend this bill to the House.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe, tēnā koutou e te Whare. It’s probably quite useful to zoom out a little bit and to talk about what we’re talking about when we discuss the regulatory approaches that we can take to substances in this country, and when I’m referring to substances or drugs kind of writ large I’m also talking about things like tobacco and alcohol, which are licit or legal substances at present. That regulatory spectrum on the one side of things looks like complete prohibition. That is, obviously, what the National Party appears to be advocating for, because it’s worked so well for the past 40-plus years, when we’ve seen the proliferation of more drugs, more drug harm, and otherwise! The other extreme end of the spectrum is a complete free market.

If you look at the mountains of evidence that we have accumulated over the past few decades on those two approaches—one end of town, which we’ve taken by compounding criminal prohibition and the criminal penalties inherent in that; the other end of town, enabling things like advertising, glamorisation, and glorification of substances like alcohol—both of those ends of the spectrum are where you end up with the maximisation of harm. The reason for that is that in both of those extreme ends of the spectrum—on the one side you have an entity, criminal organisations; on the other side you have an entity, corporates, particularly monopolistic behaving corporates—you have entities which are incentivised to exploit vulnerable communities in order to make a quick buck. The way that you deal with that is bringing the issue into the light through a mechanism that should be pretty well known in this House: it’s regulation. That is where, when you talk about something like alcohol or you talk about something like tobacco, you say, “Hey, we can better regulate and control that to provide people with better information about what they’re deciding to do with or put into their bodies.”

On the other side, when we’re talking about the likes of prohibition, we have to recognise that the National Party can bang their fists on the table as much as they like, but the Misuse of Drugs Act 1975 has been a demonstrative failure in that we have consistently seen more drugs on the street, harsher substances on the street, and increased problems in our communities. The best way to deal with that issue is to tackle that reality, because the reality is that we have unknown people in unknown places consuming unknown substances in unknown places to unknown effect. The very least that you can do is inform people about what they’re doing, and the evidence shows us that people make better decisions when they have that information.

So to the bill in front of us tonight: as has been outlined by other speakers, it makes permanent the amendment to section 12 of the Misuse of Drugs Act. Section 12 of that old piece of legislation, that terrible piece of legislation, the Misuse of Drugs Act 1975, in its original writing makes it illegal to knowingly provide a place where people consume substances. That provided, technically, the ability to prosecute, practically, actually, any bar, club, or music festival in the entire country, bar the fact that they feigned ignorance that this stuff happened. But by virtue of the introduction of a harm reduction measure, which you could argue makes them knowing that people are consuming these substances—and actually, therefore, that we have far less hospitalisations; to the point made before by the Hon Simon Bridges, we have evidence from 2016 out of the UK that shows us that there was a 95 percent reduction in hospital admissions at festivals by virtue of the implementation of drug-checking services.

If you provide people with that information and you put them through the system, the likes of which has been provided on the smell of an oily rag by a ragtag, phenomenal group of volunteers led by Jez and Wendy at KnowYourStuffNZ for the past several years—and I know that there are members in this House from both sides who have been into this tent, so I really, really want to question the supposed consensus of the National Party on this issue—what you’ll see is that Jez and Wendy and their volunteers will provide you with the starting point that consumption of illicit substances is not something that you should probably do, and it’s dangerous, and there is no way to safely engage in this behaviour, but, hey, if you are going to do this, then here are ways to minimise that harm, and we’re going to let you know whether what you have is something that you thought you had. And, hey presto, what all of the evidence shows of the past several years, as reported on knowyourstuff.nz—I hope the National Party are taking notes; it’s “knowyourstuff.nz” that was being asked for before by the likes of Simeon Brown and Simon Bridges—if you go on to that website you will see consistently that the majority of people will dispose of the substance and not take it if it turns out not to be what they thought it was.

Actually, we have far more profound and long-reaching evidence, as released about a week ago out of the International Journal of Drug Policy. This shows us, actually, qualitatively and quantitatively on about 3,500 people out of the UK who’ve been followed up over a process of the last three years, that actually not only does it change potentially harmful behaviour at the point of that potential harmful behaviour, but it has flow-on effects. Two-thirds of people in this study had changed their behaviour permanently because of the interaction that they had had with a drug-checking service, which in turn meant that they were less likely to engage in harmful behaviour.

Now, I also just really need to address a few of the points made by the National Party in their, I think, intentionally quite riling contributions tonight, one of which is the point made by Simeon Brown that, you know, “Are the public going to be happy with these drug-checking services popping up everywhere?” Well, it may come as a surprise to the likes of the member Simeon Brown, but it actually happens, again in this place called reality, that people aren’t just consuming illicit substances at music festivals. They happen to do it every other weekend as well. And we know this because we’ve also heard from the National Party that they’re frustrated that the police are not enforcing the law at present. The reason that the police have not been enforcing that law is because it is completely unworkable.

I also need to refer the member and the other National Party members who are attempting to barrack me right now to what happened in the 1980s in this country when we were a world leader and we instituted the very first national needle exchange services, which they seem to have forgotten about in their tweets about “Does this mean that we’re now going to have needle exchange services?” We do, and we did it first. And as a result of that, we have the lowest in the OECD amount of HIV/AIDS amongst intravenous drug users in the entire comparable countries that we often compare ourselves to. That should be a win. Of course, Dr Nick Smith, people are still taking these intravenous drugs, but would you not prefer that they do not contract HIV/AIDS and lead to their deaths by virtue of doing a behaviour that your preference for criminal prohibition would continue to see occur?

DEPUTY SPEAKER: I’m going to warn the member: too much use of the personal pronoun, bringing the Speaker into the debate. Don’t do it.

CHLÖE SWARBRICK: Apologies, Mr Speaker—I was doing a bit of a Mark Mitchell there. I also just need to very briefly run through the process that has been alluded to frequently by National Party members as a reason as to why we shouldn’t do this, and that is the psychoactive substances legislation. I would refer members of the National Party to the chronology which happened under their watch in Government. The psychoactive substances legislation was created under the former National Government and was a process to try to grapple with the fact that the Misuse of Drugs Act classification scheme requires that every single time a new substance comes on to the market, Parliament quickly tries to prohibit it. By virtue of that process and new chemical procedures being developed, we saw that Parliament had to do something differently if it wanted to maintain this criminal prohibition. That was the psychoactive substances legislation.

Largely, Government had its hand forced by the continued proliferation of synthetic cannabinoids. At that point in time, we had a number of people who were experiencing a huge number of issues. What was actually proposed in the psychoactive substances legislation was a procedure to regulate to reduce harm. Inherent in that was, for example, requiring that those substances were sold in R18 venues without any sale of alcohol being present. In practicality, that meant those substances went from being sold in a ubiquitous place, like dairy counters, to in a pretty evident and obvious place, like adult stores, which were the only kinds of places or shops that fit that bill. All of a sudden, that compounding and visibility of the issue meant that there were lines outside of these shops, and at that point in time, with the temporary licensing scheme implemented, there were no deaths by virtue of those drugs that had been licensed under that temporary scheme. But a knee-jerk response from the National Government to repeal that temporary licensing pushed those substances underground and in turn killed nearly 50 New Zealanders, based on coronial reports. We can and must do better.

DAVID SEYMOUR (Leader—ACT): Thank you, Mr Speaker. I rise on behalf of ACT in support of this Drug and Substance Checking Legislation Bill (No 2). It is not often that I find myself on the same side of an argument as Swarbrick. I live in great hope that one day she’ll wake up and apply the same principles to economics and personal property as she applies to freedom of the body and mind. But until that happens, we’re going to have to focus on this bill and the reason why all members of good conscience should support it.

It’s very simple. On the politics, on the policy, on the morality of this legislation, it is completely wrong for this House to prohibit drug checking. Drug checking is when people come together voluntarily and offer a service to help their fellow New Zealanders stay safe. That’s what it is. People like KnowYourStuff have been taking considerable risks, placing themselves in legal jeopardy, on their own time, with their own money, to go to festivals and test drugs to help people ensure that if they do have drugs that have been infused with impure substances—horse tranquiliser and awful stuff far worse than MDMA—at the very least they can find out that that’s the case and not take it. That’s what we’re talking about—people helping people voluntarily. That’s why I think a conservative political party should support it. We don’t want the State to solve all our problems. When we see people helping each other voluntarily, we should actually be in support of that, rather than standing in this House and prohibiting it.

Then there’s the politics of it. What do parents really think about this legislation? Well, there are two things they might think. They might think pill testing will encourage their kids when they go to a festival to take drugs like MDMA. If they know it’s pure, the logic goes, then they might be more likely to try it than if they were unsure and worried that it could have horse tranquilliser in it. And no doubt, for some kids, that is actually true. Allowing pill testing will mean some kids will try MDMA whereas they might have been discouraged by the risk of there being bad things in it. But surely even the opponents of this legislation have to concede that there will also be kids who are saved from taking much more dangerous things because they are able to test and find out that the dangerous stuff is inside the pills that they have.

Really, on a moral basis it’s pretty difficult to argue that you want to make sure that no more people take safer pills at the cost of some people taking very dangerous ones—because that’s effectively the argument. When you’re a parent and you know your kid is going to get invited to festivals and go along to these things in the summer, do you really want to take the risk because you think, “I hope my kid won’t try anything but if they do, I want there to be a facility to make sure they don’t really take bad stuff.”? That’s the politics of it, for the opponents of this bill. Do you really want to say to parents, “We want your kids to go along and risk taking really dangerous stuff, but at least it will stop a few people from experimenting because they’re too scared.”? Do you want to say to parents, “Do you really want to bet that your kid’s not going to be one of the ones that tries it anyway?” That’s the politics of it.

Then there’s the data. Some people want to say that, actually, the number of people taking MDMA is going to increase more than the number of lives that are going to be saved by being able to detect the really bad stuff. I would say that, actually, no side has managed to put forward compelling evidence that it’s one or the other. I don’t think anyone’s actually presented the data. The National Party stands up and says that the data that the Labour Party’s put up is terribly compromised, and the Labour Party says that the National Party is bringing evidence from 1975, but neither of them have presented compelling evidence one way or another.

That’s when you come back to the basic morality. Should this Parliament pass a law to prevent people from helping themselves? Here is a philosophical question: do we believe that people should be able to make informed choices about how they live their lives and how they use their bodies? Well, some people would say that it’s better to keep people in ignorance in the hope it will scare them off making any choice at all. I think that is philosophically a very difficult position for any party on the right of politics to sustain. The State, as Big Brother, will keep citizens in ignorance, stop them from accessing information, stop them having information voluntarily provided by their fellow citizens, because keeping citizens in ignorance is for their own good—is that really the position of the National Party when they oppose this legislation and retain the prohibition on pill testing? I think that if they thought about it for a moment, they would not take such a position.

In conclusion, the starting point is a question of whether this House should prohibit New Zealanders from voluntarily helping each other. The ACT Party says that we should never stop people voluntarily helping each other, and that’s what people like KnowYourStuff are doing. The second question is which is the greater risk: that some kids at festivals who wouldn’t have tried MDMA will try it and therefore increase usage; or that people will take drugs when they don’t know what’s in them, thereby increasing harm? The ACT Party says that when neither side is presenting greater evidence, the lesser risk is for a few more kids to take MDMA than for some kids to be taking horse tranquilliser because they don’t know what’s in the pills they have. Finally, there’s the philosophical argument that we should live in a free society where people are free to receive and impart information and make decisions about how they use their minds and their bodies and their property for themselves, not be kept in ignorance by the Big Brother State for their own good.

When you weigh up those points, it should be easy to see that the moral and philosophical and the practical evidence is in favour of supporting this bill and allowing pill testing. But, finally, there’s the political argument, and I want to say to the people I represent, and perhaps people opposing this bill: do you really think that parents who know their kids are going to festivals, parents who know their kids may be offered pills, parents who think their kids are pretty good kids but can’t really be sure they won’t be tempted, would want them to go to a place where they can find out if their pills are dangerous, or would they want them to go to a place where they just risk it and might be given something with horse tranquiliser in it? That’s the simple question, and I think I know how parents in the Epsom electorate and beyond would answer those questions. They would want their kids to be able to make informed choices, and that is why the ACT Party is in favour of this legislation.

Dr GAURAV SHARMA (Labour—Hamilton West): It’s my pleasure to rise a second time in the House today after having recently spoken on the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill. This time I’m speaking on the Drug and Substance Checking Legislation Bill (No 2). I just want to acknowledge David Seymour; I used to live in his electorate—rather, I spent the majority of my life living in Epsom going to school and medical school there, and I never thought I would actually agree with him. So never say never, I guess.

As a member of the Health Committee, as well as a medical professional, I’m proudly supporting this bill. I’m supporting this bill because last summer the Labour Party - led Government legalised drug-checking services to operate at festivals over the summer and it’s already having an impact. As we’ve heard from other members—the deputy chair of the Health Committee, Dr Tracey McLellan—research from Victoria University has shown that 68 percent of people surveyed, festival-goers who used the drug-testing services, changed their behaviour as a result of that. This behaviour change meant that some disposed of their drugs that had been tested, some reduced the amount of drugs they took, and 87 percent, that’s a lot, said that as a result of talking to the testing team they understood more about the harmful behaviour involved in taking the drugs.

The problem we’ve got at the moment, though, is the Act will expire in December and experts are telling us that it should be made permanent. The Act has also given welcome reassurance to those operating the services in New Zealand, as well as festival organisers who host them, that they will not be criminalised for their efforts to keep young New Zealanders safe.

Under section 12 of the Misuse of Drugs Act 1975, it is an offence at the moment to knowingly allow premises to be used for the commission of an offence against the Act. Before section 12 was amended by the drug checking Act recently, on an interim basis, event organisers and other hosts who allowed drug-checking services to take place were at risk of prosecution under section 12, because the promotion of drug-checking services could have constituted evidence of knowledge that drugs were being consumed or possessed on the premises. The drug-checking amendment on section 12 provided that it’s not an offence to host a drug-checking service any more.

But if a permanent regulatory system is not introduced, drug checking will revert to a legal grey area and drug-checking service providers and their hosts will again be at risk of prosecution. It is likely that drug-checking services will be provided at fewer events once again.

As a health professional, I would say it adds another layer to it, because once you test the drugs you know what people are taking and you are able to provide the best medical care to people. In my own career, I have seen people come to me, but not knowing what the drug is means it takes that much longer to provide that care. So, for us, it’s always been about a health perspective, not the criminal aspect of it, and we want to make sure that people have that access available to them, especially our young kids.

So I will say to the Opposition: “know your stuff” before you criticise Victoria University, Simeon Brown. And as such, I would recommend this to the next stage.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call Chris Penk.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Speaker, for the opportunity to speak on the Drug and Substance Checking Legislation Bill (No 2).

We’ve heard a number of different claims on the other side of the House, and on this side of the House to the extent that the ACT Party has contributed to the debate, along the lines, of course, of harm minimisation. I think it’s worth acknowledging from the start that that, in itself, is a worthy goal. I’d like to think that every member of this House would want to minimise the harm associated with drug taking. So just to put it in that context, I very much hope that we are arguing over the detail about how that might best be achieved, and, of course, more particularly on whether sending a particular message about the safety of particular drugs, notwithstanding any additional elements, is where we need to focus our efforts.

So taking the intent of the legislation at its face value, namely “to try to minimise drug and substance harm by allowing drug and substance checking services to operate legally in New Zealand.”, we can make a number of different observations. The first is that one of the points of emphasis of the bill is the idea of legal certainty. This is explained in the general policy statement with reference to the handling of controlled drugs. But more accurately, or more importantly, the point is not simply the handling of the drugs; it’s the fact of handing them back to a person who has handed them into the care of these checkers, who might have the best intentions in the world, but who are nevertheless engaging in activity that will increase the likelihood of harm from the drugs themselves in the act of handing them back. So whereas we see in the explanatory note a number of different functions that can be carried out, one of which is the testing, another of which is the checking, another being the advising—these things are all fine, of course, in themselves, but it is the returning of the drug or substance to the individual who had presented it for checking that is the dangerous element that we can see in the licensing regime, that is to allow the activities to be carried out in a way that’s licensed or regulated.

Of course, there is also an interesting issue, as one of the stated aims of the licensing regime to legitimate the activity is “providing information and harm reduction advice to help individuals make informed decisions about drug and psychoactive substance use:”—well, amen to that. Providing information and advice is a very worthy aim indeed, but it is not illegal at the moment to provide information about the harm that drugs can cause to young people, or indeed any other people, and the more of that the better, but it doesn’t require an act of Parliament to allow such education to take place, and it is indulging in a straw man argument to suggest otherwise.

I do also want to comment on the scope of the bill in the sense of the different aspects of New Zealand public life or private life, indeed, that are covered by it. Again, somewhat of a straw man argument to reference heavily music festivals, because there is no such limitation in the bill. But if we’re going to focus on that then let’s at least interrogate that notion in a way that is giving the proper attention that this category of entertainment deserves. There has been far too little comment on the nature of so-called music festivals at which drug taking is so rife. A drug festival with a soundtrack is not a music festival. If the amount of drug-taking activity endangering the lives of young Kiwis is such that we need to make a law so that they need not be afraid of allowing drug checkers on site then how about we, as a Parliament, legislate better and as a society deal with the problem better of the fact that there is so much illicit drug supply and use going on in the first place. That is at the heart of what we should be dealing with and not the relatively innocuous activity of the checking, the testing, certainly the educational element, but, of course, the handing back of that which is dangerous with or without additional elements, which may or may not be known; that is a straw man. Again, we should resist that notion. We should resist sending the message that drug taking, in the case of these very harmful substances, is OK. We must resist this idea that we could hand back that which will kill or injure our young people under the guise of education and false notions of harm minimisation.

KIERAN McANULTY (Labour—Wairarapa): I’ll be honest: I don’t like drugs as much as those on the other side of the House. I’ve lived somewhat of a sheltered life. I grew up in Masterton, and I didn’t really have the opportunity to have drugs until I went to the University of Otago, at which point I said no. I went overseas and played rugby in Ireland and travelled around Europe. I spent a week in Amsterdam, and I still said no. I had no interest in trying drugs whatsoever. I, like many on the other side of the House, thought—and still think, to some extent—that they are bad. But I’m actually not hearing anyone tonight say that they’re good, and I think that’s the guts of this: we need to face facts.

I’ve never done any hard drugs. I’ve tried marijuana twice. The first time was by accident—that’s God’s truth—and I was crook as a dog. Then my mate said to me “Well, you’ve done it now. You’ve gone your whole life without trying it. You’ve gone and done it. You may as well try it properly.” And I did, and I was crook as a dog. So I’ve done it twice, and I was crook both times, and I’ll never do it again. Horrible. Awful experience. I’ve never tried any of these things that are listed in this piece of legislation, but am I going to cast judgment on those that choose to do it? Of course I’m not. And that’s the thing. This is what we’ve got here. We can’t place some ideological view, some conservative view, that drugs are bad and the people that take them are doing a bad thing, and therefore they should be told off and we should increase the laws and increase punishment, and it’s on them; it’s their own fault.

Let’s just face up to a fact: some people take drugs, and it is a bloody dangerous thing to do, so let’s bring in measures to make it safer. Bring in education and bring in testing at music festivals in particular, so that if people make a choice to try a drug, they can do so knowing that the stuff that the facts say is actually hurting them and actually killing people is not in the drug. When we step back from our personal views and look at the facts, and show that the temporary bill that was brought in has been able to assist people in identifying that a significant proportion of the drugs that they tested were not what they thought it was, this bill will save a lot of hardship, a lot of pain, and quite possibly save lives. So let’s as a House put aside our personal views. I don’t want people to take drugs, and I say that with the greatest sincerity, because I’m worried about it. I’m worried about the impact that it will have on them. I’m worried about the impact that it will have on society. But they’re going to do it anyway, so let’s make sure that it’s safer.

I’ve learnt a lot since taking on this role, since coming into Parliament four years ago. I went to my first music festival since being elected to this House, and that was an eye-opening experience—literally. There were people that I think most people would be quite surprised to see engaging in these sorts of substances—respected people with respected professions, from right around the country, getting together, enjoying themselves, enjoying the company of their mates and their family, and enjoying the music and things that were on offer. At times, I felt uncomfortable. I’ll be honest. It’s not the sort of situation that I or someone in my job probably wants to be around, so I removed myself at times.

I was worried about what was in those products and the damage that it could do, but in what this bill proposes, there will be provisions available for people to check what they have and make sure that it is what they think it is. Then, at least, we will know it’s safe. So whilst we still might not like it, at least we will have that worry out of our minds. And one day, if I am lucky enough to be a father, I will have a conversation with my children and say “Look, I don’t really want you to do it, but if you’re going to do it, make sure it’s safe.” Isn’t that pretty much what we’ve all heard from our parents at various times when we were growing up? Make good choices—that’s pretty much it, isn’t it?

Simeon Brown: It simply just normalises it.

KIERAN McANULTY: Look, make good choices—that’s the guts of it. One day you’re going to be an adult. You can do what Simeon Brown does as he squeaks over there and says—casting judgment. That’s what he’s doing. He is casting judgment on people. He’s got an opportunity now to bring in law that will save lives and help people, and instead he’s sitting there judging people. I refuse to do that. I commend this to the House.

Dr ANAE NERU LEAVASA (Labour—Takanini): Fa‘afetai lava, Madam Speaker. Thank you for the opportunity to speak on the Drug and Substance Checking Legislation Bill (No 2). I also acknowledge the member who spoke before me, Kieran McAnulty, and say yes, I agree, taking drugs is not good. I mean, being a clinician and seeing the harmful effects it has where I’m from in South Auckland—it is so dangerous that I’ve seen people lose their lives as well. Working at Middlemore Hospital’s emergency department (ED) and seeing the effects there and also seeing people come through our primary clinic doors as well.

This bill deals with the reality of drug use. We say that, obviously, in a utopian society we wouldn’t see people take drugs, but in reality they do. So this is one of the levers to minimise harm in order to protect our community, our whānau, and those who are taking drugs. As I said, being in a clinic setting, I remember seeing a couple of teenagers in school uniform come to the clinic in Manukau, and seeing that one friend was so concerned about her other friend who had taken some tablets but didn’t know what the actual drugs were—in an emergency setting trying to stabilise her friend, and her friend didn’t know what was taken. She had taken it from home. We rang the family; they didn’t know what was taken. So these are the types of scenarios where we really, definitely need to know what the patient has taken in order to provide treatment. Obviously, sent her to ED for them to do a drug test as well. That’s why this is one of the bills that I fully support in order to minimise harm.

When we talk about MDMA and the testing of that drug—ecstasy, molly, or pingers, as it is called—this is one of the things where some of the providers or the drug suppliers lace it with different things. One of the drugs that is so harmful is the eutylone, or the synthetic cathinones, as it’s also known as. The risk of seeing our young ones, whether it be with fast heart rates, seizures, collapsing in front of you, all these different harmful effects that, when we identify these drugs, we really need to make sure that this new system can be put in place in order to prevent and lower the risk of these issues occurring.

As I see with those who have fatally and tragically lost their lives here and overseas—especially, I point to Australia and what we’ve seen in their studies and evidence across the Tasman. It is so important that we learn from international studies, that we can bring this into the ongoing work that’s going on with the temporary Act, that we can roll this out smoothly, and that it carries on providing safety.

We’ve seen the numbers. We’ve heard the research, done by Victoria University, about the 68 percent that once they knew of the test results were able to get rid of it and change their minds. Also, the number of 87 percent, which I think is really pivotal in terms of getting tested and knowing and getting education; the 87 percent that had said that they have increased their understanding of the harm reduction for the drug they were about to take; and, also, the 53 percent from the study that said that their knowledge has substantially improved knowing the test result.

We look to the companies that provide the testing as well—this bill will help in terms of providing licences, provisionally, to make sure that there is some oversight and they can get their full licences after a period of time. This bill is one I would recommend and support because it does so much to minimise harm and also educate our community in drug taking, and that’s why I support this bill. Thank you.

Hon Dr NICK SMITH (National): There’s not a member of this House that wants to see our young people die as a consequence of using recreational illicit drugs. Twice in my work as a member of Parliament I have had the awful situation of working with parents trying to bring the bodies of their loved children back to New Zealand from different corners of the world where they have died as a consequence of experimenting with recreational drugs. It’s awful. For the record, one of them was at a music festival where the drug had been tested but still died. The emotion of seeing those young people returned and the funerals in my community was horrific. Other members have tried to characterise it that if anybody doesn’t agree with this bill, somehow they’re disconnected with young people. Well, I’ve got three of my children at Otago University. I’ve got another teenager. Don’t lecture me on what it is to be a parent and my love for my children.

The issue that we need to debate in this House is that by allowing for drug and substance testing are we sure that it is going to make it safer. Now, I was interested in the contribution from Dr Leavasa, and he said, “We need to look at the research from countries like Australia.” Well, I think Australia is a good comparison because culturally they’re actually pretty similar to us and I would say a lot more similar to us than maybe the Netherlands, which is the only other country that’s gone down this path, and I would say that there is a lot of cultural differences. Well, the University of New South Wales did an in-depth study of 392 deaths from recreational drug use. Three hundred and ninety two young Australian lives lost to illicit drug use. What that research showed is not one—zero—were caused by impurities in the ecstasy that they used; zero. So when I hear members from both the ACT Party and the Green Party and the Labour Party saying that we need to make decisions on a research base, saying that this is all about saving lives because of impurities, I challenge them, and say, “Show me the deaths from the impurities, because I can show you 392 deaths of people who have taken ecstasy.” So my worry with this bill is that we are going to be saying to young people, “It’s got no impurities, it’s pure ecstasy. It’s OK.”, when it is not.

Now, I can appreciate where the ACT Party comes from. They come from a civil libertarian perspective, and they say whatever individuals take in their body is their business. On the basis of that, you’d legalise heroin and cocaine and all those drugs. But here’s the problem with that philosophy: it’s not just the individual that’s affected when people take dangerous drugs. There’s, of course, an impact on the mental health system, and every constituency or other MP has seen that. There is impact on violence, on poverty, on workplace accidents.

Chris Penk: On families.

Hon Dr NICK SMITH: My colleague says, “On families.”, and anybody in this House who knows families that have dealt with drug abuse and addiction is—man, it is tough, and I wouldn’t wish it upon my worst enemy.

Now, my second concern that the Parliament needs to be very open about with this bill, as compared with the bill we considered under urgency last December, is this: the word “festival” was used over and over again in the bill that was passed last December. We were assured this is all just about providing testing at those music festivals and concerts. Well, ‘ello, ‘ello, this bill provides no such limitation. We are talking about introducing drug testing right across the community. There’s a certain logic to it. If you truly believe that you’re going to make the music festival safer by enabling drug testing, well, the logical answer is that, well, you’d do it at the local nightclub, you’d do it at the local dairy. This bill provides for permanent drug-testing facilities in our communities. We need to be open that this permanent change in the law is taking things considerably further. My worry is that Parliament needs to learn the lessons.

I have a very different view to Chlöe Swarbrick about the experience of this Parliament in 2013. The Greens had long advocated a view that regulating dangerous substances was a better option than prohibiting them. I have never seen this Parliament do as fast a U-turn as what we did on trying to regulate psychoactive substances. Those members that are here representing those communities of South Auckland, I say go connect with your community organisations, your A & Es, and the like that had to deal with the scourge of recreational drugs when this Parliament was seduced into an argument of saying that liberalising and testing and regulating was a better option than prohibition. The Green Party argues that there was nothing wrong with that law. I say there was everything wrong with that law. It did not work. It was a disaster. It cost lives. Parliament needs to learn from history and from its mistakes.

I also have to note some kind of odd analogies that we heard from the Green Party and from Chlöe Swarbrick. In characterising the National Party as conservatives, she tried to run the argument that said, “Oh, well, the National Party would say it’s like sex. And the National Party, if they had their way, would ban sex, and just simply say no to young people.” Can I say to the Green Party, there’s a difference. You can have safe sex. There’s no safe way to use ecstasy. There’s a key difference. She then used the analogy, “Oh, this legislation is just like providing a seatbelt.” Well, I say that analogy is wrong too, because if the car’s unsafe it doesn’t matter whether you’re wearing a seatbelt or not; it doesn’t make it any safer. It is my view that ecstasy is unsafe, tested or untested.

I also want to take issue with those that are quoting some of the research in saying that, “Oh well, we did it and the research showed that it all works.” My colleagues have pointed out that the research that has been cited from Victoria University specifically said, “The sample was purposeful, focused, and non-random.” Well, what credibility would anybody from a science background give to a non-random survey? When I read that research it gave me the jeebies. You know why? It said that 90 percent of the participants said that after it was tested, they’d still use the drug.

Now, I have got absolutely no problem with the public funding, at music festivals and other places, for good information to tell young people the dangers of these illicit substances; absolutely right. But what you can’t do is claim that the only way you can provide that information at music festivals and other places is to also provide a drug-testing service. That is a flawed logic. There isn’t a member of this House that does not support better information for all people to make better informed choices.

The last point I want to make is there’s a perception that this bill is very mainstream. Well, the New York Times reported this week that we would be only the second country in the world to go down this path of providing testing for drugs that are illegal. This is quite radical legislation. At the select committee, I want to challenge the Government to be open and transparent. We do need to make an evidence basis. We know that further lives have been lost over the last year. My view is the clearer that this Parliament can be that drugs like ecstasy should not be used, the better and the stronger our message is.

SARAH PALLETT (Labour—Ilam): Thank you, Madam Speaker. Thank you so much. It’s with pleasure that I stand this evening as the final speaker for the Drug and Substance Checking Legislation Bill (No 2). It’s always fun to have the last word.

But before I start with wrapping up what we’ve heard before us this evening, I have to first begin by standing in defence of my colleagues Dr Leavasa and Dr Sharma, who, I would like to point out, are doctors in name because they have clinical medical practices. Both have lived, clinical experience of treating people who have experienced drug overdoses and the side effects of taking MDMA that was not, so they are very familiar with the effect of this legislation and why we are standing here in support of it.

But, to wrap up, this bill allows drug and substance - checking services to operate with legal certainty, and the drugs we’re talking about are MDMA, cannabis, LSD, ketamine, magic mushrooms, amphetamines, methamphetamines, etc. [Interruption]

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! We will hear this speech in silence, thank you very much, members on my left.

SARAH PALLETT: Thank you so much, Madam Speaker. So what we’re doing is testing to see whether the drug is fundamentally what the person thinks it is, and I’d like to start by just highlighting the fact that I think most of us agree on—yes, I hope we do—and that’s that no drug use is the safest option. So when we’re looking to see if the drug is what we think it is, it could be sugar—and when I say “we”, I beg the House’s pardon. I’m not referring to us here in this House. We could be looking at sugar, plaster of Paris, or ketamine being sold as MDMA or cocaine. It’s really—

Simon Court: Oh, what a rip-off.

SARAH PALLETT: Yeah, it is a rip-off. Thank you, I do agree. It would be a rip-off. You would feel cheated, but wouldn’t you be fortunate if that were the only thing that you were experiencing, because what you don’t want is to be getting synthetic cathinones.

It’s really important when you’re doing this testing to give advice, because advice is resulting in information and harm reduction. Advice allows people to make informed decisions.

Then, of course, the other purpose of these testing stations is to safely dispose of the samples being tested and also of the drugs themselves, if they’re surrendered. Why do we do this? Not to put too fine a point on it, we do it because people die when they take contaminated drugs, and I do absolutely 100 percent agree that drug use is not a safe activity and not one that we want to encourage. In New South Wales, tragically, we saw that six young people died in 2018-19; in New Zealand, we’ve seen 13 young people hospitalised due to contaminated MDMA, and a Canadian study has shown that about a quarter of samples, they found, when tested were contaminated.

But if we’d like to look at the amazing work being done by KnowYourStuffNZ, looking at the years 2019-20, they tested 1,368 samples—according to their excellent website, which I’d like to refer you to for further information—and 86 percent were as expected, but not safe-use drugs. We’re not saying that drugs are safe here. Two percent of those were cathinones: n-ethylpentylone, which can cause death and mass hospitalisations. Two percent of them were mixtures. They also found high-dose mixtures, so they had two or more doses when only one was expected, and it doesn’t take a rocket scientist to work out that that’s not the best plan.

So when people are tested—and we’re looking at about 78 percent, I think, of people who are attending festivals who are planning to use drugs at those festivals. So it’s quite a few people, and, interestingly, only 4 percent of those would be first-time users. Testing resulted in 68 percent of them altering their behaviour. They were either taking less, declining to use the drugs, or deciding not to mix them. So this pragmatic piece of legislation substantially reduces harm.

Ninety-seven percent of people that attend festivals, and 97 percent of those that don’t, think that this legislation is a good idea. Medical personnel think that this law change is a good idea because they recognise that young people will take drugs even if they’re illegal. Festival organisers themselves have had far fewer serious incidents resulting from drug consumption.

But what I have to end with is the words of KnowYourStuff—which we would all agree with, I think—which are “that the safest option is always not to take the substance.” With that, I commend this bill to the House.

A party vote was called for on the question, That the Drug and Substance Checking Legislation Bill (No 2) be now read a first time.

Ayes 87

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

Noes 33

New Zealand National 33.

Motion agreed to.

That the Drug and Substance Checking Legislation Bill (No 2) be considered by the Health Committee.

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

Ayes 85

New Zealand Labour 65; ACT New Zealand 10; Green Party of Aotearoa New Zealand 10.

Noes 33

New Zealand National 33.

Motion agreed to.

ASSISTANT SPEAKER (Hon Jenny Salesa): The question is,

Bill referred to the Health Committee.

Instruction to the Health Committee

Hon PEENI HENARE (Associate Minister of Health (Māori Health)) on behalf of the Minister of Health: I move, That the Drug and Substance Checking Legislation Bill (No 2) be reported to the House by 29 October 2021.

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

Motion agreed to.

Bills

Plant Variety Rights Bill

First Reading

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I present a legislative statement on the Plant Variety Rights Bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon Dr DAVID CLARK: I move, That the Plant Variety Rights Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill.

Hon Simon Bridges: Why?

Hon Dr DAVID CLARK: That is the right committee to consider the bill, I say to the member. The plant variety rights (PVR) issue has been with us for some time. It addresses problems that haven’t been solved since we first had this legislation on plant variety rights in New Zealand in 1973. This bill enables us to meet our obligations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, our free-trade agreement that is aiming at being progressive. It facilitates economic recovery and, at the same time, it respects indigenous rights and takes a partnership approach, recognising the rights of Māori in the development of our indigenous species and the kaitiaki relationships that they have.

This bill gives certainty to business. It hits a sweet spot that enables progressive trade. It is inclusive. It’s the best of both worlds: indigenous rights and commercial returns for intellectual property (IP) development. This bill and those that support it will find themselves on the right side of history, supporting those who develop intellectual property and growing New Zealand’s GDP. To oppose it, of course, would be to oppose progressive free trade and to undermine both Māori and the business community. I would not expect any member in this House to oppose and undermine business and prosperity for the future of our country. I would not expect any member in this House to oppose this bill and undermine indigenous rights. So, with this bill, we move things forward.

It is interesting that, first, these issues came in a really substantive form with the Wai 262 claim in 1991, and the review of the Plant Variety Rights Act in 1987 began the job of aligning New Zealand’s plant variety Act’s regime with the International Union for the Protection of New Varieties of Plants (UPOV) 91, about which I will say a little more. Plant variety rights make a valuable contribution to the New Zealand economy, underpinning many advances in the agricultural, horticultural, and ornamental sectors. By encouraging the development and distribution of new plant varieties, farmers and growers benefit from high-yielding or disease-resistant crops, and consumers benefit from a greater variety of high-quality produce that meets new and modern needs. New varieties of kiwifruit, apples, and hops, along with our world-leading ryegrasses, are all examples of innovation brought about by the granting of plant variety rights.

While on the whole the new plant varieties innovation system is in reasonable health, breeders and growers are pointing to an uncertain future if our rules are not brought up to date with modern standards. These standards are set out in the most recent international agreement for plant variety rights, settled upon in 1991 and known as UPOV 91. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership requires us to align our law with this UPOV framework, but New Zealand currently, with the existing regime, is trapped in 1978. The current law, put simply, is not compliant with our obligations under the Treaty of Waitangi.

So, as I’ve mentioned previously, the Wai 262 report concluded that kaitiaki relationships with taonga species are entitled to a reasonable degree of protection. The tribunal noted that some plant species can be classified taonga, and Māori, as kaitiaki, of course then have a connection with them. As a result, the report said there should be a mandate to refuse a PVR grant if kaitiaki relationships are affected, and called for the establishment of a Māori advisory committee to provide advice to the commissioner on plant variety rights.

The report was the starting point, and there was then a good degree of consultation. It was listened to the wider concerns of Māori during the engagement and the review process, and as a result the bill does extend further than that Wai 262 report in some areas. For example, if work includes the use of plants that may be taonga, like some indigenous plant species, breeders are encouraged to identify and engage with kaitiaki early, prior to submitting a PVR application, and the bill will establish a Māori plant varieties committee with genuine—

Hon Simon Bridges: There’s no life without plants.

Hon Dr DAVID CLARK: —decision-making power to help protect those kaitiaki relationships.

Hon Simon Bridges: Photosynthesis.

Hon Dr DAVID CLARK: Now, all applications—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Mr Simon Bridges.

Hon Dr DAVID CLARK: He needs some light, as his interjections suggest! He needs to grow. He needs water. He needs light.

All applications involving indigenous plant species and a small number of species that were brought on the migrating waka are covered by this committee and its oversight, and any species concerning their use must be considered by that committee. Now, if the impact of the development of the plants impacts on the kaitiaki relationship, it may well not proceed as an application.

We do want to modernise the Plant Variety Rights Bill so that it’s finally consistent with international best practice in IP rights, as laid down in the well-known UPOV 91. This is long overdue. Giving effect to UPOV 91 will strengthen breeders’ rights to better reflect the realities of modern plant breeding. It will help stimulate innovation in the sector, much as when plant variety rights protections were first introduced in the 1970s to encourage a rose grower to come to New Zealand, as it happens, to develop rose plants here. We want our businesses to have their intellectual property protected. We want to have reasonable concern to the rights of those with kaitiaki relationships. So I expect that these IP rights and the protection of them will bring benefits to New Zealand and our society as a whole.

The bill does find the right balance. Farmers will still be able to save seed to plant for next season’s crop. Breeders will still be able to build on existing innovation to create new varieties, and home gardeners will still be free to grow new varieties for themselves. I’m aware there are many who would have liked us to have gone further. I think this bill is something to be celebrated, tackling a problem that has been sitting there since the 1970s, that has had challenges through the 1990s—the Wai 262 that came around and was discussed in the 2000s at some length—and a problem that has not been able to be solved by a succession of Governments.

Here we have, as a result of, in part, the progression of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—and I do want to congratulate the Hon David Parker for his work in this area previously. As a result of that work, we found a way through that supports indigenous rights in New Zealand, that brings prosperity with free trade, and, as I said at the outset, that brings the best of both worlds. It will support our industries with the protection of intellectual property. It will support Māori and indigenous interests, and those who support the bill will find themselves on the right side of history. Those who don’t will find businesses questioning them as to why they are not bringing intellectual property rights into the 21st century and why they are not willing to protect and engage the kaitiaki of this land and ensure that indigenous rights are also respected. I commend this bill to the House.

Hon TODD McCLAY (National—Rotorua): This is an important piece of legislation, and I’ll come to it in a moment. But beforehand, I just lost a bet with my colleague Simon Bridges. I bet him that the Minister couldn’t do a full 10 minutes on this, and he did. Mr Bridges bet me that the Minister wouldn’t say that voting for this would put you on the right side of history twice, and, actually, that’s what the Minister said. Minister, this piece of legislation is nowhere near as important as you say, and if somebody in this House finds a reason that is credible not to support it, it has nothing to do with history.

You are right that the Hon David Parker did a lot of good work here, when he took the Trans-Pacific Partnership (TPP) and turned it into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In fact, I remember him coming to this House, and all that he spoke about was Wai 262 and the International Convention on the Protection of New Varieties of Plants and, actually, how he had, with his new Government, carved out protections so that New Zealand would be able to make sure that not only did it meet the requirements under the agreement so that plants were protected in New Zealand as elsewhere but also that New Zealand could meet its obligation under the Treaty of Waitangi. Except he didn’t, because that was negotiated by the National Government over a nine-year period, and it is one of the provisions that wasn’t touched—it didn’t change at all.

This is an important piece of legislation, because, actually, New Zealand, in many cases, has been able to take plant varieties that are indigenous to New Zealand or from overseas and add significant value to them, and have led the world in creating medicines and being able to feed people more and actually creating great value—great value—in things that others didn’t see value in. The reason this has happened is we had good protection, we’ve had a very open and transparent process, there has been certainty for business to come and invest in New Zealand, New Zealanders to invest in others, with the understanding that, actually, a Government supported them, and they could quickly get to the point where, if they found innovation, they could turn that into a return for their company, for New Zealanders, and for others.

So this very piece of legislation continues that work. It does have the opportunity, or can provide an opportunity, for investment from outside of New Zealand in the country, science and innovation, and, more so, for New Zealand companies. That’s why the National Government was very happy for this to be part of the original TPP but, at the same time, recognised that there was a piece of work under way that we had to decide for New Zealand, to provide for us to meet our obligations under the Treaty.

The challenge that we have is that it comes to the interpretation of how the Government decides they want to meet that obligation. If we look at the Wai 262 report, it was very clear, and much of it is set out in the bill. But what Wai 262 said was that Māori, in as far as indigenous plant varieties are concerned, should be consulted on, shouldn’t have a decision-making process. Interpretation of this bill, from others, suggests that the Government has gone further than Wai 262 asked for.

Now, if that is the case, the Government needs to tell us why they have done that and what the implications could be. If we look for much of what has happened in New Zealand around research and innovation of indigenous plant species and species from overseas that have been brought here to be developed, it has been because, actually, the process is open, transparent, and happens very, very quickly.

If we look elsewhere, where previous Governments, including the National Government, have decided that Māori have a role to meet so that we meet the Treaty obligations—the Patents Bill is an example, or the Copyright Bill, both of which there are committees set up where Māori have a view, but it is a consultative view where they offer advice for the commissioner to make a decision.

In the case of this legislation that the Minister’s brought forward, he didn’t mention this—that is not what has happened here. It is the case that the commissioner must refer everything that has indigenous, part-indigenous, or the special list that he mentioned, to a committee, and that committee actually will make the decision—not delegated from the commissioner, but will make the decision themselves. The concern that we have around that is that, actually, it could work very, very well, but elsewhere we’ve seen that it probably won’t and it may not, and that it will be delayed. So the reason the Minister didn’t mention this in his speech that went for a full 10 minutes was because he too would be uncertain about what would happen here, because what he said to the commissioner is “You appoint some people and then get them to decide what the rules will be and how they will engage and what that will mean.”

In as far as innovation is concerned in New Zealand, leaving those questions unanswered is not good for certainty for business and for those that want to invest. It is not good for the next company that wants to take an indigenous plant in New Zealand and spend tens, if not twenties, hundreds of millions of dollars to create the next medicine that is good for New Zealand and the world, because there is too much uncertainty.

So the National Party will be supporting this bill to the select committee, and we will be seeking assurances and answers on the issues that we’ve raised, because they are important. It is our belief and position that, actually, the legislation needs to be aligned with the Patents Act and the Copyright Act. The reason for this is that it would be consultative and give advice to the commissioner, for the commissioner to make decisions not for this committee that will be set up to decide for themselves, because that wouldn’t be fair to all New Zealanders and, equally, it wouldn’t be fair to those who need to invest here. Thank you, Madam Speaker.

JAMIE STRANGE (Labour—Hamilton East): I appreciate the opportunity to take a call on this bill. I always listen very carefully to the previous speaker, Todd McClay. He has a lot of experience in this area. However, he was making some comments about the Minister not going for the full 10, only going for nine minutes, but then the previous speaker only spoke for about five minutes. I did find that a little bit strange. However, look, I appreciate the opportunity to add to the debate tonight—at 9.30 p.m. on a Tuesday night here in Parliament.

Our country is a plant-producing nation. We produce plants well, and we produce a variety of plants, as we’ve heard on various bills tonight, and we’re also a trading nation. And when you combine the two of those together, as a plant-producing nation and a trading nation, that is where we start to hit our sweet spot, as the Minister was talking about.

I’m just going to talk a little bit about what the bill does, and then I’m going to talk about one of our key exports which benefit greatly from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This bill represents a new and uniquely New Zealand approach to plant variety rights that will ensure our responsibilities under the Treaty of Waitangi are upheld while also aligning with the highest international standards of plant variety protection. And meeting our obligations—

Hon Simon Bridges: He’s reading this for the first time.

JAMIE STRANGE: No, no. Meeting our obligations to the CPTPP opens the door wide to progressive free trade for New Zealand.

Hon David Bennett: Trevor said you can’t read it.

JAMIE STRANGE: I appreciate the enthusiasm from the members over there, because, as everyone in this House will realise, the CPTPP creates significant opportunities for our country, and the aspect around the intellectual property being protected is a very important part of this.

I’ll get on to the point around one of the key beneficiaries of the CPTPP being kiwifruit. The main planting, as we know, is in the Bay of Plenty, Canterbury, Nelson, and actually Auckland—I didn’t realise there was much kiwifruit in Auckland, but there is a little bit up there—

Glen Bennett: And Taranaki’s doing some—

JAMIE STRANGE: And Taranaki as well. So there we go. We’ve got Kiwifruit all over the country.

I was at the Fieldays recently, and I went into the Zespri tent. I have visited the Zespri head office—they’ve got a fantastic head office over there in Tauranga, but I visited the Zespri tent and some of their green kiwifruit. It was very nice. But I thought, “Well, look, I mean, that’s OK, I have tried that before, but it was good. Don’t get me wrong.” And I tried some gold kiwifruit. That was very nice, actually. It was very sweet. But then I tried some red kiwifruit. I think that maybe the Zespri staff knew I was a member of the Labour Party, but they gave me this red kiwifruit. I’m not sure how many members in the House have tasted red kiwifruit, but it is very, very nice.

That’s just an example of some of the intellectual property that’s happening within our plant-based products here in New Zealand. This red kiwifruit, I’ve only tried it once. I’m not sure actually how to get my hands on some more, and that’s not a pitch to anybody. But just to highlight the opportunities, and that’s just one industry—we’re talking about kiwifruit—and the Minister alluded to other industries as well.

In terms of the CPTPP, our main market there, in terms of the growth aspect, is in Japan. Kiwifruit continues to be New Zealand’s largest single horticultural export by volume and value. Exports exceeded $2.5 billion in 2020, representing a 36 percent increase in value from 2018, and a lot of that was down to the free-trade agreement that the Hon David Parker signed.

So look, I probably don’t need to say much more. The Minister, you know, fairly clearly outlined what the bill does, and I just wanted to highlight that example of the area of kiwifruit in terms of the innovation and the opportunities under the CPTPP—that it’s important that, as a small trading nation, we continue to capitalise on those opportunities. I commend this bill to the House.

Hon DAVID BENNETT (National): Thank you, Madam Speaker. The National Party will be voting for this bill at the first reading. As my previous speaker from the National Party has asserted, we have some issues, primarily around the role of the Māori advisory group and what role that committee will hold and whether that is consistent with other uses of Māori advisory committees in other legislation. So that is the primary focus, I think, that we as a party would like to see settled at select committee. Also at select committee, we will take an interest in seeing what the submissions are from those in the sector, because it’s all right for everybody in this House to talk about what kiwifruit they may have eaten, but the reality is that there will be some experts in the sector that will want to make submissions, and, as parliamentarians, it’s important that we listen to those submissions and take them into account to make sure this legislation is actually fit for purpose.

So the starting point, I guess, is our arable sector, and it is part of our farming sector that is not often given much focus. You know, the focus always goes on those sectors that export product, whether it’s milk or kiwifruit or such like—our commodity and value-added production that we sell in the rest of the world. But underscoring that is a very solid and successful arable sector in New Zealand that provides a lot of the plant varieties, it provides a lot of the grass seeds, it provides a lot of the feed sources for the cows that produce the milk, and also, as my colleague from Hamilton talked about, some of the fruit varieties that we use in New Zealand, as well, aren’t directly from arable, but they are from that plant and food research - type nature. So the arable sector is one I want to put a bit of a plug in for tonight, because they aren’t often recognised, because they’re not often the end point in the New Zealand export machine, but they provide a very vital role in the New Zealand export machine and enabling those later export industries to actually achieve their goals. So I’m really going to be very interested to see, when that sector comes before the Parliament and the select committee, that they are happy with this legislation, that it covers off any of the issues that they may think need to be sorted out in this area.

Plant variety rights are very important when you consider the scale of some of the sectors in New Zealand. Most people don’t understand how strong our seed businesses are—you know, from carrot seeds, and especially in South Canterbury you can see the clover and the grass seeds that are grown down there, and even the very unique seeds that are looked over in some of our research institutes towards dealing with some of the climate change issues that we will have to deal with as a country going forward. So it has a lot of important repercussions, and we need to make sure that we protect those rights for New Zealand producers and New Zealand scientists and New Zealand farmers. So that is vital, and it has got a protection role there.

But it has also got a very commercial role, as well, because what you’re starting to see in a lot of intellectual property (IP) arrangements now is that there will be a cost per use of that IP, rather than just purchase of the IP in the initial stage. So we want to make sure that this bill is reflective of what the sector sees as the rules that they want to see progress in that part of the equation. So, you know, rather than in the past where, traditionally, IP has been a one-off payment and then you’ve got the use of something, now there is much more of a trend towards clipping the ticket on every use of that IP. So I’d be interested to see how that relates to the rules in this, as well.

I think that we will be at the mercy, I guess, of the experts in the sector when they come in front of Parliament in the select committee to give their views on this legislation. Until we have that, many in this House won’t be able to make too much judgment on the efficacy of this legislation in front of us. We understand what the Government is doing here; we’re taking them at their word, you could say, in the sense of where it’s going and the international obligations that they’re trying to achieve here. We do have serious concerns around their Māori advisory committee. It’s important that we take into account Māori views, but it’s also important that we also have the flexibility in that arrangement so that there is that commercial rigour and desire to grow and that that is not stifled in any way by attempts to take ownership in a different way, when we’re talking about ownership of that intellectual property.

So that’s a crucial issue for us, and we look forward to seeing how that develops through the select committee process and we would encourage the Government to look at having consistency in that approach with other parts of legislation rather than as it first appears in this legislation, which is taking it further from other advisory committees that we’ve seen. So National Party supports this legislation, but tonight it’s a big shout-out to our arable farmers out there. They do a fantastic job, often not recognised, but they provide a lot of the intellectual property and the skills and the seeds that make this country prosper and grow. So I think it’s well worth this Parliament thanking them and recognising their great work and hopefully in this legislation we can add more value to that sector and other primary producing sectors as well. Thank you, Madam Speaker.

RACHEL BROOKING (Labour): Thank you, Madam Speaker. It’s quite strange for me to be speaking on this bill, because once upon a time, in 1998, I was flatting at the great University of Otago—that’s been raised a number of times this evening in a very different context—because my flatmate, she was doing her honours dissertation in law on Wai 262. And, of course, that was a claim at the time. It was lodged on 9 October 1991. This was many years later, in 1998, and I remember thinking at the time, “Well, this is brave to be doing your dissertation on something that’s likely to become prominent soon and maybe not last for that much longer.” I was a little bit wrong in that thought! Of course, the final recommendations from Wai 262 came out on 2 July 2011, and there’s been a long response, and it’s an ongoing response, to that very important decision from the Waitangi Tribunal.

Back in 1998, I was a student of ecology doing marine botany physiology—so I appreciate a lot of the substance of this bill—and, of course, my law degree. So I’d also comment just quickly that a part of this legislation, part of the bill that we’re looking at, is a review of legislation that’s now old. It’s 30-plus years old. We need to look at it and make it better. We’ve heard just from David Bennett about the importance of arable farmers and seeds, and we need to have good legislation around those intellectual property rights. A lot of what this bill does does improve that legislation, and, you know, it’s right that bills that are 30 years old are normally ripe for review. There’s a few of them to be doing this term.

So what I would like to concentrate really on is the integration of Wai 262 with this property regime, and that’s because the current legislation hasn’t had a Treaty clause or any other process. We can see in the departmental disclosure statement that there’s been a lot of consultation. You see here there was an issues paper in 2018, an options development hui in 2019, another options paper in 2019, and then an outstanding issues paper in August 2020. So this is work that has been well canvassed, and that’s good, because it’s important.

Now, we can see that the bill is trying to rectify the issue that there’s been no acknowledgment of the Treaty. So at clause 3, the purpose clause, in subclause (b) there’s a reference to the Treaty, and then we have the new Part 5, and that’s the most important part in terms of incorporating those Wai 262 ideas and concepts. So at clause 52 there’s the Treaty clause, and I will go to that. This is a very well-developed Treaty clause that takes people through what is to be done to recognise and respect the Crown’s responsibilities to apply the principles of the Treaty.

Then another interesting part of this Part is at section 54, and that has some definitions and interpretation for this Part of the bill. It introduces a concept of sort of three tiers of different types of plants. One of them is native plants—that’s quite simple—and then another is plants that have arrived in New Zealand without human assistance. And then there’s a third, which is non-native plants that have arrived with human assistance, but that’s on a waka before 1769, and are listed in regulations as significant.

Then there are these two key concepts in this Part of the bill. The first one is “kaitiaki relationship”. That’s defined in clause 54 and “in relation to a plant species, means the relationship that any particular person, iwi, hapū, or group has, or Māori in general have, as guardian, [or] trustee, or caretaker of—(a) an indigenous plant species; or (b) a non-indigenous plant species of significance”.

Then there’s another concept in here of what a “taonga species” is. This isn’t defined, and in part I think that comes from the Wai 262 decision. On page 65 of that decision, there’s a discussion at 2.2.2 of taonga species, and it’s saying, “As we have said, taonga species are the species of flora and fauna for which an iwi, hapū, or whānau says it has kaitiaki responsibilities.” Then it goes on, a few paragraphs down: “Most of all, we were told of practical relationships, developed over 40 generations between iwi and taonga species used for food”. It goes on: “Claimants spoke at length on the uses of plants and treatment methodologies, while others spoke of the life cycles and characteristics of these species.” So that hasn’t been defined because it’s related to the relationship, and that’s been a decision of Cabinet.

What Part 5 does is it sets up this scheme with the Māori Plant Varieties Committee, and in clause 55 we have the requirements of the knowledge that those members have to have. That’s knowledge of mātauranga, tikanga, Te Ao Māori, and taonga species, which I was just talking about. The committee can prepare guidelines and then it assesses applications and makes decisions on whether or not there is a kaitiaki relationship. So that assessment is provided in clause 61. Then, if that’s demonstrated, they can consider whether or not there’s agreement between the parties or if there’s a need for conditions. And, yes, it is very explicit in the bill that they make a decision. I refer to Hon Todd McClay’s speech earlier where he was questioning this—it’s very clear in the bill.

This is a very important piece of legislation in terms of New Zealand responding to that document Wai 262, that decision that took such a long time and involved very many people, and for that reason, I commend this bill to the House.

RICARDO MENÉNDEZ MARCH (Green): Kia ora, Madam Speaker. I rise on behalf of the Greens to speak on the Plant Variety Rights Bill, first reading. I want to acknowledge the member to my left, Rachel Brooking, who has given a very extensive report on some of the clauses that the bill covers; so I will try to keep my contributions to just our Green Party position on the bill. But, in summary, this bill will modernise New Zealand’s plant variety rights regime, which is a fixed-term intellectual property right granted to plant breeders over varieties they develop. The Green Party strongly supports the proposed kaitiaki relationship considerations, and we actually do think that the principle of bringing these into legislation has a lot of merit and we’re really excited to debate these and discuss with stakeholders at select committee, but we do think that the appropriate course of action for this change is in wider legislation protecting taonga species from bioprospecting, as Wai 262 may have led us to. This issue can be addressed without also extending intellectual property rights to the detriment of farmers or consumers.

So when we look at moving us closer to actually meeting our Te Tiriti obligations, in relationship to also meeting our obligations to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), it’s important to contextualise that the CPTPP contains a Treaty protection clause that the Waitangi Tribunal specifically found to be insufficient to protect Māori rights and our obligations pursuant to Te Tiriti. Despite this, our Government did not change the Treaty protection clause, and so we’re put in a situation where we have this amazing proposal to develop kaitiaki relationship considerations but at the cost of them coming with us swallowing a dead rat in the form of the CPTPP. We believe that the merit of those kaitiaki relationships perhaps could be unpacked at select committee, but we should not accept something that will ultimately create inequities in society, in the nature of the design of the CPTPP. Instead, we should just be looking at upholding our Te Tiriti obligations in a way that genuinely creates trade for all, not just trade for people who already hold a lot of power in our international economies or trade that, ultimately, will continue benefiting Pākehā.

So for those reasons, the Green Party does not support this bill, but we do look forward to really robust conversations at select committee.

DAVID SEYMOUR (Leader—ACT): Thank you, Madam Speaker. I rise on behalf of ACT in support of the Plant Variety Rights Bill. I have to say, tonight I’ve heard it all. I heard the Minister speak, saying that this bill was a divider amongst people who would be on the right or the wrong side of history—to support this bill was to be on the right side of history. I sat there and I thought, “Here’s a guy who went mountain biking and moved home in the middle of a global pandemic in contradiction of the rules that he had made, because he was the Minister of Health at the time, talking about being on the right side of history.” I had to laugh. But it does show that politics can be very forgiving. He’s still a Minister under the Jacinda Ardern Government, and still helping pass laws such as this very important Plant Variety Rights Bill.

It’s very important that this bill is passed, because we need a framework for people to do business, and in New Zealand a lot of business is agribusiness. We need to be able to trade what we produce; so it’s absolutely critical that we have an arrangement with other countries, and the Trans-Pacific Partnership (TPP) or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as it’s now called in the form that the Labour Party finds acceptable—it’s amazing what a difference two letters can make—is one of those frameworks that allows us to trade with our friends around the world. Having a set of rules, say if a person develops a variety of plant and uses a specific variety, that they can keep the rights in that, that they can extract the value for their work. That’s really important. So it’s important that we have plant variety rights (PVR), and it’s important that they’re consistent with the agreements we have, such as the CPTPP, with our partners around the world. That is all well and good, and that is worth supporting. I think it would be a huge mistake not to support it.

But what’s curious about this piece of legislation is that it’s sort of confected or concatenated. It doesn’t only align New Zealand’s plant variety rights legislation with the CPTPP so people can develop new forms of plants and use those rights to make money and trade with our friends around the world; it also says it makes the plant variety rights regime consistent with the Treaty of Waitangi. What it does is it says it does this by incentivising plant breeders to engage early with kaitiaki if the new variety they wish to seek a plant variety right for may involve a taonga species, establishing a Māori Plant Varieties Committee to assess the effect of the grant of a PVR on kaitiaki relationships and make decisions on whether the PVR application should proceed.

Now, let’s just spell out what this actually means. It means if you’re one of those people who’s involved in developing new plant varieties to export and trade with our friends around the world to generate wealth, to provide for your farms and your firms, for you friends and your family, if you’re one of those people engaging in that sort of productive, entrepreneurial activity, then good on you, but first you may have to check in with the Māori Plant Varieties Committee and see if you can get permissions, see if you can proceed. A lot of people might ask, “Why?” Why has the Government chosen to concatenate this very noble piece of legislation that allows New Zealanders to trade with others around the world with this new obligation—this new tax, one might say—on the ability to innovate and create new plant varieties and become wealthier as a country? Why have they done that?

Well, we can only assume that it is due to this world view that we see out of this Government that, as someone put it to me recently, democracy is different in New Zealand. Democracy in New Zealand doesn’t mean that we have elected representative bodies where one person has one vote, where political power is proportionate to the number of people—oh no, no; that’s old fashioned thinking! No, forget the fact that most of this country’s history is a long march towards that kind of democratic institution! Forget that we used to celebrate democracy as the best system of government for protecting people’s rights and allowing people to live their lives—oh, forget all of that! What we now believe, or what this Government now believes, is that, actually, democracy in New Zealand means democracy for most people and special institutions that give people decision-making rights and power and perhaps ownership based on birth—the exact set of ideas that for hundreds of years people have been campaigning against. So much of the long march for a free and liberal society has been demolishing caste and class, expanding the range of liberties that an individual has as a person, and then making sure that they’re universal and people can access those liberties regardless of creed or race.

This legislation says, actually, there are now two sets of rights. If you want to go about developing plant varieties, first you’ve got to check in with the Māori Plant Varieties Committee. I can’t think of something more likely to create division and frustration where people start to see each other for their racial background, not because they themselves prefer to racialise people but because, actually, that’s the official Government policy—that people should be treated differently before the law based on ancestry, the exact thing people have been trying to get rid of, get out of our society, for hundreds of years so that each person could be free and equal.

So it’s going to lead to divisiveness, but it’s also just going to make it harder to get stuff done. Instead of being able to go ahead and succeed with an idea on its merits—does it use resources well, does it satisfy customers, does it lower the environmental footprint; all those sorts of questions that people in modern business around the world might ask, and you have to ask those questions, of course, to be commercially viable—you have to ask the Māori Plant Varieties Committee to assess the effect of the grant of a plant variety on kaitiaki relationships and make decisions on whether the plant variety right application should proceed. It’s that extra hurdle.

And here’s the next thing. People doing business in New Zealand are often globally connected. In fact, remember at the start of this, this whole piece of legislation is about the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). So people are going to have to explain to people around the world that, “Yes, New Zealand is a free and democratic society but there’s this special panel we have to ask because, you see, the Government thinks that some people, based on ancestry, have a special connection to the plant rights. So we have to ask them and then, hopefully, they’ll say yes and we’ll be able to develop our business venture and keep our intellectual property, but, you know, you never quite know how it goes.”

It starts to sound like doing business in a country with quite a different set of values and institutions than what we would like to think of New Zealand as—a First World, open, free society that wants to do business with the world. And, unfortunately, increasingly, New Zealanders are becoming very disenfranchised with this kind of thing when this Government is going about business as usual but also changing the constitutional arrangements of this country in such a way that after hundreds of years of progress for everyone to be free and equal—to look at the content of people’s character, not the colour of their skin, to take each person as you find them; that’s something Helen Clark said that I’ll always remember, actually—all of a sudden we are starting to say, “Well, actually, you know, if you have one set of ancestry, you have these rights; if you’ve got another set of ancestry, you have another set of rights.” That is wrong.

So where does that leave us with the Plant Variety Rights Bill? Well, ACT has to support it, at least to first reading, at least to have the discussion at select committee on how this legislation should work. We couldn’t oppose it, because it’s so essential to have a system of property rights compatible with our trading relationships. But we have to be clear that the reservations about the route that this Government is taking us down with these Treaty obligations, as they call them, is very destructive to the future of our country.

ASSISTANT SPEAKER (Hon Jenny Salesa): This debate is interrupted and is set down for resumption next sitting day.

The House adjourned at 9.56 p.m.