Wednesday, 7 July 2021

WEDNESDAY, 7 JULY 2021

WEDNESDAY, 7 JULY 2021

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

ASSISTANT SPEAKER (Hon Jacqui Dean): 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, justice, mercy, and humility for the welfare and peace of New Zealand. Amen.

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

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

SPEAKER: No select committee reports have been presented. No bills have been introduced.

Petitions have been delivered to the Clerk for presentation.

CLERK:

Petition of Wendy Baker requesting that the House amend the Rates Rebate Act 1973 to increase the rates rebate amount that relevant people can apply for every year

petition of the Citizens Advice Bureau New Zealand requesting that the House urge the Government to address digital exclusion and to ensure that the Citizens Advice Bureau is resourced to address the impacts of public services going online

petition of Lindsay Calvi-Freeman requesting that the House urge the Government to reverse its decision to remove tax deductibility of interest for landlords.

SPEAKER: Those petitions stand referred to the Petitions Committee.

Ministers have delivered papers.

CLERK:

MetService Statement of Corporate Intent 2021-2024

AsureQuality Statement of Corporate Intent 2021-2022

Quotable Value Statement of Corporate Intent 1 July 2021-30 June 2024

Electricity Corporation of New Zealand Statement of Corporate Intent 30 June 2022

Transpower Statement of Corporate Intent 1 July 2021

Te Taura Whiri i te Reo Māori Statement of Performance Expectations 2021-2022

Airways New Zealand Statement of Corporate Intent 20221-2024

New Zealand Railways Corporation Statement of Corporate Intent 2022-2024

Kordia Statement of Corporate Intent 2021.

SPEAKER: Those papers are published under the authority of the House.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. 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. I particularly stand by our decision to ensure New Zealanders receive a full course of COVID-19 vaccine in the clinically recommended time frame, which is why today we’ve announced that over half a million New Zealanders are fully vaccinated against COVID-19. We must remain vigilant, especially in the face of variants of concern, but this Government’s actions continue to support our recovery but also continue to support the health of New Zealanders.

Hon Judith Collins: Can she confirm her Government’s method for detecting if emergency housing applicants are gang members is, as her Minister for social development said yesterday, to ask: “It’s on the form.”; and does she think a gang member will answer this truthfully?

Rt Hon JACINDA ARDERN: As I said yesterday, I think the most important thing that we need to focus on is ways that we can get around the original design of the use of motels by the last Government, which did not give us the flexibility to ensure that we were placing with care children against those who may have other housing needs, and so we’re working hard to do a redesign of the system that allows for that. Fully contracting entire facilities and case-managing in that way, as we’re doing in Rotorua, is, I think, a model for how we may do things in the future. But, again, our focus is on housing people and housing them safely, and, of course, we take into account who they are housed alongside.

Hon Judith Collins: Why is her Government not simply using information from the Gang Intelligence Centre to identify gang members and prevent 4,000 children living alongside gang members, four years after she took office?

Rt Hon JACINDA ARDERN: Again, I would point to the fact that we are working very hard to ensure that when we are placing people, we are doing so safely. Again, if the member wishes to criticise the way in which our emergency housing system is operating as it relates to motels, her Government was the first one to design it. So if she believes that it’s not utilising other agencies, then that, I would put to the member, is because of the way in which it was first established.

Hon Judith Collins: What does she say to the 4,000 children currently growing up in dangerous motels who were told when she became Prime Minister of New Zealand four years ago that New Zealand would be the best place in the world to be a child?

Rt Hon JACINDA ARDERN: I’d point to the fact that there are 43,000 fewer children living in poverty, under the housing cost measure, because of this Government. I would point to the indexation of benefits, the most significant benefit increases since benefits were established, the fact that we changed the way the in-work tax credit applies, that we established the BestStart payment, the reinstatement around the training incentive allowance—we’ve seen some of the most fundamental reforms to our benefits system for decades, and I am very proud of that. Does that mean the work is done? No. We will continue to build houses as fast as we can to redress the issues that have been building over many decades, including the decade in which that member was in Government.

David Seymour: How many doses of the Janssen COVID-19 vaccine does the Government have ordered, and when will they be onshore in New Zealand?

Rt Hon JACINDA ARDERN: The Janssen vaccine was, obviously, only approved by Medsafe today. So there is still a decision to use—a process that needs to go through Cabinet. My understanding is that those orders are in the vicinity of 2 million. But, again, I’d say to the member that Cabinet needs to make decisions around the usage of those vaccines, but they do provide choices and opportunities for New Zealand.

Hon Judith Collins: Can she commit to have no children living in motels with gang members by this Christmas, four years after she took office?

Rt Hon JACINDA ARDERN: I don’t want any children living in motels at all, and that, in fact, is the goal of this Government. We have of course, over the last quarter, housed 1,700 people from the register, and when you look at the churn over many quarters, in the December quarter, we’d housed 2,100; the September quarter, 1,800; and then across the March quarter—again, before that—1,860. We continue to house people as quickly as we can while we build houses and create transitional housing places, but I cannot tell the member how long it will take us to solve the mess she left us.

Hon Judith Collins: How much longer does she anticipate mental health workers will be forced to care for some of the most vulnerable patients in the country in clinically unsafe conditions, as stated by the Association of Salaried Medical Specialists?

Rt Hon JACINDA ARDERN: Of course, I can only make assumptions about what the member—or, indeed, the referral there that’s been made to clinically unsafe environments. But I can make an assumption, having seen some of those environments myself across, for instance, the Waikato or across Mid-Central, that those are facilities that we are working to rebuild. That includes Waikato, Lakes, Mid-Central, a refurbishment at Tai Rāwhiti, and Waitematā, and, of course, that comes out of the Budget funding that we put in only in 2019.

Question No. 2—Finance

2. HELEN WHITE (Labour) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): The primary sector is continuing to support and secure the recovery. The ANZ Commodity Price Index, which was released yesterday, rose by 0.8 percent in June—the ninth successive monthly increase—to leave the index at a record high. The gains were broad-based, with producers benefiting from higher prices as global demand for New Zealand’s commodities remains robust. Forestry extended its record highs, rising by 3.6 percent in June, while meat and fibre rose 1.8 percent, and horticulture gained 4.3 percent. Dairy prices did ease by 1.5 percent, but they are still 35 percent higher than they were a year ago. When returns to producers are converted back to New Zealand dollars, the overall index rose by 2.3 percent. Nevertheless, our producers are operating in a volatile market, reflecting the impact of the pandemic.

Helen White: What other reports has he seen on the economy?

Hon GRANT ROBERTSON: Data released today shows an increase in advertised job vacancies. TradeMe’s latest jobs data shows the site recorded—

Andrew Bayly: That’s because they can’t get people.

Hon GRANT ROBERTSON: No, your job hasn’t been advertised yet, Mr Bayly, but it will be soon. TradeMe’s latest jobs data shows the site recorded its highest number of jobs listed ever in the June quarter, increasing by 25 percent compared with the same period in 2019, prior to COVID. It now has more than 80,000 jobs being advertised. The largest increases were in hospitality and tourism, which rose by 56 percent; manufacturing and operations up 52 percent; and construction and roading up 46 percent. TradeMe says the listings did not look to be slowing down, and this shows just how strong and quickly the job market has bounced back.

Helen White: What reports has he seen of the impact of the economy on consumer confidence?

Hon GRANT ROBERTSON: The latest ANZ-Roy Morgan Consumer Confidence index shows consumer confidence remains steady. The index stood at 114 in June, a little under its historical average of 120. The proportion of people who believe it is a good time to buy a major household item, which is a key retail indicator of confidence, rose 3 points to 22. Respondents were more positive about their own financial position: jumping seven points to 14 percent, its strongest post-COVID level. The survey does, however, show that consumers remain cautious about the future, which is completely understandable in the context of the COVID-19 pandemic.

Question No. 3—Finance

3. Hon MICHAEL WOODHOUSE (National) to the Minister of Finance: What actions, if any, does the Government intend to take in response to the Treasury report entitled He Tirohanga Mokopuna 2021: Consultation on the draft content of the Treasury’s combined Statement on the Long-term Fiscal Position and Long-term Insights Briefing?

Hon GRANT ROBERTSON (Minister of Finance): Given that there is a consultation under way on a draft document, the initial action that I am taking is to read it and consider the feedback on it once it comes in. In terms of the issues raised within the report, the Government is already taking action to provide security and certainty to New Zealanders.

Hon Michael Woodhouse: Does the report’s warnings about long-term debt projections cause him to reconsider spending decisions on projects such as the $785 million cycling bridge across Waitematā Harbour?

Hon GRANT ROBERTSON: I note that the Treasury in the report do not express any concern about the current level of debt that the Government has, nor is this report about current projects.

Hon Michael Woodhouse: Will he commit to reductions in structural spending from the COVID-19 Response and Recovery Fund (CRRF) that have nothing to do with COVID response and recovery?

Hon GRANT ROBERTSON: We will continue to use the COVID-19 Response and Recovery Fund for the words that are in the name of the fund—response and recovery—because that is what it’s for. I repeat my earlier answer: the Treasury’s report that this question is based on is not about the current spending, with which Treasury is comfortable.

Hon Michael Woodhouse: What does spending $710 million on three waters reform and the online pornography ad campaign have to do with COVID-19?

Hon GRANT ROBERTSON: I think it would be pretty obvious to most New Zealanders that making sure we have an efficient system and effective system for the management of water which helps create jobs and lowers costs on New Zealanders is something that we’d welcome. Clearly, on the other side of the House, there is no interest whatsoever in making sure that our water system works well.

Hon Chris Hipkins: Has the Minister of Finance seen any alternative proposals for the use of the CRRF funding, such as spending all of the funding that was left on roads?

Hon GRANT ROBERTSON: Yes, I actually have done that, and, in fact, that was a document that I do believe was produced by the Hon Paul Goldsmith, which I think he dropped on the floor at one stage. But it’s still probably there, if members across the House want to find it.

Hon Michael Woodhouse: Has he had a discussion with Treasury officials about whether the current net debt to GDP limit could be increased, given their concerns about spending?

Hon GRANT ROBERTSON: As outlined by the Treasury secretary in the speech that she recently gave, she does believe that it is time to have a discussion now about New Zealand’s debt levels. What we do know is that this is a Government that took our net debt under 20 percent of GDP, something that the National Party was never able to achieve. We now have debt at a higher level because of COVID, but it is forecast to reduce.

Question No. 4—Housing

4. PAUL EAGLE (Labour—Rongotai) to the Minister of Housing: What announcements has she made about transitional housing in Wellington?

Hon Dr MEGAN WOODS (Minister of Housing): Yesterday, I announced the opening of the capital’s largest transitional housing facility, and also the biggest outside of Auckland: Wellington City Mission Te Pā Pori. The Government is providing $15 million over three years in support of these refurbished apartments and the people being housed to help them get back on their feet. This builds on the momentum of our transitional housing programme by adding up to another 100 additional beds to our stock as we deliver over 18,000 new public and transitional housing places by 2024. There is much more work to do, but the opening of this facility is another important milestone on our path to achieving that goal.

Paul Eagle: How does this contribute to the Government’s ambitions for transitional housing?

Hon Dr MEGAN WOODS: We are committed to housing the people who need the most support through our public and transitional housing plan, and we’ve made good progress to date. When we came into Government, there were 1,718 transitional housing places. In the 3½ years we’ve been in Government, we have delivered 2,553 new transitional housing places, more than doubling the number of places available to 4,271. This Government continues to build momentum on our public and transitional housing plan, and the opening of this facility is another important step on that pathway.

Paul Eagle: Why is it important that the Government partner with organisations like the Wellington City Mission?

Hon Dr MEGAN WOODS: We know that the key to bringing on more public and transitional housing is strong leadership from central government in partnership with groups like the Wellington City Mission and other community housing partners. Since coming into office, the Government has spent $471.6 million for accommodation and support services in partnership with these organisations. Having a safe and secure place to stay, with provision of the right support services from these organisations, is crucial to ensuring that people can transition to long-term suitable housing.

Question No. 5—Housing (Māori Housing)

5. BROOKE VAN VELDEN (Deputy Leader—ACT) to the Associate Minister of Housing (Māori Housing): How many houses are projected to be built, and by when, at the land at Ihumātao?

Hon PEENI HENARE (Associate Minister of Housing (Māori Housing)): Kia ora, Mr Speaker. A memorandum of understanding—he pūmautanga—has been signed by the Kīngitanga, the Crown, and Auckland Council which sets out how parties will work together to decide the future of the land, and I do not wish to pre-empt this process.

Hon Member: So nothing will ever happen.

Hon PEENI HENARE: It is important to note—the member might want to listen; this is a good koha—that parties have committed that there will be housing on the site, and we are continuing to work through this process.

Brooke van Velden: Does the Minister believe it is acceptable that, over six months on from the Government signing a memorandum of understanding with Kīngitanga and Auckland Council for the land at Ihumātao, the Minister of Housing has not met with either Kīngitanga or Auckland Council?

Hon PEENI HENARE: We make no apology for taking the time to get this right—[Interruption] That side might want to listen. The Treaty of Waitangi, over 180 years—it’s taken a long time to come to where we are now. If that member is referring directly to the land at Ihumātao, I can reassure that member that I’ve met with the Kīngitanga, I have met with those who are out at the ahikā out at Ihumātao, and I have also met with the council in the time that I’ve been responsible for Māori housing.

Brooke van Velden: Can he confirm that the land will still be used for housing, as was agreed to and announced on the signing of the memorandum of understanding between the Government, Kīngitanga, and Auckland Council?

David Seymour: Point of order, Mr Speaker. It may just be me, but I wasn’t clear if the Minister was answering—actually, Mr Speaker, I’ve made a mistake and I shouldn’t have raised this point of order. I’m very sorry.

Hon PEENI HENARE: Yes.

Brooke van Velden: Can he confirm, over six months on from the signing of the memorandum of understanding, that the steering committee has been formed?

Hon PEENI HENARE: Right now, with respect to he pūmautanga, we are working with the Kīngitanga and ngā ahikā to establish the rōpū whakahaere.

Brooke van Velden: When can we expect the steering committee, consisting of six representatives representing or supporting the Crown and Kīngitanga, to be formed?

Hon PEENI HENARE: I have it on the good authority of my colleague the Hon Willie Jackson to my right here that we will be looking to push this kaupapa along, and my expectation is that in the very near future we will have an announcement.

Brooke van Velden: How many houses can be built at the land at Ihumātao, given the agreement the Government has signed and council zoning?

Hon PEENI HENARE: I refer back to my first answer to the primary question, which actually establishes that he pūmautanga to sit down together to establish the use of that land, which the expectation of the Government is part of it will be for housing.

Brooke van Velden: Does he know of any private developers that have spent $30 million and have produced no plans for housing?

Hon PEENI HENARE: No.

Question No. 6—Social Development and Employment

6. ANAHILA KANONGATA’A-SUISUIKI (Labour) to the Minister for Social Development and Employment: What recent expansions has she launched to support more graduates into employment?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): Last night, I had the pleasure of hosting the launch of the Student Job Search expansion. The expansion follows investment by the Ministry of Social Development to support Student Job Search to create a new team. This team will be solely focused on working with graduates to connect them with employers and place them in permanent employment. This expansion boosts Student Job Search’s focus on helping students transition from study into full-time employment and supporting employers to scale up their businesses. The Government is committed to securing our recovery, which is why we’re continuing to invest in employment products and services that support people into sustainable and meaningful jobs.

Anahila Kanongata’a-Suisuiki: Why has Student Job Search been expanded?

Hon CARMEL SEPULONI: The expansion is a response to a growth in inquiries from students looking for permanent work after graduating from study in light of COVID19. It signals a shift in the mahi of Student Job Search, which has traditionally been a place that tertiary students can go to find part-time work and odd jobs while they study. As part of the expansion, they’ve been working closely with Te Mana Ākonga and Tauira Pasifika. This has seen an increase in Māori and Pacific registration rates of 14.8 percent. The expansion means Student Job Search can continue to advocate for students after they’ve graduated. By championing their skills and qualifications and preparing them for job interviews, this will help and encourage them to make the most of the opportunities available.

Anahila Kanongata’a-Suisuiki: What impact has Student Job Search had on supporting students and graduates to get employed?

Hon CARMEL SEPULONI: Student Job Search is a household name. It has helped to place students into 159,798 jobs for 61,886 New Zealand employers since 2015—that’s more than 100 jobs each working day. Over the last three months, Student Job Search has secured 3,742 full-time roles for students—a 200 percent increase on previous years. The quality of the jobs they are sourcing has also drastically increased, with the average student earnings per job increasing by 46 percent since May 2020. I’m pleased that this expansion will support Student Job Search to maximise its reach and offerings, making a worthwhile impact in the lives of our young people. They were so excited that this question was being asked about Student Job Search today, they are here in the House, and I acknowledge them for their mahi.

SPEAKER: Order! The member knows, or should know, that she should not refer to people in the gallery.

Question No. 7—Social Development and Employment

7. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development and Employment: Does she have confidence the Government is doing all it can to make sure children in emergency housing are safe; if so, why?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): We need to keep in mind that the emergency housing special needs grant was only introduced in 2016 by the then National Government in response to the number of New Zealanders who found themselves sleeping in cars or on the streets. At that point in time, there was no thought given to wraparound support services or the suitability of accommodation options. We have spent the last 3½ years working to improve the system we inherited. In recent months, that has meant taking a more localised approach, like in Rotorua, where we have begun a new way of working that will involve cohorting of families to improve wraparound support and safety. No Government can give absolute assurances that we can keep all New Zealanders safe in all places at all times. However, the Government will always do everything it can to improve safety for New Zealanders; that includes those in emergency housing.

Hon Louise Upston: Why is the Government relying on gangs to self-declare their membership, rather than using the Gang Intelligence Centre information to prevent gangs being placed in the same motels as children?

Hon CARMEL SEPULONI: I think that that member knows that gangs taking up emergency accommodation is not a huge issue in our regions, and so it seems that it’s just an attempt to demonise those that are in emergency accommodation. When people apply for emergency housing grants, they are asked whether or not they have gang affiliation. You cannot force people to tick “Yes” to that question. The Ministry of Social Development (MSD) and emergency housing is the last port of call for all New Zealanders when they find themselves homeless. At times, that is also gang members. So I do want to remind the House, though, that none of my regional commissioners have highlighted a massive increase or any type of increase in gang members seeking emergency accommodation.

Hon Louise Upston: Point of order, Mr Speaker. Thank you, Mr Speaker. I was quite careful in specifically using the words “the Gang Intelligence Centre information”, and I don’t recall the Minister addressing that question that I asked, sir.

SPEAKER: I think that’s fair. It was a very full response to a different question. I’ll get the member to ask the question again.

Hon Louise Upston: Why is the Government relying on gangs to self-declare their membership, rather than using the Gang Intelligence Centre information to prevent gangs being placed in the same motels as children?

Hon CARMEL SEPULONI: We have not had it raised by our regional commissioners out in the regions that gang access to emergency accommodation is a concern or that it’s heightened in any way. We have not sought out that information that the member is asking for. As I said, we have a self-declare system in place, and that is what we’re using at this moment.

Hon Louise Upston: Do the regional commissioners talk to the local police officers on a regular basis?

Hon CARMEL SEPULONI: Yes, they do, and it’s also important to note that where issues do arise in emergency accommodation—keeping in mind that they are seldom and far between and they are of course not always gang members—it is up to the police to then respond to those criminal matters. It’s not up to MSD to respond to that.

Hon Louise Upston: How can she have confidence children are safe when a May police briefing said there are reports of—and I quote—“violence, intimidation, public urination, drug deals and gang involvement” at emergency housing that MSD is using?

Hon CARMEL SEPULONI: There have been instances of all those things, but we can’t conflate them into just being with gang members. Family violence is an issue that we face inside emergency housing at some times and also in private households, so we can’t put this down to gang membership and gang members, necessarily, accessing emergency accommodation.

Hon Louise Upston: How can this Government claim it’s improving children’s lives when over 4,300 children have been placed into motels, 3½ years after they came into Government, and they’re still not taking basic precautions like using gang intelligence information about keeping those children safe from harm?

Hon CARMEL SEPULONI: We, as a Government, are taking far more precautions than what the previous National Government were taking when they set up the emergency special needs grant. As we have gone on, we have continued to improve the system. The response to Rotorua, which is highly localised, is in response to our coordination with social services, with council, with iwi on the ground. We are moving in that particular area to a cohorted model so that we can ensure that children in families are located in the same place, and, as the Prime Minister said earlier, that is a model that we are seeking to also roll out, keeping in mind there was no system in place when the National Government implemented this, no wraparound support systems in place, and no regard for whether or not the accommodation was appropriate or suitable.

Question No. 8—Oceans and Fisheries

8. RACHEL BROOKING (Labour) to the Minister for Oceans and Fisheries: What announcements has the Government made regarding oceans and fisheries?

Hon DAVID PARKER (Minister for Oceans and Fisheries): Last week, the Government announced a ministerial inquiry into the use and allocation of migrant labour in the seafood sector. The inquiry will focus on the sector’s reliance on migrant labour and how to transition it away from that reliance. We’ll also examine how to accelerate efforts to attract more New Zealanders into rewarding jobs in the seafood sector. It will consider commercial seafood activities, including deep-sea fishing, inshore fishing, aquaculture, and seafood processing. The COVID-19 border restrictions have highlighted the sector’s vulnerability due to its reliance on migrant labour. While businesses in the sector have worked to reduce that reliance, some deep-sea vessels in particular are still 100 percent foreign-crewed. This work will provide information needed to understand where improvements can be made so that the industry can be more resilient and more New Zealanders can have the opportunity to participate.

Rachel Brooking: How is the Government integrating oceans and fisheries policies?

Hon DAVID PARKER: The Prime Minister created this portfolio in 2020 to focus on ocean ecosystems as a whole. In response, we’ve begun a coordinated approach to address ocean sustainability issues through a raft of programmes and initiatives. Our vision is to ensure the long-term health and resilience of oceans and coastal ecosystems, including the role of fisheries. Our vision for the oceans, as I’ve said, includes the role of fisheries, commercial and otherwise. The jobs the industry provides are important to many communities, and high-quality products sent around the world earn valuable export dollars. We’ve got a cross-agency coordination group comprising officials from the Department of Conservation, the Ministry for Primary Industries, the Ministry for the Environment, and other agencies as appropriate.

Rachel Brooking: What other announcements has the Government made regarding oceans and fisheries?

Hon DAVID PARKER: There’s been a suite of initiatives in the last month. This has included our announcements on plans for the Hauraki Gulf. We’ve set out the funding and time line for the implementation of cameras on boats for the inshore fishing fleet, we’ve announced changes around rules around the dumping of fish at sea, we’ve set out how we’re going to modernise fisheries regulations, and we have laid out our initial response to the report of the Prime Minister’s Chief Science Advisor on commercial fishing. This has been done at a pretty fast pace, but there’s still quite a bit more to do, and I thank stakeholders and officials, including the industry, for their participation to date.

Hon Eugenie Sage: How does the Minister propose to protect the sea-floor and seabed sediments in New Zealand waters as an important storehouse for carbon from the impacts of bottom trawling, which creates plumes of sediments and mobilises carbon?

Hon DAVID PARKER: We’ve already laid out plans to restrict the areas of trawling within the Hauraki Gulf area to corridors that are yet to be specified but will be significantly reduced in area compared with current trawling efforts. In respect of bottom trawling in the deep sea, we’re not proposing to ban it. We will look at issues as to whether we should have restrictions on what I think is in the media today as virgin areas being bottom trawled and whether we should be holding bottom trawling to the areas that have previously been bottom trawled, and we’ll also work with the industry to improve technology so as to minimise damage. In terms of sediment issues, a lot of those are land-based, but I would agree with the member that they need to be addressed too.

Rawiri Waititi: How does the Minister uphold mātaitai that have been signed off but challenged by the commercial fishers in that particular area?

Hon DAVID PARKER: I take advice where applications are made for the establishment of mātaitai areas, and there are a number in New Zealand that have been successfully established and operate well. There are sometimes disagreements as to proposals for new ones, and where there are disagreements, I take advice from fisheries officials and run a fair process to work those issues through.

Question No. 9—Social Development and Employment

SPEAKER: Before I call question No. 9, I just advise the House that I have been advised by the Minister that because its answer is somewhat technical, it is even longer than she normally gives.

9. RICARDO MENÉNDEZ MARCH (Green) to the Minister for Social Development and Employment: How many people, if any, receiving unabated main benefits will not see a net increase of $20 in their bank account weekly as a result of the July increase to main benefits?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): The short answer is: all people on a main benefit receive a net increase of $20, and that was effective as of 1 July, keeping in mind, though, that benefits are paid in arrears and so it won’t be in full effect until next week when they get the full payment that they are entitled to. However, I believe the member is asking whether supplementary assistance such as accommodation supplement and temporary additional support will be affected by the $20 rise in benefits. The system we use to pay income support is complicated and we are undertaking a longer-term project to simplify it. Supplementary assistance is also available to working people; therefore, how much an individual is eligible for depends on how much they earn and what their costs are. If someone’s wages or benefit goes up, then their supplementary assistance will adjust depending on these costs. But when temporary additional support falls, it is not abated dollar for dollar for beneficiaries. The formula is more complicated.

From 1 July, those who received a benefit increase of $20 could find themselves better off per week by $26 when supplementary assistance adjusts. Others who have lower weekly costs may find themselves better off by around $15 per week. I am not able to give the exact figure the member asked for because the number of people on benefit changes daily and not everyone will have received their full increase yet, as benefits, as I said, are paid in arrears.

Also important to mention that the modelling originally used by the Ministry of Social Development (MSD) and Treasury during the Budget process modelled assuming 372,000 would be receiving a benefit as of 1 July, when the actual number is closer to 354,000. So it is complicated, but the reality is that the vast majority of people are going to be better off, and we look forward to 1 April next year, when the full increase kicks in.

Ricardo Menéndez March: How many people will not receive the full extra $20 a week in hand because they also get the accommodation supplement, temporary additional support, and another payment to meet the cost of living—and this is not just about those better off?

Hon CARMEL SEPULONI: So the majority of people will be better off. There’s only 125 people out of the 354,000 that will not be better off, and they will get a temporary additional payment in place to ensure that they are no worse off. But what I have asked MSD to do and what they will be doing is, in the next few weeks, a point-in-time study to actually ascertain the brackets in terms of how much people are better off. But for the vast majority, it’s more than $15 a week, and, as I said, some will be better off by $26. In fact, I’ve been told some may be better off by $29 per week when the adjustments are actually made.

Ricardo Menéndez March: Will the top-up provided to people who would otherwise be worse off with benefit increases as a result of the complex interaction between benefits and supplementary assistance lift their benefits so they now receive a full additional $20 a week in hand?

Hon CARMEL SEPULONI: My understanding is that it ensures that they don’t fall below what they’re currently getting, so that 125 people out of the 354,000 will not fall below, and my understanding is that once the increase kicks in on 1 April, then they will be better off.

Ricardo Menéndez March: Can the Minister confirm if there will be people who will not be receiving a net increase in their bank account of at least $20?

Hon CARMEL SEPULONI: Everyone will get a net increase in their bank account of $20, but how it affects their supplementary support is different. But, as I said, the vast majority of people will be better off by at least $15 per week, and some even upwards of $26 per week.

Debbie Ngarewa-Packer: Does she agree with Auckland Action Against Poverty co-ordinator Brooke Fiafia that the recent $20 benefit increase that some aren’t yet receiving is trash more than transformational?

Hon CARMEL SEPULONI: No, I don’t. If it was just one $20 benefit increase that we were putting into place, then that would be insufficient, but we’ve had a programme of work in welfare reform that has been running since we started. We’ve seen the indexation of benefits to wages, which will see them go up more every year; we had a $25 increase last year; we’ve repealed one major sanction and are on the verge of repealing another major sanction; we have made changes to the culture and the way that MSD works with clients; we’ve lifted abatement thresholds so that people can earn more without losing the benefit, like they were before; and we’ve got more benefit increases coming into effect on 1 April. Those are only some of the changes. No one change is transformational, but the programme of work that we have had under way is transformational.

Question No. 10—COVID-19 Response

10. CHRIS BISHOP (National) to the Minister for COVID-19 Response: What percentage of people living in residential care have not had at least one dose of the COVID-19 vaccine, and is he satisfied with the vaccine roll-out in New Zealand?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): The number of people in residential care is not static, so a specific percentage is impossible to calculate with accuracy. However, I can confirm that of the 668 aged residential care facilities across the country, all but seven facilities have received at least their first dose of the vaccine. DHBs are working closely with the remaining seven facilities, who are scheduled to receive their first dose of the vaccine in the coming weeks. In regards to the second part of the member’s question, yes.

Chris Bishop: Why has Canterbury, the country’s second-biggest region by population, only administered 7,310 doses to those in group 3, as per the numbers he’s released today, when down the road the South Canterbury DHB has delivered more?

Hon CHRIS HIPKINS: I can confirm that people who live in aged residential care facilities are, in fact, in group 2 rather than group 3, so in reference to the primary question, it is irrelevant.

Chris Bishop: Point of order, Mr Speaker. That does not address the question at all, and it’s well within the scope because the second leg of the primary—“is he satisfied with the vaccine roll-out in New Zealand?”—I asked about group 3 in Canterbury and South Canterbury.

SPEAKER: OK. It’s been long established in the House that if the member wants a specific answer, he should put down a specific question, and having a general throwaway “is he satisfied” is not enough to get the Minister to bring that level of detail to the House.

Hon Gerry Brownlee: But it’s OK for him to go on TV and talk about it?

SPEAKER: Thank you for your support, Mr Brownlee.

Chris Bishop: Why has the Canterbury DHB only administered just over 7,000 doses to those in group 3 of the vaccine roll-out?

Hon CHRIS HIPKINS: It is fair to say that the size of the population in groups 1 and 2 is different in each DHB level, and that will have an impact on the number of doses they’ve delivered in group 3.

Chris Bishop: Why are there still National Health Index number matching problems for the vaccination status of border workers, and how many are in the unvaccinated group that he said today the Government was still chasing down?

Hon CHRIS HIPKINS: My understanding is that as the team have looked through the individual records of people who are showing up in the border worker testing register as unvaccinated, they have found that some of those workers have been vaccinated but that the data isn’t matching correctly to pull through their vaccination register into the border worker testing register. They’re working to resolve that issue and, where possible, to manually match to ensure that the border worker testing register is as up to date as possible.

Chris Bishop: So how many workers are there at the front line, working at the border, who have not been vaccinated?

Hon CHRIS HIPKINS: It sits somewhere around about 15 percent of the overall active workers on the border worker testing register.

Question No. 11—Transport

11. RACHEL BOYACK (Labour—Nelson) to the Minister of Transport: What progress has been made on replacing the Interislander ferries?

Hon MICHAEL WOOD (Minister of Transport): I’m pleased to confirm that we’re another step closer to replacing our ageing Interislander fleet. KiwiRail has now formally signed a contract with Korea’s Hyundai Mipo Dockyard to build two new Interislander ferries. The new ferries are expected to arrive in New Zealand in 2025 and 2026, and will help reduce transport emissions and support more goods and people crossing the Cook Strait.

Rachel Boyack: What benefits will they have for our environment?

Hon MICHAEL WOOD: Our transport emissions are the fastest-growing source of greenhouse gas emissions in New Zealand, so we need to start taking action now if we’re going to meet our 2050 targets. These new ferries will reduce the Interislander’s carbon emissions by 40 percent, with initiatives like using battery power for manoeuvring. They are also futureproofed so that more batteries can be added over time, and are to be modified to run on other low-carbon fuels like hydrogen as they become available in the future.

Rachel Boyack: How will the new ferries cater for growth?

Hon Member: They’ll be bigger.

Hon MICHAEL WOOD: The Cook—Mr Goldsmith has been consulting a spreadsheet, and it’s right for once. The Cook Strait ferries are crucial to our economy, carrying 5.5 million tonnes of freight and 850,000 passengers between the North and South Islands every year. The new ferries nearly double passenger capacity and triple rail freight capacity of the current fleet, helping support the expected growth on this important route. Being able to accommodate rail wagons on the new ferries will encourage more freight on to trains and off roads, which will also help to reduce emissions and congestion on our busy roads.

Question No. 12—Housing (Public Housing)

12. NICOLA WILLIS (National) to the Associate Minister of Housing (Public Housing): When, if ever, have there been more people on the public housing register waiting to be housed than there were in the official figures for March 2021, and by what date will she commit to a reduction in the number of people waiting to be housed?

Hon POTO WILLIAMS (Associate Minister of Housing (Public Housing)): The waiting list reflects the strong emphasis we have placed on people coming forward and telling us if they need housing support. As the member has said, our housing challenges have built up over successive Governments, and if you look back on the graph about when—[Interruption]

SPEAKER: Order! Order! I’m just going to say I’d like the Leader of the Opposition, who’s been pretty loud today, just to wind it back as an example, especially to a couple of people not very far away from her—no, not Dr Reti—who are making quite a lot of noise today. I think this is an area which the Opposition would like to continue their questioning on.

Hon POTO WILLIAMS: Thank you, Mr Speaker. As the member has said, our housing challenges have built up over successive Governments, and if you look back on the graph about when it all started going badly wrong, that was about 1991. The wait-list is the largest it’s been, which is why the Government has committed to the largest public housing build programme in decades, with over 18,000 additional public and transitional homes to be built and delivered by 2024. I will not be committing to a specific date for a reduction. Instead, I’m committed to our build programme, which, the member has acknowledged, gets it right.

Nicola Willis: What responsibility, if any, does she take for the State house waiting list more than quadrupling since Labour came to office?

Hon POTO WILLIAMS: What I do accept is that if the National Party in Government had built the numbers of houses that were required, we wouldn’t be in the state that we are in. If they had even just built 6,000 houses, our housing register waiting list would not be as high as it is. There’s no doubt that there is more to do, and that’s why we have committed to building 18,000 public and transitional houses. I’m very supportive of that programme, as is the member herself.

Nicola Willis: Why has the number of people classified as having the highest possible housing risk leapt from three in December 2017 to 198 today, and does she think it’s acceptable that those at-risk people will now spend an average six months on the waiting list?

Hon POTO WILLIAMS: It’s not acceptable that our people have to wait, and that’s why this Government is investing billions in the public housing programme. We’re on track to fund and deliver over 18,000 new public and transitional houses. If I could just refer to that member’s own comment that she herself would stick to the State housing build programme of this current Government.

Nicola Willis: Can she confirm that most of the new public housing spaces her Government claims to have created are not new builds, but, instead, are existing homes that have been taken out of the private market for use as State housing—

Hon Paul Goldsmith: Tell me it’s not true!

Nicola Willis: —and how does that help solve New Zealand’s housing shortage?

SPEAKER: The member had better apologise to his colleague pretty quickly.

Hon POTO WILLIAMS: Mr Speaker—

SPEAKER: No. Order! Mr Goldsmith’s going to stand, withdraw, and apologise.

Hon Paul Goldsmith: I withdraw and apologise.

Hon POTO WILLIAMS: I absolutely reject the premise of that member’s question.

Hon Dr Megan Woods: Has the member heard any alternative plans from any other organisations about how to solve the issue of having more public houses in New Zealand, or is she going on the Opposition spokesperson’s comment on TV this week: “I’d stick to the State house building programme [of this current] Government”?

Chris Bishop: Point of order, Mr Speaker. The Minister has no responsibility for Opposition spokespeople’s statements.

SPEAKER: That’s true, but there’s a question of whether she was going to use an alternative to it or not.

Hon POTO WILLIAMS: I have not heard of any alternatives. In fact, the only alternative I have heard is that that member has said that she would stick to the State house building programme currently in progress.

Nicola Willis: Was she advised that the Government’s new housing tax policies could increase the number of people on the housing register and in emergency housing, and, if so, why is the Government pressing ahead with this change at a time of record State housing waiting lists?

Hon POTO WILLIAMS: We were very clear in our housing policy that we preference first-home buyers, and there is no evidence to suggest that people are being disadvantaged in accessing the public housing waiting list as a result of that. I refute what the member says, and I would encourage the member to keep supporting the Government in its housing build programme.

General Debate

General Debate

Hon JUDITH COLLINS (Leader of the Opposition): I move, That the House take note of miscellaneous business.

Well, today, we have seen four years of failure in a housing market made worse by that Government. We’ve had the Minister say, “No, the State houses are not being bought up from the private sector.”—yes they are, right through our electorates, going anything under $1 million, that’s how much they spend now. They are now setting the market, making it harder for first-home buyers and harder for the private sector to be able to provide housing. Four long years of failure. And we heard from the Prime Minister today that apparently it’s all our fault—well, who has been in charge for the last four years?

They promised to get 100,000 children out of child poverty, and somehow they’ve managed to make it worse. They said it was terrible that National had some families, who needed emergency housing, living in motels; they’ve got 4,000 kids now growing up in motels. They can’t tell a gang member from a family member, they’re now saying things like, “We asked the gang members whether or not they’re gang members.” Aww, is that before they get the koha?

We now have a generation of kids growing up whose name is going to be, unfortunately, “the motel generation”. The Minister today, Carmel Sepuloni—I used to think she was one of their better Ministers, but I’ve now rephrased that one; mind you, Kris Faafoi once looked OK too, didn’t he, team? I mean, my goodness, what a mess—she said today that she’s heard nothing about a problem in the regions with gangs. Has she not even listened to “red radio”? Radio New Zealand’s been out reporting what’s been going on and apparently this Minister doesn’t want to listen to it.

What’s happened to house prices, up $300,000 under this Government? What’s happened to rents, up $100 a week? Their answer has been to attack the private landlords, attack the people who actually provide housing, attack the community providers and take all the money off them. They need to know that they have to do everything better from the Government. All they’ve done is to make it worse. How many houses did they say no to when they cancelled out the Ihumātao issue, was it 480 houses? How many built? Zero. Not one; zero. How many started? Zero. Not one; zero.

We have a Government here who has blamed everyone. Remember when it was people with Chinese-sounding names? That was their fault. That was Rob Salmond from the Prime Minister’s office. He ran that one. We also had Phil Twyford running that and he’s now in charge of disarmament. But given what they’re doing to the military these days, there won’t be anything to disarm. We have, in fact, records being broken. What they’ve done, too, is that they have blamed speculators. So who are these speculators? Speculators, apparently, are mums and dads who have saved up, paid off their own mortgage, and bought a second property to rent out so they can keep themselves in a good situation in their retirement. They’ve picked on them, gone after them, and at the same time they have failed to produce the houses that needed to be produced. They’ve cut out the private market, made it harder.

And now this interest deduction, which is a normal cost of business, has been removed by this Government—this Government. Ten thousand people have signed a petition today, we’re presenting it to Parliament—15,000, sorry—that shows just how seriously people take this. And the answer to it—what happens with it—is that the prices go up, not down. There is a basic part of economics and theory of economics and principle that we know works all the time, it is supply and demand. More supply is what the Government needs in housing—more supply. Yet they’ve arrogantly refused to ever actually adopt all of our ideas about getting more houses built. Instead, in the middle of a pandemic, what’s their answer? Pay the nurses more? No. Help the doctors? No. Keep them in New Zealand? No. What they want to do is restructure everything and have another bureaucracy. Half a billion dollars in bureaucracy instead of to the nurses tells you everything they care about.

They want to centralise everything. For them, they think the Government is the only one who can perform. Actually, if it’s in housing, if it’s in health, if it’s in transport, whatever it’s in, the Government is the only one that can never perform, and that’s their problem. Whether it’s in transport—I heard today from Michael Wood, how about the Eastern Busway? How about that, 3,000 people would be using that? He’s put that on slow for a cycleway.

Hon CHRIS HIPKINS (Minister for COVID-19 Response): It was absolutely evident during that contribution that the person most enjoying themselves on the opposite side was one Christopher Luxon, because, when the caucus starts chanting no after everything the leader says, you know that it’s all on. And when it comes right before a three-week parliamentary recess, you know that the knives will be out.

Judith Collins chose to start her contribution today talking about housing, just a day after her housing spokesperson said that she would stick to the State house building programme of the current Government, but Judith Collins just this morning, asked about that, said the opposite, and said, “Well, I could tell you how many, but I think it is certainly not at this stage.” Not quite sure exactly what that means, but it clearly means that they’re not talking to each other—but, of course, that’s not unusual in the National Party caucus.

So Christopher Luxon thoroughly enjoyed himself. I understand he’s using the three-week parliamentary recess to begin his reconnecting-with-the-provinces tour around New Zealand. He’s going to start in Kaitāia, Whakatāne, Whanganui, Masterton, Kāpiti, Westport, and Wānaka, and all of the other places where he cut their air services whilst he was the chief executive in Air New Zealand, and start with an apology to those communities.

It is, in fact, a great time to be a part of this Government—a Government that is united and focused, making real progress for New Zealand as we continue to lay the foundations of recovery and tackle the long-term challenges that have been facing our country, including the housing crisis that we inherited from the last Government, and shame on them for ignoring that for nine long years. We are keeping New Zealanders safe from COVID-19, working on accelerating our recovery, and making progress on those big, long-term challenges that we face as a country.

Aren’t our economic figures stacking up pretty well compared to the rest of the world at the moment? The Opposition, while they try and talk down the New Zealand economy, should get out and about a bit more and see the fact that New Zealand has actually been incredibly resilient through this global pandemic. New Zealanders are doing the hard yards to make sure that we are rebounding and recovering from what has been an unprecedented economic shock. It has been the hard work of New Zealanders that has delivered that rebound for New Zealand. We are seeing unemployment decreasing—one of the lowest unemployment rates, despite the challenges that we have at the moment. We are seeing numbers of people leaving main benefits and going into work every week now because of the work that we have been doing to ensure that New Zealand is rebounding from this economic shock.

We have good news on the vaccine front today. I want to mention the number 150,000 twice today, in fact: 150,000 Pfizer vaccines arrived in New Zealand this week—the biggest delivery that we’ve received to date, which happened to coincide with 150,000 New Zealanders safely arriving back in New Zealand through our managed isolation facilities without bringing COVID-19 into the community with them, because of the hard work of the people working at our border to keep us safe. I would, of course, remind the members opposite that the only disruptions that we have had to the trans-Tasman bubble since it opened have not been in New Zealand. The team working in our border to keep COVID-19 out of our community have been incredibly effective. They have been working very hard, and they deserve our thanks. When we look at how difficult it is around the rest of the world, it only underscores just how good they have been and just how much we owe them a great debt of thanks. And so I want to say that on behalf of all New Zealanders to our border workers: thank you for what you have been doing to keep the country safe and for the sacrifices you are making for the rest of us.

Half a million New Zealanders are now fully vaccinated against COVID-19, three-quarters of a million New Zealanders have had at least their first dose of vaccine. We have approved a new vaccine today. Medsafe has approved a new vaccine today that gives us further choices, should we need them, around our vaccine roll-out, and we are seeing the number of vaccine doses delivered into New Zealanders’ arms continuing to increase as bigger quantities of the vaccine arrive in New Zealand over the coming month. And, again, I want to thank our front-line health workers for the work that they are doing to get vaccines out of the freezer and into peoples’ arms as fast as they are arriving in the country—that is a huge tribute to our health workers. I think they deserve our thanks, and I think that people should stop running down their efforts and actually thank them for the contribution that they’ve been making.

Dr SHANE RETI (Deputy Leader—National): Thank you, Mr Speaker. I would like to thank the member Chris Hipkins, who has resumed his seat, for resuming his seat, because I think if we could un-hear the last five minutes, New Zealand would be a more enlightened place. I want to bring some facts to this debate and focus on some of the failures of this Government to deliver. In fact, there are so many broken promises that it really is a menu of targets, but I’m going to focus first of all on health.

Labour doesn’t care about older people. We know this from the Budget a few months ago, where, callously, the free over-65s GP visit and eye check was cancelled. Clearly, the Government wants everyone to be like them: not well and with no vision. This $185 million of funding for older people cancelled wasn’t even in the Speech from the Throne, and yet older people were cast aside for a cycle bridge over Auckland harbour. Labour doesn’t care about older people.

Another broken Labour Party promise is around dental care. Labour doesn’t care about young people’s teeth. Last year, on the campaign trail, the Prime Minister promised 20 mobile dental units this year, and yet not one—not one—will be delivered, nor did the Budget appropriate any funding for those 20 mobile dental units—a clearly broken promise. Not one. Labour doesn’t care about young people.

So we’ve got the old people who aren’t being looked after, we’ve got the young people, but the group in between are also suffering under this Government, because what we can tell from the document that fell off the back of the lorry as a draft health budget is that the ministry and the Minister are looking to reduce funding in three key ways: first of all, cutting specialist services to provincial hospitals; reducing the eligibility for the aged residential care subsidy; and reducing eligibility for disability—all of this to pay for $486 million of health restructuring, layers and layers and layers of bureaucracy from Wellington.

Now, the draft health budget somewhat fell off the back of a lorry into our hands. It’s kind of dangerous to walk around Lambton Quay, there’s so much falling off the back of a lorry these days, and I think, really, the Minister of Transport needs to do some work around restraining dangerous loads, which leads me to Willie Jackson. When we’re talking about dangerous loads, let’s talk about He Puapua, which fell off the back of a lorry, unredacted, and into our hands. Willie Jackson, here’s some advice: you’re being hung out on He Puapua. Who was standing beside you on Thursday when you made the announcement? It wasn’t the Prime Minister. A centre point for this Government—she wasn’t there. Was she in the South Island, maybe? No, she was only two or three hours up the road in Northland. Kia tūpato: you are being hung out on He Puapua, Willie Jackson.

What we do know about He Puapua is that it was developed under stealth from about 2019. Even Andrew Little said he didn’t know anything about it. This is the Minister involved with justice and Treaty settlements. What Willie did cough up was that he’d been having discussions on He Puapua with the Prime Minister.

SPEAKER: Order!

Dr SHANE RETI: What he did suggest was that he was having conversations—

SPEAKER: No, “Mr Willie Jackson”.

Dr SHANE RETI: Oh, Mr Willie Jackson was having conversations with the Prime Minister, and I can imagine how that went. As they came to Cabinet, I’m sure he said, “Well, Prime Minister, we’ve kept He Puapua secret for nearly two years. We’re two weeks away from taking it to Cabinet. I need to know, is the plan to show or no-show?”, and I think the Prime Minister said to Mr Willie Jackson, “No-show.” But here’s the problem with this conversation, because, you see, other Cabinet members were walking past when the Prime Minister said to Mr Willie Jackson “No-show.”, but they all heard different versions of that. You see, Andrew Little was walking past, and instead of “No-show.”, he heard “Veto.”, and thought, “Ooh, I need to put a veto into the health document.”, so duly wrote in a veto. Marama Davidson was also walking past, but instead of “No-show.”, she heard “Let’s visit the bros.” “Oh, I need to go to a gang pad—I must go to a gang pad.” And, finally, David Clark was also in earshot, but he correctly heard “No-show.”, and so he hasn’t.

This whole Government is a no-show—no-show on housing, no-show on transport, no-show on child poverty. It’s just a no-show Government. They should go home. Thank you.

Hon KIRITAPU ALLAN (Minister of Conservation): Mānawa maiea te putanga o Matariki. Mānawa maiea te ariki o te rangi. Mānawa maiea te mātahi o te tau. Mr Speaker, tēnā koe, otirā ki a koutou katoa, tēnei te mihi ki a koutou.

[I acknowledge the rising of Matariki. I acknowledge the sovereign of the heavens. I acknowledge the first day of the year. Mr Speaker, thank you, indeed to all of you. This is my greeting to all of you.]

Whilst we’re still in the time where Tangaroa rules the moon, it is a time to reflect, and, admittedly, I’ve had a little bit more time to reflect than some in this House, as I’ve had the opportunity to take a few months out and I want to acknowledge the House for the support that has been provided. I must say that during that time of reflecting, can I just say how exceptionally excited I felt to be a part of a Government that is united, that is focused, and that is getting down to the real business. We are making progress for our country that we love, Aotearoa, and I would be remiss if I didn’t acknowledge my colleague the Hon Christopher Hipkins, who has been working like a mule to make sure that we are indeed keeping New Zealanders safe, that this Government is keeping New Zealanders safe, with 150,000 vaccines that have landed in this country.

I have felt incredibly proud reflecting during this period of Matariki. This period of Matariki does make me think about a couple of things. We have plenty of time to reflect. On this side of the House, it’s our 105th birthday today and, gosh, we’re doing all right.

But I too have had a little bit of time to think about how the opposite side of the House are going, and I don’t know if it’s all true, but from what I have been seeing on the wee box in the evenings at 6 p.m., it looks a little bit chaotic. A few things have changed since I have been away from the Chamber. My mate Nick Smith, replaced by the stellar queen here, Rachel Boyack, the member for Nelson—he’s gone. It seems that there’s been a few leaks in the Whare and—well, I don’t know, but he’s gone. He’s cleared out.

My mate Todd Muller—he’s a mate. He’s a good guy, but I think he was taken out by his own team. I don’t know what happened there, but he’s gone, and now I’ve just heard a rumour that my other mate Mark Mitchell—I think he’s running for mayor, or something like that. Anyway, I don’t know what’s going on.

But I will say this: I am very proud to see my relation—my whanaunga—Harete Hipango back here in this House, and aren’t we glad, team? [Interruption] Yes, we’re glad.

Now, Matariki is a time when we reflect on the nine stars. Waitī: Waitī is aligned with our fresh water and our environment, and I want to acknowledge my colleague the Hon David Parker for the incredible progress that he is making, and our Government is making, to restore the health of our freshwater ways.

Waitā: this is a time when we acknowledge the oceans and the coast, and acknowledge the work that we are doing to tackle the challenges there, too. In particular, whilst I was away, I want to acknowledge my colleagues Dr Ayesha Verrall and the Hon David Parker for the announcements that they’ve made in terms of the restoration of the Hauraki Gulf, and all of the hapū, the iwi, and whānau there that have been working incredibly hard.

Now, Waipuna-ā-rangi: this is a time when we look to the winter skies and winter in all of its forms. I was going to make a little joke here about the leaks, but I’ve already done that, but that was directed to that side of the House.

Tupuānuku: plants—now, I could take a pot-shot at their position, but I’ve done enough of that, so, no; I’ll take a leaf out of the agriculture Minister’s book. This is a time when we acknowledge the plants and make hay while the sun shines, even if it has to be done in managed isolation. So to the Hon Damien O’Connor: thinking of you, buddy.

Tupuārangi: this is something that falls squarely within my delegations in the conservation portfolio. I want to acknowledge the thousands of men, women, people across the country that are out there being kaitiaki to our whenua, to our forests—that are out there in Jobs for Nature. We have got thousands of people out there, across the country, doing an immeasurable amount of work to restore the mana and the mauri of the whenua, as that Jobs for Nature programme is rolled out.

I turn to the star of Ururangi: the four winds. The winds of change appear to be blowing hard from across the Opposition benches, and I have been looking up and I’ve been looking for the Leader of the Opposition. Is it, or is it David Seymour? I don’t know—I don’t know. We’ll take a poll later on as to who the new Leader of the Opposition will be, but anyway. The winds are a changing, and that’s something that happens in this House.

Pōhutukawa: this is a time when we reflect on those that have passed. I want to acknowledge that over the past year, we have been afflicted by COVID and that we have lost many lives. I also too, just briefly, mention Hiwa-i-te-rangi, and the time that we look forward, cast our dreams and aspirations to the future. And it’s going to be a great year ahead with Jacinda Ardern at the helm. Tēnā koe.

NICOLE McKEE (ACT): I’d just like to acknowledge and welcome back to the Whare Kiritapu Allan. It’s really great to hear your voice, although I would say, even though you referred to the Hon Chris Hipkins as “working like a mule”, I might say rather working like an arse. But there you go.

SPEAKER: I think the member means “an ass”.

NICOLE McKEE: Sorry.

I’d like to do my general debate today on firearms administration issues. Look, I do need to speak about this; I’ve spoken about it before. I need to bring it up again, because the last time I spoke of this was a few months ago at the beginning of the year. Quite frankly, nothing has changed since we brought some issues to the House and, at this rate, my inbox is filling quite dramatically and very quickly with incident reports from firearm owners.

They’re talking about concerns with excessive delays in processing applications, calls to police being ignored, and messages not even being returned, no responses to emails, inconsistencies with application of the new firearm laws, dealers being unable to work, museums closing their doors, aggressive interviewing styles by police vetters, demands for private information—including home layout, where alarms and cameras are located—being detailed on files that many within the community do not trust police to securely hold. These incidents all relate back to the new laws, the laws that Government rushed through without thinking of the consequences. Well, I think the consequences are coming home to roost.

I’m really glad ACT is in the House and able to expose the realities of what this Government has done to the people of this nation, those who were once respected as police-approved, fit and proper, licensed people. The royal commission inquiry showed that the police failed New Zealand—it’s not this country’s legitimate firearm owners, but it is the firearms owners that bear the consequences of that agency’s inability to implement old law, let alone fast-tracked new law. ACT suggests that the Government needs to leave police to do their core business, which is policing, because administrating via the firearms group is continuing to fail.

They know this. They can see it themselves. They actually changed their name from Arms Act Service Delivery group to—removing the words “service delivery”—just calling themselves Arms Safety and Control. New Zealand Police also refer to themselves as regulators now; they’re not even administrators any more. So it’s well overdue to implement the new independent firearms authority promised to New Zealand in the last term of this Government.

Why is this urgent? Well, here’s some examples. Let’s talk about the licensing. An application that a person pays a Government agency to be considered for: in April this year, those that had been waiting for weeks or more totalled 8,179. In July, it’s 7,913. That’s only a difference of 266. In April, those that had been waiting eight months totalled 3,601. In July, it’s 3,654. Oh dear, it’s going up—it’s not going down. In April this year, those that had been waiting for 12 months were 1,382; it’s now risen to 1,611 that are waiting for 12 months and 523 people have been waiting 18 months, and they’ll soon be joining, I expect, the 271 people who have been waiting more than two years. The Minister advised us in this House earlier this year that the delays were being addressed, but a written parliamentary question (WPQ) answer that I received yesterday actually indicated that police are just getting recruitment under way now. I have to ask: why is it just now that this is happening? Perhaps it’s all the WPQs I’ve been asking.

Dealers are complaining that the processing time is taking so long that they’re unable to go through with their business. Museum curators have been told that they need a dealer’s licence to operate, but haven’t been told this expensive annual licence is only required if they operate a business, and then there are the police themselves advertising images in local papers showing firearms in unsafe conditions for securing.

It’s really important that ACT continues to stand up for the rights of not only licence holders but those New Zealanders who have been affected by rushed law, such as the farmers, the small-business owners, the landlords, and the nurses. We are there for them to help make good policy for New Zealand. Thank you, Mr Speaker.

Hon PHIL TWYFORD (Associate Minister of Immigration): Thank you, Mr Speaker. I want to start by saying just how happy we are on this side of the House to have our mate Kiritapu Allan back in the House.

I want to speak today about one of the elements of this Government’s massive work programme. It’s designed to keep Kiwis safe and navigate this country through the economic recovery, and, most importantly, to build back better. The Government’s economic plan involves a managed transition away from a low-wage, low-productivity economic model, a model this country has embraced for decades and, at its heart, it has had consistently high net migration figures. This effort that is already under way, led by Minister Kris Faafoi, continues even as we try to recover from the pandemic, and the border closure has given us an opportunity to accelerate the work we started before COVID, focused on tilting the profile of migrants who’ve come to, and stay in, New Zealand towards more highly skilled workers.

As a small and, until very recently, a very open economy, migrants will always, always play an important role in New Zealand society. We simply can’t provide and generate the skills that we need right across the economy, and migrants, as our friends, colleagues, family, and community leaders make an incredibly positive contribution to New Zealand. But even prior to the pandemic, it was becoming increasingly clear that we needed to re-evaluate the immigration settings. Migration levels grew over the last 10 years, prior to the border closure, as the previous National Government focused on growing GDP through the immigration system, rather than by addressing the structural impediments to wage and productivity growth. This led to New Zealand having the highest share of temporary migrants as a proportion of our labour force of any OECD country and an entrenched low-wage, low-productivity economic model that we inherited when we came into Government in 2017.

This Government is rebalancing our approach to immigration. There will always be a place in this country for temporary workers and new residents, particularly those who are highly skilled and can do technical and specialised work that we need. But we cannot and must not let the immigration system act as a kind of fall-back for failing to train Kiwis and build the workforce that we need for the new economy. We cannot allow the immigration system to inhibit the investment and innovation that will result in higher productivity, higher wages, and more wellbeing in our community.

Now, this is going to take work right across the system of Government, not just in immigration. That’s why Minister Chris Hipkins is rebuilding a 21st century trade and vocational training system, a polytech for the entire country. For too long, in this country, we’ve failed to give Kiwis the opportunities to get the skills they need. We’re going to have industry transformation plans, regional skills leadership groups, workforce development councils, and a skills and training system that delivers what the regions, business, and employers need.

We’re also investing across the board in raising productivity. In our industry transformation plans in sectors like biotech, digital, high-value processing of food and beverage, we’re working with employers and the workforce to grow these industries, to lift productivity. We’ve got tax incentives for R & D, and an investment attraction strategy that’s designed to bring high-quality investors here to grow businesses and grow the industries that we need.

This Government is working hard to build a high-wage, high-productivity economy. It’s the opposite of what National stands for; they say they want to raise incomes, but every time in this House they oppose any effort to raise wages. Fair pay agreements, raising the minimum wage—you name it, their business is actually keeping labour costs low. On this side of the House, we stand for building a high-wage, high-skill, high-productivity economy, and reforming the immigration system, as Kris Faafoi is beginning to do, will make a very important contribution.

Dr GAURAV SHARMA (Labour—Hamilton West): Kia ora, Mr Speaker. It’s an absolute pleasure of mine today to speak in the House during this general debate. I guess, the general theme of this debate is around the foundation of our recovery, and what I interpret this to mean is recovery from nine years of a National Government which severely underfunded everything, from housing to health.

Today, we celebrate 105 years of the Labour Party and, just last week, I celebrated my own 34th birthday, and what a way to celebrate: the Labour-led Government has given the best birthday present anybody could ever ask for. On 1 July, a raft of initiatives kicked in to support New Zealand’s economic recovery from COVID, which also addressed child poverty, housing, and climate change.

These include a main benefit increase, after tax, by $20 per adult, per week. In addition to this, the training incentive allowance will support high-level study for sole parents on benefits, and carers and disabled people on supported living payment. We also extended the unsupported child’s benefit and orphans benefit to short-term caregivers of children who are unable to live with their parents. We increased the paid parental leave rates, established a ministry of ethnic affairs, and started a new migrant exploitation protection visa to protect migrants and help them leave exploitative situations. We’ve started a new rebate for electric and plug-in hybrid vehicles, and my favourite one is around the healthy home standard, which means many of our communities will get to live in a dry, warm home for the first time in their lives.

The list is exhaustive, but it would be a disservice to not mention the incredible work this Government has done in the most beautiful city in the country, which, as you know, is Hamilton, or rather the Hamilton West electorate, where you used to be the member of Parliament, Mr Speaker. The biggest challenge for me is just—

SPEAKER: I left.

Dr GAURAV SHARMA: Well, I think it probably got the award after you left—sorry.

SPEAKER: Oh!

Dr GAURAV SHARMA: The biggest challenge for me is to choose just a few of these projects from an exhaustive list. I want to, first of all, start talking about the incentives that the Government gave during the COVID pandemic. I used to be a front-line healthcare worker—you know, swabbing patients on the front line—and, at that point, the Government gave $853 million to 129,000 people, followed by $156 million to another 36,000, and $17 million to another 16,000 in resurgence. That’s $1 billion given out to people for wage subsidy during this time.

Before I finish the rest of my speech, I just want to go on a bit of a side-line story. At the medical practice I used to work at, there was a worker there, and well before COVID they got in touch with me one time and they said, “You know, your Government”—I was still a candidate then—“is hell-bent on giving away money to people, and people who apparently don’t want to improve their situation.” We had quite a long conversation around supporting people who need help, and because of various reasons they end up in those situations. Well, during COVID, this person pretty much got fired on the phone line by their boss without any notice, without following the contract that should have been followed, and the Government did help them with the wage subsidy. The same person got back to me and said, “For the first time in my life, I realised that people do need a helping hand when they are in trouble, and often the situation isn’t in people’s own control.” He’s really appreciative of the help that the Government gave him at that point and has changed his whole view on providing help to people.

But, anyway, coming back to the great work the Government’s done in Waikato, especially in health: $106 million as part of the health capital funding has been allocated, $32 million for increased capacity around speciality services, and $100 million for a new acute mental health facility. In transport, we launched Te Huia train service from Hamilton to Papakura, which received $85.8 million funding, and $8.2 million has been invested in the Hamilton to Cambridge section of Te Awa cycleway. This year alone, $500 million from Waka Kotahi will go towards 398 kilometres of State highway being maintained, resealed, and repaired in Hamilton. That’s a lot of investment by the Government in Hamilton.

As part of the shovel-ready project, $23.8 million towards Waikato Regional Council—that’s part of the climate resilience package—$1.64 million to help eight Pasifika churches, $13.9 million for 53 maraes, and creating 363 jobs. I’m also looking forward to the new alcohol and drug rehab court which was recently opened by Minister Faafoi and the Hon Aupito William Sio. Thank you.

RACHEL BOYACK (Labour—Nelson): It’s a pleasure to take a call in the general debate today as the member for the real most beautiful electorate in Aotearoa: Nelson. Although I know that my colleague here—Anna Lorck—would like to claim that the Hawke’s Bay has beauty that surpasses Nelson. But I know that my colleague across the House Chris Baillie from the ACT Party will support me on this—that Nelson is the centre of Aotearoa, as well as being the most beautiful electorate in this country. I’m proud to represent it here.

Today, I want to talk about being part of a Government that is laying the foundations for our recovery and tackling New Zealand’s long-term challenges. Because of the hard work of our team of 5 million over the last 18 months, we are now well positioned to recover and rebuild from COVID-19. The Government’s books last week show that the New Zealand economy is continuing to display resilience in the face of the ongoing impact of COVID, and this Government has introduced a range of measures across Budget 2020 and Budget 2021 to help lay the foundations for our recovery.

Jobs for Nature is just one example in my electorate of Nelson of a project that is helping to create jobs, support our economic recovery, and protect and restore our environment. I want to acknowledge the return of our colleague the Hon Kiritapu Allan and the work she has done on this project. Over 100 new jobs have been created through Jobs for Nature projects across Nelson. They range from projects aimed at maintaining the health of our taonga, the Maitai River, to supporting the restoration of the Waimea Inlet, which is the largest semi-enclosed estuary in the South Island, and my personal favourite: supporting the improvement and water quality in the Wakapuaka catchment at Paremata Flats.

These projects are not only supporting people and Nelson with jobs but will also pay dividends for future generations by restoring and preserving our environment. This Government is committed to looking after nature and people’s livelihoods. It was designed specifically to respond to the impact of COVID-19, and the funding enables iwi, businesses, and councils working with Government agencies like the Department of Conservation to employ thousands of people across Aotearoa to look after our natural landscapes.

I am personally delighted that more New Zealanders are moving into trades. Over 100,000 learners have signed up for free vocational training since we introduced the Targeted Training and Apprenticeship Fund in July 2020. We know that, as a result of COVID, many New Zealanders are looking to retrain and gain new skills, and employers in key sectors will need more skilled people. The Nelson Mail reported in May this year that over 1,100 students have begun vocational training at the Nelson Marlborough Institute of Technology (NMIT) under the Targeted Training and Apprenticeship Fund. NMIT have said that they have 4,041 domestic students currently enrolled, compared to 3,299 in March 2020—an increase of 22 percent, with demand across all programmes. They’ve even said that the increase in domestic funding will compensate for the loss of international fees.

There’s a particular policy that I am extremely proud of, which is the reintroduction of the training incentive allowance which came back into effect last week. I was student president at NMIT when the previous National Government cut the training incentive allowance in 2009. That cut took away hope for a number of current and future students. Our office had to support students who were told they weren’t eligible, when they were. The irony was that the Minister who cut the training incentive allowance used it twice when she was a sole parent, and then admitted she was wrong to cut it. On this side of the House, we don’t rip the ladder up after us.

Last week, I hosted Minister Sepuloni and Minister Nash in Nelson, and it was clear from the number of people we spoke to that the Nelson-Tasman region is in good heart. From the investment into training and jobs in our environment to the outstanding leadership shown by organisations like Wakatu Inc. and the intergenerational strategy and the Nelson Regional Development Agency and Chamber of Commerce’s work with councils and iwi to develop our economic blueprint for the region, Project Kōkiri, through to the world-leading research led by Nelson’s Cawthron Institute into algae research, we have the ideas and the people ready to make a significant difference to the Nelson-Tasman region. It is an exciting time to be part of a Government that is putting—

SPEAKER: Order! The member’s time has expired.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. Tēnā koutou e te Whare. While we’re all talking about beautiful electorates, I’d like to turn the House’s attention to Auckland Central, and to the Hauraki Gulf in particular, and ask that all eyes are on Pūtiki Bay, Kennedy Point. I think all of us in this House and many of those who are watching at home are probably aware of the fact that the law isn’t this thing that is deified, created by the gods. It isn’t this natural phenomena; the law is man-made. It is something that we here create in this House, and it is something that we often acknowledge we get wrong when we end up changing the law. That recognition of wrongdoing is often, actually, also reflected in the likes of Te Tiriti settlements.

That is why I, as Auckland Central MP, and the Greens are asking for all eyes on Pūtiki Bay. Five years ago, there was a resource consent granted for development of what is now known as Kennedy Point Marina. That development started a few months ago. Today and this past week, we have seen aggressions flaring. We have seen around that development that there has been an increase in the risk to the health and safety of occupiers and those working on the ground and the ancestral moana of Ngāti Pāoa around Waiheke Island. One can’t help but reflect on the kind of kōrero that we were having in this country nearly 20 years ago around the foreshore and seabed, where we heard from, particularly, conservative, separatist politicians who trotted out this line of “Iwi versus Kiwi”, which, might I add, is inherently ironic because the very word “Kiwi” is te reo Māori, and therefore an inherent recognition of the cultural value of Te Ao Māori and tikanga. But I digress.

It so clearly turns out inherently in this occupation at Pūtiki that it is iwi Māori who are doing the protection of our moana and our whenua for future generations. We’ve had leading kororā or little blue penguin expert Professor John Cockrem out on the island at Waiheke, who issued an interim report about a week ago asking for an immediate stopwork, and we expect that his final report will be issued shortly. But, in the meantime, he has made comments about concern that perhaps some of the 127 resource consent conditions may be being breached. Tomorrow, Ngati Paoa Trust Board will take their case for an urgent injunction on that basis. Multiple courts, I might add, had already to this point acknowledged that there has not been thorough engagement with iwi Māori when it comes to this development.

At moments like this in our history, in this ivory tower, it may seem miles away, that occupation that’s occurring at Pūtiki. But I think it is really important that we reflect on the unsanitised reality of activism and advocacy that protects these places and spaces for future generations.

In 1976, the Government at that point in time announced that it would be selling off Bastion Point in Auckland to the highest-bidding developer. Two days before the development was due to start, we saw Ōrākei Māori Committee Action Committee, led by Joe Hawke, begin an occupation. During the cold and the wet of winter, the crowds dwindled to a mere handful of people at that occupation, but whenever there was a threat by the Prime Minister at the time—Muldoon—we saw those crowds swell. We saw people turn up and turn out, and after 506 days, the Government of the time issued hundreds of police officers and the New Zealand Army to take away those occupiers and those protesters, and it arrested 222 people. But, 10 years thereafter, that land was returned through settlements to Ngāti Whātua Ōrākei, who, in turn, turned around and provided access to the people of Tāmaki Makaurau.

I just really want to the House to reflect on that, because, after putting their bodies on the line for a year and a half, after holding space and gathering some criminal convictions—

Hon Paul Goldsmith: “Professor Swarbrick”.

CHLÖE SWARBRICK: Profit was never the point—Paul Goldsmith—but the point was to ensure that this space was available for all future generations. That is kaitiaki. That is koha. Honour Te Tiriti—protect Pūtiki.

Dr TRACEY McLELLAN (Labour—Banks Peninsula): Thank you, Mr Speaker. It’s a great day to be positive. It’s an excellent day to be positive, and although some “Bah, humbug!” started this debate earlier on, it’s a special treat to be here today in particular, because we got to see and we got to witness our colleague the formidable Kiritapu Allan doing what she does best in this House, and that’s brushing away any kind of negativity and just putting a smile on our face. So I thank her for that.

What Kiritapu also mentioned was the fact that we’re united and we’re focused. All of that positivity reminds me of a couple of my favourite things—namely, the beautiful Banks Peninsula electorate, and science and innovation. I like it even more so when I can combine the two things, as recently happened when Minister Megan Woods came down and recently confirmed a special joint venture between Kaitōrete Ltd, Taumutu Rūnanga, Wairewa Rūnanga, and the Crown: a space-launching site to be developed on Kaitōrete Spit, which will be supported by additional research and development facilities also.

Now, the project will create sustainable education and training opportunities and unlock jobs—good jobs, particularly in science and advanced manufacturing. An important focus of the joint venture is the protection and the rejuvenation of the cultural interests and the unique biodiversity of the area. It’s an incredibly exciting opportunity for the Banks Peninsula. The Māori Crown partnership has been hailed for its emphasis on co-design and co-development, and I’m very proud of it.

Speaking of biodiversity, the release of the Predator Free 2050 five-year progress report illustrates that New Zealand’s recovery extends well beyond just our strong economic performance. Becoming predator free by 2050 is an ambitious target, but it’s fantastic to see that pest suppression is exceeding the 2025 targets already. That statistic alone illustrates the hard work and commitment of all the people involved to date.

It would be remiss of me not to point out that Banks Peninsula was singled out in the report for its collaborative and local focus. The Banks Peninsula Conservation Trust was lauded for empowering locals to lead local conservation efforts for three decades, and Pest Free Banks Peninsula was held up as an example for its engagement efforts, particularly because it incorporated Ngāi Tahu principles into its strategy and partnered with locals to implement pest control measures. Again, that’s something I feel very proud of.

Talking of all of this science and innovation, R & D, science, and infrastructure, obviously, are significant priorities for this Labour Government, and the Scott Base Redevelopment combines all three of these. It’s not only of great benefit, really, to all of our scientific aspirations in Antarctica but it’s also of great benefit to the economy of the Mainland—particularly Canterbury—with 700 jobs expected to be created over six years. Christchurch is the gateway to Antarctica. The airport in Ilam provides aviation support, and the port of Lyttelton, as scenic as it is strategic, in the wonderful electorate of Banks Peninsula, provides a maritime base for all things Antarctic.

All of this positivity, and I also would like to acknowledge colleagues who have spoken before me, each one focusing on different areas that they think are important but each one never running out of positive things to say. It creates a little bit of warm and fuzzy, but it’s a timely reminder that many South Islanders woke up to snow last week. Even at the higher parts of my electorate, the Banks Peninsula electorate, had a little bit of a dusting. It’s a timely reminder that New Zealanders—particularly our most vulnerable—often require a little bit of extra help to keep their homes warm in the winter months. That’s exactly why this Labour Government is providing for that. Last year, we doubled the winter energy payment, and this year the payment is available again, and we’ve also committed to making 47,700 more Kiwi homes warmer and more energy efficient through our funding of insulation and heating retrofits as part of Budget 2021.

I’d like to thank all of my colleagues, as I said, for highlighting other important parts of this positive feel that we all have here today, and reiterate that we are united, we’re focused, and we’re making real progress for Kiwis.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Speaker. While everyone’s on the topic this afternoon of their favourite electorate, we can’t let this afternoon go by without mentioning the wonderful electorate of Taranaki - King Country. It is where a large percentage of our GDP comes from in terms of agriculture. But I can’t leave out Waitomo at this point in time, because, as a result of COVID, the tourism business there is very sad right now. I’m pleased for the New Zealanders who do support it when they can come to that beautiful part of the country.

There’s been a lot of talk about positivity on the other side of the House today, but all I can see from the angle that I look from is four years of failure, and four long years of failure. Because the only thing that this Government has delivered in its four years is bad legislation. I want to talk for a bit about rural, because I don’t think this Government cares about rural. In fact, in the main, I don’t honestly know that this Government even knows—and many of the Ministers—where rural is.

I want to quote a piece out of Minister Wood’s recent transport consultation discussion document: “good cycling networks can link rural neighbourhoods and destinations, serving both the community and the tourists.” That just gives me an indication that the Minister and his Government have no idea how rural New Zealand operates. Yes, we all like to go for a bike ride on a lovely sunny day. That’s fine. But thinking about rural communities going around their businesses on cycles—imagine a large bale. You know, this Government’s trying to take the services of people who have utes away in a large way. Let’s attack the ute owners. Let’s put everyone on bicycles and build some cycleways in New Zealand—that’ll work! Rural New Zealand will run really well on bicycles!

If it wasn’t bad enough, when the protest happened on the Auckland Harbour Bridge and the Government made that announcement about the Auckland cycling bridge, which has gone down like a lead balloon, it looked like a very strong reaction to a protest. Even being generous in my thoughts around this, if it had been planned for some time, it was a very tone-deaf announcement to do it at that time, when the Ashburton bridge was out because of floods, and people were struggling to get where they needed to go because of those awful floods that hit Canterbury.

So in terms of our rural roads, there are cones, cones, and more cones everywhere. But, sadly, we seem to be driving through cones, and the roads are not getting any better, because this Government’s solution to rural roads seems to be to slow them down—don’t fix them; slow them down.

Now, recently, we had what is normally the biggest agricultural event in the Southern Hemisphere. This year, Fieldays would have been probably the largest agricultural event in the world over a two-year period. And while trade is important, it was interesting that the Minister of Agriculture chose, at that time, to go overseas and do his trade talks. There must have been a window around which he could have done that, which didn’t include not coming to Fieldays. After all, if you were the agriculture and the rural communities Minister, would you not take the opportunity to go out and talk to farmers as much as possible? Unless, of course, one didn’t want to talk to farmers, and one didn’t want to front up to the announcement that this Government has made about utes, because, actually, utes were the talk of the Fieldays. It was really interesting that post-Fieldays, the Prime Minister actually had to go to Canterbury to front up for some extra funding for the flood, and who turned up in a ute but the Prime Minister? It’s just as well the Prime Minister did turn up in a ute, because had she not turned up in a four-wheel drive ute, she might have still been stuck and never made her way back to Parliament. So thank heavens for the ute.

Also thanks to Grant Robertson, who is one person, at least, over the other side of the House, that does get where the money is delivered from in this country. So we want to bring attention to rural. We want the Government to know where it is. It’s very important, because without rural—without agriculture—in this COVID environment, this country would be in a far worse state than it currently is. Thank you.

ANNA LORCK (Labour—Tukituki): I rise as the final speaker in this general debate, to talk about the absolute proudly provincial, rural MPs that are on this side of the House. We are a very, very strong bunch. And I can tell you a really good reason about why these provincial regions are doing so well. It comes down to teamwork. It comes to strong working relationships, positive attitudes, drive, and passion for the region. Building partnerships: Labour Government with local and regional council, iwi and private sector, business, industry, and, of course, our people. We are all working together, striving for a strong economy locally and nationally.

As we do, I would like to take this opportunity first to acknowledge Rex Graham. Rex Graham is the outgoing Hawke’s Bay Regional Council chairman who resigned from his position in early June due to his cancer return. Rex has been described by former Tukituki MP Rick Barker as the “Best chairman [of the] regional council … in 30 years.” The biggest change Rex has brought about was a passion for building a strong relationship with mana whenua and his environmental efforts. Over the years, Rex and I have worked together supporting and opposing each other on local issues. We’ve had feisty conversations, but I know we have a mutual respect for each other. He works hard, he’s passionate, and Hawke’s Bay runs through his veins. And now his loyal deputy, Rick Barker, has stepped up to serve as chair of Hawke’s Bay Regional Council.

Leadership—this is what Hawke’s Bay is achieving by working together, uniting a region to grow and build a bright and sustainable future for all generations. When you look at the Tukituki electorate with Hastings at our heart, we know that, as we continue to build these excellent, strong working relationships, it’s absolutely critical to our ongoing success. It’s how we get things done.

We are in a transformational time, with our can-do attitude, entrepreneurial talent, leadership and innovation, growing jobs, and bringing our people with us. As the local MP for Hastings Tukituki electorate, I would like to report that our city and district is absolutely going for it. Hastings is becoming an absolute success story of the region. We are the engine room for Hawke’s Bay, and we were once called “The fruit bowl of New Zealand”; now we’re called “The food capital of this country”. And we are celebrating our success; working hard and building on our strengths. Record investment into local industry; leading locally and exporting to the world.

We’re creating a food innovation hub called foodeast, and this Government is getting right behind us, investing $12 million to help get this project under way. It will be the place of innovation and connection, designed to add value to our region’s food, beverage, and agritech businesses. We’re backing growers. We’re investing and growing jobs. We’ve got everything going in Hawke’s Bay—

Shanan Halbert: Go Wattie’s.

ANNA LORCK: —and that’s why—yes, that’s right. Let’s go Wattie’s. Thank you, Mr Shanan, over here, for saying that. He’s local too. He comes from Hawke’s Bay.

Now, this food innovation hub, this is forecast to add another $100 million to the region’s GPD and bring $100 million—yes—and 500 new full-time jobs to Hawke’s Bay over the next 15 years. All driven by local passion, innovation, entrepreneurship, working together, maximising every opportunity for Hawke’s Bay’s growth and productivity. And it shows a Government who’s prepared to work alongside, invest with locals, where we need it. This is real evidence of foundations for rebuilding our future. Thank you, Mr Speaker.

The debate having concluded, the motion lapsed.

Bills

Education and Training (Grants—Budget Measures) Amendment Bill

Third Reading

Hon CHRIS HIPKINS (Minister of Education): I present a legislative statement on the Education and Training (Grants—Budget Measures) Amendment Bill.

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

Hon CHRIS HIPKINS: I move, That the Education and Training (Grants—Budget Measures) Amendment Bill be now read a third time.

This bill is a very simple bill, and it allows us to deliver on a commitment that the Government made at the last election to deliver pay parity for early childhood education teachers working in education and care services outside of the kindergarten sector. We have made the commitment over this term of Government to ensure that we reach the point where teachers working in those services are paid the equivalent of their counterparts working in kindergartens.

The pay gap that has opened up between education and care teachers and teachers in kindergartens—over a decade now—is wrong. It is unacceptable. Why did it happen? It happened because between 2008 and 2017, there were not adjustments to the per child, per hour funding rate for education and care services to reflect the pay increases that were being given to kindergarten teachers—none, not one at all, during that nine-year period—and, as a result, we saw quite a significant pay differential open up. Under our Government we have given annual funding increases in terms of the per child, per hour funding rate, including to the salary component of that funding rate, every year that we have been in Government, but we recognise that that is not enough to undo the damage that was done during that nine-year pay freeze, so we do have to do more to catch up and to start to get nearer to pay parity.

We started that process last year when we increased the minimum attestation rate that centres have to sign up to in order to reach the highest rate of funding to at least the equivalent bottom step on the kindergarten teacher salary scale. So in order for a centre to access the highest per child, per hour funding rate, they have to attest that they are paying their staff at least the bottom step on the kindergarten teacher salary scale. That requirement came into force last year, and we increased funding to accommodate that.

Kindergarten teachers had a pay increase this year, and so this year’s Budget introduced extra funding to ensure that that parity did not go backwards. The Budget also set aside funding, to apply from 1 January next year, that will allow centres to go further. It will fund centres to allow their teachers to step their way up the salary scale, up to step six of the kindergarten teacher salary scale, depending on their length of service. So if they’ve been teaching there for three years, they would get on to step three; for six years, they would get on to step six. Over time, it is the Government’s intention to continue to increase funding and provide extra funding so that centres can make it all the way to the top of the kindergarten teacher salary scale, and that is step 10.

In order to be able to ensure that that extra funding actually flows through into teacher pay, the Government wants to be able to establish a condition on access to the highest level of funding that relates to employment relations—i.e., that the centres sign up to saying that they will pay their staff at least those steps on the salary scale in order to get that extra level of funding. There is some ambiguity about whether the existing conditions that can be attached could do that, so to remove all doubt about that, we have put this extra provision in place. That will mean that we can attach that condition, we can do that with certainty, and those early childhood services will know that the condition is consistent with the Education and Training Act of 2020. So this minor amendment allows us to attach that condition.

There is debate with the sector about whether or not the rates of funding being proposed are sufficient to meet the cost of moving all of those teachers to step six on the kindergarten teacher salary scale if they have done six years’ worth of service. Those discussions are ongoing. We’ve had feedback from the sector about that. This bill does not relate specifically to the rates proposed. It simply allows the conditions to be put in place. The discussions around what the rates are, when they should come into force, and how that should be stepped out is a discussion that we continue to have with the sector. So the bill allows us to deliver pay parity, but it is the work that we have to do once the bill is passed that is actually the important part, which is to identify what the funding conditions are and to identify what the funding rates that go with those funding conditions are. I commend the bill to the House.

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

ERICA STANFORD (National—East Coast Bays): This is a bill that was sold all those weeks ago as small and insignificant technical fix, a mere minor change, that actually has turned out to be a nightmare for the Minister—a nightmare of such epic proportions that I think it surprised even him.

Just a few weeks ago, Minister Hipkins was in a perfectly presented presser at an early childhood centre, with smiling children, happy teachers, and centre owners that were beaming from ear to ear. He announced that pay parity was happening and he was fulfilling his election promise. There was one throw-away comment that he mentioned on the day—that he would need to make a minor technical change to the law to achieve his goals, and here we are.

So much has changed since we saw those happy smiling faces at that press conference. On to the Early Childhood Council conference on Saturday just gone, where the Minister was skewered, to put it mildly. Where angry and frustrated early childhood centres—while they absolutely want and support pay parity and want to pay their very much valued teachers a lot more—were angry, upset, and frustrated with the Minister for the way in which he has gone about his pay parity promise. There were many reasons that were talked about.

The first thing about this bill is the time frame, and I mentioned this all the way along—the fact that we’re doing this in urgency, the fact that we only had a few weeks to think about the bill, to have submissions, and the fact that we only had three days, during early childhood centre hours, where submitters to the bill could come and talk to our committee. Now, we know that the sector is short staffed. We know that they’re under a huge amount of pressure, and what did we do? We put the submission times during the time that the centres would be open, making sure that they would not have the chance to talk to our committee in person. But they did make themselves heard loud and clear through the written submission process—over 550 of them, and most of them opposed to this bill.

They were upset about the lack of consultation. They were blindsided by this bill. The Early Childhood Council, which is the sector representative, said that this had never been discussed with them. The terms and conditions of pay parity that were outlined, which had been outlined to the committee, were never discussed with them. The third thing that they were upset about was the term “employment matters” in the bill, and while it was cleared up somewhat in the bill, and the Minister tried to talk his way around it, the fact is that “employment matters” is still the term that is used in the bill. This worries privately owned centres, who are worried about what the Minister will do, what terms and conditions he will impose on them that are outside of just pay.

As I said in my second reading speech, and it was said again on the weekend by all of the early childhood centres that were at that conference, they were never talked to about the fact that pay parity, the money that was going to be granted, would be attached to conditions like the fact that it would be a tenure-based scale rather than performance based, and the fact that the centres themselves wouldn’t get to decide where, in fact, their own staff started on that scale. These things were never mentioned. In all of the lead-up to this bill and during the bill and during the select committee, it was never mentioned, until we dragged it out of the officials, and said, “Hang on a minute. What other terms and conditions of the kindergarten teachers collective agreement will be imposed?” The Minister said, “Oh no, none at all. None at all.”, and the officials said, “None at all.”, but then they did actually have to say, “Well, there will be a couple of conditions that will mimic the KTCA.”, and those will be the fact that the centres will not get to decide where their staff start on the scale, nor how they go up the scale. That will not be up to them; that will be as per the kindergarten agreement—never mentioned, but confirmed. They were blindsided by this, and the feedback from the conference was, “We are private businesses. You are foisting a collective agreement on to private businesses who want to manage their own employment affairs.” They do not want to have it put on to them in such a manner that it’s done under urgency, without any consultation, and sort of slipped in at the last minute.

Therefore, these centres, at the beginning of this process, were not able to work out actually how much this was going to cost them. They’re looking at this bill, going, “Do we support it? Do we not? Let’s have a think about if we can opt in. Can we opt in?” They weren’t able to work out how much it would cost them, because they didn’t realise they wouldn’t be the ones to decide where their staff would start on that scale. When it was made apparent and they were able to do the calculations, it was a pretty dire situation. Most of the centres—in fact, every single one at the conference—when they were asked to put up their hands as to who could afford to opt in, not a single hand went up. Not a single centre could afford to opt in.

Now, the Minister can play games and say, “Oh, well, but the funding is completely separate to this bill.” He could be a bit tricky and clever and say, “We’re not talking about that. We’re just talking about the bill and the technical amendment.” Actually, those two things are inextricably linked. The centres that were there on the day were standing up, almost in tears, saying, “What are we supposed to do? You’re putting us between a rock and a hard place.” In fact, those were the Minister’s words. The Minister said, “You are between a rock and a hard place.”

The teachers’ expectations have been massively raised—“We’re getting pay parity.”—and yet a minuscule amount of money has been put forward to actually fund it. So where does that extra bit get made up? Well, I’ll go into that later. So many questions were poised at this conference that the Minister was not able to answer about this bill. The early childhood centres were saying to him, “What happens when our staff go? Even if we can’t afford it but we manage to make things work in the first year, what happens in the second year when all of our staff on all the different levels go up? What happens then? What if we are massively out of pocket? Will you commit to paying?” The Minister was very clever with his words and talked about the bottom rate, but he never talked about all of the other people on the higher levels of that scale.

They also said to him, “Well, what about the kindy agreement. If the kindy agreement rates go up, will you make our grant match that”—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Not the Speaker.

ERICA STANFORD: I’m sorry, Madam Speaker. They said, “Will the Minister increase the grant to match that, so that centres wouldn’t get further and further and further behind?”, and he could not answer. He says, “Well, it’s my intention that we will.”, but there’s no promise and there’s nothing in this bill to guarantee that while a centre might be out of pocket in the first year but manages to make up the difference—in future years will they be able to keep their doors open?

This whole issue is, in my opinion, the worst possible outcome for the quality of early education, and the reason for that, as I said, is the Minister is pitting centres against teachers, and the centres know and want desperately to increase pay for their teachers—they want to opt in; they desperately want to—but they’re not funded enough to. So what do they do instead? If they opt in, they’re going to have to increase the ratios to the bare minimum, which international evidence shows is not the best thing to do. They desperately don’t want to do that. What else can they do? They can reduce the amount of resources. They can hire less qualified or unqualified teachers, or they can increase fees to parents, which many are loathe to do.

The worst thing about this is the centres who will be the most adversely affected—and the Minister even admitted to this in committee—are the ones that are in highly deprived areas who can’t afford to charge fees, or charge very, very low fees. They certainly can’t afford to increase those fees, because those parents and families won’t be able to afford it and will pull their children out, and we desperately want those children in early childhood education. So if they can’t do that, what will they do? They will increase their ratios—so one teacher for 10 two-year-olds—and nobody wants that.

These are some of the most vulnerable children in our society who need the best ratios, and we are forcing these centres into a situation where they will have to choose between teacher pay and quality. If they choose teacher pay, the quality will go down, and those kids in those highly deprived areas will suffer the most. They will have to cut back on food, they will have to cut back on resources, and the biggest jump is for these centres in deprived areas because often their teachers aren’t paid like teachers are in more affluent areas. So they’ve got the biggest jump to get on to those steps. They will have the biggest cost to get to pay parity, but they don’t want to lose those teachers. They want to keep their teachers, so they’ll opt in and the quality will reduce.

All the submitters on the bill said the same thing: quality will be reduced if people opt in. I suspect, now, that Minister Hipkins is going cap in hand to Minister Robertson to ask for more money, because he knows centres can’t opt in. He knows that at that conference, no one raised their hands. Even in committee, when I asked the Minister how many centres would opt in, he couldn’t say.

This is a bad bill that jams a collective agreement model into a private business model, with no guarantee of future funding to meet the increased teacher pay. That will see kids in the most deprived areas suffer the most, and the Minister admitted to that himself. We cannot support this bill. The Minister should have just used the existing attestation rate to increase teacher pay.

MARJA LUBECK (Labour): Tēnā koe, e te Māngai o te Whare. Thank you, Madam Speaker, for the opportunity to do a third reading speech on the Education and Training (Grants—Budget Measures) Amendment Bill. We heard the Minister very succinctly put it in his speech this is a very small, non-complex bill that makes really one change only, and that is an important clarification that is needed to the Education and Training Act 2020, because it will help enable our Government to support pay equity.

This change will allow our Government to deliver on the commitment to move towards closing the gap between those two groups that are basically operating with the same or equivalent qualifications yet are paid very differently. The Minister also outlined in his speech how that came about and he talked about a nine-year pay freeze. That, of course, is in stark contrast to the $170 million that our Budget 2021 committed over the next four years for the purposes of improving the pay for certificated teachers in that area.

Under our current funding system, teachers and kindergarten teachers carrying out the same work but not being paid the same is basically wrong. It’s not right that we have this. Pay parity is not a novel concept. It’s nothing new but it’s one that our Government has committed to, and that is what this bill will help address. So really, what it comes down to, at the end, is that this is a bill about fairness.

All that I’m left to do really is to say thank you to our 558 submitters, the 14 submitters that either provided oral submissions by Zoom or by coming in to talk to the committee in person, our Office of the Clerk team, the ministry officials, and Parliamentary Counsel Office for helping us get this bill back in time to the House. I commend it to the House. Thank you, Madam Speaker.

Hon PAUL GOLDSMITH (National): Thank you, Madam Speaker. The National Party is opposed to this bill, the Education and Training (Grants—Budget Measures) Amendment Bill, and we’re opposed for a number of reasons. The first and foremost is that this is just a very typical example of the way in which this Government is operating. An old adage in politics is that, in their third term, Governments tend to become arrogant in their approach to Government, and what we’re seeing here with this Government in the first year of their second term is they’ve already got “third-term-itis” and arrogance. So they’re in the position of ramming through legislation in a short, truncated process such as we’ve seen here. And, more often than not, it’s ill-thought-through and will have to be revisited.

So what happens in the normal process—for people to understand how Parliament usually works—is that a Government consults with a sector when it’s bringing in legislation that is going to directly affect it. The sector that’s being directly affected by this, of course, is the early childhood education sector—a very important sector; a critical sector, of course, to the many tens of thousands of working parents who are looking for the opportunity to have their young children looked after and set on a path of good education but also looking after their kids while they’re trying to work and make a living. It’s an expensive business, as any parent would know. So this is an important area, and one in which the previous National Government put a huge amount of effort into increasing the share of young children who were enjoying and participating in early education, and there has been a very, very significant increase in that over the past few years. But this legislation directly affects the private providers of early education, of which there are many tens of thousands.

Now, did this Government consult with them before bringing this in, in any proper way? Absolutely not. They talked a little bit about pay parity being an issue, and there was consultation on that, but what suddenly has appeared in this legislation as it was thrown before the House is something that’s a bit broader than that. It talks about wider employment relations priorities, and we all know that the primary employment relations priority of this Government is to increase unionism, and that, naturally, is something that rightly concerns the private sector providers of early childhood education. So they didn’t consult over these broader issues; they brought this legislation quickly into the House and then, in their usual fashion, have tried to ram it through in short order. Rather than having the normal period of time to consult with the community, through the select committee process, which is a critical part of our democracy, they truncated that dramatically so that people had only a week or two to make submissions and then a very short period to hear those submissions. That was a slap in the face to a sector that is working hard to provide services to tens of thousands of parents around the country—a complete slap in the face from an arrogant Government.

Then, when they heard the submissions, the providers of this early childhood education said, “Well, what’s going on here is that the Government is saying we need to pay our workers more—but, hang on a moment, we’re not clear how much, if any, extra funding we’d get.”, and that’s still unresolved. Then they look at the legislation, and the legislation is around bringing in industrial relations rules relating to payments for workers—that they should go up automatically every year regardless of performance, and they should start at a particular point on a new scale. All these questions are, naturally, left in the hands of the providers, saying, “Well, how much is this going to cost and how am I going to make a living? How am I going to stay afloat?”, and the average proposal or suggestion or guess from the providers was that this might add an extra $40,000 of cost on to each provider.

They then made the obvious point: “Well, where are we going to find this money from?”, and the most likely outcome, this Government always just assumes, is “Well, when we add extra costs to business, it just means businesses will be less profitable and everybody will be happy, because we all don’t like businesses, and if they’re less profitable, that’s a good thing.” That’s the basic kind of attitude that this Government has when it comes to small businesses. What they fail to realise is that a lack of profitability in businesses leads to less investment and less sustainable businesses. But, secondly, most business owners actually prefer to look at other options, and the two most likely options in this space are higher fees for the tens of thousands of working parents or reduced ratios between the teachers and the children. So you’d have more children per teacher. So that was the message that this Government got from the sector in the very short, truncated, and rather arrogant way in which they went about consultation through this bill.

So did the Government listen to any of that? Absolutely not. What we had was a very clear message from the Minister: “Get lost. We’re not listening to you. We’re not changing a thing in this bill. We’re going to ram it through, because we’ve got the numbers. Ha, ha!”, and when he went to a conference on the weekend with this sector, he was roasted by that sector for this piece of legislation and the way that it’s been introduced. That is why we, on this side of the House, are deeply concerned about it and we’re not supportive of it, and we’re worried that the most likely outcome is to be higher fees for the children, for the parents to pay. When we consider that in the context of what is going on at the moment, we, on this side, are deeply concerned about the pressures that many families are facing right here, right now. We’ve seen rents continuing to increase. The costs of living that many families are facing are going up, and we all know how difficult it is, particularly in big cities like Auckland, but not exclusively. In fact, if you go all round provincial New Zealand, many, many families are under intense pressure by higher rent costs, and then, if you add to that extra costs for childcare, it makes it very, very difficult for families to get by.

What this Government doesn’t seem to understand is that there is no magic. If you continue to add costs to businesses, often with the best of intentions—and there’s always a good reason, and there’s always a desire to pay people more or to have higher minimum wages; a whole bunch of things, very good. But, if you add the cost to those businesses—and, in the case of this one, don’t send a clear signal that those additional costs will be properly funded—then that leads to a very obvious outcome, which is, like I say, either higher fees or a reduced ratio for the number of kids per teacher.

So here we are at this late stage, this third reading, and this Government is full of its power that it has got here right now. It’s got the ability just to ram legislation through this House. We might well be seeing another example of that today, where they win every vote because they’ve got the numbers. I suppose the message I’d give to the members on the other side of the House is that it’s a two-edged sword, because in two years’ time you will have no other excuse, as members—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! The member will not bring the Speaker into the debate.

Hon PAUL GOLDSMITH: Yes, thank you very much, Madam Speaker. Members on the other side will have no other excuse. Those members are responsible for the outcomes. You can’t blame New Zealand First anymore—or anybody else. What they will see, and what they will have to tell New Zealanders, is “What have we done with this power that has been granted to us?”, and, if this legislation is anything to go by, they’re not going to have a very good response, because what they’ve done is made it more difficult for New Zealand families to get by. They’ve made it more difficult for young New Zealanders who are trying to get ahead, trying to get on to the housing ladder, facing higher rents, and now face the prospect of higher fees and costs to have their children in early childhood education, and everybody knows that it’s expensive enough as it is.

The icing on the cake is the Minister coming in here yesterday and coolly saying, “Well, it’s not our intention to do anything other than focus on pay parity. Trust us. We’ve brought in legislation that’s broad and gives me all sorts of powers to meddle in the way that the employment relations are sorted out. I’ve got all this power, but don’t worry, trust us, we’re not going to do anything wrong.” And this is a Government that, of course, said it wouldn’t increase taxes but then they’ve raised taxes on the poor ute drivers—

ASSISTANT SPEAKER (Hon Jacqui Dean): The member’s time has expired.

ANGELA ROBERTS (Labour): Tēnā koe, Madam Speaker. It is my privilege to stand and take a call on the third reading for the Education and Training (Grants—Budget Measures) Amendment Bill. It is my pleasure to do this because it allows this Government to deliver on its commitment to move towards closing the pay gap and achieving pay parity for education and care teachers in comparison with kindergarten teachers, who are generally paid at higher rates.

This is about enabling legislation that will help the sector to move towards pay parity. This legislation enables the Minister to determine the additional $170 million that are dropped into the system is ring-fenced, not to be spent on anything else but moving towards pay parity. So it is very, very helpful and enabling legislation. At the moment, the improved ratios that we’ve been hearing about that some centres are able to afford are currently being paid for out of teachers’ salaries. It isn’t the teachers who should be paying for these conditions, improved learning conditions, for our young people. So this is an opportunity to support those centres who really want to move towards pay parity to engage in this process.

I’m really pleased to hear that the member opposite is concerned about consultation, and it is at this point I thank the 558 submitters and their absolute commitment, their desire to engage around the really gnarly bit as the rubber hits the road—is how to improve the funding model. As I’ve said before in this House, there are issues with blunt bulk-funding measures, and it is really encouraging to hear that the sector wants to engage in improving the funding model so that we can make sure that we support our teachers and their centres to provide wonderful education for our young people. I commend this bill to the House.

TEANAU TUIONO (Green): E tū ana mātou ngā Kākāriki ki te tautoko i tēnei o ngā pire. The Greens are standing to support this bill amending the Education and Training Act 2020 to clarify the education Minister’s power to set conditions for funding and to fulfil its Budget 2021 decision to unlock funding by $170 million to employers who opt into higher funding levels and agree to pay their teachers at least parity with the first six steps of the kindergartens’ collective agreement, and we welcome that.

I agree with the previous speaker, Angela Roberts, who talked about the problematic nature of paying for extra things from the wages of teachers. This legislation—it’s a small, technical bill, but it will unlock a pathway for that funding to actually start to happen to flow into the sector. When we had a committee of the whole House last night, I welcomed the statements of the Minister that this would be a first step, and that there would be a next step and there would be a step after that, but I would also invite the Minister to actually provide that clarity to send very strong signals to the sector about what that actually will look like—sending signals to the teaching profession, but also to the providers as well.

I also think it’s important that we stop trying to rearrange the deckchairs on the Titanic—that’s the impression I get from that corner of the Whare. It’s important that things cost what they cost. You can’t go to the mechanic and go “You know what, I’ll just have three wheels on my car.” and then expect it to go. Things cost what they cost, and having this amendment to unlock and to begin this move towards full pay parity is a good thing.

I think it’s really important to acknowledge the work of the early childhood education (ECE) sector. They do an incredible job teaching our tamariki. They’re passionate about what they do—all the ECE teachers that I’ve talked to are passionate about what they do. I have my own relatives who work in the sector as well—they’re not doing it for the money, they’re not there for the pūtea, but they do need to get paid properly so they can feed their whānau as well.

The first years in a child’s life are really important, and they set up our children for educational success. The future of our physical, cognitive, and emotional social development is profoundly affected by our early experiences. At the heart of those experiences are the relationships children form with their parents and, of course, with their teachers, and ensuring that those teachers are paid properly is actually a strong part of that. The Greens believe that every child deserves a high-quality, free, accessible public education that gives them the best possible start in life, and we want all children to reach their full potential.

For true pay parity to be implemented and sustained, ECE sectors need to be able to start, as kindergarten and school teachers do, on pay steps that reflect their qualifications and experience, then progressively advance through the steps annually. The pay varies wildly across the ECE sector—we know that. And while in schools there’s a clear, transparent pay scale that means teachers with the same experience, responsibilities, and qualifications receive the same pay and advance up the scale every year, teachers’ submissions on this bill made it clear that they want the same fairness in ECE. And that gap is huge. I keep reflecting on this press release that came out last week from the NZEI, where they did a bit of—in this quote in particular, it says, “NZEI Te Riu Roa estimates that within 10 years, an ECE teacher starting their career today will on average have been paid more than $100,000 less than their colleagues in kindergarten unless the Government accelerates pay parity.”—$100,000, that’s massive. So this first step must be followed up by consecutive steps.

As I was saying, regardless of what people say, it costs what it costs, and we need to get a really clear sense of what that is. Continuing down the path of privatisation, expecting that when we rearrange the deck chairs on the Titanic that it will sort it out, will not work. So I would urge all of us around this House to be courageous in terms of the way that we fund education, in particular, with what needs to happen in order to meet pay parity. And I think, again, that we can alleviate the anxiety in the sector if we can give teachers and providers a clear plan—give them that clear plan, so they know that, this year, it’s $170 million; next Budget, it’s something else; next Budget, it’s something else; because if we do that, that gives them a kind of pathway for them to organise. They know exactly what’s coming down the pipeline. It’ll help them to organise their staffing, and that will mean the flow-on effects and how they can manage teacher ratios, workload, and, of course, deal with the teacher shortages that we’re experiencing, not just within the ECE sector but teaching in general, but in particular within the ECE sector. I think we need to do this and I look forward to the next step, because our teachers deserve it and so do our tamariki. Tēnā koutou.

CHRIS BAILLIE (ACT): Madam Speaker—

ASSISTANT SPEAKER (Hon Jacqui Dean): James Baillie.

CHRIS BAILLIE: It’s Chris, Madam Speaker, but it’s OK.

ASSISTANT SPEAKER (Hon Jacqui Dean): It’s the second time I’ve done that.

CHRIS BAILLIE: I rise on behalf of ACT to take a short call on the Education and Training (Grants—Budget Measures) Amendment Bill. The details of what is wrong with this bill I think have been pretty well explained by members over on this side of the House and there are a number of other factors which make this bill unacceptable in its present form. There were over 550 submissions. They all said that pay parity was an issue and they’re all good, caring people who want to pay their workers more but they showed up a number of flaws. If I can just read David Gibson, with 120 staff, he said it’s a nail in the coffin for him and he’ll become insolvent. Jessica Dodd: “It’ll be unaffordable. There’s too much bureaucracy, no consultation.” Bridget Gifford: “Fifty kids—will reduce staff or put up fees.” Deborah Petterson with 334 kids in her centres: “I’ll have to change ratios, increase fees. Special things cancelled like special needs programmes.”

The funding is inadequate and it’s been mentioned in quite a bit of detail over this side. To pay people, businesses must have the money themselves to be able to afford to pay people and if they don’t have it they won’t be able to, and it’s the same with this Government’s approach to small business as well: the businesses must have the money in order for it to flow down and for them to get it.

The unintended consequences—I’ve explained, the early childhood centres, some will have to close, the ratios will change, will get greater, and the fees will go up. The consultation process was non-existent. I’m not sure of Minister Hipkins’ definition of “consultation” but I think it’s pertinent to just remind ourselves of a High Court judge’s definition of “consultation”, if I may just quote this: “Consultation must allow sufficient time, and a genuine effort must be made. It is a reality not a charade. … To “consult” is not merely to tell or present. … consultation is to seek at least consensus. … Implicit in the concept is a requirement that the party consulted will be (or will be made) adequately informed so as to be able to make intelligent and useful responses. It is also implicit that the party obliged to consult, while quite entitled to have a working plan already in mind, must keep its mind open and be ready to change and even start afresh.”

I think to ignore all of the submitters—almost all of them—would be arrogance to the extreme. It’s not surprising that there is a suspicion of an ulterior motive. The extra powers awarded through this bill haven’t been explained properly. The quote “I have no intention of doing anything.” really falls on deaf ears and I think we have reasonable—we accept that that is a pretty reasonable assumption. We do expect an edict dictating who 5 percent of our employees have to be.

To conclude, things need to change in this very important sector, but it deserves a thorough review so it’s done right: consultation that is listened to, adequate funding provided, and solutions that respect both the hard-working early childhood centre owners and their hard-working employees. Thank you, Madam Speaker.

CAMILLA BELICH (Labour): Thank you, Madam Speaker. I’m happy to take a call in this third reading of the Education and Training (Grants—Budget Measures) Amendment Bill. As I stated in my speech on the second reading of this bill, it is a technical bill. It doesn’t go into the funding mechanisms that have been discussed at length by those opposite. As the Minister says, it authorises the Minister, whoever he or she may be, when setting out the conditions on grant funding to do so for employment relations aims. It does this through amending one clause, clause 4—sorry, that amends section 548 of the primary Act, which is the Education and Training Act 2020.

The Minister, as the House will appreciate, already has wide power to set conditions for grant funding, and this particular bill makes it clear that these conditions can be for employment relations purposes. This is the only substantive change in this bill. It adds clarity to the intention of this legislation and removes, therefore, any ambiguity as to the purpose clause, and it is a pathway to remove serious inequity between kindergarten teachers and education and care service teachers. This move is colloquially known as pay parity, and pay parity in the early childhood sector has been called for for some time. In fact, one of my earliest memories is being pushed in my pushchair from Hill St childcare centre, up the road, down to Parliament to a protest asking for more money for early childhood teachers.

This has also been remarked on by those opposite. The Hon Paul Goldsmith said this bill is typical of the way the Government is working, and I agree. This is part of the Government’s ongoing programme to address inequity and promote fair pay, including work towards significant settlements and pay equity for female-dominated work, raising the minimum wage for those on the lowest pay, and working towards pay parity in the early childhood sector. This bill allows this important work of this Government to continue, and therefore I commend this bill to the House.

NICOLA WILLIS (National): This bill is not about pay parity. If it were, it would include those words somewhere in the text. It does not, and the reason that it does not include those words is that it has a far broader purpose, which the Minister of Education has tried to hide from view but which the early childhood sector are very alive to. This bill gives the Minister of Education the power to set employment conditions in privately owned businesses. It gives the Minister of Education a much wider power than he has ever had before, which is to set conditions in early childhood services in order to, and—I quote from the bill—“help achieve employment relations aims”. While we have this bill progressing through this House, I want to summarise some of the key questions that have been asked and the key themes that have been raised that remain unaddressed as we have this, its final reading.

The first question that members asked was why this bill was necessary at all, given the Minister already has the ability to require attestation rates for those receiving grant funding—that is, he already has the ability to set minimum pay rates. That remained unaddressed. We had a whole lot of technical explanations that really did not get to the heart of that.

The second thing we asked was if this is actually about pay parity, then where is the funding to make that possible, because the questions that early childhood centres have asked are very fair and very reasonable. They have said, “Well, if the Minister is now going to have the power to specify the conditions relating to a broad range of employment matters, including when we step people up in their pay and what the pay levels are at different levels of experience, then can we be confident that the Minister will match that power with the funding to make those things possible?”, and the Minister has at no stage engaged in that debate. Instead, he’s said that it’s not relevant. Well, I put to this House that if this is a bill about pay parity, as members opposite have harped on about, then it is absolutely about funding, because that is at the core of why early childhood services today are unable to pay their staff as much as kindergartens: because they are funded at a lower rate than kindergartens. So if the Minister is not addressing that fundamental issue, then you do have to be cynical about what this bill is doing.

The second issue that has been raised by services who will be affected by this bill is why so quick? Why so rushed? The discussion about pay parity has been ongoing for a number of years. The Minister has had multiple opportunities to engage with the sector on it, and yet this bill was introduced under urgency. It was rushed through. Only 14 days were given for submissions and only two days for oral hearings, two days of which were days when, actually, early childhood service owners and teachers across the country were operating those services and so found it pretty difficult to come and have their say, and were left feeling that actually the Minister of Education didn’t want them to know about this bill, didn’t want them to examine it, and didn’t want them to raise their concerns.

But more than 550 entities and individuals were so concerned to hear about this bill that they did share their views, and what were their concerns, because it is pretty important. The member speaking before me—Camilla Belich—raised this issue of equity. Well, the question that they put was: “If the Minister imposes employment conditions that we cannot afford, how do you expect us to pay for them, because, really, we have two choices. One, we can increase fees”—and by the way, Minister Sepuloni, that is not good for the lower-income families who need to access early childhood education in order to be able to return to work; that is not good for them—“or, actually, the other choice we have is to lower quality in early childhood services by increasing the ratio of children to teachers.” So if employment conditions are imposed by a Minister but they are not funded, that does not improve affordability or accessibility of early childhood education.

This bill is a Trojan Horse. It is not about pay parity. It is about the Minister increasing his control over the early childhood education sector.

TANGI UTIKERE (Labour—Palmerston North): Kia orana, Madam Speaker. In the absence of the Māori Party, I rise to take a third reading call on the Education and Training (Grants—Budget Measures) Amendment Bill, which I am happy to rise in support for.

I was not involved with the select committee that looked at this and this is my first opportunity to take a call on the bill. However, as someone, along with other members in the House, who has a background in education, I certainly value and understand—albeit my background is in secondary education, I none the less understand the hard work that those in our early childhood sector do up and down the country in our communities. This bill is actually about supporting them. This bill is actually about supporting those hard-working teachers in early childhood education who deserve to have the support of people in this particular House.

The whole point of this bill, as colleagues before me have already alluded to, is to allow the Government and, in this case, the Minister of Education, whoever it might be, to deliver on fairness—to deliver on the fairness that the chair of the Education and Workforce Committee, Marja Lubeck, indicated was the purpose of this particular bill, and the Minister himself identified that in the House last night. I was present, listening to him and his responses to questions from the Opposition as this was being progressed through the House. So this is a bill about fairness, and I would have thought that anyone in this House would be wanting to support it as a result of that.

Kieran McAnulty: You’d think so.

TANGI UTIKERE: You’d think so. But, clearly, there are others that perhaps are more focused on having barriers towards pay parity and other opportunities that identify the hard work that teachers are doing. Mr Baillie, you sit there and nod, and, as a teacher yourself, I’m surprised that you wish to stand in the way—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! The member will not bring the Speaker into the debate.

TANGI UTIKERE: My apologies, Madam Speaker.

Kieran McAnulty: Point of order, Madam Speaker. Just by way of seeking clarification, Speaker Mallard made a ruling at the end of last term clarifying the use of the word “you”. It was clarified in that ruling that when a member is responding to another member, and it is clear in that response that he is not bringing the Speaker into the debate but responding to another member, then there would be a lenient approach taken to that.

ASSISTANT SPEAKER (Hon Jacqui Dean): Look, thank you very much for that point of order. My ruling is that I will rule out “you” when it is directed at a member; using the word “you” when it can be replaced for the word “one” is now acceptable.

TANGI UTIKERE: Thank you, Madam Speaker. Mr Baillie, who shook his head, perhaps is one member who continues to want to remain as a barrier towards pay parity opportunities and support.

So, on that basis, I am happy to support this bill.

IBRAHIM OMER (Labour): Thank you Madam Speaker. I am very grateful for the opportunity to rise to speak in support of this bill. This bill, as a member on the other side previously indicated, is not a parity bill—we know that, and we have said it over and over—but it makes a small clarification to the Education and Training Act 2020. It’s very simple, but it will allow the Government to deliver on its promise to address inequality.

For far too long our hard-working early childhood education (ECE) teachers have been underpaid, undervalued, and they were left behind. Teachers with the same qualification carrying out the same work do not get paid equally. This pushed our teachers to look for jobs somewhere else. They’ve been leaving the country in an exodus, therefore many ECE centres have been struggling to either retain their existing teachers or to recruit new ones. This also has been affecting our children, who deserve high-quality care with the consistent and secure relationships that they need at the very early stage of their lives.

We have heard a lot about this from the other side. It’s all negative and they’ve consistently been attacking this because, for them, it’s all about freezing the pay increase for hard-working Kiwis. For them, it’s about increasing any sort of pay increase for nine years, but for this Government it’s all about addressing inequality. It’s all about bridging the unfair pay gaps. It’s all about lifting those who are struggling on low wages. We know our ECE teachers have been struggling on low wages. They have had it hard, they have had it tough, and I’m very proud that this Government is paying attention and listening, to address this. I’m very proud that our Government is not leaving anyone behind, because that is what a compassionate and a kind Government should be doing and that is what our Government is doing.

On that note, I highly, highly, highly commend this bill to the House. Thank you.

PENNY SIMMONDS (National—Invercargill): Thank you, Madam Speaker. I rise to speak in opposition of this Education and Training (Grants—Budget Measures) Amendment Bill. This amendment concerns the funding of our early childhood services, and as my colleague has said, this bill is very typical of what this Government likes to do plenty of, and that is gaining tighter control. Even though these early childhood services are privately owned or community-run playgroups, the Minister wants more control.

I’d like it to be seen in the context of some of the other things that the Minister has done in the education sector. Let’s have a look at the review of vocational education, where the Minister has decided he needs to have a much greater level of control. I find it fascinating, the arrogance of a Minister who has never taught, who has never managed, who has never been involved in an educational institution feels he has the expertise to exert this level of control. I listened to Mr Baillie, the member of the ACT Party, who talked about the arrogance of ignoring submitters.

I’d like to give a little bit of an example, to put it, again, in context, of what that Minister did around the review of vocational education submitters. The Minister, who clearly needs a little bit of remedial maths, said that he had an overwhelming majority of submitters who supported his review. Well, it was 46 percent, and I don’t think that’s even a majority, let alone an overwhelming majority. But wait—there’s more. That 46 percent was if you took the 800 submissions opposed that came from Southland and you say “They’re all from Southland. They’re pretty much the same. I’ll only count them as one submission.” So if you don’t allow that to happen, actually, the overwhelming majority of submissions in support is actually 29 percent. So I think a little bit of remedial numeracy support for the Minister would not go amiss.

What we see in this bill is, as my colleague has said, a continuation of the Minister wanting to exert control, and he is wanting to, essentially, expand the reach of a collective agreement into private businesses. Early childhood education is incredibly important, so, please, we mustn’t dismiss the importance of it. Even though we are not supporting this bill, we want to make it very, very clear that we understand the importance of the early childhood education centres in the development and the wellbeing of our young tamariki.

I want to just talk to you a little bit about my history at the Southern Institute of Technology, where one of my first jobs as a senior manager was to build a new centre for our early childhood centre. Now, that facility and the environment and the equipment was really, really important. We spent a lot of time making sure that we got the best possible physical environment that we could for that centre, and it was incredibly important to the teachers, to the parents, to the young children, but it was nowhere near as important as the staff that were in that centre.

I want to tell you about a wonderful centre manager that we had for over 25 years—in fact, I may be doing her a disservice; I think she was there for more than 30 years—Anne Golding. She was an outstanding early childhood teacher. She was an outstanding manager. She taught my children and then my grandchildren, and rumour has it she retired very shortly after my grandchildren started. That may have tipped the balance! However, that woman was an outstanding teacher and an outstanding manager, and so I absolutely know the importance of having wonderful staff at these centres, both for the children and for the parents who leave their children in that care. It is an absolute blessing to have good staff in an early childhood centre.

But this bill is not about rewarding great staff; this bill is about requiring pay parity and the acceptance of pay scales and that imposition on our privately owned centres of the kindergarten collective agreement, with its terms and conditions. Now, that mightn’t be so bad if the funding that went with it enabled these centres to achieve that parity, but it doesn’t allow that. It puts them in this no-win situation where they can reward some of the newest staff, but then they lose the parity of their more senior staff. It puts them in the difficult position of having had better ratios, for example, than some other centres, and they won’t be able to do that, or they will have to choose whether they do that or whether they try and keep that parity there of their more experienced staff. That’s a terrible position for us to be putting our centres in, our centres that genuinely want to have conditions that enhance the quality of the services that they provide.

My colleague said earlier that this is about the Minister setting employment conditions on privately owned businesses. This is an ideologically driven agenda from the Government. A member on the opposite side of the House said, “No, nothing to see here. This is just a technical change.” This is not a technical change; this is a deeply fundamental ideological agenda being driven on to private businesses, but they are, at the same time, continuing to pay these centres at a lower rate, putting the centres in this most dreadful situation of having to weigh up do they increase fees, do they increase ratios, do they leave their more experienced staff without the parity that they should have against less experienced staff. It is a very, very difficult situation these centres are being put into, and the poor consultation around it proves that this is not just a technical change.

This was rushed through to try and avoid the submitters being able to have a meaningful impact on this bill. Despite that, despite putting this through urgency and having such a limited amount of time, 550 submitters wanted to have their voice heard, but they didn’t, because this Minister, as I said, from the review of vocational education, has a history of not taking any notice of submitters. He has a history of downplaying submitters. How else do you explain taking 800 submissions and saying, “Oh, they’re really similar. I’ll just call them one.”? He has a history of devaluing the input that comes from people who are out in the industry, and he has a history of dismissing the value of their contribution.

So to those 550 submitters that took the time, when they only had a limited number of days and they were still trying to run business as usual in their centres—I want to thank them for putting that effort in to put submissions through, and I want to apologise for how much they were disrespected and completely ignored in the issues that they brought up. I think that we owe people a much, much greater respect if they go to the time of putting submissions in on this.

So it is not a technical change. This is deeply, fundamentally ideologically driven. It is imposing something on to our private centres that it should not be doing, while at the same time restricting their funding, so we vehemently oppose this bill.

SHANAN HALBERT (Labour—Northcote): Tēnā koe, Madam Speaker. It is my honour to rise and speak in support of the Education and Training (Grants—Budget Measures) Amendment Bill. Unlike my friend across the room, I have quite an optimistic and positive view of our education reforms in this country. I also have a positive view, understanding the importance of pay parity—and, sadly, the examples that she gave do not make sense. Both of us come from the tertiary sector and both of us worked in organisations that did run early childhood centres. We also, as leaders within those organisations, acknowledge the balance sheet and the benefits commercially, I guess, that running early childhood education (ECE) centres in a wider tertiary organisation gave, but we also were able, within those institutions, to pay people properly because we value education and we value our kaiako and our teachers within those organisations, and we also see that within our kindergartens as well.

But, sadly, there are small institutions, early childhood centres, that aren’t receiving pay parity. The former member spoke before about not being able to see pay parity within this piece of legislation; well, you wouldn’t see the terminology of “pay parity” within legislation. It is not a technical term; it is a colloquialism that you would use as a phrase, or something like that. So let’s just be clear about the intent of this particular bill that is going through the House for its third reading. It is a small but important clarification to the Education and Training Act 2020.

I just want to respond to the history of our Minister, because the history of this Minister is, in fact, educational reform. We saw that today in the presentation from Te Pūkenga. Sadly, it hasn’t worked out for the Southern Institute of Technology, to my friend across the room, but it has worked out in ensuring that learners in this country have appropriate pathways, that they are able to have a consistent learning programme in front of them, and that those options and resources are going to the right places in our sector. That is what is important. While other organisations, key organisations, might have best practice, the importance of Government taking a role in leading education reform is very, very important. And that’s why this particular bill, the Education and Training (Grants—Budget Measures) Amendment Bill, is taking one step to doing that.

We need to achieve pay parity, and that is what this sets us up to do, that as we invest an additional $170 million into ECE centres, it is about ensuring that people are paid the way that we want them to be paid, that no matter where you teach—whether it be in a kindergarten, whether it be in kōhanga reo, or whether it be in an early childhood centre—that everyone is on a good, respectable wage that acknowledges the contribution that they make to our tamariki and our learners. That is what this bill starts to achieve.

Pay parity: when we look at the previous Government, for nine years there was no increase in early childhood education—nine long years—and, with that, we’ve got to pick up this mess. Again, I acknowledge the history of this Minister to be able to reform this sector, to take brave steps, and to put moves in place to ensure that our learners and the people that teach them in our classrooms, no matter what those classrooms are, are respected through pay parity.

So that is what we’re doing, and we are very, very interested in consultation. We come from a whānau, as the Labour Party, where we like to hear from unions—yes. We want to hear from people on the ground, from grassroots communities. As a good local MP in Northcote, that I’m really proud of, I’ve been out to speak to my early childhood education centres. As we build more and more houses in Northcote—2,000-odd—we are seeing ECE centres pop up as well. I opened one last week in Beach Haven. It is fantastic to see people contributing to the growth of our community as we build houses, as our North Shore community grows, that we bring education, community, and whānau together.

So I am very pleased with this bill, very proud that we are making steps to achieving pay parity. It doesn’t work in isolation; it is part of a history of an extremely effective Minister of Education that is prioritising learners and prioritising our teachers. I commend this bill to the House.

A party vote was called for on the question, That the Education and Training (Grants—Budget Measures) Amendment Bill be now read a third time.

Ayes 77

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

Noes 43

New Zealand National 33; ACT New Zealand 10.

Motion agreed to.

Bill read a third time.

Urgency

Urgency

Hon CARMEL SEPULONI (Minister for Social Development and Employment): I move, That urgency be accorded the passing through of all stages of the Annual Reporting and Audit Time Frames Extensions Legislation Bill.

The Annual Reporting and Audit Time Frames Extensions Legislation Bill is a simple bill of just seven clauses that extends certain statutory time frames in relation to the audits of Crown accounts and the annual reporting requirements of local authorities and council-controlled organisations. The bill is in response to a situation created by a shortage of auditors across Australia and New Zealand that has made it impossible for the Office of the Auditor-General to meet some forthcoming deadlines. It is essential that the bill be enacted before the forthcoming adjournment so that the Auditor-General can communicate with public entities about the impacts of the current auditor shortages. It will also allow the Auditor-General to provide assurance to his staff that the work of the office is achievable with the current resources available to ensure the health, safety, and wellbeing of all staff are protected. The Auditor-General cannot take these steps in anticipation of what the House might decide to do. It has to act within the confines of the law, which is why it is necessary for the bill to be enacted before the House adjourns for three weeks.

A party vote was called for on the question, That urgency be accorded.

Ayes 65

New Zealand Labour 65.

Noes 53

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

Motion agreed to.

Bills

Annual Reporting and Audit Time Frames Extensions Legislation Bill

First Reading

Hon GRANT ROBERTSON (Minister of Finance): I present a legislative statement on the Annual Reporting and Audit Time Frames Extensions Legislation Bill.

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

Hon GRANT ROBERTSON: I move, That the Annual Reporting and Audit Time Frames Extensions Legislation Bill be now read a first time.

This is a relatively simple piece of legislation that the Auditor-General has asked to be passed through the House, and Cabinet has considered his request and agreed to it. There are three main reasons behind the shortage of auditors that has led to this bill. The Auditor-General has advised us that the ability of auditors to do their audit work and meet statutory audit time frames and produce sufficiently robust audits is under pressure due to severe capacity constraints within the auditor profession. The three main factors involved are an ongoing shortage of auditors in New Zealand and Australia, caused by increased demand for auditing expertise with more complex requirements. The current border settings have disrupted the traditional model of private audit firms bringing in offshore staff to assist with audit workloads, limiting the additional resources that these firms can provide for public sector audits. There is also the issue of the turnover of Audit New Zealand staff, and a constrained recruitment environment due to difficulties, as already mentioned.

This auditor shortage is more widespread than just Audit New Zealand and the public sector. Recently, the Financial Markets Authority provided temporary relief to some businesses to give them additional time with certain regulatory reporting requirements if their reporting was delayed because of auditor capacity constraints across the private sector. Even in normal times, there is a peak of resourcing for auditing in the public sector—the so-called audit season, much like an apple or a kiwifruit season—and with the financial year for most public entities ending on 30 June, there is high pressure on audit teams and organisations to complete public sector audits to time. With the shortage of auditors now, the current time frames do put additional stress on staff, and increase the likelihood of compromises in the processes and of reporting quality. The Auditor-General has advised us that there are currently 1,000 vacancies in the audit profession in Australia and 200 vacancies in the New Zealand profession. So this is a shortage not just here in New Zealand but also in Australia, and indeed, around the world.

The bill recognises and addresses these issues by providing extensions to the annual reporting and audit time frames so that the audits can be spread out over a slightly longer period, ensuring a robust assurance and audit opinion to support continued public accountability.

The amendments in this bill change the time frames in two Acts: the Crown Entities Act 2004 and the Local Government Act 2002. The Auditor-General informs me that these two Acts are pivotal to the scheduling of audits and that, by providing extensions, robust audits can be undertaken and legislative time frames met.

The bill achieves this by extending the time lines for audits—or having an audit done—by a period of two months. The bill provides these extensions for a period of the next two financial years, to reflect the need to address longer-term workforce supply issues. It is important to note the audits will still be done, but there is a two-month extension provided for in the two Acts being amended.

The type of provisions in this bill are technical, but they are important. It is important that audits are done well, and that robust assurance underpins and supports this fundamental aspect of public accountability and transparency. These provisions do need to be in place as soon as possible so that those entities who are being audited have certainty about when that will occur, and to make sure that the auditors themselves can plan and sequence this work.

The Auditor-General is proposing a sequencing, which he has communicated to members of Parliament, which includes putting at the start the financial statements of Government and related activities along with other larger entities, such as large councils, and that those audits will be done within the normal time frame, and that other audits will take the two months that will be added by this legislation to be completed. These are minor amendments. They recognise a workforce shortage, and I think the House should not delay itself too long in passing this legislation through.

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

ANDREW BAYLY (National—Port Waikato): Thank you, Mr Speaker. It is a duty to be talking on the Annual Reporting and Audit Time Frames Extensions Legislation Bill. I want to start out by saying that National is going to be opposing this legislation, not because we don’t think that the Audit Office does a good job, because I want to just put on record that they do do a good job. They do an extensive number of audits—over 3,000 a year. So I think we should just make that an important aspect, that we respect the institution and what they do.

But I think that the issue with this is that—I think there are four major issues. The first one is—I think this highlighted a Minister who should have had greater oversight of what was going on with this entity.

Hon Grant Robertson: He’s an Officer of Parliament.

ANDREW BAYLY: I know, but this is an issue that even when the Auditor-General comes before the Finance and Expenditure Committee, there has been repeated questioning around staffing requirements. It seems inconceivable at this late stage that we have a request to extend the time line for two months for the different entities, both central government and local government entities. I just think, in terms of the liaison and oversight by the Government over this entity, it has been something that just raises a few issues as to why we’ve been suddenly surprised with this issue that has now required urgency to be passed. I think these types of issues should be considered and should be contemplated in a time frame that people are aware of it and can make sure that proper planning has gone on. Obviously, we’re at a stage where it has to be passed through and rammed through under urgency. That’s the first point.

I think the other thing is this shows that the Audit Office has been losing staff, and the Minister alluded to that. There’s been some reduction in the staff of the Audit Office. I understand there’s been possibly up to about 30 people that have left the Audit Office. As we understand, the Audit Office has its own staff and they do a good job, but also rely on third-party auditors to do that. I think the first question is: why is the Audit Office in a situation where it is losing substantial numbers of staff and would appear to be in a position where it cannot compete? I think there’s inability to compete in a market where a lot of these people have been taken from the Audit Office into the private sector. It gives rise to the issue of the funding of the Audit Office and how it’s being managed and whether, in fact, it is being properly structured and funded to make sure that it can meet its duties. Clearly, it hasn’t been in the situation where it can do that, because otherwise we wouldn’t be doing this bill under urgency today.

Just on that, we have heard from many Government Ministers across multiple portfolios who’ve quite simply said to the private sector—virtually to every component of the private sector—that they should just pay more. It’s been a pretty tough message that the Government has given to, virtually, every employer in New Zealand who has been screaming for additional staff. Yet, when it comes to a Government entity, the response to the Government is: “We’re not going to pay you more. Let’s just defer the timetable.” I think there’s a lack of consistency around that message, which I think’s a pretty important aspect that needs to be taken into account. If we talk about apple orchardists, farmers, manufacturers—everyone has been saying, from the Government Ministers, that they should be paying more to attract staff; I think, quite simply, that it hasn’t been able to in some cases. In this situation, the Government’s not prepared to front up. I think that just gives rise to this. Is this a case of the Government not doing what it’s saying it should do to everyone else?

The other aspect about this is the issue of immigration. I think there is an absolute need for skilled migrants. Again, the Government’s been pretty robust and tough on private sector wanting to get people into New Zealand. We’ve just heard from the Minister that there’s a shortage of 200 auditors required in New Zealand to be able to deal with this issue. If we accept the Minister at his word at 200 auditors that are required, the question that should be asked is why aren’t they getting allowed to come through as skilled workers and enter into the managed isolation and quarantine (MIQ) facilities? As TVNZ 1 reported on 3 July, there were currently, at that point 2,000 rooms unavailable in the MIQ facilities. And what’s more, the Government made an absolute commitment that 10 percent of MIQ facilities would be made available to skilled migrants to assist all types of businesses. I think this has been a case where what we are seeing—if you go and talk to any business around New Zealand—is the ability to attract and get anyone through MIQ’s facilities, particularly in terms of skilled staff, has been absolutely stymied. I think, again, if we’re going to be consistent, the Government should also be consistent in its approach. Again, do what we say, not what we’re going to do as a Government. This is a case of the Government changing the rules for a Government entity.

The third thing I’d like to talk about is that businesses don’t have the luxury of changing the law—they don’t have the luxury of changing the law. We don’t have vineyards who can legislate that vines don’t need pruning. We are not in a position for legislation to be passed that cows have got to milk themselves. The whole type of approach around this is that businesses have had to deal with the framework that the Government has dealt to them. Yet when we get to a Government entity like this, the Government again says, “We’re going to legislate. We’re going to make a one-off change just for one particular sector.” Yet all the other businesses, the 350,000 active businesses in New Zealand—“Hey presto. Don’t you worry about it. You just get on and operate and pay people more.”

I think all that just comes together in terms of saying, look, this is a situation where we’ve got considerable inconsistency by the Government in terms of the way it wants to operate for Government entities and the way it wants to impose conditions on New Zealand employers. I see the Minister for social welfare over here talking earlier, talking today about the issue—

Hon Carmel Sepuloni: There’s no Minister for social welfare; it’s social development.

ANDREW BAYLY: —social development—talking about doing the mahi and training up people and doing all that sort of stuff. Well, that’s the same reason that the Government has given to employers that they should go and train people up. Well, if we had had a better visibility around that, maybe the Audit Office, supported by the Government, should have been actually looking at training activities. Yet what we’ve done is we’ve got to this point or juncture where the Government decided that it needed to pass urgent legislation to drive this through.

Again, I just think that it is a bit of a concern for every employer who will be looking at this piece of legislation and saying, “This Government simply wants the right rules for itself, and yet imposes difficult conditions on everyone else in the country who is trying to get on with their lives, trying to grow their business, trying to take on a risk, but are unable to because they literally can’t get staff—in many cases can’t get one or two staff members who are critical to come and drive or operate parts of their factory because they simply cannot get access to MIQ facilities.” I think that argument needs to be explained more by the Government, because, I think, once you’ve got clarity around that, then the justification for moving and providing an extension to the Audit Office, in terms of passing special legislation under urgency, therefore becomes a key part.

The other aspect we haven’t heard about is reprioritisation of Audit New Zealand’s work, which is another option that could have been considered, but I haven’t heard that from the Minister who spoke earlier. So I think the options that should have been on the table is reprioritisation of work—the Government could have contemplated entering into a payment arrangement even for the short term—and the opening up of MIQ facilities to allow auditors to come into this country which are desperately needed.

Dr DEBORAH RUSSELL (Labour—New Lynn): Just for the avoidance of doubt, I wish to state that my initial job when I left university was as an auditor, and I even did work under contract for the Audit Office at some stages.

The Opposition raised a number of objections to this particular bill. They raised the objection around oversight by the Minister. They raised an objection around how the Audit Office is performing, they raised an objection around funding of the Audit Office, and they raised an objection around immigration. I am not a greedy person, so I will deal with one of these arguments, and leave the remainder for my colleagues.

I wish to talk about the special status of the Audit Office, particularly in terms of the Opposition saying it should have been better supervised by the Minister. The Audit Office is not supervised by a Minister. It is an Office of Parliament. The Auditor-General is an independent officer of this Parliament, of all of us. There are three independent Officers of Parliament: there is the Parliamentary Commissioner for the Environment, there is the Ombudsman, and there is the Auditor-General. As a Parliament, we rely on the Auditor-General so that we may perform our role of supervising the work of Government departments and inquiring into it. It is an office that ought to be cherished, in particular by the Opposition. It ought to be cherished and given the resources it needs as easily as it needs them, and, in particular, the Opposition ought to defend the Auditor-General at all opportunities.

The Auditor-General has properly seen that, given the constraints of the market at the moment, given the world in which we’re operating, which has COVID, he will not be able to perform the job that this Parliament needs him to do, and, quite properly, he has come to this Parliament and asked us to give him a little bit of leeway, two months—two months—so that he can reprioritise his work, make sure that the most critical work gets done first, and that all the work gets done within the statutory deadlines. This is why, as a Parliament, we ought to support this bill, and I am astonished that the Opposition is choosing not to. I commend this bill to the House.

Hon MICHAEL WOODHOUSE (National): Well, that’s us being thoroughly lectured to by the good doctor Deborah Russell. Like her, I was actually offered a role in Audit New Zealand, as it was known then, in the mid-1990s, and rather pertinently I turned it down to work for a KPMG associate in Dunedin. Not because of the money—in fact, I think the starting salary at Audit New Zealand was higher than the KPMG salary—but because of the variety of work and the opportunities for progression.

But I do agree that the integrity and probity of our public spending and of the public accounts that are produced is absolutely fundamental to the reputation New Zealand has for good governance. And, frankly, this bill significantly undermines that confidence and that integrity. But my, my, aren’t the chickens coming home to roost? Because this Government—not only is Dr Russell a good lecturer but this Government has been lecturing to businesses for 3½ years about how they should fix their own houses. When they came to the Ministers of immigration and said, “Try as we might, we cannot find the staff we need”, the doors were closed on them—and that was before COVID. But now the Government has a problem and it finds itself a solution. It has a problem with teachers, so it just mandates that 300 teachers can come through the border when every other company that’s not Government-owned is having to just suck it up and, as so many Ministers of the Crown have said, pay more.

Then, when they get a problem identified by the Office of the Auditor-General (OAG) that they cannot meet their legislative obligations: “But that’s OK, we’ll give them a pass, we’ll come to this Parliament, bypass that pesky democracy thing.”, like having a reasonable exposure draft and a select committee process, and use the weight of their numbers to ram through a piece of legislation that undermines confidence in our public accounts. And the Government wonders why we don’t support this. It’s frustrated that we don’t think this is a good idea. Well, they better lock themselves in for a long evening and an early morning start, because there’s a lot to be said about this and a lot to be unpacked.

I agree with Dr Russell—the Auditor-General office is an independent Officer of Parliament, but they’re not independent of the law and they’re not independent of the need to come to Parliament to have their funding appropriated. It is true that auditors, I understand, who are employed by the Office of the Auditor-General are paid less on average and that they are vulnerable to being picked off by accounting firms here in New Zealand, but those same accounting firms are under the same sort of salary pressure because Australian firms are picking them off. It’s a vicious cycle that, frankly, the Government should fix. They’ve told businesses for 3½ years that if there’s supply side problems, meet the market. When there’s a shortage of supply, what happens? Fourth form economics says the price goes up. That’s what they’ve told businesses for 3½ years. But, apparently, what’s good for the goose isn’t good for the gander. The Government just says, “No, no, we’re not going to do that; we’re just going to legislate softer public accounting processes.” And they wonder why we oppose that.

That’s one of the first questions in this debate and throughout the evening that we’ve got to be examining. We found out about this, what, Mr Bayly, last Thursday, last Friday? When did the Minister, or the Speaker, who is responsible for the appropriation for the independent Offices of Parliament, first find out that this was an issue? And why didn’t they say anything about that? We’ve just gone through a whole Budget process. There was an Estimates review. Yes, look, I preface this comment with an agreement with Mr Robertson, Mr Bayly, and Dr Russell: I have the highest regard for the Office of the Auditor-General and for Mr Ryan, but we’ve got to know more about when this was first raised. Why was this not made aware to the Governance and Administration Committee when they reviewed the Budget Estimates? Was a Budget bid put in for an increased appropriation in order that Mr Ryan could meet the market and save, not lose, some of the 27 auditors that over the last year or so he has lost? So why wasn’t this raised? Was the Budget bid put in? Was it turned down by the Government?

I also want to know what the Auditor-General’s priorities are now. The Finance and Expenditure Committee considered this document only this morning and we haven’t yet reported back to the House, but the report is a public document and it is the annual plan of the Office of the Auditor-General for 2021/22. It sets out a number of projects, processes, things that it wants to investigate that aren’t core business, I would suggest. I’ll go through this list—I’m not ranking them, but this is where the Auditor-General wants to work in 2021: “Improving outcomes for Māori; reducing family violence; improving housing outcomes; improving education outcomes; improving health outcomes; implementing the well-being agenda; resilience and climate change; integrity in the public sector; processes underpinning significant Government investments”—all good things. But first things first: the first role of the Office of the Auditor-General is to audit the accounts of Government and its entities. So my question, and we have no answer to these questions either in the communication from the Minister, the Auditor-General, the legislative statement, or this skinny-as-all-hell departmental disclosure statement—

David Seymour: You should get the A-G to investigate it!

Hon MICHAEL WOODHOUSE: —is how are these plans going to change as a consequence? It’s a very good suggestion, Mr Seymour: get the OAG to investigate it. But this just shows how we are becoming unhooked from the first principle and the first priority of the office, and that is to audit the integrity, the truth, and the fairness of the Crown accounts. That’s the number one priority. And if we are going to have to defer the timetable for doing that, are we deferring the other things that the Auditor-General has told the committee and the public that he wants to do this year? No answers to those questions. I hope, through this long debate, we can glean them out.

The obvious question, actually, is why does the bill go broader than the Office of the Auditor-General has asked for? The Minister has told us that there are certain entities that will stick to the four-month reporting time frame and there are other organisations that will get a two-month extension from these current statutory obligations by an amendment to the Crown Entities Act and the Local Government Act. The Auditor-General has told us that he’s going to look at the big material entities and do them within the statutory time frame. But the smaller DHBs, the smaller council-controlled organisations (CCOs), other Crown entities that aren’t as material will be subject to that extension of time. That’s not what the bill says. The bill gives a pass for two months for all of those Crown entities and all of those local councils and their CCOs. So the bill does not line up with the policy intent. I’ll be having more to say about that, as will Mr Bayly and my colleagues, throughout this debate.

The last thing I want to just mention in this first reading is the Minister’s reference to the Financial Markets Authority and the fact that they have given some businesses a pass. Well, they did that last year for COVID, that’s true. And they did it again just last month, but they did it for one month for one reporting period. This bill doubles that. It gives it for two months for two years. So what the Minister is saying is that this problem that we only found out about four days ago—they’re giving themselves two years to fix it. Well, I’m sorry, that’s not good enough. The public scrutiny and the integrity of Crown accounts deserves a much more proactive response. So, again, we will be examining this bill from the point of view of why is it so broad and why is it in for so long. There are a heck of a lot of other questions, and for the Minister and his colleagues to say, “Oh, this is just a simple tidy-up, short-term issue” on the very thing that underpins the confidence that the public should have in the probity of our spending of their money I think speaks volumes to this Government.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Speaker. It is disappointing that we don’t have unanimity in the House on this important matter, because we all agree on the role of the Auditor-General and the importance of it. I was surprised to hear Mr Woodhouse pooh-pooh, if you like, some of the other work that the Auditor-General’s doing and say that the Auditor-General should shove to one side the work on delivery of health, shove to one side the work on domestic violence, the work on Māori equity, and the wellbeing of all of New Zealand—that those things should be shoved to one side so that the audit reports of Crown entities can be completed on time.

Well, I suppose, in his world, that would be one thing you could do, but on this side of the House we think they’re very important tasks and that we shouldn’t constrain the Auditor-General in doing things like self-initiated audits and inquiries, because that is also a core part of the role. And if he was required only to do the Crown audits on the time line set out in the law, notwithstanding these very difficult times, then other important work would fall to one side, and this Government wouldn’t be subject to the scrutiny that it should be from the Auditor-General. We’re not going to let that happen, because we think that the role of the Auditor-General is very important and that he should be, and his team should be, given every resource that he needs to discharge his independent functions. That’s why this bill is a good bill.

The fact of the matter is that the Auditor-General has come to Parliament and said, “I can’t do my job because of existing constraints. Can you give some leeway through Parliament, through this House, to achieve that?” On this side of the House, we say yes. We want the Auditor-General to do his job and to scrutinise everything that this Government does, and we will be supporting this bill. I commend it to the House.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Mr Speaker. The Green Party doesn’t have a really strong opinion on this bill. I mean, we understand the reasons for it; they are perfectly understandable. We didn’t support the urgency motion. We do think this is something that could have been handled in another way, other than urgency, if it had been dealt with sooner, but we are supporting the bill.

I just want to make a couple of comments about the importance of the Auditor-General—that the work they do is really critical to the transparency and function of democracy; that their statutory requirements are incredibly important. But many of the other inquiries they’ve undertaken are also really useful to the functioning of our country. It is totally understandable, in the post-COVID environment, where they’ve undertaken a lot of extra work because of COVID, like many other private and public entities in Aotearoa New Zealand, that this has led to scheduling issues as well as the shortage of auditors internationally and here in New Zealand.

Now, I guess the only thing that we can say, aside from supporting this short-term measure to deal with the constraints, is the overall long-term changes that are needed so that this sort of problem doesn’t arise in the future—that there is sufficient capacity in bodies like the Auditor-General to undertake this really important work. And, I guess, that just speaks to the overall need for building up capacity and support of the State, of the Government, to undertake these public-good activities. That is something that will not happen if you get an ideological right-wing Government like the National Party or the ACT Party, who consistently run down public services—Government services. I mean, obviously, we’re still sort of dealing with that because, ultimately, after National had nine years, with ACT in part, to do this, unfortunately, when the coalition Government came in, we had a lot of promises about things that we wanted to deliver that had great public benefit but there wasn’t the revenue promised to enable it.

So, because we’re stuck in this environment where we’re not raising enough revenue from the wealthiest New Zealanders—like, for example, with a capital gains tax or a wealth tax—we’ve had an enormous increase, a windfall increase, in the value of property in New Zealand, and all of that is going into private hands rather than some of it coming back to the public, to the things that actually benefit the public; public services like the Auditor-General, which are really important, and they need to be properly funded. And I think most of the Offices of Parliament haven’t had major increases in their funding, and a lot of commissions haven’t either, over the years, and that means they aren’t able to do that work that benefits all of us in a variety of different ways.

So, ultimately, building up that capacity for public-good functions requires a commitment to us working together as a country, and it also requires a fair tax system which sees those who have gained the most from the status quo putting back to the things that benefit us all. And, of course, there will be those in this House who, I can hear, just love to demonise the whole idea, but, really, it’s not low-income or middle-income people who need to pay more tax; if anything, they pay too much. It is the highest-income earners, but mostly the wealth owners and the properties owners, who are getting rich off no work of their own, just by being in the right place at the right time, and the quantitative easing that the Reserve Bank has engaged in—just general inflation. It makes sense that that financial representation of our efforts as a country, that some of that comes back to the public good that benefits us all.

And so the Green Party supports the bill, and we will continue to support a fairer tax system where the wealthiest pay their share.

DAVID SEYMOUR (Leader—ACT): Every time Julie Anne Genter gives a speech, I sit and I hope and I pray that she has had an original thought, but every time exactly the same, no matter what the bill, the same thing: very little attention to what this House is actually up to.

I rise on behalf of ACT in support of the Annual Reporting and Audit Time Frames Extensions Legislation Bill. I take issue with some of the claims of my friends in the National Party. I don’t think that this will dilute the standards of auditing. What it will do is allow some of the report-back dates for the Auditor-General to be later than they would otherwise be, but I think it’s well worth canvassing just why we are in this situation.

I think there are basically two reasons: one that started to be canvassed is the massive shortage of auditors and accountants. The reason that we have a shortage is simply because New Zealand is an island nation, an economy of 5 million people that relies on being able to attract skills from outside our borders for the economy to go and grow. If you think about it, there’s no example in the world—or at least the economically functioning world—where we actually have only 5 million people in a labour market and no access for businesses to hire skills from outside that 5 million. You think about it: Denmark, 5 million people, access to the entire European Union; Colorado, 5 million people, access to the United States labour market; British Columbia, 5 million people, part of Canada’s labour market of 38 million. No one else in the world tries to wall off a labour market of 5 million people and get the mix of skills required for businesses to operate in a modern economy, so that’s not surprising.

The problem is the Government has given its Auditor-General—or at least Parliament’s Auditor-General—an out by introducing this legislation, but what is the remedy for everybody else who is facing exactly the same problem? It’s not just auditors in the public sector; it’s in the private sector. I visited a “big four” accounting firm in Auckland a couple of weeks ago. They said, “We have 88 vacancies for our Auckland office right now.”, they can’t get them. I was talking to someone who was getting their taxes done two months late. They asked their accountant, “What’s the hold up?” They said, “Like everybody, we’re facing a skills shortage.”

So here’s the question: when people have to file with the IRD, are they going to get an extension of time because their accountant was busy like the Auditor-General is? And what about every other sector of the economy? What about Olaf the baker in Mount Eden Village? He’s across the road from Frasers, the iconic cafe—it’s got a sign on the door saying, “We don’t open on Mondays, because we can’t get enough people.” Are they going to get a law passed to make their lives easier? Olaf himself is down so many bakers that he can’t produce the bread to keep his 28 staff that he’s still got going. Is he going to get any special dispensation? Of course he’s not. The Government is solving this problem for the Auditor-General, and the ACT Party agrees it might as well happen—if we can save them, we shouldn’t spite them—but what is the Government going to do about immigration? How is it going to innovate in regards to isolation and managed isolation and quarantine (MIQ) so more than a few hundred people a day can enter New Zealand? It has no plan.

And even if it did, Immigration New Zealand are not processing visas. What is it going to do about the shambles of the department that drives more constituents through the doors of local MPs than any other department? When I was first elected, I didn’t think any department could drive more constituents through my office door than Auckland Transport—how wrong I was. I hadn’t thought about Immigration New Zealand. Somebody walks through my door, I can almost guarantee you, 50:50, it’ll be an Immigration New Zealand problem. When the lockdown happened last year, Immigration New Zealand went home and had a holiday for seven weeks. They couldn’t work because their IT systems don’t work. If we don’t put a bomb under Immigration New Zealand, there won’t be any visas, even if the problem of MIQ shortages is solved.

And then there’s the question of: what’s the policy? This Government campaigned on 30,000 net permanent or long-term arrivals per year. They delivered, two years later, 92,000, so they didn’t carry out their policy, but COVID did. Last year, we had only 6,000 permanent net long-term arrivals. So what is the future of immigration in New Zealand? The Minister helpfully read out a speech from another Minister, because the wrong Minister showed up—that’s what this Government’s like—and said it’s time for a once-in-a-generation reset. Everybody is facing this problem. Nobody knows if they’re going to be able to get skilled labour. The Government, if it was serious, instead of rushing through this legislation under urgency at the last minute before the winter recess, would actually have a broader solution to safely reconnecting with the world post-COVID, but, as we see time and again, the Prime Minister gets asked in question time, “What’s the plan?” and all she does is discombobulate, dissemble, and otherwise fail to answer the question, relying on the Speaker to say, “Well, at least she addressed part of it.”

DEPUTY SPEAKER: Order! Do not bring the Speaker into the debate.

DAVID SEYMOUR: Mr Speaker, I have not brought the Speaker into the debate at all. What I have said—

DEPUTY SPEAKER: I disagree with you. Don’t bring the Speaker into the debate.

DAVID SEYMOUR: Well, Mr Speaker, I don’t understand why that is, but I’ll continue anyway. That is the Prime Minister’s strategy—it doesn’t involve the Speaker. I was describing her strategy.

In any case, the other problem that the Auditor-General has, other than a shortage of staff, is so much demand to fix up the Government’s various screw-ups. And here’s just a few they’ve had to do recently: the Provincial Growth Fund. We had a joker called Shane Jones, who gave out money to people who were associated with his boss’s lawyer, his boss’s lawyer’s son, I think his boss’s partner were all involved—

DEPUTY SPEAKER: And I’ll ask the member to come back to the bill. You haven’t mentioned anything relating to the bill in the last two minutes.

DAVID SEYMOUR: The Auditor-General’s under time pressure—I’ve been talking about the bill the whole way through—

DEPUTY SPEAKER: That’s the second and final warning, by the way.

DAVID SEYMOUR: And the Auditor-General said, “improvements … needed in how appropriations administered, how conflicts of interest in contracts were managed, and how investments were tracked and reported.” I mean, the reason he’s so busy is that’s the kind of thing that this Government has been serving up—that was the Provincial Growth Fund.

Then there’s the vaccine roll-out: “Given the significance of the challenge, I did not expect to find a perfect plan.”, says the Auditor-General—at least he’s sporting and gives them a chance—“However, to successfully navigate these challenges, a clear strategy, a well thought-out path, and fit-for-purpose governance arrangements are required. In particular, I expected to see a level of planning that matched the public commitments the Government has made.” These are the kinds of things that Auditor-General is finding all the time about the way that this Government screws up its own programmes, that’s why he’s so busy. That was his report on the vaccine roll-out.

What about light rail? Now, we’re getting into a power force in New Zealand politics called the “Twyford effect”. Light rail: “Our initial concern was that given the strong presumption in the rules that the best way to ensure value for money is some form of competitive market process, a parallel process involving only two parties did not, on the face of it, seem proportionate to the value, risk, and complexity of this particular procurement. We therefore wanted to understand what consideration officials had given to the rules … [and] taken to ensure the good practice principles underlying the rules were given effect to, even though the rules were not.” That’s light rail.

And then there’s Ihumātao—the kinds of things the Auditor-General has been kept so busy with because this Government seems to be able to screw up everything it touches. “In our view, the intent of the document prepared by the ministry, and the intent of the joint Ministers, was to establish a new appropriation that would provide authority for the purchase of the land at Ihumātao. However, as described above, there were two important omissions from the approval for the expenditure. As a result, the payment of $29.9 million used to purchase the land was incurred without the proper authority.”

No wonder the Auditor-General needs an extension of time, there are so many screw-ups and, in many cases, downright dodgy activities happening with the expenditure of public money under this Government, the Auditor-General needs to work double time, and compounded by the fact that this Government has no plan to safely reconnect with the world so we can actually get some skills into our economy of only 5 million people. He needs this extension of time, so we’d rather that the Government solve the problem in other ways, but they seem incapable of that, so we can only, as ACT, commend this bill to the House. Thank you, Mr Speaker.

ANNA LORCK (Labour—Tukituki): I rise to speak in favour of this bill. It’s a very urgent matter and it requires urgent action. There is nothing more simple than that. It is so disappointing when the National Party just says it’s not going to support something for the sake of it. We need to get on and let the Auditor-General’s office have two months—two months. That’s all it is: two months. Why is that so hard for the National Party to agree to? What will happen in those two months?

They talk about this being a New Zealand problem. It’s not. It’s a worldwide problem. Australia has a population of 25.5 million and they’re 1,000 auditors short. We’re 200 auditors short, and we just need two months to get everything back into place so that we can report back and do the job that’s required of this Parliament. It’s practical. It’s a working solution. It just needs to be done. It just is such a little thing to do, an urgent matter, but Mr Woodhouse wants to go all night and apparently into the morning just to complain, just to carry on like the negative National Party of the day. I mean, come on. Let’s just get this urgent matter under way. Vote for it. It’s not hard to do. Give them the time they need—two months. That’s two months, team—two months. I commend this bill to the House.

DEPUTY SPEAKER: This is a split call. I call Simon Watts.

SIMON WATTS (National—North Shore): Thank you very much, Mr Speaker, and I rise on behalf of National and as the member of Parliament for North Shore. I must say, just listening to the comments by the last speaker, when I was in the Hawke’s Bay earlier this year, talking to apple growers about the significant workforce gaps that they had at that point in time, and came back and asked them “What is this Government doing about resolving those problems?”, the answer was “Nothing.” So have a look in your own backyard and have a talk to your own businesses. National oppose this bill, and I’m going to articulate a few reasons why that is the case. As one of the few people who actually has a financial background as a chartered accountant and over 25 years in this sector, I am someone that understands this challenge.

The reality of what we’re being told in regards to this bill, which is a bill which seeks to extend the deadline by two months, is this is because it is of a workforce gap. Well, how can this workforce gap have just appeared? If anyone knows how to plan an audit, the planning for resourcing of an audit is undertaken months and months before the work even started. There is no way that this is a surprise. This Government, on that side of the House, have known about this problem for a long, long time, and they have decided, under the auspices of urgency, to throw it on us and say, “Oh, well, you know what? The changes need to happen.”, and push it through under urgency. Well, I’m sorry. You can’t just change the rules of the game to suit yourself when other people and other businesses in this country are significantly struggling because of a workforce crisis. So this bill, in terms of that extension of the deadline, is basically symptomatic of a Government that is unable to manage the problems that we have around workforce in this country, and that is why National are opposing this quite strongly.

Within my home electorate of the North Shore, Peter and Susan Reeves, who own Manuka Cafe in Devonport, had to close their doors for a period because of a lack of workforce. Sid and Chand Sahrawat, who own Cassia and major restaurant chains in Auckland, were in the Herald yesterday saying that they have to close for two weeks, at losses of over $300,000, because they do not have the workforce to operate their business. But is the Government going to legislate to try and help those businesses? No. What are they going to do? Nothing. Are they going to do the right thing and put releases around immigration to let some of that workforce come in to fill those significant labour gaps? No. But what are they going to do in their own backyard when the auditor teams can’t complete the work that is required for them because of Government? Well, how about we just change the legislation? Well, I’m sorry. That is a lazy approach, and this is something that is not a surprise and should have been well planned out.

What this indicates is we’ve got a Minister who is out of touch. He is not over the detail in regards to this, and while the Auditor-General’s office do an absolutely wonderful job and I do appreciate the advisory they provide to us across the board, basically this problem has been caused by the Government, and the Auditor-General’s office are basically symptomatic of the issues underlying that, and that is simply not good enough. Basically, what we’re trying to get through here is around whether this two-month issue is going to actually provide the changes required. But what we know in this articulation is actually the Auditor-General has articulated that there are a number of entities which they will be able to complete the audits for. However, the legislation on the Table here is a catch-all driftnet of every single entity, with a whole lot of, basically, no limitations on the Minister around that, and I don’t think that is good enough either.

We should be looking, if they want to be putting in place exemptions, to at least advise what are the entities that can’t be audited within this time line. But no, none of that detail is here. It’s basically just a big catch-all, and that is not good enough. The other aspect I’m looking forward to in speaking a little bit later on—because I’m running out of time, so I won’t be able to cover it this evening in this speech—is the other aspect around what’s actually driving these vacancies, but we’ll hear a little bit more of that later.

DEPUTY SPEAKER: Dr Tracey McLellan—five minutes.

Dr TRACEY McLELLAN (Labour—Banks Peninsula): Thank you, Mr Speaker. I am happy—happy enough, at least—to take a very short call on the Annual Reporting and Audit Time Frames Extensions Legislation Bill. This bill, in a nutshell, really arises in an acknowledgment that robust reporting supports the principles of accountability and transparency, which are important—very important—to this Government. But, alas, there is a shortage of auditors—a shortage of auditors caused in part by the ongoing impacts of COVID-19 and, in part, by the increases in auditor demand arising out of the increased complexity of the work. So, very briefly, the bill seeks to mitigate these impacts by extending the audit report time frames by two months in two specific Acts—it’s as simple as that.

As the Minister, the very hard-working Grant Robertson, said at the beginning of this debate, it’s a simple bill, but it is still an important bill, and I certainly have no desire to delay it any further. No, it’s not frustrating, as members opposite might lead us to believe, but just a bit blandly, and, quite frankly, boringly disappointing to see them doing just that. Nevertheless, however, I have no hesitancy to commend this bill to the House. Thank you.

DEPUTY SPEAKER: Tēnā rā tātou. It’s come time for me to leave the Chair for the dinner break. I will return at 7 p.m. Kia ora.

Sitting suspended from 5.55 p.m. to 7 p.m.

ASSISTANT SPEAKER (Hon Jacqui Dean): Members, the House is resumed. We are currently on the first reading of the Annual Reporting and Audit Time Frames Extensions Legislation Bill.

INGRID LEARY (Labour—Taieri): I’ve been listening to the speeches in the House tonight about this bill, and people have said that it should come as no surprise that extra auditors would be needed, but, in fact, it has been a little bit of a surprise, I would say, especially to the private sector. If I read the article on Politik from Richard Harman, a well-respected journalist, he talks about the shortage of auditors being the oddest shortage. If I read his article correctly—this came out today in Politik—he has said that the economy has come roaring back to life and in a way that has caused some surprise to people in the private sector who are needing more financial services, and auditing is, of course, one of them.

If we look at the employment rates and if we look at other economic indicators, the economy certainly is roaring back. We have numbers from the end of May that show that the deficit is $5.8 billion better than forecast, and, actually, Richard Harman’s article quotes Bill English from another time saying that it’s a nice problem to have. So we want that to continue.

We want our economy to keep roaring back to life. We want it to keep being transparent and keep being stable. To do that, we need to have audits that are done properly and that are done in a timely way and that they are quality audits. We want to hit that mark in 2022, as we did in 2020, from Transparency International, which places New Zealand at the top of the rankings when it comes to being the least corrupt country. To do those quality audits, it’s very simple. As my colleague Anna Lorck said, we just need two more months.

So it’s a sensible proposition. This bill simply asks for a two-month extension for those audits. I commend it to the House.

Hon GERRY BROWNLEE (National): This debate here has seen a display of the most breathtaking arrogance that could ever be put on in front of the people of New Zealand—quite extraordinary. So while the members over there have said, “Nothing to see here. Just a bit of a problem. We can’t get enough auditors to do the auditing that they’re supposed to do, so let’s just ignore the problem”—which affects not just the Auditor-General’s office but all businesses throughout the country—“and just put it off for two months, for the next two years.” The question I’ve got is: when is there a catch-up point? That’s something we’ll tease out during the committee stages of this debate.

But what is most extraordinary is that the Government has decided to do this largely for itself. Maybe the Auditor-General did come in and say, “I can’t do it. I don’t have the personnel. I can’t get to that point. You”—as he would be speaking, not to you, Madam Speaker, but to the Government—“have to help me. The Government has to help me.” And the Minister of Finance over there nods his head.

Well, every MP, at least on this side of the House, and, I know, on that side as well, has businesses coming to them on a weekly basis saying, “I need help. I need personnel. I’ve got to get them through the gate.”, and what do we get? We get the process that one goes through to the Minister of Immigration, making a good case, and what do we get? Nothing—not a thing—and told, “Employ locally.” “Employ locally.”, we’re told. It doesn’t matter how qualified a person is. Apparently, they can come in and do the job.

So why wasn’t the Auditor-General just told, “Employ locally. Employ from the New Zealand pool.”?

Anna Lorck: And they are—and they are.

Hon GERRY BROWNLEE: It’s because there aren’t enough people here, Anna Lorck There aren’t enough people with the expertise necessary. So we’ve got this extraordinary situation where the Auditor-General, the person who is supposed to protect the integrity of the financial system inside the Government, who would pillory—pillory—any organisation that fails to meet their deadlines, coming along and asking the Government, asking the Parliament, to give him or his office an extension because they can’t meet a deadline, and that’s outrageous.

I think one of the questions that remains unanswered is how has this happened, and if it is just because “Oh, they’ve lost 27 staff members.”, why have they lost them? If the answer is because they are being taken out into the private sector by other accounting firms, well, that would tell us that’s a good thing. That would tell us it’s a good thing. But where there is no capacity to bring in people with audit experience into New Zealand, then it is an unreasonable thing to say to this Parliament, “Just pass this law for this office and ignore all the problems that others have got.”

I went to the Minister of Immigration, asking him could we get one refrigeration engineer in for a firm that employs over 200 New Zealanders, 40-odd of whom are apprentices, for a position in Invercargill, and the Minister, when I spoke to him directly—all very friendly—said, “Oh look, send me a note. Yep, we should be able to fix that.” What did we get three weeks later? A note saying, “No, we believe that the vacancy can be filled from our domestic personnel.”, yet that business has been 18 months trying to get new staff and can’t get them. That’s just one, and across this side of the House, through the evening, there will be other examples of workplaces where more people could be employed and the effect on the economy could be improved by a better immigration scheme.

Dr Duncan Webb: In the bill? Would there be any refrigeration in here, do you reckon?

Hon GERRY BROWNLEE: And there we have the Hon—no, no, he’s not quite yet. He’s a man who holds himself out to be a fairly honourable member. Dr Duncan Webb is saying, “Read the bill.” Well, the bill is just symptomatic of the problem that this House is being asked to deal with. It is not unreasonable to carve out some of the problems that we currently face in this country.

The finance Minister—the Deputy Prime Minister—came into the House today and, I think, enjoyed being able to talk about how well the economy’s going, and we agree with him. That’s a good thing. We agree with him.

Hon Grant Robertson: Oh, there you go—write that down.

Hon GERRY BROWNLEE: It’s a good thing. He says, “Write it down.” Well, that’s good that you write it down, Mr Robertson. Please remember it so that next time you get up to give one of those speeches about how the Opposition doesn’t want the economy to grow, just refer back to that note and give yourself a bit of correction.

Madam Speaker, I apologise for the use of the term “you”. We do, of course, live in a time of some confusion around some of those sorts of affirmations—

ASSISTANT SPEAKER (Hon Jacqui Dean): Well, that member might be confused.

Hon GERRY BROWNLEE: —so I do apologise. I don’t mean to bring you into the debate.

However—however—if, in fact, we are to have the economy continuing to grow at the rate it is, there does have to be something done about the flow of people into the country who could augment that. The current unemployment level is extremely low, extremely low; almost as low as it was under a National Government—almost. But, of course, the National Government did not constrain the economy by having the sort of tight immigration policy that leads to this sort of bill in front of the House tonight. So the question simply is: why is it that there can be one rule for a Government agency and a different rule for businesses that are providing jobs for New Zealanders out in the private sector?

The thing that’s really interesting is that—I hate to say this—auditors kind of sit at the top of the commercial pyramid, metaphorically, because unless there is activity, broad activity, inside the economy, there’s no need to audit. So if we’ve got a shortage of auditors, it tells us just how much activity is going on in that economy, and one way, of course, to prevent it getting any better is to continue with the terrible immigration policy that the Government’s currently got where skilled people are told they cannot come to this country—cannot come to this country—and that we have to fill it all somehow, magically, from local persons. Eventually, that will start to slow things—no question about that.

So I hope that, perhaps, the Government might just think about this and recognise that asking Parliament to, effectively, vote one of its officers an exemption to the existing law by passing a new one, albeit temporary, is completely unreasonable.

There are a number of cases that I could go into about—

Hon Grant Robertson: None of them will be relevant to the bill.

Hon GERRY BROWNLEE: I beg your pardon, sir?

Hon Grant Robertson: None of them will be relevant to the bill.

Hon GERRY BROWNLEE: Well, no, it’s not so much that anything I might say wouldn’t be relevant to the bill; it would appear to be beyond the Minister of Finance’s capacity to understand that if there is a need for auditors in the country, it’s because there is a huge amount of business activity taking place, and that activity—

Hon Members: Yes, there is.

Hon GERRY BROWNLEE: —is what’s going to—look at them over there. They seem excited. They’re like a bunch of performing seals suddenly clapping. It’s as if they’ve just suddenly realised that New Zealanders are very good at dealing with bad situations—they always have been—and they have done a good job. But they have done it. It’s not necessarily anything the Government’s done, and what is now happening is that their efforts are being constrained by the lack of ability to get skilled workforces into the country. It’s just extraordinary that the Government comes in here tonight, demonstrates that there is a problem, and then says, “Oh no, we’re only going to solve it for our part of it—only going to solve it for our part of it.”

It’s like the 300 teachers. Suddenly, when the Government realises “Oh heck, we could be in trouble with staffing our schools. Oh look, we’ll just give ourselves an exemption and we’ll bring in 300 teachers.”, well, what about all of those businesses that need staff? No answer—absolute silence. It’s as if somehow the economy is a magical thing that works all on its own. The economy works because it has workers in it. Then, we have over there—[Interruption] I’ll tell you what, I don’t think that member should engage in fire across the House after the dinner break. I don’t think that’s wise for her to do that.

I don’t want to go into any further comment on this bill, other than to say it is a disgrace. It is a complete disgrace that the—

Hon Grant Robertson: This speech is a disgrace—you’re right.

Hon GERRY BROWNLEE: Well, the member over there says my speech is a disgrace. I guess that’s the guilty man hiding behind the veil of what he thinks is a sharp critic across the House. It’s not. Why is it that the Government is doing one thing for itself, when it will not do it for the rest of the economy?

HELEN WHITE (Labour): I am pleased to stand and talk to this to this bill and in support of it. I’m also pleased that the Hon Gerry Brownlee is realising that this really is something that is a product of success: a very successful economy that’s bounced back and a business sector that’s thriving.

We have had an Auditor-General who’s had an enormous year. It’s been an incredibly difficult job, and it has been a difficult job for the local bodies and for the Government departments that have been dealing with one of the greatest crises that I have ever had in my lifetime. They’ve done an exemplary job, and I have great respect for anyone who chooses the life of an auditor. It is not something that I would want to do, and I think that they are doing excellent work there. What we need to do, as a Government and as a Parliament, as my friend Deborah Russell said just earlier in the debate, is we actually need to support and respect those independent bodies that do that work so thoroughly.

I notice that the Hon Michael Woodhouse talked about how this bill would somehow undermine the quality of audits. This isn’t a bill about undermining the quality of audits. This—

Hon Michael Woodhouse: No, I didn’t. I said it was the confidence in them; not the quality of them.

HELEN WHITE: I think the words were that it would undermine confidence. It won’t undermine confidence, because people will see this and they will know that, actually, two months has been given and the Auditor-General has prioritised work and the work that is being done is thorough and robust and has integrity—and I, for one, am grateful.

I’d just like to take the last nine seconds to wish my father, who turned 90 yesterday, a happy birthday.

A party vote was called for on the question, That the Annual Reporting and Audit Time Frames Extensions Legislation Bill be now read a first time.

Ayes 87

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

Noes 33

New Zealand National 33.

Motion agreed to.

Bill read a first time.

Second Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Annual Reporting and Audit Time Frames Extensions Legislation Bill be now read a second time.

As I said in my first reading speech, this is a relatively simple bill. It extends the time frames for audits covered under the two Acts being amended, those being the Crown Entities Act and the Local Government Act, by two months—two months—for the audit time frames in order to deal with what has been covered in the first reading debate: the impact of a shortage of available auditors with the appropriate expertise to be able to complete these audits. This is a simple bill, and therefore I’m going to focus my comments in the second reading on correcting one or two of the matters that I’ve heard raised in the first reading, and also on making the point to the Mr Woodhouse and others that, for such an egregious bill in their eyes, they voted for it last year. So they voted for the same bill last year, but this year, apparently, it’s an egregious bill.

I want to turn to a number of the comments that have been raised. The first of those, and one that’s been a common thread in a number of the Opposition speeches, is that somehow or other the Government is doing something here that it would not be prepared to do for any other agency. A number of members in the House may not have been present for my first reading speech—and I can do a bit more detail for the benefit of the Opposition now—where, on 15 June, the Financial Markets Authority granted relief for private businesses, for the audits that they have in place. They also, along with the Inland Revenue, have been providing regular relief from various regulatory provisions that affect businesses throughout the last year and a half. The Government is here doing as the Auditor-General has requested: for this extension to be made for the Act for which the Auditor-General is responsible. So we are not doing as members across the House suggest. We are, in fact, merely doing what is within our powers, and the Financial Markets Authority have done what is within their powers to support those private businesses.

The other concern that seems to have been raised is that somehow or other this could have all been solved by simply opening up the border, and, by the way, that was a reasonably extraordinary contribution from the Hon Gerry Brownlee, who appeared to be advocating for a mass opening of the border, because that’s the only way we could interpret that. What Mr Brownlee seems to have not picked up is that 17,000 critical workers have come through the managed isolation and quarantine system and are now working in New Zealand. We continue each day to see critical workers across many industries come into New Zealand. This issue would not be solved by that, Mr Brownlee. This issue is immediate. It needs to be dealt with now, and I want to thank all of the other parties in Parliament for the vote that was just cast on the first reading of this bill, because what that shows is that there is a level of understanding among members across the House—with the exception of one party—that this is a situation that, while not at all desirable, is easily solvable, and it does not change anything other than the fact that there is a two-month extension to complete all of the audits that are required by the Auditor-General to complete, as was done last year.

The other issue that has been raised is this question—and I do want to allude to it—of high staff turnover in the Office of the Auditor-General, or in the Audit Office. That is true, and the Auditor-General has acknowledged that in correspondence with myself and, indeed, I believe, with Mr Bayly—and I will return to the Auditor-General’s correspondence with Mr Bayly at a later point in this debate. But in that correspondence, it’s clear that there has been high staff turnover in the Audit Office. I would encourage the members of the Officers of Parliament Committee, the appropriate place for a discussion about the Audit Office and the Auditor-General, to take that matter up, if that is of concern to the Opposition. But the Auditor-General himself has been very open with myself and Mr Bayly about the fact that this is one of the contributory issues.

But the overall point is that there is a shortage of auditors across Australasia. The way in which the Audit Office manages the season of audits is to use private sector auditors to join the office. So even if the staff turnover issue in the Audit Office was not an issue today, the overall number of auditors available in Australasia is now the problem, and what we know from Australia is that they have about 1,000 vacancies and, from a survey conducted by the Chartered Accountants Australia and New Zealand, about 200 vacancies here in New Zealand. So the ability of the Audit Office to do what it would normally do and seek people from those private sector firms is also diminished as a result of the global shortage of auditors.

So this is a problem. We need to address the problem. Most of the parties in Parliament understand that this is a practical and pragmatic solution that the Auditor-General, an Officer of Parliament, has come to this Parliament to ask for. It is as simple as that. That is why we have a bill in front of us tonight. It should be able to pass through the House very quickly, if people take that kind of mature approach.

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

ANDREW BAYLY (National—Port Waikato): Madam Speaker, thank you. Well, I think some of the points that Mr Robertson’s just been talking about need to be discussed, and I think the first thing is that to say that 17,000 skilled workers have been allowed through the border, and I presume that’s over the last 14 months that he was quoting that figure from. Given there are about 2.5 million people employed in New Zealand, that represents 0.68 percent, or less than 1 percent, of all the people working in New Zealand.

I think if Mr Robertson was to properly engage, as I know he has been, in going around the country, and actually talk to the manufacturing people in places like Canterbury, talk to farmers, or to some people like the horticulture industry, even in my electorate in Pukekohe, or to a whole raft of other industries—and Mr Brownlee talked about some that he’s aware of—everyone is crying out for skilled workers. That doesn’t mean that we’re looking to replace whole stacks of people involved in various businesses or industries. What we’re asking for is a specific, targeted approach. Where there are operators of machinery, that may be one person who has a crucial skill who should be allowed into New Zealand, but right now cannot get into New Zealand because we’ve got a Government that has locked down the borders.

Worse than that, they’ve not only locked down that but they’re not even using all the managed isolation and quarantine (MIQ) facilities. There are reportedly 2,000 MIQ rooms that are not being utilised, and that is the issue. Why should the industry be forced to go through the trials and tribulations and absolute stress of not being able to operate their businesses?

Actually, a lot of them are telling me now they’re having to turn away customer contracts. They’ve been offered the work, but they simply cannot do it, because they do not have access to certain skilled staff. That is the crucial point that we’re talking about which a number of my colleagues have raised tonight. We’re not talking about a wholesale opening of the border—that’s far from what we’re suggesting. What we’re talking about is using all the MIQ systems and rooms to bring people in. Make sure that they go through the proper quarantine, make sure they’re COVID-tested, but make sure we’re prioritising the skilled workers that come into New Zealand, and utilise the 2,000 rooms that are sitting vacant. That’s the issue that we’re talking about tonight, and talking about 17,000 coming through the border is just a ridiculous proposition when not only are we waiting for skilled people but also we’ve got many New Zealanders wanting to be reunited with their families.

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! I’d invite the member to come back to the bill.

ANDREW BAYLY: Yep. So that is a really, really crucial point—that we do need the skilled workers.

In terms of auditors in New Zealand, as the Minister himself quoted twice now, there is a shortfall of 200 auditors in New Zealand. Two hundred is not a lot of people—200 accountants—because, effectively, auditors are junior accountants, rising up to very senior accountants. But for many, many auditors, it’s the first job they get when they get their accounting qualification, or as part of getting their accounting qualification. We should be focused on the top end of those and allowing those types of people to come in. I imagine that out of the 200, there will be a varying level of expertise. The important people to use and to allow into the country would be the most skilled, and that is where the Government should have been putting its priority.

At the moment, we’ve got a Government that’s blind to that and that’s said to every industry in New Zealand—all 325,000 businesses—“Hard luck. You just get on. Don’t worry about getting that contract. Don’t worry about that stress. You just pay workers more, if you can get them locally.”, which is obviously the big issue. But when it comes to a Government entity, it thinks it can just automatically pass a piece of legislation to give a special dispensation to one entity.

As I’ve said in my opening speech, we think the Audit Office does a wonderful job. It does a wonderful job and is very diligent in performing its duties. But simply for the Government to say, “Look, we are going to pass a special piece of legislation because our immigration strategy or policies haven’t worked.”, it is just an outlandish proposition. That’s the first thing.

The second thing we haven’t heard is the issue about why these auditors are actually leaving. That is about the terms of work conditions that these people work under at Audit New Zealand, and an element of that will be pay. If there’s a short-term issue, I think the Government could have been much more proactive in terms of dealing with some of those issues that are leading to people leaving the Audit Office and going and joining the private sector or, perhaps, emigrating. That is the issue I think that we haven’t also heard from the Government on. Why aren’t they addressing that issue? Even if you pass this piece of legislation over the next 24 hours, there will be no doubt, if there’s no other changes made—it is almost inevitable—that we’re going to see the Audit Office requiring a similar dispensation for next year, and possibly the year after, depending on where we go with COVID and depending on the level and type of immigration policy the Government wants to have in place at that point in time. So I think there’s no creative thinking about the way that the Government’s approached this.

The third element, if you really wanted to be creative, would be a question of prioritising some of the work that Audit New Zealand should be focused on. My colleague the Hon Michael Woodhouse was talking about this in his first reading speech, talking about the wide range of work that Audit New Zealand is proposing to undertake in this financial year. One of the options—the third option—is to say to Audit New Zealand, “Maybe you should put on hold some of that work so you can focus on doing the audits.” Again, a responsible Government or a creative Government would have looked at those options. What we haven’t heard, and haven’t heard from any of the speeches given tonight, nor even from the Minister, is any of those things being canvassed. All we see is a blunt tool from the Government which is saying, “We are going to pass a special piece of legislation to deal with this issue and this deficiency in the way that the immigration policies have been applied by the Government.”, and I think that’s the crux of the matter.

That’s the crux of the matter, and that’s why National has a fundamental issue with this urgent bill that we’re looking at tonight and tomorrow. We need the Government to be more receptive. Every business person watching and listening to this debate tonight will say, “If they’re doing it for one industry, why aren’t they doing it for mine?”, and that is the stress that we’re putting on these people.

We’ve heard all about the training that the Minister for Social Development and Employment talked about earlier today—doing the mahi, as she likes to talk about—about training up New Zealanders. Well, where’s been the issue around helping train some of the early-stage auditors? What is the plan about that? We’ve heard nothing about training about that, or even the concept of trying to get these people working in organisations like Audit New Zealand.

We need to see people actually focus on trying to achieve a proper, enduring solution. That’s not what we’ve heard from the Government tonight at all, and I think it’s very disappointing that the Government just resorts to a quick fix without actually dealing with the substantive issue that we’re all facing. I’d just implore the Government members talking tonight to just bear in mind the electorates that they represent or the areas that they represent as a list MP, and just think through all the different companies and business activities that you know are going on in your area and just ask yourself—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! The member must not bring the Speaker into the debate.

ANDREW BAYLY: Sorry. I would ask each member to think: if we passed this bill tonight, is that fair on those businesses in the area where you represent? If you go back through the period of recess over the next three weeks and ask businesses whether this piece of legislation that’s being passed tonight is fair on them, I think you will get an answer that is very firmly saying to you, “No, that is not fair. You need to give us a fair shot and help us so that we can carry on and be successful as business people and continue to employ people and, hopefully, in time, employ even more people.”, which is really what we want to see in New Zealand.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Speaker. That was a nice lecture from Mr Bayly on immigration policy, but nothing about this bill. I imagine that’s what we’ll be up for all night tonight.

This bill is a simple bill. It gives the Auditor-General two more months to complete important work so that it can do all of its job properly, fully, and for the people of New Zealand. I commend this bill to the House.

Hon MICHAEL WOODHOUSE (National): I love second reading debates, except not from Labour members, because you never get anything out of them. But it does give us an opportunity to continue the contest of ideas, such that there were any from the Government backbenches.

But before I do, I want to just talk about a little thing that really, really grinds my gears and it comes from the Labour backbench all the time, and that’s the so-called straw man argument. Now, for those listening who don’t know what a straw man argument is, it’s a form of argument and an informal fallacy of having the impression of refuting an argument, whereas the real subject of the argument was not addressed or refuted but, instead, replaced with a false one.

I think Dr Duncan Webb has many talents, but his ability to articulate and argue a straw man argument, as evidenced by that first reading speech—there was nothing in his second reading speech, so there were no straw man arguments or any arguments, in that one—is actually unsurpassed. He and, I think, Greg O’Connor are probably neck and neck amongst the two Labour members who are able to deliver the fallacy of the straw man argument, and then argue and berate and belittle the people that didn’t actually make the argument.

I quote him from his first reading speech. He was surprised to hear me “pooh-pooh[ing] … some of the other work that the Auditor-General’s doing”, saying that the Auditor-General should “shove to one side the work on delivery of health” and “shove to one side the work on domestic violence … Māori equity,” and so on.” That’s not what I said at all.

What I said was that this House is owed an explanation about what the veracity and the intentions of the Auditor-General’s annual plan for 2021-22 is in respect of those things, important though they are. First principles: core business for the Auditor-General is to audit the statements of account for Crown entities. No one’s saying that work shouldn’t be done. I certainly did not say that work should be shoved to one side, Dr Webb. It is important work, but the Auditor-General has told the Minister and this House that their office has a problem, and the solution is to pass a law to extend the report-back period. I think that in considering that bill, we need to know what the plan is, and for Dr Webb to throw up the straw man argument that I said that those things weren’t important or that they should be shoved to one side is patently not correct.

Then we got to Helen White. In fact, it was a good thing I was listening carefully, because she talked and quoted me as saying that I’d said it was about the quality of the audits, as if that was a slight on the Auditor-General. I said no such thing and I corrected her in her speech in the debate. I talked about the confidence in the audits—another straw man argument that is to be defeated.

Then we heard from the Minister—actually, in his second reading speech—accusing my colleague and friend the Hon Gerry Brownlee of throwing open the doors—a wholesale opening of the border. No such thing was said by Mr Brownlee. It certainly isn’t being suggested by any member of the National Party. But the irony of the Government solving its own problems but leaving companies to the wolves of the problems that they have in getting staff—300 teachers? “No worries, we’ll open the border.” Need some horticulture workers, some hospitality workers, some skilled migrants? “Forget it—forget it.”

Angela Roberts: 17,000.

Hon MICHAEL WOODHOUSE: 17,000. Does the member know what it used to be?

Anna Lorck: We’re in COVID—we’re in COVID.

Hon MICHAEL WOODHOUSE: The member will—we’ll come to Anna Lorck in a minute, with that dreamy, singsongy first reading speech that we all heard. Seventeen thousand is a drop in the bucket of what this economy generally relies on. Pre-COVID, at any one time, there were around a quarter of a million temporary migrant workers in this country, whether they were on international student visas, working holiday visas, essential skills visas, or pathways to residence under the skilled migrant category. So to talk about 17,000 as if this is a great big thing actually shows how little these people understand about immigration and migration policy in this country.

So let’s come to Anna Lorck, in her singsongy voice—dreamy—“Two months, just two months. Two months, just two months.” I think the whole speech used those two words about eight times. So I ask the member and the House: what would happen if I got into trouble with the tax department and just said, “Oh two months. Don’t worry—just two months.”? Or if my driver’s licence or my firearms licence or my motor vehicle registration expired, and I just said, “That’s OK. Two months—just months.” Remember, according to Anna Lorck—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! I would invite the member to return a little more closely to the bill.

Hon MICHAEL WOODHOUSE: The bill is about extending the report back for audits by just two months. But I draw to the House’s attention the Government’s inconsistency in the approach to people in need.

Now, we talked a little bit about the reasons why the Auditor -General’s office is in this state, and the 200 auditors short across the country, so my question is: what’s the plan? Is this a palliative measure? Yes.

Hon Stuart Nash: Extend it for two months. This bill is the—

Hon MICHAEL WOODHOUSE: Oh, exactly—thank you. The Hon Stuart Nash has just admitted this is the plan. The only plan the Government has got is to delay. Never mind—and the Minister did remind us that we were here last year, albeit I have to point out that the extension was for just six weeks and it was for just one year. So we’re going for a longer extension for a longer period of time, and last year we had COVID. It had nothing to do with the staffing issues in the Audit Office, so we’re applying the same solution to a different problem. But Mr Nash has just told us that the Government has no plan to fix the problem. It’s just pass a law and hope—pass a law and hope.

So what do we know about the Government’s attempts to train more auditors? Where is the graduate recruitment programme? Where are the salary expectations going to go, because they didn’t give the Auditor-General any more money to meet the market, which is the thing that the Government has told every other company they need to do. “Oh, can’t find staff? Pay more.”—right. When it comes to the Government: “Can’t find auditors? Oh, we’ll just delay things for a bit.” What’s good for the goose should be good for the gander.

So where’s the retention strategy? How long are they going to take to fix this problem? [Interruption] Oh, they’re up like meerkats now—good. We might have a decent debate in the committee of the whole House.

Andrew Bayly: Hopefully, they’re going to speak for 10 minutes each.

Hon MICHAEL WOODHOUSE: Yeah, well, that’s right. It couldn’t be any worse than the speeches we’ve heard so far.

No plan, and, as I said in my first reading speech, the bill overkills the problem. The Auditor-General wrote to the Minister of Finance and Mr Bayly setting out exactly how they intended to go about fixing the problem, but that’s not what the bill does. The bill throws a much wider blanket over the problem. It just says for all Crown entities and all local government organisations and council-controlled organisations, a two-month extension. It’s not. There’s more than—

Anna Lorck: Two months.

Hon MICHAEL WOODHOUSE: “Two months.”—there she goes. She’s back—“Two months, just two months.”

So I’m going to indicate to the House that in the committee of the whole House, I and my colleagues will be tabling amendments to the bill to do what the Government hasn’t done, and that is introduce a bill that is aligned with their policy intent. One would think that that was “Politics and Policy 101”, but no, no—lazy Government, lazy bill. So we’ll do their job for them.

If they want a two-month extension for certain organisations, name the organisations—name the organisations. We’ll be tabling amendments that list the large DHBs that the Auditor-General wants to do first, that list the large Crown entities that he thinks are more important than some of the others, and that list the city councils that are larger. I think there’s a question—and we’ll debate this, I think, in the committee of the whole House—about the degree to which size and risk are actually closely correlated. That’s not always the case; in fact, we’re going to give an exemption to the Human Rights Commission, because I think they certainly need to have the bonnet lifted on their spending to make sure that it’s appropriate. So they won’t get a two-month extension according to the tabled amendments that we’re going to put.

There is so much more to talk about in this bill and in this debate, and I look forward to it. As Ms Lorck said, “I can go all night.”

HELEN WHITE (Labour): I rise in the second reading of this bill to support it. This is a really simple bill, and if we stick to actually what it’s about, it won’t take long. This is a two-month extension. It is an extension to audits that are due on 30 June, and it is going to allow the Auditor-General to act like a grown-up.

It is very interesting to hear the National Party suggest that we should micro-manage such an important and independent role. I do not agree. I commend this bill to the House.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. The Green Party is supporting the bill. We did not support the urgency motion, but we do think the bill is perfectly reasonable and that there are extenuating circumstances. COVID has changed everything for everyone and it has resulted in quite an additional workload to the Auditor-General for issues that are not statutory requirements but are very much in the public interest. Many of the audits they’ve undertaken related to COVID have meant that they’ve had less capacity. Of course there’s issues affecting the workforce. That’s made clear in the disclosure statement, and that’s something that is affecting many institutions and organisations across New Zealand at the moment, again, related to COVID. So a two-month extension is reasonable, it’s simple, and it’s going to mean that the proper scrutiny can be applied to annual reports. We do want that proper scrutiny.

Of course, I did make the point in my first reading speech that in the medium to long term to deal with these issues, we have to improve the capacity of the Auditor-General and the capacity of the Public Service to deliver these types of public goods. For that we require revenue, for that we require a fair tax system, and for that we might need the wealthiest New Zealanders to make a much bigger contribution and a much fairer contribution to this country and the public institutions that serve all of us.

Of course, the lowest-income people and those on medium incomes probably pay too much tax, but that’s only because we don’t tax capital, we don’t tax wealth, and so the real bludgers are the people who own heaps of properties who will pay nothing on their windfall gains over the last year, where we’ve had an over 100 percent increase—

Maureen Pugh: They’re called hard workers, not bludgers.

Hon JULIE ANNE GENTER: Oh yeah, it’s hard work sitting on some property—I’ll just respond to Maureen Pugh there. I know, as a property owner, it’s not hard work. I bought a house at the right time in the right place and it’s increased in value due to nothing I’ve done, and I would happily pay tax on the increase in that value, as would most hard-working New Zealanders who care about this country and want to invest in the shared public good for this country—not like those selfish people to my right.

ANNA LORCK (Labour—Tukituki): I’d just like to commend this bill to the House, because I think what Mr Woodhouse said tonight—he said that we should be paying auditors more, and yet back in April, all parties supported an address that adjusted the Offices of Parliament for the financial year just ended, and no mention by National at the time for any further funds for staffing. Outrageous argument. I commend this bill to the House.

SIMON WATTS (National—North Shore): Thank you very much, Madam Speaker. I rise to talk on the second reading of the Annual Reporting and Audit Time Frames Extensions Legislation Bill. Gosh, it’s tiresome listening to the other side of the House talk about this being a minor change—“Don’t worry; it’s just a simple thing that we need to push through.” What that demonstrates is a complete lack of understanding of what we are talking about here this evening and the fact that, actually, this is a very serious matter.

I refer to the department disclosure statement part one, where it refers to the key issue, and I quote: “to mitigate the impacts of a severe shortage of auditors on obtaining robust audit opinions on end-of-year reporting.” I could change the word “auditor” to pretty much any other role in this country and that would still have the same impact. The reality is these auditors are symptomatic of a much broader problem around workforce and a problem that this Government is failing to take action to deliver the results required. Why, I guess, is an important issue. Why do we have a significant shortage of auditors? Well, I’ll tell you why: the workforce vacancies for—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! The member won’t tell me why. The member will keep the Speaker out of the debate.

SIMON WATTS: The workforce vacancies for auditors in New Zealand is a result of stopping of immigration for normal secondees from overseas. In terms of the audit workforce within this country, a huge element of that is new secondees coming from overseas to fill the junior roles. Those taps for that workforce pipeline have basically been turned off.

What’s happening when the auditors reach two to three years of experience is they are then transitioning rapidly into industry and other jobs. Basically, if you imagine the audit workforce as a sieve, the sieve is leaking workforce with no flow of new workforce coming in the top. And guess who has their hands firmly on the tap of workforce: this Government. So this Government, right here this evening, could make a change to immigration numbers to increase audit secondees into New Zealand to be on the ground within weeks. They could take that action right here, right now. But what have this Government done this evening? They have announced 50,000 offshore visa applications have been cancelled. So they have taken action this evening, while we’ve been sitting in this House, to make the severe workforce shortage for auditors and other roles worse, and that is absolutely disgraceful. Looking at the bill, this basically gives us a flavour—the consequence, I think—of a failure to plan and to act.

The bill refers to an extension of eight weeks. Well, if you look at local government—which I think is a key area which benefits from the value that is added by auditors to identify areas of risk, of issue, of fiscal risk particularly—the absence of audit, particularly around where they don’t have the capability within their own teams to do that, is going to be extended. So does anyone understand what the implication is of delaying an audit on a business that has significant fiscal problems? Well, you delay highlighting that issue. You delay the ability or the escalation of that issue being raised to management, to governance, and to Government. And what is the result of that? Potentially fiscal losses increase and significantly grow, and that is because action could have been taken earlier to mitigate that fiscal risk. So that is quite clearly a simple consequence of the shortage of workforce but, more particularly, the significant implication of this extension by eight weeks.

What is worse is that the audit workforce, as I understand, are leaving the sector not just for money but also for work-life balance issues. The workload is significant for those few people that are working within the audit sector. The public sector, Audit New Zealand, get paid less than the private sector, and that is very similar in terms of the workforce challenges.

DAMIEN SMITH (ACT): This is a great example of the free market working in perfect synchronicity.

Ian McKelvie: Great example of it failing.

DAMIEN SMITH: Or failing, as you may ask. But the Government that can provide a fiscal strategy for 10 years, can’t work out how many auditors they’re going to need for the next two months. So if you do some auditing calculations, it’s about 300 hours per auditor, so I’m sure that that’s a function of several things. One is—and it exposes a couple of elements that the ACT Party believes: the need for less regulation but more quality auditing around various projects, light rail, Ihumātao, looking at State-owned enterprises. So I’m sure there’s a massive job going on at KiwiRail, as an example, where largesse has abounded, there’s been infrastructure investment that has probably been building a business case that hasn’t been sustainable.

So we do support this extension, but what we would say is that it’s exposing a planning issue that the Minister of Finance should actually be totally on top of, and I don’t understand why his team hasn’t foreseen this circumstance. If you look at some of the key principles of auditing, the numbers are either bigger or smaller, they’re either wider or shorter, and the risks are either defined or not defined. So there are a perception of the shortage of auditors. In Australia at the moment, they’re actually giving them pay incentives, facials—believe it or not—and massages to get them to go to work. But maybe on this side of the House we should roll our sleeves up and spend recess out doing some auditing just to help out. That would be a good thing.

So in terms of the legislation, I also find it difficult to find out how linear the two months is because you would argue that with statement of intents or with full audits you have to work with your clients, you have to work with your organisation, so will we be back here in another month’s time for another extension?

Then that takes me on to the last point: in 2019 when pre-COVID was going strong, there was a full auditing compliment in the House at that time and in the committees, so what happened this time around and why are people leaving the industry? It’s a small amount of people that are actually needed to do this task. You would think—it sounds to me like the Government has resourced this in a way that they haven’t anticipated the workflow, the quality of auditing, which we’re not arguing with because we support the task that has to be done, but it’s just really management of time and motion.

So in terms of the ACT Party’s view on the bill, we will support it. But we would also like to consider some serious thought goes into resource and planning because this is just unacceptable. Two months, as I said, is only 300 hours per auditor for a matter of eight weeks. So why did somebody not see this coming? So thank you very much for the talk to the bill.

ASSISTANT SPEAKER (Hon Jacqui Dean): Sarah Pallett. Five-minute call.

SARAH PALLETT (Labour—Ilam): Thank you so much, Madam Speaker. I’ve been sitting in the House this evening listening to a great deal of unedifying waffle and learning that the Opposition is able to speak at length about bills; it’s a shame that they didn’t do so about the Biosecurity (Information for Incoming Passengers) Amendment Bill, which is of extreme relevance to not only the entire country, but to the people that they purport to represent. But in doing so, I shall just commend this bill to the House, and thank you.

INGRID LEARY (Labour—Taieri): COVID—COVID, public interest, two months. I rest my case. I commend this bill to the House.

Hon GERRY BROWNLEE (National): I need to start by responding to some of the allegations made in the second reading speech by the Minister of Finance, the mover of this bill. He suggested that somehow I and my colleagues were suggesting that we wanted the border to be opened and people to come flooding in. Now, that was, of course, the sort of gross exaggeration of what was actually said—so gross, in fact, as to be a complete misrepresentation—but somewhat typical of what is often said when people know that they’ve got a bill that’s actually not exactly kosher.

One of the things that’s really important in this country is that all agencies follow the law—all Government agencies follow the law. The Auditor-General is an Officer of this Parliament. The Auditor-General would not tolerate, in any circumstance, entities that they are required to audit simply saying, “We haven’t got our audit material prepared. Would you give us a bit of an extension?” Yet the Auditor-General himself has gone to the Minister and pleaded, for whatever reason, that he’s now so depleted of staff that he can’t get these audits done in the time required; therefore, could the Parliament please change the law? That is an extraordinary request regardless of the circumstances that might be outlined somewhat, I think, over strenuously by members of the Government. Yes, last year we did support an extension. It was clear that we had gone through a month of total lockdown and subsequent restrictions on people’s movements, and it was a reasonable thing to do. But, if we are now to be getting into a position where this could be our normal for quite some time to come, I think we have to be acting still within the law, where possible.

The exemplifier of that type of course of action should be the Office of the Auditor-General. The Office of the Auditor-General would not tolerate any of the local authorities coming to this House with a local bill asking that they be exempt from audit processes for a given period of time. There’d be outrage over that. So I think for the Government members to say that this is a simple bill, that it should just be gently ticked through the Parliament without any scrutiny of any great depth, is, I think, a misunderstanding of what the purpose of the Parliament is in the first place. And it is also, I think, very disrespectful of the Office of the Auditor-General, because, while the Office of the Auditor-General will be held by individuals who might have a different interpretation of how they should operate at any given time, the office itself should be one that is required to act with the greatest of integrity and within the law at all times.

So we, on this side of the House, have made the point that other people who do need staff are not able to get them, and while we’re saying, “OK, we don’t think that the gates should be flung wide open”, we’re saying that the Government is being very hard on those businesses in comparison to the way it’s prepared to listen to an Officer of Parliament, effectively, asking the law to be changed to excuse them from their obligations. That’s an extraordinary thing, and I would suggest that, while there will be, obviously, more votes cast than just the 65 of the Government, it’s the sort of bill that a Government with a massive majority just decides it can do, particularly under urgency, where there is absolutely no scrutiny whatsoever.

It’s interesting to look at the departmental disclosure statement on this bill, and throughout it there are a number of questions under a number of topics, and for each one of these, ordinarily when a person goes through these, a member goes through these, they’re able to get some sense of the level of scrutiny that’s gone on. But through here we have just a series of the answer “No, haven’t done it” or “Not applicable”, and it is one of those sorts of incredibly lightweight documents that leads people who have been around for a while to get quite concerned about what the actual intention of the bill is. So, while we’re seeing that it does apparently just extend the period under which an audit might be conducted, it does not exclude some of the major departments of State from that exemption. It may have been a more acceptable bill if there were some of the smaller organisations, particularly Government entities, not local government, not health boards, but other entities that were to have their audit period extended, but to do it carte blanche, across all of the agencies of the State, seems to me to be an excess.

What’s not being discussed here is how this situation has apparently suddenly appeared. It cannot be that just earlier this week the Auditor-General turned up in the Minister of Finance’s office and said—

Hon Grant Robertson: Not this week.

Hon GERRY BROWNLEE: Last week. He’s now said it was last week. So the Minister may have had a few days to think about it, but was it just the case that the Minister opened the door, in walked the Auditor-General throwing his hands in the air, saying, “I’ve lost 27 staff members. I cannot complete my statutory functions in the time span that I am statutorily required to. Therefore, Minister, there will be a requirement for a bill in the House in the name of the Minister of Finance to extend my statutory deadlines.”?

Well, here’s a question, and we’ll discuss this further, I’m sure, in the committee stage. The Minister technically responsible for an Officer of Parliament is the Speaker. So what advocacy did the Speaker undertake during the time of the Estimates, not for this year but for the last year, when it should have been abundantly clear that there were going to be staffing issues, to try and deal with the reasons why so many of their staff were being poached to other entities? Why was it that there wasn’t some long-term contractual arrangements with some of the private auditing houses around the country to have them doing their continuous work in a way that gets it done?

Hon Grant Robertson: They don’t have auditors, either, Gerry.

Hon GERRY BROWNLEE: Well, those are the sorts of questions that need to be answered, because to just suddenly plunge the House into urgency to absolve an Officer of Parliament of their legal responsibilities seems to me to be the sort of excess that only—only—a majority Government would have a go at. And I think that raises all sorts of concerns on its own.

Anna Lorck: That’s right—Government majority!

Hon GERRY BROWNLEE: Well, Anna Lorck over there, a new MP, says, “Well, that’s why there is a majority for the Government.”—so that they can do things that they want to. Well, that is interesting if it is policy that’s been taken to the people and there’s been choice made on it. That’s one thing, but to come in here and use this Parliament to usurp the rights of the Parliament in relation to an Officer of Parliament is, I think, quite a significant contravention of the standards that we’ve established in this House over a long period of years.

So it’s not possible for the Speaker to participate in a debate, but unfortunately this bill drags the Speaker into it, because, as the acting Minister, or the Minister responsible for Officers of Parliament, it would be appropriate, I think, to know a view from the Speaker about how this situation materialised. At what point in the last 12 months did the Auditor-General come into the Officers of Parliament Committee and say, “I’ve got a staffing problem—such a bad staffing problem that I may not be able to meet my statutory obligations.”? Because, at that point, a select committee, with the guidance of the Minister responsible, might have been able to come up with a solution that didn’t require Parliament to plunge itself into urgency and for the Government to use the club hammer of its absolute majority. So we do see this as a serious bill. We see it, too, as the Government saying one thing for Government agencies and another thing for the private sector.

GREG O’CONNOR (Labour—Ōhāriu): Major disruptions like COVID require flexibility and pragmatism to overcome. This Government is both flexible and pragmatic. I commend this legislation to the House.

A party vote was called for on the question, That the Annual Reporting and Audit Time Frames Extensions Legislation Bill be now read a second time.

Ayes 87

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

Noes 33

New Zealand National 33.

Motion agreed to.

Bill read a second time.

In Committee

Part 1 Amendment to Crown Entities Act 2004

CHAIRPERSON (Hon Jacqui Dean): Members, the House in committee on the Annual Reporting and Audit Time Frames Extensions Legislation Bill. We come first to Part 1. Now, Part 1 is the debate on clauses 3 and 4, the amendment to the Crown Entities Act 2004. The question is that Part 1 stand part.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. I do hope that we hear from the Minister in answer to a number of questions that I have, and some I and my colleagues have, which we believe to be very constructive amendments to the bill so that it lines up with the policy intent. I’m going to launch straight into them.

I’m fascinated to know why this bill is in the name of the Minister of Finance. As Mr Brownlee has said in his second reading speech, the Office of the Auditor-General is an officer of Parliament, independent of the normal lines of ministerial responsibility, accountability, and control—that’s as it should be—but when there are changes to the Crown Entities Act or the Local Government Act, those bills are generally sponsored by the Minister for the Public Service, or the Associate Minister of Finance as a shareholding Minister, or the Minister of Local Government. So I’m interested in two things in respect of why we are here with the Minister of Finance in the chair, given the traditional responsibilities for those pieces of legislation. How and when and to whom did the Office of the Auditor-General actually approach the Minister, if it was this Minister, to advise that there was a problem with meeting its legislative obligations?

I note that Anna Lorck, in her second reading speech, said that she agreed that we should pay auditors more, so why did the National Party not raise this issue in April when it had an opportunity to? Well, the answer to that is very simple: we had no idea. We can’t raise issues that haven’t been first raised by the people to whom that issue relates. And so we’ve not actually heard much about that. We had a heads up on Thursday, we’ve got a letter—a quite comprehensive letter—that Mr O’Connor might be interested to know doesn’t mention COVID at all, except to the extent that the remedy being sought is similar to a remedy that was applied last year. We are not fixing a COVID problem here. The problem is not going to go away just because we kicked the can down the road. As Mr Nash said in his interjection on me in the second reading, “This is the only plan the Government has.” Although, I’ll give the Minister a chance to correct his colleague, because I think we are in need of an explanation of that.

So my first questions therefore are: why is the bill in the name of the Minister of Finance, when was the issue first elevated to the Government, to whom was that elevated, and by what method?

Hon GRANT ROBERTSON (Minister of Finance): I’m the Minister of Finance, this bill amends the Crown Entities Act. It also does amend the Local Government Act, so I guess it would be arguable that the Minister of Local Government could bring the bill—

Hon Michael Woodhouse: Or the Public Service.

Hon GRANT ROBERTSON: Or the Public Service Commission, but I don’t think that’s a particularly material matter. I am the Minister of Finance, and the Crown Entities Act is one in which I have a significant interest.

In answer to the second of the member’s questions: on 16 June, the Auditor-General came to see me. He then wrote to me on 17 June around these issues. As you would expect in those circumstances, we sought advice from officials as to what approach we should take to deal with this. The Auditor-General—and this is a letter that Mr Bayly has, and I’m sure he shared it with his caucus, and happy to table in the House at some point if that’s of any interest to anybody. The letter was written on 17 June, reiterating the matters that the Auditor-General raised with me. They are the same matters that I’ve raised in the House today. So that was the means by which that occurred. The Auditor-General responded to some questions that I had and I believe some questions that Mr Bayly had in a letter dated 2 July 2021, addressed to myself and Mr Bayly, that begins with the following words: “Tēnā korua, Minister and Mr Bayly. Thank you for indicating your support for legislative change to address the current shortage of auditors”, and then there were some further questions that followed on from that, which the Auditor-General wrote back to us on about 6 July—that’s yesterday, isn’t it?—and here we find ourselves on 7 July.

Hon GERRY BROWNLEE (National): Point of order, Madam Chair. There are a number of Supplementary Order Papers that the Opposition wish to speak to in this debate; they are not on the Table.

CHAIRPERSON (Hon Jacqui Dean): Thank you for that, because the amendments have not been tabled, they are—right, OK, so they have been tabled and they will be put on the Table as soon as possible. The amendments are coming in as we speak, or minutes ago, so I’m sure the Office of the Clerk is catching up as quickly as they can. I call Damien Smith.

Hon MICHAEL WOODHOUSE (National): Point of order, Madam Chair. I apologise for my tardiness, but I was on my feet, seeking a call at the time Mr Brownlee took his point of order, and I do have some questions that in the normal exchange of the committee of the whole House, as set out in the new Standing Orders, where by convention the call would have returned to me. I don’t want to run across Mr Smith’s—what I’m sure are—very intelligent arguments, but I think, if we could continue that tête-à-tête, it would be good.

CHAIRPERSON (Hon Jacqui Dean): Thank you for that. I will take the member for the very next call—Damien Smith.

DAMIEN SMITH (ACT): Madam Chair, Minister, I guess at the centre of this is insufficient audit capacity and, obviously, doing my calculations, it’s 300 hours per auditor for the next eight weeks, which doesn’t seem a lot. But I guess the question we have is, given this extension: what percentage of the large and significant audits are outstanding and are to be audited or in near completion for auditing, and what certain audit reports are the main priorities?

Hon GRANT ROBERTSON (Minister of Finance): I thank the member for the question and, reiterating as I do—as I’m sure over the next few minutes I’ll answer a number of questions on behalf of the Auditor-General but, obviously, I can’t really do that in that the Auditor-General is an independent Officer of Parliament—I’m aware that it is the intention of the Auditor-General to write to Parliament, I think via the Finance and Expenditure Committee, to advise the House of his intentions, which are entirely in his purview as to how he intends to sequence matters. What he has identified to myself and to Mr Bayly in a letter dated 2 July is that it is his intention that the following audits will be completed within the current statutory auditing reporting deadlines: the financial statements of the Government and all key components. This will include all Government departments, the Reserve Bank, the New Zealand Superannuation Fund, State-owned enterprises, mixed-ownership model companies, Air New Zealand; large Crown entities such as the ACC, Kāinga Ora, Waka Kotahi, and larger district health boards; all financial market conduct reporting entities; those covered by the Financial Markets Conduct Act and their significant components, for example, Auckland Council, Auckland Transport, Watercare Services, and the Ports of Auckland; and larger councils, for example, Christchurch City, Tauranga City, Wellington City, Dunedin City, and others including significant council-controlled organisations. It is the intention of the Auditor-General that all of those audits will be completed during the current statutory time frames. The extension of two months—he expects that to deal with small to medium sized councils, smaller district health boards, and small Crown entities and trusts.

Hon GERRY BROWNLEE (National): Point of order, Madam Chairperson. The Supplementary Order Papers (SOPs) were tabled before the conclusion of the first reading. We’ve been through the second reading, we’ve had several speeches now in this committee stage but the SOPs are not on the Table of the House and that’s becoming quite an irritant, I’ve got to say.

CHAIRPERSON (Hon Jacqui Dean): Thank you for that. I understand the irritation of the Opposition members. The tabled amendments will be tabled just as soon as possible. However, I acknowledge the frustration that is felt by some of the members and that will be reflected in the opportunities that I will be giving members to speak in the first part of this bill. I too, would like the tabled amendments to hit the Table.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. I’m going to go a bit backwards now that Mr Smith has raised his issue and with the Minister’s reply, while it’s still fresh in my mind, about the intention of this, as set out in the Controller and Auditor-General’s letter dated 2 July. I would add, incidentally, that while the Minister points out the first sentence in that—and Mr Bayly will speak to this, I’m sure—the National Party’s position was certainly an openness to consider it, but at no point did the party indicate its support for the legislative changes, nor could we have done that before the caucus saw the bill and was able to consider it for themselves yesterday morning. So I think that’s perhaps a misunderstanding. I don’t believe that Mr Ryan intended to say something that wasn’t accurate, but it’s worth putting on record that the support was to have a decent look at this, as we are responsible to do. It is our requirement.

Now, back to the question of what the Minister or the Government knew and when, and the Minister has indicated to the committee that he was first alerted to this on 16 June, and that was followed up on 17 June. My question is around the Budget bid process. I don’t think the Treasury documents have been released on to the website yet, but it’s customary that after a Budget, a swag of documents will get uploaded on to the Treasury website in due course. Usually, the Government is a bit coy about Budget bids that aren’t successful, and there’s big black lines through lots of those documents, but I think given the situation we find ourselves in, the committee, I think, deserves an explanation—or an understanding, rather—of the degree to which the salary constraints that the Auditor-General clearly knew was happening, because they’ve lost 27 staff over the last year, were reflected in a Budget bid that was put to the Government and whether or not that bid was successful.

Now, it may well be that it is and it’s simply a case that it takes longer—as we know from this Government, just making an announcement and an appropriation doesn’t make things happen.

Hon Scott Simpson: They’re good at announcements.

Hon MICHAEL WOODHOUSE: They are good at them. That’s right. But there’s always a pretty significant body of work, particularly when it comes to recruitment of staff in short supply, and so it may well be that there was a successful Budget bid. But I think we need to know whether or not there is a remedy coming and whether that was sought in January or February, when the Budget bid process was under way.

In my time—the last question I have at this stage relates to the answer that the Minister gave to Mr Smith in respect of the intention as articulated in that letter of 7 July. Why does the bill not reflect that intention? Because the Auditor-General is very clear about which audits will be completed within the current statutory time frames and which ones he and his teams will need an extension of time, but the bill is a broad blanket. Once this bill is passed, the best endeavours don’t become law, because the bill is much wider than that. Every Crown entity that’s subject to the Crown Entities Act and every local government and council-controlled organisation that’s the subject of the Local Government Act gets the extension. So why are we not being more precise about this and putting into law that which is intended by the policy?

Hon GRANT ROBERTSON (Minister of Finance): On the last point that the member’s made, I would have thought it was reasonably obvious that an Officer of Parliament has a certain amount of discretion. The Auditor-General has that discretion, and I don’t think it would be the right thing to do for this Parliament to direct him in that way. Now, that is entirely in Parliament’s hands, obviously, but we do tend to trust the Officers of Parliament to make the kinds of decisions that the member is talking about, the kinds of prioritisation decisions.

In response to questions from both myself and Mr Bayly, the Auditor-General has outlined the prioritisation and the sequencing in the way that I just did, but I think it is certainly my view and, I believe, the view of the Government members of the House that we trust the Auditor-General. We believe the Auditor-General should be the person who makes decisions about specific audits and the specific times they happen. The practice of Parliament getting involved in that would have potentially very unfortunate consequences. For example, a member of the House may decide that, actually, they’d rather that a particular Government department wasn’t audited and move that around in the sequencing. We would not like that kind of approach. That would be a level of interference I think that we would not be comfortable with. So it is a matter for the Auditor-General the order in which he and his staff undertake their work, and I don’t believe it would be appropriate for the House to interfere in that.

On the member’s other question, I want to clarify for him how the staffing arrangements of the Audit Office work and where the funding comes from. Audit staff who do their work in this space are funded from audit fees, which are charged to the agencies. So it’s not actually an appropriation matter. Non-audit staff within the Audit Office are funded out of an appropriation, and it is my understanding that when the Auditor-General appeared before the Officers of Parliament Committee on 11 March, he indicated that audit fees were going to need to increase in order to maintain a competitive pay structure within his office, and that Parliament had also approved funding to adjust pay levels for the non-audit staff in order to make sure that they had comparative pay rates with the rest of the public sector. So in terms of these people here, that’s not an appropriation matter.

Hon MICHAEL WOODHOUSE (National): Thank you, Minister, for that explanation. I would make one comment and then finish with a question, before, I’m sure, my colleagues have others. I fear the Minister may have conflated two things. One is the exercise of discretion by the Auditor-General about priorities in carrying out his function with his legislative obligations to do them in a certain time frame. He has no discretion to breach those time frames. That’s why we’re here. We’re kind of arguing both sides of the same coin in that regard, in the sense that we’re being asked not for him to have greater discretion; he wants the legal power to have a longer period of time. I think it’s not unreasonable for this House to grant that if it so wishes, but to be a heck of a lot more specific about that than we are, than the broad blanket, and many of the Supplementary Order Papers that are being tabled right now actually speak to that point.

My colleagues will speak to it specifically, but if certain organisations are going to be prioritised, fine—exclude them from the extension of time. The question I have—and I thank the Minister for clarifying the point about how audit fees are charged, and I expect that the appropriation is probably for the external auditors, the “big four” and so on that actually subcontract out, and then they charge Audit New Zealand—

Hon Grant Robertson: That will all be under the fees.

Hon MICHAEL WOODHOUSE: OK, but if those fees have gone up, was a bid for extra fees put in and was it accepted?

Hon Grant Robertson: They don’t need to bid.

Hon MICHAEL WOODHOUSE: The Minister says they don’t need to bid. OK. But they don’t have carte blanche—

Hon Grant Robertson: They just charge.

Hon MICHAEL WOODHOUSE: That’s their charges to the client. That is the Crown entity. So my question then is: when an external organisation like PricewaterhouseCoopers or Deloitte is used to carry out their audit, as many of them are, are those fees charged to the Audit Office or to the client—in that case, say, the school or the DHB or what have you? The reason this is relevant is if the fees have gone up and the client is paying them, that’s fine—I understand that—but if the fees have gone up and the Office of the Auditor-General is paying them, then that would have resulted in a Budget bid.

Hon GRANT ROBERTSON (Minister of Finance): I can confirm they’re charged to the clients.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. It’s an honour to be able to speak to the Annual Reporting and Audit Time Frames Extensions Legislation Bill.

I have three questions in relation to the bill; I’ve got a lot more questions than that more generally. But my first question to the Minister is: what is the effect of the extension in the sense of decision making that will flow from reports that the Auditor-General will make? It seems to me as though the debate has focused, quite rightly, on a number of policy decisions that have led us to this place and some detail around the mechanics of the provision of those reports that the Auditor-General will eventually be making. But in terms of the flow-on effects and the real world consequences, in terms of actions of third parties relying upon the Auditor-General making those decisions, and to understand exactly what is riding on this policy and this legislation that will give effect to it—that is my first question to the Minister and I’ll pause there in case he’s minded to respond to that before I proceed to my other questions. And he’s indicating, in fact, that he would have me continue.

Hon Scott Simpson: He likes what you’re saying.

CHRIS PENK: He does like what I’m saying, that’s right. The Hon Scott Simpson is quite right on that. The Minister’s now making another hand gesture at me, which I won’t share with those watching. I’m just kidding.

Hon Grant Robertson: Aw, you’re going to make it sound bad!

CHRIS PENK: No, I did make that sound bad.

Hon Scott Simpson: It was an internationally recognised gesture.

CHRIS PENK: It was an internationally recognised gesture, but it was not of that nature. I do the Minister a disservice if I suggest anything untoward in that regard. So, thus encouraged, or at least not discouraged, I’ll proceed to my second point which is—it really derives from what would be, I suppose, more of a commercial or contractual understanding of time frames. So forgive me if I delve into one of my lives before Parliament—makes it sound like I’ve been reincarnated. You know, let’s hope for better than a backbench MP next time around! That’s right. You know, there may be new life in the old dog yet, but no new tricks. So anyway, I’m getting some very—

Hon Scott Simpson: If you were really bad in a previous life you’d be a Labour Minister.

CHRIS PENK: If I was very bad in a previous life I’d be a Labour Minister! Says the Hon Scott Simpson—he’s on fire.

ASSISTANT SPEAKER (Hon Jacqui Dean): Sorry, any time the member wishes to pose a question.

CHRIS PENK: Oh, thank you. Thank you. Thank you very much. I’ve got many philosophical questions, as you see, Madam Chair, but I’ve also got some that relate to the legislation. So in terms of the way that this is characterised, essentially the time extension is to be provided and that much is obvious from the name of the bill and, indeed, from the clear terms of Part 2, we see that it’s not later than the close of 31 December 2021. So the goalposts have really just shifted and, of course, that’s the intent and we can all have our views about why and how that has happened.

But I wonder if the Minister had contemplated, or would contemplate by way of tabled amendment or Supplementary Order Paper, a change whereby, instead, the relevant provision would talk about an obligation on the Auditor-General to provide the reports as soon as reasonably possible. But in any case, not later than 31 December 2021, or 2022 as the case may be, just to make it clear that there is an intent from Parliament as directed by the Minister. But, ultimately, it will be passed by this House, no doubt by majority, whereby we would make it clear in this place that it should be provided as soon as possible. Each and every report that is already late—because it’s not a matter simply of being late and being happy about that, but to minimise the error and not compound it or not to allow it to exist to its greatest possible extent. We should be requiring that the Auditor-General understand that their office should be providing things as soon as possible in the circumstances but, in any case, not later than the close of, as I say, the end of those respective years. So I sense the Minister is ready, willing, and able to provide an answer on that point and perhaps the previous one, too.

Hon GRANT ROBERTSON (Minister of Finance): Yeah, look, in terms of the latter point, I just make the point to the member that, again—and I’ve made this response already to Minister Woodhouse—I do think we need to be particularly careful as a Parliament around the way in which we impinge on the activities of Officers of Parliament. They are deliberately at arm’s length—both from the Government, but also to some extent from Parliament—in the sense that they undertake their work and are regarded as trusted professionals who can manage their work programme and their workflow. That’s why the Auditor-General has come to us and said, “Look, I am in danger of not meeting the statutory deadlines that I have. I’m looking for two months, just two months to be able to complete those.” In the course of the exchange that followed from the Auditor-General doing that, he has made clear to myself—and indeed to Mr Bayly—how he intends to sequence what he does.

So I don’t believe it would be necessary to do as the member suggests in terms of more specificity and more caveats because, ultimately, as a House, I believe we do have to trust and, in fact, we do trust the Auditor-General. And because this is a technical bill—it’s not one that’s designed to do anything other than that time limit change—I think we risk getting into unintended consequences if we have too much of a detailed approach with regard to that. In terms of the impact, the answer is very limited, particularly on the public entities for which we’re talking about here, because when it comes to Government departments and Government agencies, they will be done according to the advice we’ve had from the Auditor-General within the space of that time frame. So there’ll be no difference there, and for the small number of entities that the Auditor-General believes will fall outside the current legislated time frame, the impact, I’m advised, will be minimal. It is only a two-month period, the councils and the small trusts and so on, they’ll have clear guidance as to why it’s occurred. I believe the impact, as I’m advised, will be minimal, if any.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Mr Chair, and I’m grateful, too, to Minister Robertson for engaging on both those questions that I posed. I wonder, by way of follow-up on the first of the two points, in order that he addressed them, if it’s not the case that we should be thinking in a consistent way about the obligations and the independence of the Auditor-General, such that we say that that office should not be subject to obligations that are imposed in any more stringent fashion than the House or the Government may wish, but nor should it be subject to largesse or generosity that appears to be sought for no particularly good reason, so far as I can tell. But at least the Minister has engaged with that, and, as I say, I do thank him for it.

My other question is in the realm of, essentially, the fact that the Government is providing policy here somewhat—I should keep careful of my phrasing of this, Mr Chair. I don’t wish to indicate anything untoward or that would have me fall foul of the Standing Orders, more to the point, but the Government is very much being a judge in its own cause here. There is a clear conflict of interest whereby the Government is seeking to avoid the consequences of its own policy failures in related areas, such that it is getting a “get out of jail free” card in the way that this legislation allows. So I did just want to place that on the record. There’s no question particularly attached to it, although if the Minister did sort of wish to respond to that, then, of course, he would be very welcome indeed.

My final question, at least for now, is why, in clause 4, which talks about repealing this extension—well, the question is really why is it to be repealed? It’s very clear in the provision at new section 156(3) that the time limit will apply only for particular calendar years, so there’s no particular reason to repeal it. It does remind one of that famous quote that doctors bury their mistakes 6 feet below ground, but other professions don’t usually have that opportunity. Indeed, journalists bury their mistakes on the front page. That was said some hundred years ago, and, of course, we probably wouldn’t talk so much about a front page any more, being in a digital environment more so—certainly for the news, and, indeed, many other things. But there’s an element of the Government seeking to sort of be done with this change, this sordid chapter in its inability to manage better the demands of public accountability, really, and certainly bearing in mind the extent to which those are imposed on the private sector, as others have already noted. It seems to me that it’s actually entirely unnecessary for those clauses to be repealed, because, as I say, it’s clear from the wording of the provision that precedes the repeal provision that there’s only a particular couple of calendar years or financial years or reporting years to which the provision, actually, and the policy even apply. I look forward to the Minister providing some explanation on that point.

Hon GERRY BROWNLEE (National): Thank you. I’m sure that Minister Robertson will want to respond to Mr Penk’s concerns at the appropriate time. In this Part 1, which amends the Crown Entities Act, the Minister might like to perhaps elucidate a little bit about where the two months comes from as an extension. The bill talks about “in relation to the financial year ending with 30 June 2021, the audit report referred to in that subsection must be provided by the Auditor-General no later than the close of 31 December 2021”, which is a six-month extension on that date. Well, the Minister’s sitting there saying, “No, no, it’s not.” Anybody from the public will read that the gap between June and December is a much longer gap than two months. Similarly with new section 156(3)(b), “in relation to the financial year ending … 30 June 2022, the audit report referred to in that subsection must be provided by the Auditor-General no later than the close of 31 December 2022.” Can the Minister just briefly explain to the committee how that works?

Hon GRANT ROBERTSON (Minister of Finance): There are a variety of dates, depending on when financial years end, when it is appropriate for entities to provide their reports. What this means is that there is a two-month extension for any report on its reporting deadline, wherever it falls.

Hon GERRY BROWNLEE (National): Except that the next part of it is, under new section 156(4), “However, subsection (3) applies to an entity only if its financial year ends … 30 June”. So I still go back, and tell me what I’m missing here, to where it says that where the financial year ends on 30 June, the Auditor-General has a deadline of 31 December of the same year—2021, or the subsequent year 2022—to produce that report. Explain how the Minister keeps saying it’s only two months.

Hon GRANT ROBERTSON (Minister of Finance): Because, Mr Brownlee, we wouldn’t expect an audit to be completed the moment a financial year ended, would we? There is always some time in which an audit is to be completed. This adds two months to that time.

Hon GERRY BROWNLEE (National): That is the interesting sort of point that the Minister makes. If, in fact, the auditor only needs an extra two months on top of the time that they have now—in other words, they’re saying that “We can’t report by 30 June 2021, because we need an extra two months”—

Hon Grant Robertson: No.

Hon GERRY BROWNLEE: Well, the Minister’s shaking his head and saying, “No, no, no.” The satisfactory argument has not been made by the Minister. If, in fact, he’s saying that of course there’s not a drop-dead date, they’ve got to complete the audit and then they write the report and then they deliver the report—well, that’s one thing. But the reality is statutorily, the dates are moved by a lot more than two months. So is there some other explanation that the Minister might be able to more succinctly give, perhaps in the language of a 12-year-old that we’re required to use for most communications around this place, to explain what it is or how it is that between 30 June 2021, the current requirement for reporting, and what the bill proposes, 31 December 2021, there’s only two months’ extension for the Auditor-General.

Hon GRANT ROBERTSON (Minister of Finance): I will try to repeat what I just said before. So the 30 June date that the member’s referring to refers to the end of the financial year—it refers to the end of the period which the accounts are being audited for. That’s not the audit date. The audit date comes after then, and what this does is extend that two months from there. So he’s misreading the section, which I think he might know.

KIERAN McANULTY (Chief Whip—Labour): I move, That the question be now put.

Hon GERRY BROWNLEE (National): I raise a point of order, Mr Chair. The new provisions allow us to be in an exchange with the Minister over a period of time. I was still in that exchange. You were taking it as if the Minister’s explanation to the Chamber ends my time speaking. I think that’s a bit unreasonable. I haven’t taken a full five minutes, even with the exchanges that we’ve had. So I’m asking for the call.

CHAIRPERSON (Adrian Rurawhe): I’ll just respond to the member. I mean, I’ve got to be fair as well, across the whole committee. When someone from another party stands and hasn’t yet spoken to it, I tend to give the call to them. I’ve not accepted the motion that the member moved, and so I’ll now give the call to the next person, as I was going to do.

Hon GERRY BROWNLEE (National): I raise a point of order, Mr Chair. I didn’t move a motion.

CHAIRPERSON (Adrian Rurawhe): No—no. Sorry, I meant the member Kieran McAnulty.

Hon GERRY BROWNLEE (National): Oh, then I’m calling.

CHAIRPERSON (Adrian Rurawhe): And then I was going to accept another call.

Hon GERRY BROWNLEE (National): That was a very satisfactory outcome. So are we to take it, then, that the date by which the auditor is required to report on the financial year ending 30 June 2021 is currently around about 30 August 2021? That being two months past the date. Well, then, what month is it that we’re extending it? Are we extending from October? Then why isn’t that clearly stated in the bill.

Hon Grant Robertson: Ha, ha!

Hon GERRY BROWNLEE: No—the Minister can’t sit there and laugh, as the bill does not state here what the drop dead date is that’s being extended. I think that’s an unreasonable sort of thing.

Hon Grant Robertson: Ha, ha!

Hon GERRY BROWNLEE: Well, the Minister continues to guffaw. That’s the trouble—they guffaw while everything burns around them. And while the general respect for the Chamber and for the position of an Officer of Parliament is just quietly tossed to one side, the duty of the Speaker to be involved in these matters also tossed to one side, and the Parliament just expected to ram through a bit of legislation that the Auditor-General—who has very clearly got problems in that office that aren’t being discussed here—has come along and convinced the Minister would be a good idea.

Hon GRANT ROBERTSON (Minister of Finance): We’ll do this as slowly as we can. So we have financial years, and in the case of replacement section 156(4) set out in clause 4 it’s 30 June, so entities where their financial year ends at 30 June. If, in the case of a Crown entity, normally they would be required to have the audit done by 31 October. That’s now being extended out. This is amending an Act, so we’re changing the Act, which would currently say 31 October to 31 December. It’s very conventional; it’s two months. Strangely enough, it’s exactly what was done last year when the National Party voted for it.

ANDREW BAYLY (National—Port Waikato): Thank you, Mr Chair. I just thought it’d be useful—I’ve got a tabled amendment trying to deal with this issue of prioritisation, and I think, as Minister Robertson is quite correct in pointing out, we did both receive a letter on 2 July. As he will know, the backdrop to that was trying to understand what would be the implication if there was a delay, and this letter from the Auditor-General did specify that. As he has pointed out, the letter signals that there are four areas where the audit would be completed within the current due time, particularly the financial statements of Government and all key components. The second one is Financial Markets Conduct Act reporting entities, and those are things such as Auckland Council, Auckland Transport, Watercare, and larger councils. Also, the fourth element is any outstanding audits of councils’ long-term plans for 2021-2031.

I think the issue, as the letter sets out, is there are three areas where the Auditor-General wasn’t able to give assurance that the audits would be completed within the due time frame. Namely, small to medium sized councils and smaller council-controlled organisations, some smaller district health boards, and smaller Crown entities and trusts. The purpose of the letter that was received from the Auditor-General was to try and get an understanding of why this was required and, also, what would be the prioritisation.

So in that light, having heard that the Minister was first informed of the possible problems with the Auditor-General on 16 June, and it wasn’t until middle of last week that we were informed of this, but a day later we got a bill that, from my reckoning, hasn’t changed since it was sent to us on Thursday last week, the issue—there has been no consideration in terms of looking at, if there was a delay of two months, how would we ensure that, from the Government’s perspective, key Government organisations were actually audited within the due specified date? This was a central question that you and I did discuss, Minister, and, unfortunately, the piece of legislation that was sent to us on the Thursday—and still remains the same—hasn’t changed, and what we understood that if there was to be a delay then there would be a prioritisation around it. I am therefore surprised that there’s been no attempt—and I’ve heard what the Minister said before, that we shouldn’t unnecessarily constrain the Auditor-General in terms of prioritisation. That is one argument. But actually, from a Government’s perspective, another argument is there are certain key, critical organisations that should be actually audited because they’re absolutely essential.

The tabled amendment I’ve put forward is seeking to address that specific issue that has been a common theme throughout. Namely, making sure that the following organisations, there’s a fair number here, that require—organisations like Waka Kotahi, Broadcasting Standards Authority, Human Rights Commission, Law Commission, Mental Health and Wellbeing Commission, New Zealand Productivity Commission, and major universities of New Zealand. A whole raft of organisations that are absolutely essential that are audited and completed. I’d like to hear from the Minister why further consideration wasn’t made from the date that the first draft of the legislation was sent to us until today. Why was there no attempt to even try and specify some of the ones that we really did want to make sure are audited, from Government’s perspective?

Hon GRANT ROBERTSON (Minister of Finance): As the member has acknowledged, I have already answered this question. And that is, to repeat for the member, because I don’t believe—and this is my belief, and I accept that he holds a different belief, but it’s my belief that Parliament dictating that level of detail to an Officer of Parliament exercising—

Hon Michael Woodhouse: But it does anyway. That’s what the law does.

Hon GRANT ROBERTSON: —their duty—no, the law, Mr Woodhouse, covers carte blanche, as the extension does. So you can’t have that argument both ways.

But I can give the member an additional reason, which is in fact covered on the very next line over the page of the letter that we both received on 2 July, which says, “As always, final priorities will depend to some extent on an entity’s readiness for audit.” But also, I’m sure the member can imagine the situation, were we to pass his Supplementary Order Paper (SOP) and then for some reason one of those entities on his SOP was not able to be completed in the time expected by the Auditor-General, we would have to come back to Parliament and make a law change to get rid of it.

So it doesn’t, to me, make any sense, and I don’t actually believe the member distrusts the Auditor-General. The Auditor-General has written to us, indicated the priority list—to me that is exactly the appropriate way for this to be dealt with. I do not believe it would be appropriate for us to direct at the level that the member’s SOP does.

ANDREW BAYLY (National—Port Waikato): Thank you, Minister, for that response. I find the response absolutely fascinating, actually, because, as he says—and this is in the letter from the Auditor-General—“Final priorities will depend to some extent on entity readiness for audit.” Now, what the Minister has now just suggested is that we’re now not looking at the issue of whether the Auditor-General has sufficient audit staff, which is, I understood, what the purpose of this bill was—in the light of people leaving the Audit Office; auditors leaving the Audit Office and lack of capacity in third-party auditing firms—to now one of suggesting that not only have we got a problem with that but we’ve now got a problem with Government entities who may not be in a position to be audit ready. And if that is what he’s suggesting, I’d just really ask him to clarify it, because that is a totally different aspect. And I think, if that’s now the proposition and a reason underpinning this, that is a fundamental change.

Hon GRANT ROBERTSON (Minister of Finance): I am merely quoting exactly what the Auditor-General wrote to both Mr Bayly and myself, but I can clarify for him that the issue that brings us here tonight is a shortage of auditors. I’d also point out to Mr Bayly that, actually, universities aren’t impacted by this particular change, as they have a 31 December balance date. So that would be another reason for not supporting his amendment.

Dr DUNCAN WEBB (Junior Whip—Labour): I move, That the question be now put.

Hon DAVID BENNETT (National): Thank you, Mr Chair. I’ve just got two questions for the Minister, and I’m sure that he will be able to respond quite quickly to them. The first is in regard to clause 4, new section 156(5), where it says that this subsection will be repealed at the close of 30 June 2023. So, effectively, the Government is giving itself two years at the maximum to, basically, ride out the issue of the lack of auditors that they’re finding. Now, I’d just like, in light of the Minister’s previous comments confirming that this is the reason why this bill is coming forward—you know, it takes at least three years for someone to go through university and get a commerce degree. We’ve got the potential that that two-year period could be revisited in the future. So I’d like to see what evidence the Minister has for coming to that conclusion that he thinks the problem will be solved in two years’ time, when we see in other parts of the economy, such as the dairy industry and the horticulture industry, that those concerns around labour supply haven’t been able to be solved in that short period of time. So I’d be interested to see what the Minister has got to say around how he’s come to that date, because I’m sure he wouldn’t want to put the House through urgency again in two years’ time to redo this bill, as we’ve done in some other legislation. So I’d be interested in the rationale that he’s used in that case.

My second question is in regard to the departmental disclosure statement. In 4.3., where we talk about retrospective effect, it says, “Does this bill affect the rights retrospectively of any individual?” And it said “No” in the departmental disclosure. The delay of a few months in an audit can affect the rights of individuals. I would like to take the case that we had of the Waikato District Health Board, for example, where we had an individual that was actually a councillor and a Waikato District Health Board member that had a very specific issue in regard to the health board, around her family member, and that became quite a protracted dispute, and timing was a lot of the issue in that case, around the ability for that individual family to seek justice for what they had seen had been done at the district health board level. For the Government to say that there is no effect on the rights of individuals—I don’t think that is true. It may not be an effect that we determine as significant, or it may not be an effect that we determine as being relevant, but to answer that question saying there is no effect is incorrect. There can, potentially, be circumstances like that one. If you had the facts in a slightly different format, that would be an effect on the individual’s rights, and it would be retrospective because it would affect this order coming up and the delay there.

So I would like the Minister to perhaps correct that answer and to give a rationale for why they have said no when, potentially, there are facts which indicate that there would be an effect on a person’s rights, and also to answer how they came to that date of June 2023 and what evidence he has to show that there will, in fact, be that supply of staff and auditors by that date.

Hon GRANT ROBERTSON (Minister of Finance): In answer to the member’s question around the date, firstly that is the proposal that the Auditor-General brought to us, and we have, by and large, in this process tried to stick to what an Officer of Parliament has asked for us to do. There is an expectation in particular because a large part of the way in which the audit season works is to bring people in from the private sector companies to assist with the audits. Obviously that will, we hope, be in a stronger position to see people come in from overseas to support both those private sector companies and, potentially, the Audit Office itself. But I also don’t think going beyond two years would be appropriate, actually, when we do have a statutory provision that we want to return to. So it’s both a practical response that we do believe we will be in a much stronger position to have more people come in from offshore during that period of time, but also because, actually, I think it’s not the practice to go beyond the two years. I don’t expect to be back here in two years’ time doing this, either.

In terms of the departmental disclosure statement, the member will be aware, because he was a former Minister, that I don’t have a role in producing that document per se. That is the judgment of those people who have written it, that there are not effects in that regard. I didn’t actually understand the member’s example and how that would relate to a financial audit specifically, but it is the judgment of the departmental officials that it does not have that effect.

Hon DAVID BENNETT (National): Minister Robertson used, in his answer to my first question around the date, the potential of overseas labour coming into the country. Well, there’s no way that that labour can come in under a closed-border system that we have at the moment. There’s no indication that that border system will be changing in the near future. To use the answer that we’re going to bring in foreign workers to be able to do this, just doesn’t make sense and doesn’t fit with the rationale of this Government, which has been to employ New Zealanders first, to train New Zealanders first, and to use that as the rationale for all other industries. Yet the rationale given here tonight is that we will get people in from overseas. So it just doesn’t make sense. It’s contrary to other Government policy in other sectors like horticulture and the dairy sector, where there’s no way that the Minister of Agriculture has ever said that you can bring people in from overseas to sort things out. And yet, that this Minister is able to rely on that excuse in this case is not consistent.

Secondly, they just won’t get in because the border policy is effectively that they’re shut. They would not be considered the skilled type of worker that would come in under any skilled exemption category at the moment, to the nature that the Minister is talking about. If they did, they’d be taking away from other skilled category workers because managed isolation and quarantine places are limited, as we’ve heard from the Government. So how does he reconcile that? That he’s going to use the answer, “We’re going to bring foreign workers in.”, when he won’t let foreign workers come in for our industrial base and other parts of the economy that are crying out for foreign workers at the moment?

DAMIEN SMITH (ACT): Thank you very much. We were just looking at the Auditor-General’s website today, and there’s some interesting points which don’t quite match with the bill, but I think it’s worth raising in the House. The statutory deadlines are an important component of our accountability system. So what he’s guaranteeing is with a two-month deadline extension, we expect that all 30 June 2021 audits will be completed by the end of this calendar year without compromising audit quality—and more importantly—or breaching statutory deadlines. Yeah? If he gets the support he will allocate all of the resources to ensure that the larger, more significant audits are completed first and that auditors will engage directly with affected public organisations once Parliament has considered the proposed legislative changes.

He also goes on to point out that this will be a need for one year not two years. So there seems to be an inherent plea for help in here in terms of the actual dynamic, which doesn’t quite match the bill but, actually, is the solution. So I’d like to ask the Minister, does this make sense to him, and would that satisfy the needs of public accountability and your department?

Hon GRANT ROBERTSON (Minister of Finance): With reference to the first part of what the member raised, that’s precisely what we’ve been discussing. So all of that up until the point about the two years or one year, I think is entirely consistent with what we’ve been discussing and what’s in the bill. So it is an arrangement by which we are trying to ensure that the robustness of the audit process is upheld. There’s also the issue for staff because, clearly, with a reduced number of staff—and we’ve covered off in the earlier stages of the debate the fact that this is not only about the ability to bring staff in, it’s also about a loss of staff over a recent period of time. So staff wellbeing is a factor in addition to the robustness of the audit process.

Yes, I do believe—that’s what I’ve been assured, is that audits will be able to be completed by the extended time frame that takes us out to the end of the year.

With reference to the one year, two year matter, I haven’t looked at the website, so I can’t attest to what the member’s saying. What I can say is that the Auditor-General was consistent from the 16 of June onwards when he contacted me that it was a two-year time frame. I’m aware from the correspondence that’s gone backwards and forwards with myself, Mr Bayly, and the Auditor-General that it would be his intention not to use the second year if he didn’t have to. But rather than do this on a year-by-year process we give the option for that second year. But for me, it’s consistent to what is in the bill, and consistent to all of the communications I’ve had with the Auditor-General.

SIMEON BROWN (National—Pakuranga): Thank you, Mr Chair, for the opportunity to take a call on Part 1 of the Annual Reporting and Audit Time Frames Extensions Legislation Bill. I’d like to ask Minister Robertson some questions around the sequencing, because I do believe there is a significant concern around the sequencing which is being proposed. Well, effectively, no sequencing is being proposed, although the Auditor-General has proposed a certain set of sequences that he believes that the Audit Office should be undertaking through this process. The question I’d like to ask the Minister in the chair is: where in the auditor’s process will the audit of the Human Rights Commission be taking place? It may be a small entity, but the question is: will it be being undertaken sooner rather than later in the process? I see he’s asking officials for some advice and I’d appreciate a firm date commitment because this is of important concern to all New Zealanders.

I’ve put a tabled amendment on the Table. I’m not sure if it’s there or not yet, due to the fact that there are substantial numbers of tabled amendments coming forward with many different arguments from this side of the House. I have one which says that the Human Rights Commission should be removed from this process of having their audit put forward by two months. They should be required to have theirs done by 31 October—and the reason being is because it has come to light for the New Zealand public this week that the Chief Human Rights Commissioner, Paul Hunt, gave a $200 donation to the Human Rights Commission.

Hon David Bennett: No!

SIMEON BROWN: That’s right, Mr Bennett. A $200 donation on 1 May.

Hon Member: Did he get a receipt?

SIMEON BROWN: Well, I don’t know. Did he get a receipt? That’s a good question. Was it paid in cash? How was it paid? Is it the only money that he’s paid to the Mongrel Mob? But I just think it’s outrageous that New Zealanders have to put up with a Government and Government agencies which are giving money to organised crime. We have a substantial issue with organised crime here in New Zealand—

CHAIRPERSON (Adrian Rurawhe): If the member wants to carry on like that with matters that—if he can’t link it to the bill. This is Part 1 and he hasn’t done it yet. I’m just warning the member.

SIMEON BROWN: The tabled amendment which I am tabling and if it’s not on the Table yet—is to say that, actually, the Human Rights Commission should not be given an extension to their audit to 31 December in 2021. And, in fact, it should be done by 31 October this year because there are substantial issues and concerns around the finances in that entity over the last 12 months. And so, Mr Chair, that is incredibly relevant to what is happening, because this bill is saying, “Actually, what we’re going to say is the Human Rights Commission—we’re going to let them have their audit extended out for an additional two months, despite the fact that there are significant concerns over their expenditure at the Human Rights Commission and, particularly, how Paul Hunt used $200 as a donation to the Mongrel Mob, an organised criminal organisation, on 1 May at a hui earlier this year.”

So this is an incredibly important issue. New Zealanders will be wanting to see that audit report sooner rather than later, and they will not find that this piece of legislation is something which they will agree with when it comes to the Human Rights Commission. They’ll be saying, “We want that as soon as possible. And in fact, we want that according to the legislated time frames, which is 31 October this year, so that we have some oversight as to that $200 donation given to organised crime.” No money from the taxpayers should be given to organised crime at any point, let alone $200 donated to the Mongrel Mob on 1 May. And so that audit report is critically important and that is why I am moving a tabled amendment in this debate so that we have that audit report put to New Zealanders so we have some transparency over what has happened so that we have some accountability over that $200 donation.

New Zealanders want that. New Zealanders will be asking for that. And I ask the Minister: will he be supporting my tabled amendment? Will he be supporting and requiring some transparency on this issue as well? Will he be actually standing up for taxpayers? Will he be standing up on behalf of taxpayers who are concerned that under this Government, their hard-earned taxpayers’ dollars have been going to the Mongrel Mob? Will he be standing up for taxpayers concerned that their hard-earned taxpayers’ money is going to organised criminal groups in New Zealand? I wonder whether he will be able to actually say that. Will he be saying that or will he be saying, “Nothing to see here. Not too worried. We’ll let this one pass. We’ll let it just go.”? Well, I’m putting this tabled amendment before the committee and I’m asking all parties in this Parliament, all members, to support this tabled amendment today. Thank you very much.

Hon GRANT ROBERTSON (Minister of Finance): For the third or possibly fourth time, I will repeat the point that I have made—that it is, in my opinion, the Auditor-General’s judgment that counts when it comes to the order of the audits that will take place. He has written his explanation of that to myself and to Mr Bayly. I believe—I have trust in him and I have already stated I do not believe it would be appropriate for this House to issue very specific guidance about that. I think the member needs to reflect on how that would work if the Government decided to pick and choose particular audits to do in a particular way. I imagine that member and others might have some concerns with that. So this is simply a two-month extension. The Human Rights Commission will be audited, if this bill passes, within the period that is prescribed. That will be appropriate. It will mean we will have a robust audit. I’m sure that’s what taxpayers want—that we have robust audits that are able to withstand any analysis or criticism. So, in short for the member, no, I will not be supporting it.

Dr EMILY HENDERSON (Labour—Whangārei): I move, That the question be now put.

Hon DAVID BENNETT (National): A point of order. I’m just raising a point of order. I asked the Minister a very simple question two questions ago. He has been very good in responding to all questions tonight, but he refused to respond to my simple question about the inconsistency of foreign labour in—

CHAIRPERSON (Adrian Rurawhe): So what’s your point of order?

Hon DAVID BENNETT: Well, why didn’t the Minister answer that question? Is he afraid to—

CHAIRPERSON (Adrian Rurawhe): It’s not a point of order.

STUART SMITH (National—Kaikōura): I’d like to thank Minister Robertson for his response just before, and he made a very strong point about the Parliament not deciding the order in which audits should be done and that we should trust the Auditor-General to make those judgments. So the Minister, in short, is asking us to trust the Auditor-General to make a decision about which entities should have priority for an audit. This is the same Auditor-General that has got us in a position where a bill has to come to Parliament for us to get him out of the trouble he got himself into. He hasn’t either, but perhaps it’s because the Minister—perhaps not the Minister in the chair, but the one who’s responsible for that Government department, hasn’t adequately provided the funding for the Auditor-General to remunerate the staff sufficiently to keep them.

But that isn’t our problem today, our problem is trying to clean up the mess that we have. So we’re being asked to trust a person to make the right decision about what entities should be audited when they have got us in this position where we are tonight: in urgency, trying to clean up the mess. I think that that’s a very big stretch for us.

I’d like to, while I’m on my feet, speak to a tabled amendment in my name around the Climate Change Commission. I think the Climate Change Commission has to be exempted from this perverse piece of legislation being rushed through the House under urgency. The simple reason is the Climate Change Commission, the decisions that they have made, the report—albeit that it is going to be before the court for a judicial review, which we could debate tonight if we wanted to—that entity, any decision that they make is going to impact everybody’s lives in New Zealand. And yet that entity won’t be at the top of the list. I think they have to be at the top of the list. I’ll give you a good reason: one of the commissioners is a research fellow of a company called Motu. Motu is one of the biggest contractors to the Climate Change Commission and I think that in itself may not be sinister and there might be nothing wrong with it, but how can we have confidence in an entity that is giving advice to the Government that will have an impact on every New Zealander’s life?

If the numbers that were released earlier in the week are anywhere near correct, we could be talking about not $50 a tonne, as they said, to get to net zero, but over $1,100 a tonne. That will impact on every household in New Zealand. We need to have confidence that the advice that has gone into that report and gone to the Government is actually something that we can all have confidence in. If there’s anything in New Zealand that we should have confidence in, it is the Climate Change Commission. And it’s not just “Trust us, we know what we’re doing.” Actually, we need to check. That’s what the Auditor-General is supposed to do. That’s what the Audit Office is meant to do. And, actually, what they should have probably been checking is did they have enough staff to do the job. But they clearly didn’t do that early enough. If they had, we wouldn’t be here tonight.

I think that a fundamental of confidence is actually being confident in yourself as an entity to be audited, have everything thrown open, show that there’s nothing to hide. That flows through to every household in New Zealand having confidence that that entity is actually a robust entity with no conflicts. And what conflicts they do have, if there are any, are not conflicts that would impact in any way on the advice that they gave, because it impacts on us all.

As I’m sure you will be aware, Madam Chair, that the advice is far reaching, it is absolutely far reaching. They’ve gone further, in fact, in the agriculture space than was required under the Act. So there has to be good reasons behind that. What happens if the person who’s the commissioner has perversely moved that advice in a direction that they have some sort of conflict with, which we don’t know about? And so it’s right and proper that this entity is at the top of the list to have their entity audited.

PENNY SIMMONDS (National—Invercargill): Madam Chair, what a wonderful choice. Thank you so much for recognising the need for gender diversity in this debate.

My question for Minister Robertson relates to the amendment that was put forward by Mr Andrew Bayly. The Minister quite rightly pointed out that the universities listed there, in fact, don’t have their end of financial year date in June, but in fact on 31 December. I can see how this may be going to cause an issue for the Minister, so I am concerned when I know that the Southern Institute of Technology (SIT) in our audits—the pre-audit of the audit started in December. And so if this amendment takes place, then the audits that are being delayed by two months are actually going to flow across into the pre-audits of 31 December. So my concern really is that in six months’ time, he’ll be bringing this to us again and wanting things pushed out again.

Of course, it’s a real concern not only for Auckland University of Technology, Lincoln University, Massey University, University of Auckland, University of Canterbury, University of Otago, University of Waikato, Victoria University of Wellington, but it’s also of absolute concern for this dreadful shambles of Te Pūkenga that Minister Hipkins has created, pulling all the institutes of technology and polytechnics together and all of those subsidiary companies within there and the huge amounts of money. Remember, this is going to be one of the largest educational institutions in the world, not just in New Zealand but in the world. So we need to be very sure that in a timely manner we will be seeing that, for example, millions of dollars don’t get taken out of SIT and used across some of the other polytechnics. So it’s incredibly important that those time lines don’t slip for those tertiary institutions.

They have to report not only their financial report, obviously, but also the EPIs, their educational performance indicators. Now, it’s really important that those come out early enough, because we have wash-ups of their Student Achievement Component funding that occur in April, and you have to have the EPIs available. So any delay in those annual reports might well delay the funding through into the following year. So I’m really interested to know whether the Minister sees that, perhaps, that amendment tabled by Andrew Bayly actually, probably, needs to be amended for any institutions like the universities and Te Pūkenga and the polytechnics who will have their end of financial year 31 December and being impacted on because of the delay. Whether we, in fact, need to put an amendment in that accounts for those that have their financial year ending 31 December to ensure that we don’t see another delay of two months for those entities, given how important it is for their future funding or for the following years’ funding of the universities and of all the Te Pūkenga subsidiaries. That includes NorthTec, Unitec, Manukau Institute of Technology, Toi Ohomai, Eastern Institute of Technology, University College of Learning, Western Institute of Technology at Taranaki, WelTec, Whitireia, Nelson Marlborough Institute of Technology, Ara Institute of Canterbury, Otago Polytechnic, Open Polytechnic, and, of course—very importantly, with their millions of dollars sitting in reserves—the Southern Institute of Technology.

So my question to the Minister is: do we really need to be putting in a further amendment that ensures that those entities, the universities, Te Pūkenga, and the subsidiary companies be excluded, because of the importance of the public knowing how that shambles of Te Pūkenga is getting on, but also because of the possible impact of funding for those institutions for the 2022 year, given the length of time it would push out the EPI reporting?

Hon Member: You wouldn’t have run SIT like this, Penny.

PENNY SIMMONDS: Wouldn’t have run SIT like this, and I know the tertiary entities will be ready and they will have all their—[Time expired]

Hon MICHAEL WOODHOUSE (National): I have two questions for Minister Robertson, but before I ask them, I just want to take the opportunity to commend to the committee the tabled amendment in my name. I think Simeon Brown in his contribution made the very good point that, actually, size isn’t always the best proxy for risk. The Human Rights Commission—

Chris Penk: Careful!

Hon MICHAEL WOODHOUSE: —I think is an organisation—we know that, don’t we Mr Brown? I think good things—

Greg O’Connor: A good big man will beat a good little man any day!

Hon MICHAEL WOODHOUSE: —come in small parcels. Mr O’Connor knows that the nippy halfback is just as important as the big front-rower.

Now, I want to come to this point about—so, firstly, I’ll speak to my tabled amendment. My amendment is to exclude from the extension Waka Kotahi New Zealand Transport Agency. They are big and complex and risky and, actually, consistent with the Auditor-General’s expectations for what he thinks will happen over the next few months.

Now, the Minister, again, as I say, is trying to have a dollar each way. He’s talking about how we should not be legislating over the exercise of judgment of the Office of the Controller and Auditor-General, but the one thing the Auditor-General cannot exercise judgment over is the statutory time frames for reporting. So we’re not doing any such thing in suggesting amendments to the bill that give effect to the very policy intent that the Minister wants to achieve. There is no harm in agreeing to the amendments that I and my colleagues have tabled. It is simply a statutory reflection of what the Controller and Auditor-General actually believes will be achieved.

In a normal year, he cannot exercise his judgment to say, “Well, the statutory deadline is 31 October, but I’m a bit busy. We’re going to extend it out.” He has no such discretion. I should note that while the Minister keeps quoting actions of the Financial Markets Authority (FMA) in respect of extension of time for reporting to them, they didn’t do a change to the law. All the FMA said was they would suspend action and they would not prosecute or pursue in respect of those failed deadlines. Now, the Controller and Auditor-General doesn’t have that discretion either, so the Government argues that the bill is necessary. That’s their prerogative, but at least the amendments that I and my colleagues are suggesting give better effect to the reporting deadlines.

Now, the two questions I have—and I’m still reeling somewhat at the revelation, and I must confess I missed it in the letter from Mr Ryan to him and Mr Bayly, and that comment that, as always, final priorities will depend to some extent on entity readiness for audit. So my question in respect of that is: was that the first time that the Minister had been made aware that entities in his control and other ministerial colleagues’ control may not be ready for audit, and is that why we are passing this? So have they received advice that individual entities, whether they be DHBs or State-owned enterprises, won’t be ready for audit? Has the Auditor-General’s office—and I see that their fine staff are represented on the bench tonight and may be able to answer this. Have Crown entities or local councils come to the Office of the Controller and Auditor-General and said, “We can’t. We’re going to struggle with our entity readiness for audit.”? What is the problem that we’re trying to solve here? Because that hasn’t been pointed out prior to this.

Now, my last question is in relation to the responsibilities that this House has, and I am a very firm believer in the separation of the executive from the legislature. One of the things that this House has to do through its select committees is financial review. Now, last financial review period, we were somewhat disrupted as a House by two things. One was COVID and the extension that was necessary last year, and the other was the 2020 general election, which squeezed up considerably the time that committees had, many of them brand new committees—sorry, brand new members of the committees. The Finance and Expenditure Committee is a very good example of that—a good committee, lots of new members. So we were squeezing up the financial review, and some would argue or I would argue that we were rushing it somewhat. [Time expired]

Dr EMILY HENDERSON (Labour—Whangārei): I move, That the question be now put.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. I won’t be long. I just wanted to make the point that the select committees are the engine room of our democracy and of this place, and they are separate from the executive, so my question is this: has the Minister taken advice or sought advice into the degree to which the delay in the reporting period for Crown entities will once again affect this place’s ability to scrutinise the annual reports of these through the financial review process? Has he considered going to the Standing Orders Committee and getting a sessional order similarly extending the time period for that scrutiny and the period within which the select committees have to report back to this House on their findings? Because it seems to me that this is another example of how the Government is actually acting in its own interests but Parliament is going to be squeezed in its ability to fulfil its obligations. And I think this is a really fundamental point, because, ultimately, it’s the legislature that scrutinises the executive, it’s the legislature and its select committees that holds the public sector organisations to account, and importantly through its Crown entity reporting. So those are my two questions: what feedback has he or the Office of the Auditor-General had on the entity readiness for audit, and what consideration has he given to representing to the Standing Orders Committee an extension of time for us to do our important work?

WILLOW-JEAN PRIME (Assistant Whip—Labour): I move, That the question be now put.

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

Ayes 85

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

Noes 33

New Zealand National 33.

Motion agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that Andrew Bayly’s tabled amendment to clause 4 to delete section 156(3)(b) be agreed to.

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

Amendment not agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Hon Michael Woodhouse’s tabled amendment to clause 4 to exempt listed district health boards be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that Andrew Bayly’s tabled amendment to clause 4 to exempt listed Crown entities be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that Joseph Mooney’s tabled amendment to clause 4 to exempt the Commerce Commission be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that Simon Watts’ tabled amendment to clause 4 to exempt the Accident Compensation Corporation be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Hon Michael Woodhouse’s tabled amendment to clause 4 to exempt the New Zealand Transport Agency be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that Simeon Brown’s tabled amendment to clause 4 to exempt the Human Rights Commission 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.

CHAIRPERSON (Hon Jacqui Dean): The question is that Stuart Smith’s tabled amendment to clause 4 to exempt the Climate Change Commission 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.

CHAIRPERSON (Hon Jacqui Dean): The question is that Nicola Willis’s tabled amendment to clause 4 to exempt Kāinga Ora 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 Part 1 be agreed.

Ayes 87

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

Noes 33

New Zealand National 33.

Part 1 agreed to.

Part 2 Amendments to the Local Government Act 2002

CHAIRPERSON (Hon Jacqui Dean): Members, we now come to Part 2, which is the debate on clauses 5 to 7, the Amendments to the Local Government 2002. The question is that Part 2 stand part.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I thought I’d talk to my tabled amendment, just as a bit of a change. My tabled amendment deals with the issue of the two-year clause, and specifically deals with clause 6 and, actually, clause 7. So what it does is it deletes new clause 5(b), which states: “in relation to the financial year ending with 30 June 2022, the report referred to in that subsection must be delivered in accordance with subsection (1)(b), and made available in accordance with subsection (1)(c), no later than the close of 30 November 2022.” Similarly, clause 7 also deals with a similar time frame—albeit it notes that it will have to be the 31 December date, as opposed to the 30 November date.

The purpose of this tabled amendment deals with the second year. Obviously, Mr Robertson, in predetermining the legislation, which he delivered to us on 1 July, always anticipated a two-year stand-down period, or delay, for all entities—and, of course, we’ve been debating some of those entities before. But in terms of local government, it also specifies that local government entities—and, of course, it doesn’t specify or limit who could be delayed; it could be any local government entity. The purpose is saying, “Look, if you’re going to give a delay, why don’t we do it on a basis that we allow, under legislation, for one year, and reconsider it thereafter?”

I suppose that gives rise to a wider issue: if you did that, that would force the Government to become a little bit more creative than it has been, in the sense of, actually, in terms of the Auditor-General fulfilling its role, what could be done to assist the Auditor-General to do that in the second year of this delay? And that might involve making sure that we’ve got access to the so-called 200 missing auditors who could come through managed isolation and quarantine, could involve a discrete and rapid training programme to get auditors into the area of becoming auditors, if they are qualified accountants or near qualified.

And then, it also gives rise to the Government maybe having a discussion with the Auditor-General around remuneration, because what I don’t think anyone in this House wants to do is to be in a situation where we are coming back in two years’ time because COVID is still carrying on and the Government still has a policy of locking down the borders—unnecessarily so—and we are having to do another extension. So this is why the tabled amendment suggests that we should limit the extension to only one year, and, if need be, this piece of legislation passed under urgency can take place pretty quickly, as the Government is inclined to do by passing it through under urgency.

So the first thing is that I assume the Minister was the person who directed the Parliamentary Counsel Office to write this draft, which was presented to us on 1 July.

Chris Bishop: Cabinet.

ANDREW BAYLY (National—Port Waikato): So, if that was the instructions that were given, what advice did he have or take in terms of limiting it to one year or extending it to two years? Secondly, the other aspect that I’m quite keen to hear from the Minister on is around whether he contemplated an alternative process, particularly in the second year, and maybe the third year, if that needs be, of maybe thinking about an Order in Council. So I’d be quite keen to hear the Minister’s views around those aspects.

Hon GRANT ROBERTSON (Minister of Finance): Thank you very much, Madam Chair. I’m covering a little bit of similar ground from Part 1 of this in terms of how we got to the two-year number. I covered off that, firstly, that was the request of the Auditor-General—as the member Andrew Bayly knows, both he and I were asking questions of the Auditor-General around why that was required, and many of the issues he’s raised, actually, about what else would you do in the meantime. So the first answer is the same one I gave to Part 1, which is that I would rather do it this way than come back again and have the House’s time taken up.

Again, I have a great deal of trust and faith in the Auditor-General, who has assured both myself and the member who’s asked these questions that this would only be used in the event that it needs to be used. But some of the issues that exist are not going to be resolved inside one year. That, in particular, is the global shortage of auditors. Now, we can do more, we hope, over the course of the next two years to see people come in from offshore for the large accounting firms who assist the Auditor-General during audit season to be able to bring people in. So we hope that we won’t need to go beyond the two years, but we can’t guarantee all of that global shortage will be resolved inside a year.

Equally, the Auditor-General wants to take some time. Again, I think he said this in one of those letters, that he wants to take some time to look at what innovative processes he can put in place to make sure that we can move more swiftly through the audit process as well. So we want to work on that. There are technological solutions that might emerge over the next couple of years. So it’s my view that two years is the appropriate length of time. It covers off the fact that it will take some time for the world to get back to a sense of pre-COVID normality. It may take a considerable amount of time, but we believe two years is the appropriate length there. It also allows the opportunity for the Auditor-General—and, to take the member’s point, the Officers of Parliament Committee, to work with the Auditor-General on a range of options. That might mean that this is not needed for the second year and certainly not yet needed in the period beyond there.

In answer to his other part of the question, his colleague Mr Bishop has already answered the question for him: it is Cabinet that issues those instructions. This bill went through Cabinet and the Cabinet legislation process.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Chair. It’s not a great surprise that we’ve ended up in this position because, if we look at many of the stories that we’ve been dealing with for the past little while, and even in the last 24 hours, three headlines: “More than 80,000 job listings as employers battle for staff”, next quote, “Stretched farmers frustrated at exemption process”, next quote, “Business confidence rebounds but labour shortages worst on record”. It is no surprise that we’ve ended up here.

In speaking to Part 2 of this bill tonight, I’m just really wanting to make a point that this report is an example of the fine work of the Office of the Controller and Auditor-General, and this beef that we’re having tonight is with the Government, not the Auditor-General. This is the productivity of the Auditor-General, this is the productivity of an apple orchard [Holds up two apples]. So I would like to propose a tabled amendment—I’ve got a tabled amendment here, and my amendment suggests that we have a new clause 8. So “After clause 7, insert 8 New section 98A, after section 98, insert: 98A Extend the apple picking season—(1) All local Government bodies, where able, for the financial year ending 30 June 2021 should ask that apples stay ripe for the picking of an extra three months. (2) This section is repealed at the close of 31 January 2023”. So the explanatory note for the Minister with my tabled amendment is that “While the Government is able to extend”—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! Thank you. That tabled amendment is out of scope with the bill and so therefore ruled out of order. The member has a few more minutes to speak if she wishes to make a speech which is relevant to the bill.

BARBARA KURIGER: My only addition—and I won’t speak to the amendment any further, thank you, Madam Chair—is that there needs to be some consistency in the decisions that this Government choses to make over the productivity of one industry as opposed to another. Thank you.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I just want to return to what the Minister said before, and thank you for addressing the matter. In my comments before, I wasn’t asking the Minister to solve the global audit problem. The issue is that we have an issue in New Zealand. We have 27 staff that have left Audit New Zealand and, under his own reckoning and public announcement before, an estimated 200 shortfall of auditors in New Zealand. New Zealand is the issue, not the global issue.

So one of the things in that whole issue about the two-year time frame is whether that’s going to be sufficient. I know the Auditor-General has asked for two years, but I asked specifically whether he took advice on another alternative, which is an Order in Council option, because what seems apparent to me is that the bill was drafted—and I take the point, through the Cabinet, but I’m sure the Minister had a very strong view on it—and that’s come through and been presented to us last week. There has been a consideration and discussion subsequent to that that led to this 2 July letter, and yet there has been no change to the bill, and so that’s quite a significant thing.

I think, in terms of the capacity constraints, which is the heart of why we are talking about whether we have a one- or two-year delay, the other question, and I’m quite specific about it, is: to what extent has the Minister—and I know it’s not the Minister’s direct responsibility, but we have a parliamentary responsibility to make sure that we do get to a situation as soon as possible where all the audits of every organisation of Government are actually audited on the due date.

The big issue I’ve had is, even with the councils, I note in the 2 July letter that smaller councils are likely to be dropped off the list. The issue is: maybe some of those, if you look at it from a risk perspective, in fact might be ones that we particularly want to see are subject to an audit, because, of all the audits that the Auditor-General undertakes, they’re the ones that possibly may lead to some significant issues that should be highlighted as soon as possible and not delayed. So the question comes back to that prioritisation, which I think is a pretty important issue.

Hon GRANT ROBERTSON (Minister of Finance): On the last point, on the prioritisation, we’ve been over it a number of times, so I won’t rehearse it again. But the member, in fairness, did raise the question about the Order in Council in his last contribution, and I didn’t respond to it, and I apologise for that. Indeed, as the member and I discussed, it could have been possible, simply, to take the approach of an Order in Council when there is a need to do something like extend time frames.

My view was that we needed to take some time to consider whether that was an appropriate long-term instrument for dealing with situations like this. At the moment, we have to use the Act to make the change, but if we were to go down that path, I just wanted to take a little bit of time to work out whether that is the best way to do this. Because we can see from tonight that there are a number of strongly held views about meeting statutory time lines. I know that the Auditor-General—and he has written it to both myself and Mr Bayly—would rather not be in this position, and, generally speaking, is not, and does meet the statutory time lines, but exceptional circumstances create this situation.

So, yes, we did consider, to answer the member’s question, the Order in Council process, and it could well be what we do in the future, but I think we need to consider that. I’d invite, potentially, the Officers of Parliament Committee to have a look at that as well. But we will consider it in the future, but this is the process we have in front of us today.

To go back to the member’s first point, the global issue is what impacts here, because the way in which this process is undertaken, in the intense period where these audits are needed, does involve, and has always involved, people coming from offshore, either to the Audit Office itself or to the larger accounting firms who take on the work that the Audit Office is not able to take on. So it is about a global shortage. That global shortage may not resolve itself in full inside a year. We hope that we will see more people looking to come to New Zealand and Australia and elsewhere as we move through and we get to a point where we don’t have the amount of border restrictions that we do. So, at the moment, it is the global issue that sits behind this. We will work with the Auditor-General, as indeed the Officers of Parliament Committee will as well.

SIMON WATTS (National—North Shore): Madam Chair, gosh, thank you very much for granting the call. It’s great to be the last call, I hope, because I do want to ask—and it potentially may take some time; I’m interested to hear the answers in the morning. Referring to Part 2, my specific question is: Minister Robertson’s articulated on 16 June he was notified around the degree of vacancy. So I’d like to ask if the vacancies for Audit New Zealand could be tabled—the vacancies that are currently there today and for every month in the last 12 months—because I want to substantiate the point that this is absolutely a new phenomenon that just appeared on 16 June, which is what the Minister has told this House. So I would like those numbers to be tabled—there’s only 12 numbers we’re looking for, by month. I want to just ensure that what is being said correlates with those numbers, because when I looked at the website for Audit New Zealand this evening for vacancies, do you know how many I found? Well, I’ll tell you: I found four.

Hon Member: Four?

SIMON WATTS: Four—four vacancies. Maybe I missed a few, but that’s how many are on the website this evening. And if I quote the departmental disclosure statement, Part One, “to mitigate the impacts of a severe”—and, as the Minister has said, global—“shortage”—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! The member will address Part 2 of the bill.

SIMON WATTS: Sorry. Yes.

Hon Member: It’s Part One of the statement, though.

SIMON WATTS: Sorry, the departmental disclosure statement Part One—my apologies for not being clear. Within the departmental disclosure statement, it talks about severe shortages, and hence what I’m trying to link back to this is around the number of vacancies.

Can we also get some context around staff turnover numbers, which are also being used as a reason why we are having to put in place this legislation under urgency? In particular, are those turnover levels today, versus, say, 12 months ago, significantly increased or different from normal? I think that would be fair to substantiate those points.

The other aspect, as well, is I want to understand—and just so you know, I’ve got a couple of other new areas of investigation that I probably have to talk about tomorrow—was there any impact of the public sector pay freeze on this entity? Now, of course, they’re a separate entity—separate. But I don’t know. They’re a separate entity, and I get that, but I want to understand, are we dealing with maybe something that this Government has caused in regards to the pay sector freezes? Because my understanding, having talked to a number of senior people within the Auckland market in recruitment and other areas within the firms that we’re talking about, is that the private sector has, in effect, increased graduate audit role salaries by about 14 percent—seven grand—and that’s because of factors relating to a number of things that we’ll probably talk about a little bit later on. But I’ll leave it there for the moment.

CHAIRPERSON (Hon Jacqui Dean): Members, the time has come for me to leave the Chair. The House is suspended until 9 a.m. tomorrow morning. Thank you.

Sitting suspended from 9.58 p.m. to 9 a.m. (Thursday)

WEDNESDAY, 7 JULY 2021

(continued on Thursday, 8 July 2021)

Bills

Annual Reporting and Audit Time Frames Extensions Legislation Bill

In Committee

Debate resumed.

Part 2 Amendments to the Local Government Act 2002 (continued)

CHAIRPERSON (Hon Jenny Salesa): Members, when we suspended last night, we were debating Part 2, clauses 5 to 7, the amendments to the Local Government Act 2002. The question is that Part 2 stand part.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Speaker. Lovely to see us all back here this morning. I was complimenting Mr Robertson before on his dress attire. At least he didn’t have the issue of having to worry about a tie. But it’s nice to see you again.

The issue we’ve got is obviously about the local government component of this bill. I have a tabled amendment, as you’re probably aware, about the timing and the two-month period that is being set aside. In fact, what my tabled amendment deals with is the issue of the second part of the bill, in terms of the requirements to delay the audit of local authorities. Given that we’ve had a break in the proceedings from last night, it might be worthwhile just repeating this. This is to do with, in clause 6, new part 5(b): “in relation to the financial year ending with 30 June 2022, the report referred to in that subsection must be delivered in accordance with subsection (1)(b), and made available in accordance with [that] subsection … no later than the close of 30 November 2022.”, and section 7 actually relates to 30 December rather than the 30 November date.

So, basically, in both respects for both councils, there’s an issue of the second year of delay. And the question we were talking about last night is, why was the need to have a further delay, particularly for local authorities, for the second year? My question I’d like to put to the Minister—and I hope this is going to be interactive—is, what advice did he get from local government about both seeking a delay on the audit for local authorities both for this coming financial year and, obviously, the subsequent year, which is what I’ve been referring to in my tabled amendment? Did he talk to anyone from local government, and, if so, who, and what was their response? Because that’d be an interesting—or whether, in fact, he decided in his own right.

Hon GRANT ROBERTSON (Minister of Finance): Ata mārie, good morning. In terms of that, I did not specifically, and I’m sure the member will understand that I’m not the Minister of Local Government. I would need to check as to who the Minister of Local Government spoke with. I do know that in the course of putting the Cabinet paper together, that then led to this legislation. There was consultation through the Department of Internal Affairs, as you would normally expect.

What I do know for certain is that the local government sector want there to be robust and accurate audits. They want to know that what they paid for—the fees they pay—will get them the service that they need. And, obviously, that brings us back to the premise of the legislation, which is that the Auditor-General has asked us, as a Government and now as a Parliament, to grant this extra couple of months in order to make sure that robust audits can be completed. They will still be completed in a timely manner.

Just to pick up on the member’s point in the middle of his contribution, I think it’s worthwhile, in this section, just to note that there are different deadlines for council-controlled organisations and local authorities, and that’s represented by the two different clauses in Part 2. The normal deadline for council-controlled organisations is 30 September; and for local authorities, 31 October. So each of those goes out by two months. As I say, from my perspective, this will ensure a robust audit that means that local government and council-controlled organisations will be able to stand by their audited accounts, and I’m sure that’s what matters the most.

Hon GERRY BROWNLEE (National): I want to speak to a number of points that are covered in amendments that have been introduced by the Opposition, recognising that, while the Minister in the chair continues to say this is a simple, technical change to the bill, a simple moving of dates in order that things might be done more properly, that doesn’t of itself in any way diminish the importance of a bill that changes the way an Officer of Parliament is required to operate. While I heard a number of people yesterday from the Government’s side saying, “Oh, but it’s COVID-19”, COVID-19 has become code for “Don’t look at anything we’re doing; just look at COVID-19 and feel fear.” I think it’s, in this case, a little unreasonable given that we have had a full 12 months of activity, where there has been no nationwide lockdown, and there has been an economy growing, as the Minister in the chair likes to so often tell us, at a huge rate. That doesn’t tend to support the view that there is somehow a pressure being brought on the Auditor’s Office that was not foreseen. Clearly, the Auditor looks at stats, the Auditor looks at trends, and the Auditor should have known that his staffing situation might have led to a situation like this. I can’t, in all honesty, believe that there was no notification from the Officer of Parliament to the Officers of Parliament Committee or to the Speaker, who is, effectively, the Audit Office’s Minister. So there are a number of things here that are a little concerning in that regard.

If all of that were to be set aside, the bill itself is a blanket bill: the progress that’s made with any particular audit is at the choice of the Office of the Auditor-General. I don’t think that’s particularly acceptable. If the bill had come along and there’d been some negotiation and some better understanding across the House of why the Audit Office has failed in its duties to appoint, where they’ve had to come to Parliament to ask for this particular provision, it may well have been that there could have been a negotiation about which entities that would normally have to be audited in the two financial years inside the prescribed dates of the existing legislation could be extended on a case-by-case basis. And that hasn’t happened. Instead, we’ve got a situation where the Auditor himself, and his office, will choose who gets put to the back of the queue, and I know that there was, at one point, a list floating round that looked like a priority, but what if there is some sort of a blip in that sort of arrangement? It would have been far better to ensure that the bigger organisations are definitely reported inside the current statutory reporting period, and perhaps some of the smaller ones or those that are not of such significant financial impact to our economy might have been put into this category with the extra two months.

This part sees an amendment in my name that would amend section 5(a) to add the words “however subsection (5) does not apply to the Christchurch City Council and its council-controlled organisations”. What does that mean? It means that, inside the statutory period, the Christchurch City Council should be audited. And the question will come from some, “Well, why?” Well, it goes back to that point about priorities. This is a council that has inflicted runaway levels of rates on its citizens and has a large portfolio of entities that are not easily seen as adding value to the city. Now, I can see some people over there sort of smiling, because they don’t mind that sort of thing. They think it’s OK to go to electorates with substantially fixed-income families and say, “Here’s another 8 or 9 percent on your rates.” That’s if you include the regional council stuff as well. Here’s some extra charges going on entities’ costs. That’s unreasonable, and it should be reported inside the statutory period.

Hon GRANT ROBERTSON (Minister of Finance): Thank you, Madam Chair. I’ll take the opportunity to respond to a number of the points that Mr Brownlee has raised in his most recent intervention, firstly to repeat what we talked about a number of times in Part 1, of the justification for this. So Mr Brownlee points to the fact that we haven’t had lockdowns, and he’s obviously correct about that in recent times; however, as he pointed out in one of his speeches in Part 1, we do continue to have border restrictions, and they are one—but only one—of the factors that the Auditor-General drew to our attention in asking for this extension. The other of those is the global shortage of auditors, and indeed the Australasian shortage, which we talked about last night, which includes over a thousand vacancies in Australia and over 200 vacancies for auditors in New Zealand. Then the third reason being the staff turnover issue within the Audit Office.

I do have further information about that for members, including the fact that the Audit Office has, I am advised, advertised for audit roles 11 times since 1 January, has recruited eight staff from that advertising—that since the beginning of March, they have lost 41 audit staff. In 2020, if you want to compare, 18 left at the same period; 41 since the beginning of March. And they have recruited 14 in that period. Forty-one gone, 14 recruited in that period of time. So that’s the third of the reasons that have been put forward.

Hon Gerry Brownlee: What’s that percentage of staff?

Hon GRANT ROBERTSON: Their operational staff of 235—sorry, there were 235 in February 2021, and there are now 208. There were 235 in February; there are now 208. So that is the third of the reasons that the Auditor-General put forward as his reasoning for wanting us to undertake this work. So that’s to respond to that point of Mr Brownlee intervention.

In terms of his intervention about whether or not this was known about, as I said again last night, the information I have is that the Auditor-General appeared before the Officers of Parliament Committee on 11 March and indicated at that time that audit fees, which is what, essentially, pays for the staff that we’re talking about, would need to increase to maintain the competitive pay structure within the office. I’m not a member of that committee, so I’m not in a position to be able to judge what happened or what response came from the Officers of Parliament Committee. What I do know is that, as the Minister of Finance, I have been asked by the Auditor-General, and Cabinet has agreed, to put this legislation up to make a modest and small change to allow all audits to be completed in a robust fashion by the end of the year.

My final point in response to Mr Brownlee was his urging for a cross-party way of dealing with this, and indeed that is precisely the process that we went through. It’s what led the Auditor-General to write on 2 July to myself and Mr Bayly, beginning his letter with “Thank you for indicating your support for legislative change to address the current shortage of auditors.” So that’s a letter to me and Mr Bayly thanking us for the indication of our support; obviously things changed along the way. In that same letter, the Auditor-General runs through the prioritisation process that he intends, and we covered this last night as well but I’ll mention it again. He has said that, within the normal statutory deadlines, he expects all essential Government entities to be completed with their audits, including the New Zealand Superannuation Fund and other large organisations, all of the financial markets conduct reporting entities—and, for the benefit of Mr Brownlee, larger councils; for example, Christchurch City, Tauranga City, Wellington City, Dunedin City, and others. So the Auditor-General has given an assurance that those entities are the ones that he will be prioritising.

Again, to recap last night’s discussion, I simply do not believe it is appropriate for Parliament to be at that level of detail, deciding which entities get audited and don’t, and I again put to Mr Brownlee and others the counterfactual that, given the majority that the Government holds in this House, if we were to start deciding which entity we wanted audited or not, there would be a considerable reaction to that. We should have trust and faith in the Officers of Parliament. This piece of legislation should have been able to go through the House reasonably rapidly last night, but instead we have had an extended debate, which I think members may choose to reflect on in the future about how they are talking about and how they are treating an Officer of Parliament. This has come to this Parliament because the Auditor-General has asked us to do that. There are questions that rightly the Officers of Parliament Committee may well ask, but actually this debate is a relatively simple one to extend the time frames.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. I was actually going to give the Minister credit for the thoughtful way in which he’d engaged in this debate, but I find myself having to criticise him for those last comments. Actually, democracy is messy, it takes time, and, frankly, when we are under urgency, this House is actually owed more respect than the comments that the Minister has just given. Because the legislative statement, the disclosure statement, and the information that we have about the degree to which this is necessary and appropriate is anaemic, and so I simply reject the fact that the National Party is somehow filibustering or drawing out this debate. This is a very important debate to have.

I want to, firstly, acknowledge that at least some science is being brought to the debate—for the first time, actually, since this started—about the case for change, because we now know how many staff, what the Minister says is operational—I find that quite interesting, and I’ll elaborate—have gone and how many have come back. We now know what that 27 represents—they’re having 41 resignations and 14 recruited, of what he called 235 operational staff.

There are, actually, according to the annual report of the Office of the Auditor-General—I think it was the 2019 report was the last one I could find online—420 staff that work in the Audit Office; how many of those are actually qualified auditors, or, at least, capable because they have accounting technician qualifications, or other skills that may assist chartered accountants in performing their audit duties, I’m not sure. But let’s take 235 as the denominator and the 27 net staff that have been reduced in the last period of time. That constitutes 11.4 percent of what the Minister calls the operational workforce. So that’s fine—it’s probably not that different from the percentage of registered nurses at Waitematā or Southern DHB or Canterbury District Health Board; it’s probably about the same as the staff the New Zealand Transport Agency have reduced. It’s probably a challenge not only across the Government sector but across the private sector that every single organisation has to deal with. But not every single organisation can come to this place and ask for a statutory extension of time to fulfil their duties.

And to suggest that the amendments that we are putting up are somehow interfering with the discretion that the Auditor-General has in the carrying out of his work is quite wrong. It’s not something the Auditor-General has discretion over; he has a legal obligation to do that, and we’re being asked to change the law. If that means that we have to have a bit of a debate and it’s a bit messy and it interrupts the Minister’s appointment diary, too bad, because that’s what we’re here to do.

Now, I also want to re-ask the two questions I asked at the end of Part 1, which the Minister perhaps didn’t have time to answer, and add another one. Those two questions last night related to Crown entities’ readiness for audit, and it extends, I think, to local government entities ready for audit, so it’s just as relevant to Part 2, because the letter from Mr Ryan to Messrs Bayly and Robertson talked about that. So my question is: has he received advice from the Crown entities and local government entities that the Ministers responsible for these pieces of legislation—have they heard from those entities to say that they are not ready for audit? Secondly, has the Office of the Auditor-General actually had a formal approach from those organisations to say they will struggle with readiness for audit? That’s the first question.

The second question is: has he had a discussion, or will he approach, the Leader of the House to ask him to consider extensions of time for the legislature to fulfil its obligations under the Standing Orders to review the financial reports and the annual reports of these entities? Because like this year, because of COVID and the general election we had precious little time to do that very important function. I’m quite sure that this delay is going to result in the same scenario in early 2022.

And the third question I want to put to the Minister is in relation to consultation. Mr Brownlee talked about consultation with Local Government New Zealand. I would add to that: any consultation about this with Chartered Accountants Australia and New Zealand and the actual firms, the large firms, that provide audit services to Crown entities on behalf of the Office of the Auditor-General—and, actually, let’s hear a little bit more about the science of why an 11.4 percent reduction in the staffing level, even if it’s as high as that, actually results in what’s a much larger proportion of the work being delayed.

Hon GRANT ROBERTSON (Minister of Finance): I thank the member for his questions. In answer to the first of them, the letter of 2 July—the member just needs to read the sentence carefully. It begins with “as always”. So what the Auditor-General is suggesting is that within his normal prioritisation that he has to undertake, final priorities depend on the extent of entity readiness for auditing, as always. So I don’t think there is anything whatsoever in that matter.

Secondly, the effect on select committees: I am advised that given that these audits will be completed by 31 December, financial reviews would be the next moment for us, and I’m advised they will be—

Hon Michael Woodhouse: They can’t start in November and December.

Hon GRANT ROBERTSON: —unaffected—

Hon Michael Woodhouse: Select committees can’t do their work in November and December.

Hon GRANT ROBERTSON: No, that’s not true, Mr Woodhouse, whatsoever—it’s not true: the advice I have is that this will not affect the work. And bear in mind, once again, the beginning of that letter indicates that the priority for the Auditor-General is the financial statements of Government and all key components, including all Government departments. So the Auditor-General is telling Mr Bayly and myself in that letter that that work will be completed in the normal statutory time frame, not the extended statutory time frame. So the member has nothing to worry about in that regard.

In terms of his third point, my understanding is that there is constant communication between the Office of the Auditor-General, Audit New Zealand, and the large companies whom they use to undertake work. That’s just a regular part of what they do. The reason we know that there is a 200 auditor shortage in New Zealand is as a result of a survey undertaken by the chartered accountants association of Australia and New Zealand. So this, as I’ve already mentioned multiple times, is a result of a number of factors, one of which is that global shortage and indeed the shortage here in New Zealand.

In terms of wider matters, I am repeating myself, Madam Chair, but that’s because the questions are covering the same ground, and that is to say that the Officers of Parliament Committee may well have a number of questions that arise out of this legislation. I’ve said that in my first reading speech, I said it in my second reading speech, and I’ve said it during this committee stage. And they can, at any time, take these matters up. That is the appropriate place to take these matters up. We’ve had material provided from the Office of the Auditor-General today on those staff movements. Questions about those are best directed through the Officers of Parliament Committee. The job in front of the House today is how to deal with that and other factors that have led to the Auditor-General asking us for this delay.

CHRISTOPHER LUXON (National—Botany): Thank you, Madam Chair. I really want to talk to my tabled amendment, and, in particular, it’s really asking that we actually exempt Tauranga City Council, Dunedin City Council, Hamilton City Council, Palmerston North City Council, Hutt City Council, Greater Wellington Regional Council, Waikato Regional Council, Otago Regional Council, and the Bay of Plenty Regional Council.

It’s really important, because, fundamentally, I think the Minister would have to agree that local government is feeling very overwhelmed. It’s facing some of the biggest challenges it’s had in the last 30 years. It’s actually got an unprecedented set of challenges when you actually start to look at it. You’ve got challenges around poor strategic planning, low capacity, big complex projects, poor customer experience, big projects coming through like three waters reform, etc. I think, fundamentally, we all know that if local government’s going to be successful—and that’s why these councils need to be on the statutory time frame, not coming in later. They need to be able to understand: are they fundamentally delivering real value to their community? That is the primary job of local government; to make sure they’re delivering real value to their taxpayers and to their ratepayers. A big part of that is to know whether you’re actually benchmarking your performance—and they’re having great transparency around that—and knowing whether you are or are not hitting the mark and doing the right thing with those taxpayers’ funds and getting a good return on that investment.

So there are things like CouncilMARK audits that you can do, but it’s all hit and miss. It’s not compulsory; it’s not mandatory. But these audits, I can tell you, are really important. We know they’re important, because local government, actually, has disengaged a whole bunch of people in the community. There’s only 25 percent trust in local government, there’s about 40 percent voter turnout. So, fundamentally, performance matters and audits like this really matter, particularly to smaller councils like the ones I’ve just talked through.

So I think we know efficient operations of local government all around the world are really, really important. The elimination of wasteful spending; making sure there’s not duplication of effort; making sure there’s really good governance and oversight; making sure that when you’re doing outsourcing agreements, cost-efficient IT—the realm of what a good local council has to deliver upon is really very huge.

So I think, fundamentally, I’ve got a comment around this and a question, fundamentally, around why do we think these governance issues aren’t that important, when these are the small councils that desperately need these services to illuminate what they’re doing well, what they’re not doing well.

The second comment I want to make, and my second question, is that I know the Minister is now sort of a de facto CEO of Air New Zealand, given his recent letter exchange, and it’s wonderful. But I used to be the CEO of Air New Zealand for seven or eight years, and it was a great company. I mean, we went from $4.3 billion to $6 billion, gave the Government fantastic 10 percent return year in, year out. It was wonderful. But if I sat there and I said, “Look, the dog ate my homework, ran over the kid’s bike in the driveway, couldn’t quite the auditors together, missed the deadline for the financial year end.”—not acceptable. Unacceptable. So why do you get another go at it, and everyone else doesn’t get a go at it? Because there’s this so-called global shortage. Scott Morrison’s not dealing with this today, is he? Is he delaying everything statutorily with all this?

Hon Grant Robertson: Yeah, they have.

CHRISTOPHER LUXON: Yeah, right. So the question is, Air New Zealand goes and spends a million dollars doing its own internal audit with Deloitte, and then the Office of the Auditor-General comes in over the top of it—right?—and does a bit of a scan of it all, which is great. But Air New Zealand gets the job done with the proper spending the money, getting it done, getting it sorted. So my question for you is, sort of, why don’t we take Air New Zealand off the mandatory list for the statutory bit and actually put these councils on? Because they much more desperately need the support of these audits, rather than Air New Zealand and these big guys. But I just think it’s amazing that you can actually sit there and just come up with a whole bunch of excuses, push it all out—didn’t quite get my homework in on time, didn’t get done—not just for two years going forward, but you did it last year and we’re doing it for two years. We’ve got a systemic problem. In three years, we can’t sort that problem out. You sort that problem out by going, buying the services, raising wages, doing what you need, bringing in the talent, and we haven’t got it.

So I’ve got two questions. One is: why do you think the governance issues of these local councils—which are so desperate for great illumination about what they’re doing well, what they’re not doing right, so they don’t waste people’s money, so they don’t erode public trust in those institutions. The second thing is, why would you prioritise Air New Zealand as an example of those big organisations that you said you’d do under the statutory time frame over these small councils? Because they need it much more than those big organisations. You can be reassured Air New Zealand will do its job properly; a million dollars with Deloitte gets the job done. And what the Office of the Auditor-General—you could sacrifice that one, I’d say, rather than doing that. So thank you.

Hon GRANT ROBERTSON (Minister of Finance): I am repeating myself, but in light of the fact that the member’s raised the specific matter of Air New Zealand, I’ll repeat for his benefit that the letter that was sent to his colleague Mr Bayly and myself on 2 July indicates that the councils—the exact ones that he’s naming—are going to have their audits completed in the normal statutory time frame. So he can rest assured about that. There’s no competition there between Air New Zealand and those councils. I, of course, will be forensically studying the Air New Zealand accounts, perhaps going back over a number of years, to take a very, very close look at the accounts of—

Hon Gerry Brownlee: Here comes the bully.

Hon GRANT ROBERTSON: —Air New Zealand and make sure that we have a good—

Hon Member: I’d expect nothing more from a CEO of Air New Zealand, like you.

Hon GRANT ROBERTSON: Exactly. Mr Luxon’s very comfortable with that, even if Mr Brownlee isn’t, so that’s good.

So this is the same answer that I’ve given for this question on a number of occasions. The Auditor-General has indicated that he will ensure that those councils will have their audits done inside the time frame.

SARAH PALLETT (Labour—Ilam): I move, That the question be now put.

PENNY SIMMONDS (National—Invercargill): Thank you, Madam Chair. Delighted to be able to speak. I wanted to talk a little bit, and with my experience, a little bit like my colleague Christopher Luxon, having been audited by Audit New Zealand for the past 23 years, I don’t actually recall a year when they didn’t say they were short-staffed. When my colleague Simon Watts said that there were four vacancies on the Audit New Zealand website last night, I suspect that’s somewhere around 9,996 less vacancies than in the rural sector being advertised at the moment.

But I do want to ask the Minister to just elaborate on how he feels this isn’t going to impact on those who have their 31 December end of financial year date, because I’m quite sure that the actions of this Government—for those entities that had a 31 December end of financial year last year—impacted on the issues we’re seeing now. Because the Minister’s colleague Minister Hipkins actually created another 17 audits that were required to be undertaken by the Auditor-General last year, when he put in place, on 1 April, the new entity Te Pūkenga, because that required all the Institutes of Technology and Polytechnics of New Zealand to have two audits last year. They had to have an audit for the first three months of January to 31 March, then they had to have a second audit—March to December—and then Te Pūkenga had to have an audit. So how did the Minister not foresee this unintended consequence of Minister Hipkins bringing in 17 more audits?

Now, I was there when we had to do the extra audits at the Southern Institute of Technology, and I think it probably took about two of our staff an extra six weeks of work internally. So I’m thinking it probably took another maybe three or four Audit New Zealand personnel extra time there. So surely—surely—you would see the unintended consequences of bringing in an entity. Interestingly, Minister Hipkins was warned not to bring in Te Pūkenga on 1 April during a period of such unprecedented upset in the sector with COVID and everything else, but he went ahead with it. It does make me think that if you lack business knowledge, if you lack business experience, if you lack business acumen, you make a decision and then there’s unintended consequences like 17 more audits, and you say, “Oh my goodness. Look what that’s done.”

I would have thought that before 1 April last year, the Minister of Education should have been saying to the Minister of Finance, “There will be more work for the auditors having to carry out these audits twice, and the new Te Pūkenga audit.” So I feel that the Minister needs to explain to us how he thinks that those audits didn’t impact on the situation we’re seeing now, and given that I know pre-audits for the 31 December end of financial year will have to be undertaken in December, how we’re not going to see a similar flow-on impact. This is just going to keep compounding through for the Audit Office, and how he thinks this is somehow going to be solved by giving a two-month extension when all it will do is run into the audits that have to occur for those that have their end of financial year on 31 December. I’d like to know what advice Minister Hipkins gave to him about, “Oh, by the way, there’s going to be 17 more audits having to be undertaken, and this might put a bit of pressure on the office of the auditor.” So perhaps he could just illuminate us a little in how that thinking didn’t occur earlier, and how he thinks it’s not going to carry on and give knock-on effect to those other entities having their end of financial year on 31 December.

Hon GRANT ROBERTSON (Minister of Finance): To cover the material we covered last night again, this is not about those entities. This is about dealing with the hump that occurs when you have a large number of entities—much, much larger than 17—who all require their audits at a similar time. That is why a two-month extension is required for that. The advice we have is that audits for those entities with a 31 December date will not be affected, and I did cover that material last night.

NICOLA WILLIS (National): I wish to speak to my tabled amendment, which seeks to exempt Wellington City Council and its council-controlled organisations from this bill. I note that this is actually completely in concurrence with what the Auditor-General has said should happen here. The Auditor-General’s letter to the Minister of Finance stated that larger councils would have their annual reports completed within the current statutory reporting deadlines. But as the bill is on the Table before us as the legislation current stands, those councils continue to have their audit and annual report time frames extended by two months even though the Auditor-General has said that is not necessary.

I think this is an important principle, because we need to remember and the Minister of Finance needs to remember, that extending these statutory reporting time lines is a very significant step, and so we should be minimising to the absolute extent possible the entities that are captured by the remit of this bill. I want to talk about why it is so important. Let’s remember the state that Wellington City Council is in now in relation to its accounts, and the Minister of Finance, who is resident in Wellington Central, should be very aware of these issues. Certainly, constituents in Wellington make me very aware of their concern about the fact that Audit New Zealand has issued a qualified report about the state of Wellington City Council’s accounts, its 10-year budget. They have raised particular concerns around the approach that Wellington City Council is taking to the renewal of key assets. Now, why would that be? Could that be because we have had several instances of raw sewage on the streets of Wellington? Could that be because actually we have had literally millions of litres of sewerage sludge dumped in our harbour? And could that be because the service levels in terms of water repairs have declined rapidly? So in that context, Audit New Zealand has concerns that the asset renewal programme that the council has put forward, basically says, “Look, we’ll do as much as we can within this cap.”, and will not actually get significantly outdated water assets up to standard, and this is of significant concern. I do not think it is sensible to allow in the law a delay in the law a delay in the audit for Wellington City Council when there are such stark issues at play.

Of course, that’s not the only issue at play with Wellington City Council’s accounts. The other issue is around the capital programme. Audit New Zealand has said, “Well, it’s all very well and good that you’re going to go and build cycleways and do all of those things, but have you actually looked carefully at the constraints in the construction market and done some sort of prioritisation framework should you come up against those constraints? Do you have a delivery plan?” Again, I would say that I think it is in the interests of Wellingtonians as ratepayers, as taxpayers, as citizens, to know that Audit New Zealand will be auditing these accounts thoroughly and on time because of the nature of concerns that have been raised in recent times.

Finally, I want to highlight the situation with Wellington City Council’s social housing portfolio. City Housing owns almost 2,000 properties that are home to more than 3,500 Wellingtonians, so it should be a particular concern to the Minister of Finance that City Housing is forecast to be insolvent by June 2023.

Hon Members: Really?

NICOLA WILLIS: Correct, and the reason for that is that despite signing a deed of grant with Helen Clark back in 2007, and saying, “Don’t worry, we’re going to keep the houses upgraded and do the capital works. We’re going to manage them well.”, the Wellington City Council has failed to do the upgrades that would be expected and is not running those assets in a way that allows them to be solvent. These are significant issues. We must exempt Wellington City Council from any expectation of delays.

Dr DUNCAN WEBB (Junior Whip—Labour): I move, That the question be now put.

SIMON WATTS (National—North Shore): Madam Chair, thank you very much for the opportunity. Look, I want to talk about Part 2 of the bill, which obviously extends the deadlines for the council-controlled organisations and the local authorities by two months.

Last evening I asked a number of what I thought were pretty reasonable questions around the degree of vacancies within Audit New Zealand. I haven’t seen them tabled, but I think the Minister’s indicating that he’s going to articulate to me by month what those vacancies were, because the point I wanted to make is in relation to the departmental disclosure statement, which states, as I quote, “mitigate the impacts of a severe shortage of auditors”. And the Minister has articulated a number of times in the House over the last day or so the number of 200. Well, 200 is not the number of vacancies at Audit New Zealand. The number that has been articulated this morning is actually 27. Now, 27 in the context of 235 is just over 10 percent. So when you look at the conversation around why we are here today in urgency, why are we here going through a bill and looking at the departmental disclosure statement, which states we are looking and trying to mitigate the impact of a severe—severe—shortage, 10 percent is not a severe shortage. So 25 percent of nursing vacancies is severe, hospitality vacancies well over the late teens is severe, but 11 percent of vacancies of auditors here is not severe. So I would challenge the departmental disclosure statement in terms of the accuracy of that statement, because, in the context of what we’re looking at, the numbers we’ve been given don’t add up.

The other aspect is I referred last evening to the fact, again related to the departmental disclosure statement, around this severe shortage of vacancies. I have got the four—four—vacancies on the Audit New Zealand website as at this morning. I thought they maybe just hadn’t updated it. For those at home looking: www.auditnz.parliament.nz/careers/vacancies. Four vacancies: senior advisor capability and culture, communications adviser, senior management accountant—and I thought, OK, maybe that might be an auditor; no, it’s actually to do budgets and forecasts for the chief financial officer—and a programme coordinator. So I am sorry, but this statement in this departmental disclosure statement around mitigating the impacts of severe shortages cannot be substantiated by even Audit New Zealand’s vacancy page that they’ve got online right now today, so why are we here?

Well, I’ll tell you why we’re here. We are here because this Government has failed to plan. They came up, and the Minister said to us on 16 June, this was raised as a major issue, again linking back to the departmental disclosure statement. Well, I’m sorry, these issues don’t just appear like that, and what we’re articulating is the evidence that we can see out there doesn’t correlate with the statements. And I am looking for a comprehensive explanation from this Minister around what is really going on here, because we have articulated the challenges around workforce in this country: primary sector, hospitality, nursing, medical, aged care. They are in crisis, but we are here because this Government can make the rules up. They can change the rules to suit themselves, and that is exactly what we’re going through this morning, under the urgency of this Parliament, which should only be used in exceptional circumstances.

I also want to talk about two new areas that I haven’t raised already, and I think these are critically important as part of putting context around this two-month extension that is being asked for under Part 2 of this bill. The aspect is around immigration. So what I want to understand from the Minister—and I’m conscious I might need to go a little bit further on this, because these are quite comprehensive in terms of the areas I want to get into. What I want to ask the Minister, in terms of the fact around immigration, is what steps or what consideration has been given to giving critical worker status to auditors? Because if we are dealing, as the departmental disclosure statement states, with an impact of a severe shortage, then surely—surely—the conversations would have been had around looking at how do we mitigate this risk through other means before putting this House into urgency. Surely you’d do your homework before using the biggest house in this land to try and solve the problem. So what consideration has been given—[Time expired]

BARBARA EDMONDS (Associate Whip—Labour): I move, That the question be now put.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. It’s nice that you called me, but I think my colleague here had some very valid points that he wished to continue, which is a bit of a disappointment, but I’ll take this opportunity.

There’s four things I want to try and cover, and I was hoping this was going to be interactive but obviously the way things are working it can’t be, so I’m going to have to take my time. I know that Minister Robertson gleefully pounces on the letter of 2 July, as though it’s some sort of support, but I think it should be recognised that the Minister was made aware of this issue back in mid-June. It obviously went through consideration by him before being taken to Cabinet, and legislation being prepared and made available to us on 2 July. So obviously it had been a long gestation period, and obviously the Minister had an opportunity to consider all the facets of it, which just makes me wonder about a couple of things.

One is the purposes letter, when I was made aware of this issue—and I am grateful that the Minister did speak to me, so I do want to acknowledge him about it—but there were twofold concerns that I raised with him at that stage. I don’t think they’d been adequately addressed, either by himself or the Cabinet, and that’s why we sought the letter. One is around prioritisation of the work and to what extent we could be assured that there would be no need for prioritisation, but if there was to what extent there could be, and therefore—I raise that because the legislation that was presented the day after I was made aware of this issue didn’t contemplate any prioritisation.

The second part of this letter was clearly one which was about addressing the capacity and capability constraints of Audit New Zealand, and that’s covered in the last paragraph. This is a central issue about Audit New Zealand being able to undertake its task. Now, we’ve heard today that Audit New Zealand lost 27 staff and, as my colleague just noted, that’s about 10 percent, which compared to most organisations a very modest issue around personnel. Virtually every business—and I know he’s been around the country talking to businesses, but I imagine if you walked into any manufacturing or horticultural business or whatever, the first thing they’d say is a shortage of staff. So the big issue, if it is 27 staff that Audit New Zealand are missing, my experience of auditors is that there’s normally probably at least one senior to three or four juniors. So if it is a shortfall of 27 staff, we’re probably talking in terms of the graduate auditors that are required to work on this project—which, by the way, are basically accountants or people in the process of completing their finals for accountancy, often the first job they have is an audit job. There are many accountants being trained, and one of the things we’ve heard from the Government—waxing lyrically in this House on many occasions—is undertaking further training.

Getting first-year graduates into organisations such as Audit New Zealand shouldn’t be such a big issue, and there are many, many more available than perhaps the senior staff, which is probably where it’s more critical. So the issue is why Audit New Zealand hasn’t been able to get these people, and of course it comes back to the terms of their remuneration and their working conditions. That’s why a repeated thing about this is what has the Government done about this to make sure this doesn’t turn into a systemic issue? Because, as we know with being able to complete local government audits, it is a major issue, and we’ve heard nothing from the Minister in terms of making sure that—

CHAIRPERSON (Hon Jenny Salesa): Order! We’ve covered this issue quite repetitively now. Can I ask the member, if he’s putting a question, can he put the question through about Part 2?

ANDREW BAYLY: OK. So on that question, I just want to understand from the Minister what is the actual shortfall in the breakdown of the staffing requirements to stop them from being able to complete the audits for local governments? So, the split between senior and junior staff.

The second thing is that I’m surprised in the response to my question earlier that he hadn’t got proper representations from local government. The member Nicola Willis noted before that Wellington City Council’s got some major issues, and we want to make sure that behind this—

GREG O’CONNOR (Labour—Ōhāriu): I move, That the question be now put.

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

Ayes 87

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

Noes 33

New Zealand National 33.

Motion agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Andrew Bayly’s tabled amendments to clauses 6 and 7 to delete sections 67(5)(b) and 98(7)(b) be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Christopher Luxon’s tabled amendment to clauses 6 and 7 to exempt a number of councils be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Hon Gerry Brownlee’s tabled amendment to clauses 6 and 7 to exempt Christchurch City Council be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Simon Watts’ tabled amendment to clauses 6 and 7 to exempt Auckland City Council be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Nicola Willis’ tabled amendment to clauses 6 and 7 to exempt Wellington City Council be agreed to.

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

Ayes 33

New Zealand National 33.

Noes 85

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

Amendments not agreed to.

CHAIRPERSON (Hon Jenny Salesa): Barbara Kuriger’s tabled amendment introducing new clause 8 to extend the apple picking season is out of order as it’s outside the scope of this bill.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 87

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

Noes 33

New Zealand National 33.

Part 2 agreed to.

Clauses 1 and 2

CHAIRPERSON (Hon Jenny Salesa): Members, we now come to our final debate: clauses 1 and 2, which is the debate on title and commencement.

Hon MICHAEL WOODHOUSE (National): It’s not my style, generally, to propose silly alternative names for legislation, but I think it does behove us to reflect on what we are doing here and actually propose names of this bill that more closely align with what’s actually happening here.

I did actually brainstorm with some of my policy staff about what they thought would be appropriate alternative titles for the Annual Reporting and Audit Time Frames Extensions Legislation Bill, and they were pretty good at coming up with, I think, more appropriate names. One said the bill should be the “Skill-shortage Solution Grant Robertson’s Magic Wand Act 2021”, and, oh, that DHBs could have the same magic wand so that they could magic up either staff or extensions of time. I wonder how it would go if—in fact, we know that it’s happening every single day that the DHB entities that are the subject of the extended reporting requirements in this bill are actually telling their patients they’ve got an extension of time. It’s not an extension of time that they look for if they wanted to have their cancer treatment in a more timely manner or cardiac surgery. So it is a magic wand that Mr Robertson is providing for himself but for no one else.

I think that actually is a nice segue into the second alternative title that we have seen: the “Helpful Government But Not for Business Act 2021”, because we have implored the Government to give relief to business who have severe staffing shortages of their own and the answer has been “No, no, no.”, and yet, when it comes to giving financial reporting and audit relief, it’s a “Yes, yes, yes.” from this Government.

So that, again, would suggest a title that is “We Don’t Have Solutions for Actual Kiwis Act 2021”. I don’t know about that. I think they do have solutions. They’re staring the Government in the face, but they are so blind to the need and the opportunity to maintain and increase economic growth in this country that they simply will not see where the need and the opportunity is.

So we could go on at some length on alternative titles for this, but what it really is—however it’s framed, whatever the bill and the Act is going to be called—is a deeply disappointing outcome and a terrible, terrible process. I think it’s very significant to reflect on the number of times we have been in urgency in the last 3½ or 4 years passing legislation either to fix a mess or to tidy up stuff that had been passed wrongly. This is a mess and the Government is taking the easy way out to fix it, and that, frankly, should be reflected in the title.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I know Mr Woodhouse was pointing out some of the issues around the title, and I think there’s two core tenets of what we have been debating over the last 24 hours under urgency. I think the first one is that we could change the title, actually, just simply to say “Fund the Audit Office So That It Can Pay Its Staff Sufficient To Make Sure They Stay Being Employed at Audit New Zealand Bill”, because that is one of the issues that, obviously, the Audit Office is facing. It has an issue with staff being poached by the private sector. Not all of it will be related to pay, but I think we need to make sure that the Audit Office are in a position that they can compete in the market for highly talented accountants and auditors. That’s a pretty crucial thing, especially when we have heard that they’ve lost 41 staff over this year, although they’ve been able to attract 14 back.

So we just need to make sure that the Audit Office is seen to be able and is—and I know that it’s a good organisation—able to attract the best talent so that our audits can be completed across the Government sector and across the local government sector to ensure that we are getting our accounts in a timely manner, and, obviously, this bill is about postponing it.

The other one that I think in terms of a title—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! Can I just remind the member that this part of the bill is a tight debate. So can I ask the member to confine his comments around the title and commencement.

ANDREW BAYLY: OK. The second title change I think we could have applied to this—[Bell rung]

Dr DUNCAN WEBB (Junior Whip—Labour): I move, That the question be now put.

ANDREW BAYLY (National—Port Waikato): I think that the second title change we could have said is “Make Sure that Some of the 2,000 MIQ Rooms that are Currently Empty are Made Available to Allow, as a Special Category, Auditors to come to New Zealand Bill.” I think that is a title change that we could be discussing, because I think this is what this title and what the real issue of this bill is about, which is that there is a shortfall of auditors.

The Government hasn’t allowed or been creative in terms of making sure that we can get the right auditors, and one of the obvious solutions or mitigation factors is to allow auditors to come in. It is one of the solutions; it is not the only solution, of course. But with managed isolation and quarantine (MIQ) rooms lying vacant, there could be a special allocation of 20 rooms set aside for auditors to come in from overseas, provided that they can be paid and remunerated and attracted to Audit New Zealand.

So I think in terms of the title, whilst it identifies what the intent of the bill is, I don’t think it actually cuts to the core of the key issue of what this bill is all about.

BARBARA EDMONDS (Associate Whip—Labour): I move, That the question be now put.

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

Ayes 87

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

Noes 33

New Zealand National 33.

Motion agreed to.

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

Ayes 87

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

Noes 33

New Zealand National 33.

Clause 1 agreed to.

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

Ayes 87

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

Noes 33

New Zealand National 33.

Clause 2 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Hon Jacqui Dean): The committee has considered the Annual Reporting and Audit Time Frames Extensions Legislation Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Third Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Annual Reporting and Audit Time Frames Extensions Legislation Bill be now read a third time.

I thank all members of the House for their contribution to this legislation. I want to put on record my particular appreciation to the ACT, Green, and Te Paati Māori representatives for the way that they have approached this very simple piece of legislation. None of us wants to be in the circumstances where we are passing legislation to extend statutory time frames in this way. However, the circumstances that we live in today and the world that we live in today occasionally dictates that we need to do this.

This is, as has been said a number of times, a simple bill. It is the same piece of legislation that was passed in this House with, I believe, unanimous support last year, but, clearly, something was different for some members of the House this year. But to all those members who were able to see the bill for what it was, I say thank you.

To reiterate, there are three specific reasons that the Auditor-General came to the Government and, in turn, the Government came to this House to create this extension. The first of those is the global shortage of auditors that we are facing. As we’ve said before, in New Zealand, there’s around a 200 auditor shortage; in Australia, around a 1,000 auditor shortage. All of this causes issues during the peak season for audits, where Audit New Zealand would normally have staff come in from other private sector agencies to support them in their audits, and all of those entities are challenged by the shortage that they face.

Secondly, the other reason is partly related to that. Ongoing border closures here in New Zealand, and indeed elsewhere around the world, have led to limited movement of auditors who might normally have come in during this period.

Then, thirdly, as has been addressed through the debate, there is the high level of staff turnover at Audit New Zealand, and, as I have said on a number of occasions during the debate, that may well be a matter that the Officers of Parliament Committee choose to take up at some point. I would note for members opposite that we were advised during this debate that on 11 March, the Auditor-General was in front of the Officers of Parliament Committee and he did raise the fact that he would be looking to raise audit fees in order to ensure that he was able to pay competitive salaries for auditors. It is audit fees—those fees charged to clients—that fund this; not a Government appropriation.

There isn’t a great deal more to add to the debate. We will, when this legislation passes, enable a two-month delay. The Auditor-General has been clear about his sense of prioritisation during that period that will see the financial statements of Government and the audits of those entities related to that all completed during the normal statutory time frame, and the same for large council organisations. The Auditor-General has committed to working closely with any entity who has specific circumstances that would require their audit to be done in the normal time frame, rather than the extended time frame that has been allowed for.

I’ll just finish my contribution picking up a matter that I spoke about during this morning’s proceedings, and that is the way that an Officer of Parliament and his office have been discussed during this debate. I do have some concerns as to what I have heard at times during this debate, and I would ask members, if they have concerns about those matters, to use the Officers of Parliament Committee as the appropriate place to do this. I am here today with this legislation on behalf, in a sense, of that office, with Cabinet having taken the decision that in order to get robust audits and in order to manage the wellbeing of the staff within the Audit Office, this is necessary. But underlying issues are ones that are best addressed via the Officers of Parliament Committee.

For those National MPs who will now return to their electorates, they will proudly be able to say that they managed to extend out a debate to make sure that they fought against a two-month extension to ensure that there were robust audits. They will proudly go to their electorates and go and say to them “That’s why we’re here.”, and that’s why the National Party languishes in the mid-20 percents in the polls.

ANDREW BAYLY (National—Port Waikato): Well, first of all, it’s good that we’re coming to the conclusion of this debate, and I just want to reiterate that from the National Party’s perspective, there are no concerns specifically with the Office of the Auditor-General. We acknowledge the good work that they do and they perform a very important function, so I just want to put that on the record—I said that in the first speech that I made—but this bill is not about this. This bill is about the Government using legislation under urgency to deal with an issue that every other business in New Zealand is facing. What I’d say in response to Mr Robertson’s last comment is when each of you—sorry. When each member from the Labour Party goes back to their electorates tonight, I would like you to consider asking every—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order!

ANDREW BAYLY: I would like the members to consider asking at every business meeting they hold whether they thought it was appropriate that the Government should pass special legislation under urgency for one Government entity and, in respect of their own businesses and their own electorate, whether it is appropriate that they have to continue to tough it out—as the Government has said all along—with respect to saying, “If you’re short of staff,”—literally—“go and hire more people and pay them more, or just train up more people, and just tough it out.”

That’s the central issue: I would like the members to be able to be honest with the people in their electorates and the business owners that they will be talking to, and simply put that question and ask the point: is it fair that the Government should use special legislation under urgency but seeks not to address the systemic issue that each business faces in New Zealand when they’re short of staff? That is the central call of the debate that we’ve been having. It’s not that the Audit Office is not justified, not that they do a poor job, not that they’re slow in doing their work; it is the issue that the Government wants to pass legislation for one Government entity, but chooses not to address this huge issue, and the biggest issue facing all businesses across New Zealand, which is, namely, “I cannot get staff.” So they don’t have the opportunity to come and get special legislation, and that’s what I think is the biggest issue with this bill.

The way that it’s being done, under urgency, I think is a bit of an issue. If we had taken this bill to select committee, I think the select committee would have been inundated with every business community grouping: Business New Zealand, the Employers and Manufacturers Association, and individual businesses—we would have been overwhelmed. I put to you, as the members of this House, that the reason that this bill was passed through under urgency was to stop that process being made public and being open to the business community to be able to participate in this debate. I think the use of urgency to do this has been another issue that is of significance, and one that’s detrimental to democracy. So that is the first issue.

The second thing is: what are the mitigations? I’ve heard nothing from the Minister, and I realise it’s not the Minister’s principal role, but I’ve heard nothing from the Government members either, about some of the mitigations, and obviously Cabinet considered this issue. They had prior, advance warning. They were made aware of this back on 16 June, had time to consider it, and even had time to draft the legislation before making us aware of the issue. The big issue is what were the mitigations, and nothing has been put forward.

So we are well aware that the Audit Office is under pressure. We need to make sure that there’s adequate funding, and I think the Minister was slightly cute: there is an appropriation to Audit New Zealand—it totals about $15 million—and the greatest source of revenue that the Audit Office receive is actually through charging other Government agencies for the audit costs. So there is a way to make sure that there is sufficient funding that the Audit Office has to be able to attract and retain its staff, and it’s absolutely essential that it does so.

We’ve heard that in previous years there’s been loss of staff, and we’ve heard this year that it was 27. The issue is making sure that the Audit Office can pay sufficient money to make sure it can compete with the private sector, and that is a crucial issue, but we’ve heard nothing about that.

The other issue is around the managed isolation and quarantine facilities. We’ve heard—TV1 made the report on 3 July—that 2,000 spare rooms are available. I’m not suggesting for a moment that we need to make those all available to audit people, but if we need to bring in good people from overseas, there will be a certain cadre. If we’re short of 27 and you work on a ratio of 1:3 for seniors to juniors, that means there’s nine extra spaces required. Again, if that’s part of the mitigation, that should be contemplated. But, again, there’s been nothing from the Government members about some of those mitigations.

I think the biggest concern is this one about the Government thinking it can do one thing for itself but leave the wider business community facing the challenges every day, and we’re seeing it flow through into the business sector now. Many business owners you talk to now are saying how they’re losing contracts and they’re losing the opportunity to grow their business, but in many cases they’re going backwards because they cannot compete. We’ve heard from Mr Simon Watts that the hospitality sector has vacancy rates up near 20 percent, so that many places are having to be in the situation where they cannot offer the same level of service because they simply do not have the staff. That is bad for New Zealand, and, what’s worse, it’s actually very bad for both the staff that work at businesses, because of the time pressure and the added pressure that they have every day at work but also for the business owners in terms of the type of proposition they want to offer their customer and their ability to compete with everyone else.

I think there’s a serious deterioration in what’s happening. The biggest issue around this lack of access to adequate labour is just a massive issue for New Zealand, and I’m really worried about that. I think the Audit Office is just a small symbol of what is happening, and we need a Government that actually starts to recognise this issue and actually starts to address it comprehensively, and not just talk about other, wider issues and say to everyone else, “Just get on and tough it out.” I don’t think that’s an appropriate approach.

Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora, Madam Speaker. Look, I’ve really just one thing to say. The Opposition have raised questions about the management of the Audit Office, and, as the Minister said, there is a committee which is set aside for examination of Officers of Parliament, and it would be entirely appropriate for those questions to be put to the Auditor-General at that committee. I will look forward to seeing the report of those proceedings. I commend this bill to the House.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Speaker. I can assure Dr Duncan Webb that that is exactly what will happen, but we’re not in the Officers of Parliament Committee; we are in Parliament. We are in the legislature, being asked as MPs to pass a piece of law—and that’s, essentially, what’s going to happen soon—but it is not consistent with good practice and good democracy that the Opposition simply rolls over and does the Government’s bidding. And the idea that the Minister of Finance is cajoling us to go back to our electorates and talk about what we did this week—I’ll tell you what we did this week: we stuck up for business. We stuck up for the inconsistency that exists between the “suck it up” approach by this Government to the severe staffing shortages that are a handbrake on this economy and a Government that gives itself a pass for teachers and for auditors. We will be going back to our home areas, and we will be highlighting that inconsistency and the ham-fisted approach that this Government is taking.

There is another, I think, concerning issue about that that needs to be drawn to the House’s attention. This is becoming a pattern. Since the end of 2017, the Labour-led Government has used urgency about a third more often than the Key-English Government—and Ms Genter can chuckle away. She was a lion in Opposition when it came to the use of urgency and shortened report-backs; now, she just chuckles and thinks we’re being silly. Well, that’s fickle; that’s inconsistent.

But it has gone up by about a third, as has the use of shortened select committee consideration, because this Government doesn’t think submissions on bills and making bills better is part of parliamentary business. They think that it’s an irritant, a distraction from their centralist, socialist agenda, and that if they don’t like something, they can just change it—they don’t need to consult.

We have spent the last 18 hours considering a bill that hasn’t gone to consultation, where good ideas, suggested changes, and amendments to it that bring the bill into line with the policy intent were just dismissed as a distraction and filibustering. Well, that goes to the arrogance of this Government—arrogant and out of touch—because New Zealanders up and down the country who run their plumbing firms, who pick fruit, and who export actually pay for the public services that the Government so readily dips their hands into the pockets of New Zealanders to actually pay for. But they don’t want to help those businesses. They only want to help themselves, and that is a shame.

Now, I want to touch on a couple of things that were just briefly raised in the committee of the whole House that I don’t think were adequately addressed. One is the ability of this Parliament to scrutinise the annual reports of Parliament. The Minister dismisses that as not relevant, but the reality is that select committees will not be receiving a significant chunk of the annual reports until next year. Now, it’s customary—and the Minister has been around this place for nearly 13 years; he knows this—that that period between the end of October and the Christmas recess is actually quite a busy one for select committees as they get a jump-start on the financial review process. It’s often that they use the smaller entities to review in that period, because the larger ones actually have quite a bit more work up, and those are done, usually, in early February to March. That isn’t going to be able to happen next year, again—again—and one of two things will need to happen. Either select committees will have to defer other important work or they will have to undertake fewer financial reviews—fewer annual reviews of Crown entities—and that undermines this place’s ability to scrutinise the executive.

So for him to dismiss that as just simply a red herring is quite wrong. Regardless of whether he will, I will be asking for the Business Committee and the Standing Orders Committee to consider whether or not there should be an extension of time for this House—a similar extension of time to the one that the Government has just given itself for audits—and for the select committees to do their job. What’s good for the goose should be good for the gander. So we should not have our role in this place undermined by this Government’s failure to ensure that it can meet its legislative time frames, because it’s not the Auditor-General’s legislative time frames; it’s the Government’s legislative time frames. So in letting itself off the hook, it is putting pressure on this place.

The Minister also mentioned, apparently, that Australia has done this. Well, I’ve looked very hard and I can’t see a thing in reference to the Australian audit office providing relief to Crown entities and public sector entities in Australia with the same thing. So I will keep looking, but I think it’s rather inconsistent. The Australian Securities and Investments Commission definitely has similar relief to the Financial Markets Authority, but I can’t see any reference to the thing that Mr Robertson said in interjection on Mr Luxon about the Australian Government and public entities.

So we’re a bit of an outlier. We are just about to pass a piece of legislation that will provide relief for two years without any other plan, and—as Mr Nash interjected on me—this is the plan: just kick the can down the road. No insight into how the problem is going to be fixed. No insight into how it’s going to be prevented from happening again. No insight into how, other than the audits, the work of the Auditor-General is going to be reprioritised five minutes after the finance committee received the annual plan for 2021-22. That’s now a doorstop, because it clearly isn’t going to be able to be embarked on, or, if it is, there may be further delays in audits. So I think we were owed an explanation that did not come.

No recruitment strategy ideas, no graduate recruitment, no retention strategy, and I should also note for the House’s interest that the section of Vote Audit 2021 in relation to audit and assurance activities has gone down this year compared with last year. Now, I’m not sure why that is, but it seems highly unusual that when the salaries of auditors working for Audit New Zealand are such an issue, the vote should actually go down.

So more questions than answers, no plan, and a ham-fisted process. We’re here on Thursday morning, and the reason we are here has nothing to do with the Opposition. The Opposition is doing its job. It’s the Government that’s at fault, it’s the Government that has brought us here, and it’s the Government that continues to use urgency, time and time again, to fix its own mistakes—arrogant and out of touch.

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

BARBARA EDMONDS (Labour—Mana): Thank you, Madam Speaker. I just want to speak simply, because this is a simple piece of legislation. At the request of the Auditor-General, it has come to the House as the primary legislation does not have the discretion to allow for an extension of time. Companies have the ability to file an extension of time for their annual returns. Companies also have the ability to file an extension of time for their annual tax returns. So it’s an appropriate forum that it comes to the House, given it is for the Crown’s accounts.

I’d like to thank the members of the ACT Party and the Green Party for supporting this prudent piece of legislation. I commend this bill to the House.

Hon JULIE ANNE GENTER (Green): I just want to acknowledge the excellent contributions made by the Labour members, including Barbara Edmonds, the one who just sat down. The Green Party is supporting this legislation. We didn’t support the use of urgency, but we support the legislation. It would have been great if it could have been a truncated process, but I understand that that wasn’t due to the Government; it was due to a lack of an agreement to get a truncated process. I’m really genuinely curious to know what the National Party thinks they would do differently to have avoided this situation.

I’m also intrigued by the claim by the Hon Michael Woodhouse around the use of urgency, and I’d be interested to know how much of the use of urgency was directly related in the last term and this term to a COVID response, as opposed to the first term of the last National Government in 2008 to 2011, when urgency was used extremely often and not to respond to a very unusual global pandemic but just—you know. I’m sure that they’ll stand up and list some numbers that are questionable, but, genuinely speaking, I don’t believe that this Government has abused the use of urgency. We’ve been facing quite difficult circumstances with COVID-19, and of course the Government has managed that incredibly well. All around the world, people look to New Zealand to see how well this Government has managed COVID-19. Again, this—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order!

Hon JULIE ANNE GENTER: —extension of time, which is due—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! The member will resume her seat. This is a third reading of this bill. Speaker’s ruling 128(8) provides: “Members must confine themselves to the main purposes and contents of the bill; they must deal at length with matters not provided for in the bill.”

Hon JULIE ANNE GENTER: As I was literally saying as you stood up to speak, in this bill, what it provides for is an extension of time for the auditors, which had to be passed last time and has to be passed this time directly due to the impacts of COVID-19. That is the purpose of this legislation, that is the reason we’re passing it, and that’s all I have to say. I commend the bill to the House.

ASSISTANT SPEAKER (Hon Jacqui Dean): Damien Smith—a five-minute call.

DAMIEN SMITH (ACT): ACT supports this bill. This is different from Immigration New Zealand as a dysfunctional department, and we don’t see that in the Auditor-General’s office. We do believe this should have been seen coming, and we do actually believe that the Auditor-General is open, but the border closure has been a significant impact on the skill shortage, and in that sense, the short-term contracts and insufficient auditor capacity is understandable. It’s not necessarily the Auditor-General’s fault.

We do have some issues around the two-year period, but the Auditor-General has given us confidence that if it moves statutory deadlines, then the resources will be allocated to ensure that larger, more significant audits are completed, as outlined in the letter, which I haven’t seen, between Mr Bayly and Mr Robertson. So the Office of the Auditor-General can also do this without compromising or breaching statutory deadlines.

To conclude, this is obviously a bill that probably no one wanted to have to bring to the House, but it is the situation, and with regards to the shortage of critical skills, there may have been a planning and allocation issue that should have been addressed by the Auditor-General’s office. So, today, we have been pragmatic about getting this work done and we’ve been pragmatic about the solution that’s required to have the Auditor-General’s office alleviate that backlog.

GREG O’CONNOR (Labour—Ōhāriu): We are watching a beleaguered and isolated Opposition watching on while the rest of this House—as evidenced by Damien Smith, the previous speaker—take a very pragmatic and flexible approach to getting on with the business of running this country. I commend this bill to the House.

STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. Well, that was certainly not Churchillian. There might have been a number of other labels that former speech from the previous speaker could have got.

I’m going to focus on something positive with this Annual Reporting and Audit Time Frames Extensions Legislation Bill. The positive—and I’ve spent a bit of time thinking about this—I’ve found in it is that actually, at long last, we are now in July of 2021 and the Government has realised there are skills shortages out in New Zealand. Their management of immigration and in allowing for skilled people to come into New Zealand—it’s finally dawned on them that it’s a real issue. The rest of us have been saying this for months. I don’t know about other members, but it is certainly coming through my door. I’ve got business after business coming in and saying, “I can’t get the people I need. I can’t get the people I need because the Government won’t allow these people across the border.”

So now we end up with the Auditor-General’s office that suddenly doesn’t have enough auditors to carry out their audits. This won’t have happened overnight; this will have been coming for quite some time. Why wasn’t it managed properly? Well, we’ll have to sheet that back to the Minister, and it wasn’t the Minister that was in the chair previously; it’s actually the Speaker of the House who has that responsibility. So that has to go back to the Speaker. One of the tenets of managing anything is to ensure you’re on top of all of the resources that you should have to deploy—not you, Madam Speaker.

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Not the Speaker.

STUART SMITH: Any manager does. But this hasn’t happened on this occasion, and we’re now here, going through urgency yet again on a piece of legislation that wouldn’t have been needed if they had been on top of their game, but they weren’t.

I’ll go back to one of the things that I think is really important about this bill. If an entity such as the Climate Change Commission, who is about to go to court through a judicial review challenging their processes—if there are delays in their audit, I think there could be very serious things that are being overlooked. We just simply don’t know, of course. I don’t have any great suspicions, but there could be. What entities are they not going to audit in a timely manner? We don’t know. We don’t know about a whole lot of things that could actually be very serious for New Zealand.

This is a serious issue. In relation to the Climate Change Commission, one of their commissioners is also a research fellow with an entity that is a major contractor to the Climate Change Commission. I would love to know what’s gone on there. All of—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order!

STUART SMITH: —the audit procedures would—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! Well, I was going to bring the member back to the bill, but he pre-empted me. Thank you.

STUART SMITH: You’re welcome, Madam Speaker. Well, sometimes it takes a little while to fill the story out.

ASSISTANT SPEAKER (Hon Jacqui Dean): Well, not too long.

STUART SMITH: But, actually, all of the processes that go on behind the scenes, that is exactly what an auditor would look at in an audit of the Climate Change Commission. Any other entity could be the same. This is something we must have confidence in. It’s an entity whose decisions are going to impact everybody’s—well, not their decisions, but their recommendations are going to impact everybody’s lives. We have to have confidence in that. How can we have confidence in it if we aren’t sure that they’ve been audited in a timely manner? I’ve put up a tabled amendment to ensure that they were exempted from this bill, but, unfortunately, it didn’t get past the Government, who decided not to allow it.

Chris Bishop: Very frustrating.

STUART SMITH: It’s very frustrating, and other entities will be the same. You know, if we look at the councils, which of those are going to go off the list, and how does the Auditor-General choose, because, quite likely, the surprises will be exactly that—surprises. It won’t be the ones you suspect.

Chris Penk: No, you don’t know until you audit them.

STUART SMITH: Not until you audit them.

Maureen Pugh: The smaller ones, without the staff.

STUART SMITH: Well, all of the businesses that I have coming in my door can’t get skilled staff. There’s been a deaf ear turned from Government—“Just pay more.” Well, perhaps if they’d paid more for the Office of the Auditor-General for staff, they wouldn’t have lost all their staff to the big four audit companies.

It’s an essential service that has to be done here. Everybody else has to manage with the resources they have, and so should the Auditor-General’s office. The Minister responsible has been asleep at the wheel, and we’re all paying for it.

SARAH PALLETT (Labour—Ilam): Thank you, Madam Speaker. To accuse the Government of not engaging when the National Party couldn’t even be bothered to speak on Steph Lewis’ extremely important biosecurity bill is just an unfunny joke. I commend this bill to the House. Thank you.

Hon GERRY BROWNLEE (National): The National Party is taking this bill very seriously because when Parliament is asked to set aside the statutory requirements for an Officer of Parliament, it is a serious matter. While the Government has repeatedly in third reading speeches—from, particularly, the Minister responsible—used the shield of COVID-19 as an all-cover expression for almost anything they do, and in this case this setting aside of a statutory deadline, the reality is that we have not had widespread lockdown in the last 12 months, and we have also not had the sort of indication from the Auditor-General’s office that there was a problem with the process. For the Minister to come into the House yesterday, put us into urgency, then come through the committee stage, and then in his third reading speech continue to say “Nothing to see here—move on.” is completely wrong. Parliament is being asked to excuse an Officer of Parliament for their inability to meet their statutory requirements.

Now, if there was any other Government agency where there was this sort of failure, there would be some very serious questions being asked about the management of the organisation. That has been totally skirted over here, with the Minister of Finance simply saying, “It’ll be all OK. Most of it will get done on time. They just need a bit of an extension.” Well, the question is: where has the problem been caused? Why is the Audit Office losing staff at the rate that they are? Why is it, in these supposedly uncertain times, that this is an office that has lost 41 people, or around about—what’s that—just over 20 percent of their staff in the last 12 months? Why is it that they’ve only been able to replace half of them, and they are now some 27 staff members down?

Those are the sorts of questions that should have been teased out in a select committee process. Having the Minister simply listening to the Auditor-General and saying “Yes, you’re quite right. We’ll just ram it through Parliament.”, and then, today, reading out a letter written to the Opposition by the chief executive, full of assumptions about what our position should be, is simply ignoring the fact that it’s his failure to meet his statutory guidelines that’s the problem.

There are members over there who’ve only been in Parliament literally for five minutes, saying, “Oh, this doesn’t matter. It’s all OK, it’s only a short extension.”—well, it does matter. It does matter. Process matters, because democracies stand on their ability to withstand the scrutiny of process, and when a democracy decides “No, we’re just going to use the big 65 majority to do what we want.”, then that is very, very concerning.

The Minister said today that the appropriate place for some of these questions to be asked was the select committee: the Officers of Parliament Committee. Well, I agree with him. So why wasn’t this bill sent there, even for a short time? What was the necessity to jackboot it through the House the way it has been over the last 24 hours? It’s very hard to understand. In that committee, there could have been a greater analysis of the problem that the auditor appears to have in holding on to staff. There could have been a better understanding of the so-called, and it’s just been thrown up in this debate and I think it was just snatched out of the air—the international shortage of auditors. The international shortage of auditors.

Then, of course, the comparator with Australia: well, we’re 200 short; Australia is 1,000 short. Well, Australia’s population is about five times ours, so that’s proportionately exactly right, but are they having to do the sort of things that we’re talking about? The Minister sat there shaking his head. “Yes they are.”, he said. “Yes they are.” We can’t find it anywhere—not a mention of it anywhere. Not on the Australian parliamentary website, not in any of their news stuff—nowhere.

So there we have a Minister on the one hand saying the select committee is the place to ask these questions, but, on the other, denying the opportunity for the select committee to, in fact, make those investigations. Here’s a question for the Government members: there are eight members on that committee, it’s made up of all parties in the House—it’s the Officers of Parliament Committee. Three of those members come from the National Party. The balance are from either parties that are loosely associated with the Opposition, or Government-supporting parties, so the Government has a majority. A simple question: if there were to be an inquiry put up, would the Labour Government support that inquiry? Not a chance—not a chance. Why would they want to shoot themselves in the foot and, effectively, admit that they’ve failed in the process that we’re dealing with here today?

I heard the Green member Julie Anne Genter, in a very uncharacteristically angry speech, saying that we should all just kick this through once again because of COVID19. Well, I have to say to her that COVID-19 will not continue to be the shield for all things bad for much longer. Madam Speaker, it’s a little off the point, but one only has to look at the vaccination programme to see that New Zealand is now equal with India—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order!

Hon GERRY BROWNLEE: Well, I’m coming to the audit on it—I’m coming to the audit on it.

ASSISTANT SPEAKER (Hon Jacqui Dean): The member will resume his seat. It is a little off the point, so I would encourage and thank the member, who is going to come back to the third reading of this bill.

Hon GERRY BROWNLEE: Madam Speaker, I’m not happy with that intervention, because I was saying that one only has to look at that and its relationship to—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! The member will not reflect on the Chair. I’m warning him not to do that again.

Hon GERRY BROWNLEE: The Auditor-General should be having a close look at the health ministry and its handling, for example, of the COVID-19 vaccine roll-out. New Zealand is now on a par with India, just a little bit below—or, actually, quite a bit below—Kazakhstan, and well below Belize and a number of other countries that my colleagues will be releasing in the next few days to show the need for the auditor to be on the case.

So why are we doing this? If it’s all possible, as the Minister has said, to get most of it through on time, where were the difficult ones? Why have we got a bill that actually gives him and his office the freedom over the next, really, about 15 or 16 months to take their time and decide which they will and which they won’t, and, I’ve got to say, the letter that was sent that had a so-called priority in it is not something that can be relied on, because the letter, as I said before, was full of assumptions that were totally wrong.

So I’ve also had people contact me in the last 24 hours saying “OK, it’s a shortage, and the Opposition is saying more auditors should have come into the country. But we’ve been trying for weeks to get a place in MIQ.”, even though there are some 2,000 beds apparently periodically available, and that’s a job for the auditor also. Why is that happening? Why is there no connect between the largely Government-owned airline that brings people into the country and the managed isolation and quarantine system? No one talks one to the other, there is no central planning, and they are the sorts of things an auditor should be doing. The idea that we’re going to say, “Well, we’re just going to give them a bit more time to come up with these things. Parliament’s sort of slightly interested, but we’ll let it go for another couple of months.” is, in my view, quite an abdication of the responsibilities that this Parliament has.

Had it been a select committee process where there could have been a determination about the priorities that were needed in the auditor’s office, there may have been a different result for us. But, as far as it goes, it is the Government determining they don’t want to have the scrutiny on them that they should have, and allowing all of this to go through, through this extra time period, is a huge disrespect of this House.

HELEN WHITE (Labour): Thank you, Madam Speaker. I’m thrilled to be the last speaker on this bill, because it has been an absolutely arduous task listening to the waffling and the irrelevancies from the Opposition. I commend the ACT Party and the Green Party for making constructive contributions and even holding people to account in a thoughtful way. That did not happen today from the National Party, who made submissions on such things as whether apples would ripen on trees. This is irrelevant, and not very helpful, is it, gentlemen?

Thank you very much. I commend this bill to the House.

A party vote was called for on the question, That the Annual Reporting and Audit Time Frames Extensions Legislation Bill be now read a third time.

Ayes 87

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

Noes 33

New Zealand National 33.

Motion agreed to.

Bill read a third time.

The House adjourned at 10.48 a.m. (Thursday)