Thursday, 23 September 2021

THURSDAY, 23 SEPTEMBER 2021

THURSDAY, 23 SEPTEMBER 2021

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

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

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

Business Statement

Business Statement

Hon CHRIS HIPKINS (Leader of the House): Next week the House will consider the remaining stages of the Counter-Terrorism Legislation Bill, the Social Security (Subsequent Child Policy Removal) Amendment Bill, and the Water Services Bill, and the first readings of the Animal Welfare Amendment Bill, the Civil Aviation Bill, the COVID-19 Public Health Response Amendment Bill (No 2), and the Electricity Industry Amendment Bill. A motion to confirm COVID-19 orders will be debated. As advised to the Business Committee, there’ll be an extended sitting of the House on the morning of Thursday, 30 September.

Hon MICHAEL WOODHOUSE (National): I thank the Leader of the House for that update and ask him, given we’re just over six months away from the stated time for the Government to pass significant amendments to the New Zealand Public Health and Disability Act, whether we can expect to see a bill introduced in the next week or so, or does the Government intend to introduce it later and have a shorter consideration period?

Hon CHRIS HIPKINS (Leader of the House): In terms of the timing of the introduction of health-related legislation, that is a matter for the Minister of Health.

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

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

SPEAKER: No papers have been presented. A petition has been delivered to the Clerk for presentation.

CLERK: Petition of Suzi Taylor, requesting that the House of Representatives urge the Government to make mental health support services free and ensure appointments are available when needed.

SPEAKER: That petition stands referred to the Petitions Committee.

Select committee reports have been delivered for presentation.

CLERK:

Report of the Education and Workforce Committee on the Petition of Camila Vicente

report of the Foreign Affairs, Defence and Trade Committee on the Interim report on the Briefing on the Government’s response to recent events in Afghanistan.

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

CLERK:

Protection of Journalists’ Sources Bill, introduction

Plain Language Bill, introduction

Public Finance (Prohibition on Providing Public Funds to Gangs) Amendment Bill, introduction

Improving Arrangements for Surrogacy Bill, introduction

Criminal Proceeds (Recovery) (Definition of Significant Criminal Activity) Amendment Bill, introduction

Te Ture Whenua Maori Bill, introduction

Companies (Directors Duties) Amendment Bill, introduction.

SPEAKER: Those bills are set down for first reading.

Oral Questions

Questions to Ministers

Question No. 1—Immigration

1. TEANAU TUIONO (Green) to the Minister of Immigration: How many people have been deported by Immigration New Zealand since the beginning of March 2020 and, of these, how many have been deported to Pacific Island nations?

Hon DAVID PARKER (Attorney-General) on behalf of the Minister of Immigration: I’m advised that the total number of people liable for deportation who were deported by Immigration New Zealand from March 2020, including those who self-deported or in other words, departed voluntarily following compliance action, is 1,088. Of this group of 1,088, 119 people were returned to the Pacific. Deportations to the Pacific are fewer when compared with pre-COVID because of both border restrictions and limitations on available flights. The deportees this year included people who had completed prison sentences for convictions of violence such as assault, serious assaults, threats, and intimidation. Where deportations occur, Immigration New Zealand works closely with Pacific Governments on management of that process.

Teanau Tuiono: Does he share the concerns of the Pacific Leadership Forum that fear and anxiety about deportations is a barrier for Pasifika overstayers being tested and vaccinated, and that this could undermine the Government’s COIVD response?

Hon DAVID PARKER: Look, I think the Government’s been absolutely clear that we’re not approaching deportations in that manner and that we’re doing our utmost to include everyone in the vaccinations that we need every New Zealander to take. These deportations are of a different category. I would also note that in respect of Fiji, which, of course, has had COVID problems develop this year, there has been no deportations at all since 22 April this year.

Teanau Tuiono: Does he think that deporting overstayers in the middle of a pandemic sends a message of fear to a community that is being encouraged to come forward to get tested or vaccinated?

Hon DAVID PARKER: Well, as I said in response to an earlier question, I think we’ve made it abundantly clear that vaccinations are not being used to identify overstayers and that the deportations that we have seen earlier in the pandemic were of a different nature. As I also said in another answer, for example, in Fiji, there has not been one deportation, even for released criminals, since 22 April this year.

Teanau Tuiono: Is the Minister confident that people being deported have been tested for COVID-19 to minimise the risk of unknowingly spreading COVID to Pacific countries?

Hon DAVID PARKER: I can’t answer for every person, partly because a lot of the deportations that there have been are voluntary departures by people whose visas have expired. In respect of people who have come from the corrections system, you will have heard from answers that the Minister of Corrections has given to this House that there are considerable steps undertaken within the corrections system to ensure that everyone is safe and free of COVID.

Teanau Tuiono: Does he consider that a decision on an amnesty for overstayers, as a part of a public health response, should be made now rather than at the end of the year through the immigration review?

Hon DAVID PARKER: No.

Teanau Tuiono: Is the Minister confident that Immigration New Zealand conducts investigations into potential migrant exploitation before deporting overstayers?

Hon DAVID PARKER: Could I ask the member to repeat that question? I’m not sure I caught the import of it.

Teanau Tuiono: Is the Minister confident that Immigration New Zealand conducts investigations into potential migrant exploitation before deporting overstayers?

Hon DAVID PARKER: I don’t have detailed information on that. I do have confidence in the department, but if the member wants to put down a question in writing to the Minister of Immigration, I’m sure he would be happy to reply.

Question No. 2—COVID-19 Response

2. ANGIE WARREN-CLARK (Labour) to the Minister for COVID-19 Response: What recent progress has been made on New Zealand’s COVID-19 vaccine programme?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): New Zealand is successfully rolling out at pace the largest immunisation programme the country has ever seen. Nationwide, three-quarters of the eligible population aged 12-plus have now received their first dose and 40 percent have received their second dose, meaning that they are fully vaccinated. Fifty-three percent of Māori have had their first dose, with 26 percent getting their second. For Pasifika, the vaccination rates are 68 percent for the first dose and 36 percent for the second. In terms of our over-65 population, 91 percent have received at least their first dose and 80 percent their second. For those aged between 40 and 64, 80 percent have had their first dose and 44 percent their second.

Angie Warren-Clark: How is the vaccine programme specifically progressing in Auckland?

Hon CHRIS HIPKINS: A phenomenal effort has been undertaken by the people of Auckland over the last six weeks, seeing them leap to the front of the pack with the highest vaccination rates of any region in the country. To date, 1,740,608 doses have been administered in Auckland; 1,134,586 people have had their first dose, allowing them to hit the 80 percent mark in terms of first doses; and 606,000 of them have received both doses and are, therefore, fully vaccinated. I want to pass on my thanks to all those who have been involved in this effort and all those who have already been vaccinated. This is a mammoth operation and they deserve full credit.

Angie Warren-Clark: What innovative steps are being taken to help increase vaccine numbers in Auckland?

Hon CHRIS HIPKINS: Just this morning I met with vaccination providers and the DHBs in Auckland to discuss the ongoing roll-out of the campaign. Auckland have introduced, of course, the now famous Shot Bro buses, which are being targeted specifically to locations where people are currently gathered under level 3 restrictions. The buses are focused on reaching communities less inclined to be actively engaged with the health system. It is a really good example of taking the vaccine directly to the people, and today these buses are out back on the roads in south, west, and east Auckland. I was able to speak with a number of people involved in that earlier today. They are considering other similar and novel approaches to increase vaccine uptake, and I’ll be having similar conversations with other DHBs and providers throughout the rest of this week.

Question No. 3—Prime Minister

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

Rt Hon JACINDA ARDERN (Prime Minister): Yes. In particular, I stand by the Government’s decision to increase funding to Māori health providers to provide ongoing support to Māori communities while responding to COVID-19. We know we all need to do all we can to ensure no one is left behind in our response to COVID-19, and that includes in our vaccination programme. Working with Māori and Pacific providers on our COVID response is part of that strategy.

Hon Judith Collins: Why were protocols not in place to prevent a COVID-positive gang member being remanded to an address outside of Auckland, despite the Government having 18 months to plan for regional lockdowns?

Rt Hon JACINDA ARDERN: I refute the premise of that member’s question.

Hon Judith Collins: Why are New Zealanders still not able to show digital proof that they have been vaccinated, when most other countries have had this system in place for months?

Rt Hon JACINDA ARDERN: I’d point the member to the fact that most of those countries who have those digital tools have also been using them as certificates for entry to different sites and so on. Of course, we are not in that position currently. We do have an ability for people to access a demonstration, a certificate of sorts, that they have been vaccinated. People have been doing that through the Ministry of Health and, as I’ve said in this House before, we are currently working on a digital model that will allow people to be able to carry that information certification with them, and we expect that to be completed shortly.

Hon Judith Collins: So did the Prime Minister say just recently, just today, that she refutes the allegation that a COVID-positive gang member was remanded to an address outside of Auckland; in which case, how does she refute that?

Rt Hon JACINDA ARDERN: I refute that there weren’t protocols in place.

Hon Judith Collins: Then why weren’t they followed?

Rt Hon JACINDA ARDERN: An individual is able to be bailed to an address outside a level 4, as it were, environment. The issue was around the way that person was potentially transported or came into contact with COVID in the future.

Hon Judith Collins: Has she received a report that an additional eight Middlemore staff have been stood down after gang members connected to the Mongrel Mob cluster, who should have been self-isolating, visited an associate on Tuesday evening in the hospital?

Rt Hon JACINDA ARDERN: Whilst I don’t have the individual affiliation of individual contacts, the member will be aware that there was an individual who was a close contact who did seek to visit another contact. That individual, yes, was meant to be self-isolating. I am advised that that individual has tested negative, but of course is still obliged to continue to follow the public health rules, as we do for all contacts.

Hon Judith Collins: What processes are in place to protect the staff of Middlemore Hospital from situations like this continuing to occur?

Rt Hon JACINDA ARDERN: I think it’s unfair to state “continuing to occur” as if somehow all 30,000 individuals who have been covered by requirements under our COVID response have somehow acted in this way—they have not. We have here an incident that has occurred where security personnel were involved because they are close contacts—they’ve been treated as contacts as a result of this incident. Of course we want to maintain security to keep our professionals safe, and in this scenario some of those individuals who have come in contact, there are protocols being followed to ensure their ongoing safety from COVID-19.

Hon Judith Collins: So why are gang members being allowed to break lockdown rules, breach their isolation orders, and spread COVID; and what action does she intend to take to stop this continuing?

Rt Hon JACINDA ARDERN: It is simply wrong to imply that we have an environment where everyone is just able to do whatever they want. Of course they haven’t. Broadly speaking, we have had excellent compliance. We unfortunately have had some examples where there have been issues with compliance, but I would put the emphasis on “some examples”. The member has relayed one; we’ve had others that relate to our border breaches that we’ve seen that have cut across all walks of life. COVID affects everybody. Our job, collectively, is to make sure that we have rules in place to keep people safe, to do what we can to enforce those rules, and to act when those rules are broken. But the member making assertions as if somehow every single contact has behaved in this way is just wrong.

Question No. 4—Local Government

4. TANGI UTIKERE (Labour—Palmerston North) to the Minister of Local Government: What steps has the Government taken to ensure that the Three Waters Reform proposals are well understood by councils?

Hon NANAIA MAHUTA (Minister of Local Government): Right from the beginning, I’ve worked closely with local government. We’ve established a steering group with Local Government New Zealand (LGNZ) and Taituarā , and the subsequent technical working group to address specific areas of the work programme. Prior to the local government conference, the Government released detailed information on the case for change, the reform objectives, and proposed design features. The Government and LGNZ technical advisers have provided councils with a variety of tools to help them understand their individual positions with and without reform. Officials from the Department of Internal Affairs and members from LGNZ and Taituarā have undertaken an extensive period of engagement with local government during August and September to ensure the reform proposals and the impact on councils and ratepayers are well understood. LGNZ and officials are continuing to hold one-on-one discussions with councils at their request, as we would expect.

Tangi Utikere: What feedback has she received from councils in relation to the proposed changes?

Hon NANAIA MAHUTA: At the request of LGNZ, the Government entered into an eight-week period over August and September to enable councils time to consider the reform proposals, understand the implications for their communities, and provide feedback on those proposals. I thank councils who have engaged and provided feedback. I’m hearing some clear themes that include consideration of how the entity governance, planning interface, and iwi and community input will be achieved in the new system, and how they might be strengthened according to local preferences. I’m committed to working in partnership with local government, iwi, and Māori throughout the reform journey, and I have indicated that right from the beginning. I’m also aware that there’s some public discussion about the Government’s modelling, in particular, that undertaken by the Water Industry Commission for Scotland, using data provided by each council. This Government has confidence in the modelling undertaken for us by a reputable international expert organisation. It’s been independently assessed and proven to be robust.

Tangi Utikere: What does she say in response to suggestions that pausing the reform will help the challenges faced by councils?

Hon NANAIA MAHUTA: Pausing the reform discussion will not help to respond to the significant challenges facing councils. Many of New Zealand’s communities are dealing with rising costs and unacceptable outcomes from their three waters services; that’s not good for the health of people or the environment. The case for change is strong, well canvassed, and generally accepted by most. These challenges have been discussed for more than two decades and it’s time to do something about them.

Tangi Utikere: With regards to the issues raised by councils, is there room to consider their concerns within the context of the proposed reforms?

Hon NANAIA MAHUTA: We’ve given councils eight weeks—until 1 October—to provide feedback on the water reform proposals. As I’ve already noted, prior work and feedback through this period has identified potential refinements to the current policy design. I’m willing to work in partnership with local government and iwi to ensure the reforms meet the needs of communities; that’s very important. We’ve already considered and ruled out alternatives to reform such as regulation-only models and further central government funding of local government infrastructure for an inefficient network. There are inherent challenges that create a cost burden either way on ratepayers or taxpayers. Our reforms—the ones that I’m proposing—are designed to improve public health and environmental outcomes, improve efficiency of service delivery, support a financially sustainable system, improve infrastructure delivery and decision making while upholding the rights and interests of iwi through Te Mana o Te Wai.

Hon Eugenie Sage: Is the Minister still actively considering making it mandatory for councils to become part of the four regional water entities if too many councils decide to opt out; if so, why?

Hon NANAIA MAHUTA: Thank you for the question. As I’ve said, the case for change is compelling, well understood, and needs to be addressed. We’ve undertaken about 30 different sets of modelling to see whether or not there is any significant alternative that would enable a financially sustainable model to invest in the significant costs facing councils. The issue is now for councils to consider the proposal in a way that they will continue to own the assets—albeit within the reform that’s being proposed—and have greater oversight in the way in which efficient governance of those assets can deliver community benefits; that is the proposal in front of councils. We’ve shifted significantly the discussion into a space where, I believe, even councils cannot ignore the opportunity they have ahead of them.

Question No. 5—Broadcasting and Media

5. BROOKE VAN VELDEN (Deputy Leader—ACT) to the Minister for Broadcasting and Media: Does he stand by his statement, “we are constantly reviewing our safeguards to ensure we have the right tools to respond to potential issues of foreign interference” in relation to reports over Skykiwi’s terms of service?

Hon ANDREW LITTLE (Minister of Health) on behalf of the Minister for Broadcasting and Media: Yes.

Brooke van Velden: When was he first made aware that a leading New Zealand news outlet, Skykiwi, warned its users their information could be shared with relevant State agencies if they violate Chinese law, and does he believe Skykiwi’s terms of service are an infringement of standards expected by media?

Hon ANDREW LITTLE: I became aware of the situation the member describes in an online article in the last two weeks, and I simply point out to that member that the law in New Zealand covering New Zealand citizens and residents is the law of New Zealand, and laws from other sovereign countries are not enforceable in New Zealand.

Brooke van Velden: Does he believe that New Zealanders of Chinese origin are exposed to Chinese State surveillance and censorship by Skykiwi; and, if so, what is he doing to protect freedom of speech on media platforms?

Hon ANDREW LITTLE: I think it is a stretch to say that purported conditions of use or participation on an online platform constitutes external surveillance by a different sovereign State. New Zealanders participating in any form of media in New Zealand have the benefit of our laws, including our New Zealand Bill of Rights Act and the confirmed freedoms of speech and expression, and for news media outlets who are covered by, for example, the Media Council, which Skykiwi is, they have the benefit of the principles and values and rules of that organisation, and methods of recourse if a user considers those rules have been breached.

Brooke van Velden: Will his inquiry ensure that we can stop Chinese Communist Party interference of New Zealand media to the extent where media outlets feel obliged to share New Zealanders’ data with the Chinese Communist Party?

Hon ANDREW LITTLE: I’m not quite sure what inquiry the member is referring to, but what I can say is that there is a review of media content or regulation under way that will also include what the likes of the Media Council and the Broadcasting Standards Authority do to ensure that the organisations under their remit comply with the standards that those organisations stand for.

Brooke van Velden: Does he believe New Zealanders of Chinese origin have the same rights to be free from foreign interference and freedom of association as all New Zealanders?

Hon ANDREW LITTLE: Well, the people who that member refers to, whilst in New Zealand, are covered by New Zealand laws and rules and norms, and that includes our New Zealand Bill of Rights Act, which confirms and upholds the rights of freedom of expression and freedom of speech.

Question No. 6—Finance

6. Hon TODD McCLAY (National—Rotorua) to the Minister of Finance: Is he concerned with a report from the Restaurant Association who have said 1,000 of their members are on the brink of closure without additional support; if so, what additional targeted action will his Government take to save these businesses in the hospitality, retail and event sectors?

Hon GRANT ROBERTSON (Minister of Finance): The loss of businesses and jobs anywhere in the economy amid the uncertainty created by COVID-19 is concerning. That’s why the Government has responded quickly and decisively to put in place support such as the wage subsidy scheme to help firms keep operating and help keep people connected to their jobs. In answer to the second part of the question, as we have done continually through this pandemic, we will update and expand our support to businesses and workers to ensure it is adequate. During this latest outbreak, we’ve expanded the coverage of the Resurgence Support Payment to include new businesses, as well as modified it into a three-weekly payment to recognise the extended period of alert level restrictions. The way that these supports are structured, including criteria around revenue drops, act as a de facto targeting to sectors such as those mentioned in the member’s question, in terms of the support that they have received.

Hon Todd McClay: Thank you. Why has a wage subsidy not been paid to 37,000 businesses who have waited five weeks, and is he aware of the significant financial and mental distress this is causing?

Hon GRANT ROBERTSON: I’m not 100 percent sure how that relates to the primary question that the member’s asked, but as the member is well aware, we’ve traversed this matter in the House before. In large part, this is a data-matching exercise between Inland Revenue and the Ministry of Social Development, in particular for those who are sole traders whose tax code with Inland Revenue does not indicate that they are sole traders. The member and his party have been very keen to make sure that the wage subsidy scheme has integrity measures built into it. This is one of those integrity measures. I have been raising consistently with the Ministry of Social Development and Inland Revenue my desire to see these resolved quickly. I would note that 91 percent of applications are being processed within the three-day period indicated.

Hon Todd McClay: Is it correct that the Government was asked on 9 June by the events sector for assistance with an insurance scheme that would’ve paid $20 million to its members if New Zealand was placed into COVID level 4 and that his Government has said no to this help?

Hon GRANT ROBERTSON: Mr Speaker, again asking, really, whether or not that is relevant to the primary question. But we’ve had ongoing discussions with the events sector going back all the way through to last year. There have been calls for a number of different types of underwriting schemes. At this stage, the Government has decided not to go down that path because, clearly, it would be an enormous precedent setting exercise. I do know that some local councils have taken that on. I would also note that the Government has provided significant assistance to the events sector via, for example, the $50 million fund that’s gone to regional tourism operations to put on events, and we continue to work with the sector to see how else we can support them.

SPEAKER: Just before I ask Mr McClay to ask his next supplementary, I want to make it clear to the Minister of Finance that judgments as to relevance of questions are mine and not his, and his asides are not helpful. In the latest case, he is plainly wrong.

Hon Todd McClay: Thank you, Mr Speaker. Is it fair that businesses currently in level 2 can still apply for the wage subsidy but that Auckland businesses will not be eligible when they go to level 2, even though their need is perhaps greater, and will he change this policy setting for Auckland?

Hon GRANT ROBERTSON: The wage subsidy scheme has always been related to levels 3 and 4, where there are a significant number of businesses who either cannot trade or trade significantly below where they would normally want to do. The Government has put in place the Resurgence Support Payment that is available at level 2 or above to support businesses with fixed costs that are more in line with what the restrictions are at alert level 2, and, as we have said, that Resurgence Support Payment is now available on a three-weekly basis.

Hon Stuart Nash: Can he please advise if the Small Business Cashflow (Loan) Scheme, which is interest free for two years, is available to businesses in the hospitality sector?

Hon GRANT ROBERTSON: Yes, I can confirm that the small business cashflow scheme is open. It is also open to anybody who has already drawn down the funding and paid it back or to those who haven’t drawn down the full amount of funding, and they can top up to that. It is a scheme that is still attracting a number of applications every week.

Hon Todd McClay: What does he say to the owners of the 1,000 restaurants that are reportedly about to close after doing everything that his Government has asked of them, and does he think this sacrifice could be avoided with additional targeted support, not just more debt?

Hon GRANT ROBERTSON: What I say to those businesses is that, as the Government has done throughout the pandemic, we will continue to work with them. One of the things I do know is that, when we saw similar predictions during the first lockdown, the actual result was that those businesses ended up busier than ever when New Zealand was at alert level 1, to the point that the same organisation mentioned in the member’s primary question was approaching us about the fact that they didn’t have enough staff to meet the demand that was happening during alert level 1. What the answer here is to make sure we continue to take the same response that the Government has taken throughout the pandemic, which is that a strong public health response is the best one for the economy overall.

Point of order, Mr Speaker. Can I ask you to reflect in terms of the earlier exchange that we had around the question and perhaps come back to me, or to the House more broadly? You’ve previously ruled around the relationship between two parts of a question, and obviously the second part of this question is much wider than the first part of the question, and so I just ask you to reflect on what it might mean in terms of questions and supplementaries.

Hon Michael Woodhouse: Speaking to the point of order, just in your considerations of that, I think the second part of that question is based on a belief honestly held that the restaurant industry is directly affected by what goes on in the event industry. For example, a sold-out test at Eden Park would indeed fill the cafes and restaurants in Mount Eden. It is, I think, a direct nexus to the first part of the primary question.

Hon GRANT ROBERTSON: Speaking further to the point of order, I would note for the member that that organisation is called the Restaurant Association, and my understanding about that organisation is that it represents restaurants as opposed to the retail and event sectors.

SPEAKER: I think the Minister of Finance is dancing on the head of a pin, and I feel no need to—

Hon Gerry Brownlee: Must be a bloody big pin!

Hon Simon Bridges: Well, it is about restaurants!

SPEAKER: Well, Thursday afternoon, Mr Bridges and Mr Brownlee. I understand your wish to get early planes, but we’ll just leave it for now, shall we? I shall punish you by making you stay here. I’ll go back to the Minister of Finance and tell him that I don’t need any more time to reflect. My ruling stands.

Question No. 7—Agriculture

7. ANNA LORCK (Labour—Tukituki) to the Minister of Agriculture: What recent support has the Government provided for the agricultural sector?

Hon DAMIEN O’CONNOR (Minister of Agriculture): The Government continues to support the engine room of our economy as we build our recovery from COVID-19 and seek to position ourselves in high-value markets. I’d like to take the opportunity to thank those people through the farming sectors who have worked right to keep our export revenue coming into this country. I recently announced further investments to support them through the Sustainable Food and Fibre Futures fund. To date the Government has co-invested more than $150 million into 157 projects worth almost $299 million in total. It’s a key part of the Government’s Fit for a Better World, accelerating our economic potential road map. We’ve also announced funding of catchment groups, with 171 now supported across New Zealand by the Government, and we are supporting a total investment of almost $29 million.

Anna Lorck: What are some of the recent projects being funded through the Sustainable Food and Fibre Futures fund?

Hon DAMIEN O’CONNOR: We’re investing $6.68 million, for example, into a seven-year partnership with Beef + Lamb New Zealand, which is targeting a 10 percent reduction in greenhouse gas emissions per kilogram of product produced. It’s also expected to result in more efficient cows within the next 25 years through the use of artificial insemination and genomic selection to identify the bulls with the best genetic markers earlier in their life, and with greater accuracy. We’re also contributing $2.6 million to a $5 million project to develop a commercial-scale autonomous robotic asparagus harvester to help address the ongoing labour shortages in the asparagus industry and to support New Zealand asparagus growers to tap into high-value export markets.

Anna Lorck: How is the Government engaging with the farming sector in practical ways to help it restore waterways?

Hon DAMIEN O’CONNOR: We have said that we want waterways restored within a generation, and, to that end, last week I also announced the $2.1 million funding for 31 farmer-led catchment groups in the lower North Island—in the Rangitīkei, Manawatū, and Wairarapa. This enables growers’ groups and farmers to employ catchment coordinators and farmers to develop farm environment plans to understand the environmental challenges and opportunities on their property, as well as helping farmers to produce nutrient budgets, calculate their agricultural greenhouse gas emissions, and understand changing environmental regulations. It’s through farmers working together in catchment groups and integrating the practical insights from them into their farm plans that we’ll be able to shift the dial.

Question No. 8—COVID-19 Response

8. CHRIS BISHOP (National) to the Minister for COVID-19 Response: What specific progress has been made with negotiations with Pfizer for COVID-19 booster shots, which the Director-General of Health said over a month ago were “at sort of a fairly crucial stage”, and is New Zealand intending on ordering booster shots for the COVID-19 vaccine programme?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): To date, the Pfizer vaccine has been approved for two doses and Medsafe awaits data from Pfizer clinical trials before approving its use for additional doses. The Ministry of Health is in continual discussion with Pfizer and other pharmaceutical companies about New Zealand’s future vaccine needs and it continues to review all of the latest scientific evidence. Commercial conversations with the suppliers remain sensitive and I won’t be disclosing specific details.

Chris Bishop: Why were negotiations with Pfizer for booster shots at a critical stage over a month ago; why have they not yet concluded?

Hon CHRIS HIPKINS: In the context of commercial negotiations, you often reach particularly important points in the negotiations and I’ll imagine the director-general felt at that point that we were at a particularly important point in the discussions with Pfizer.

Chris Bishop: Right. Why has New Zealand not taken a no-regrets approach to ordering boosters—in other words, ordering as many as we possibly can as quickly as we can to give ourselves options in the event that we need them?

Hon CHRIS HIPKINS: That is exactly what the New Zealand Government has been doing around vaccines. That is why we continue to adopt a portfolio approach to vaccines, so that we have options based on what our future needs may be, so that we’re not narrowing down too much and making decisions too prematurely about what might be best for New Zealand’s needs in the future.

Chris Bishop: Will New Zealanders be at the front of the queue for booster shots if they are needed?

Hon CHRIS HIPKINS: It will depend on the nature of the booster shots needed when they might be needed. I can say that from the conversations we’ve been having with Pfizer, I am confident that in the event that the evidence stacks up, supporting the need for a third shot of the Pfizer vaccine, we will be able to get access to that in a timely manner. But I also want to reiterate that we are not banking on that being the only option that New Zealand needs to have access to. We are in discussions with other pharmaceutical companies. Where agreements have been signed and it’s appropriate to announce them, that’s what we do.

Chris Bishop: Is the Government in discussions with companies other than those that we have advance purchase agreements with for the four vaccines at the moment, and, if so, what are those companies?

Hon CHRIS HIPKINS: In answer to the first part of the question, yes. In answer to the second part of the question, those are commercial negotiations.

Question No. 9—Internal Affairs

9. JAMIE STRANGE (Labour—Hamilton East) to the Minister of Internal Affairs: How is the Government encouraging young New Zealanders to make informed decisions online?

Hon JAN TINETTI (Minister of Internal Affairs): I am pleased to inform the House that the Government’s innovative and successful “Keep It Real Online” campaign is back, with the latest episode of the Eggplant series now available on TVNZ Ondemand and YouTube. This latest episode is focused on tackling misinformation. Misinformation is often camouflaged to make it hard to tell what’s real and what’s not. It’s a big issue for our young people, particularly at the moment, when getting and sharing accurate information about COVID-19 vaccinations is so important. Equipping young people with the tools to determine fact from fiction has never been more critical. And can I also recommend that to the members in this House.

Jamie Strange: Why was the theme of misinformation and disinformation chosen?

Hon JAN TINETTI: We know from the last nationwide lockdown that young Kiwis are spending more time online than ever. We also know from a report released by the Classification Office that 75 percent of New Zealanders surveyed thought false information about COVID-19 is an urgent and serious threat to New Zealand society. So it’s really important that young people are getting and sharing reliable information about COVID-19 and vaccinations, so they can make well-informed decisions. This latest episode is targeted to 13- to 18-year-olds, and explores how easy it can be to take information at face value without checking the facts.

Jamie Strange: Why was the miniseries chosen as the format for the educational campaign?

Hon JAN TINETTI: The Government recognises that traditional forms of public health and safety messages are not always the best way to reach our young people, and that we need to evolve with the times. The whole purpose of the “Keep It Real Online” campaign is to explore complex and sensitive issues in a way that young people find engaging and relatable. The focus on identifying false information in the latest episode takes a light-hearted approach to this serious subject and encourages young people to engage their critical thinking. Students from Rangitoto College and Manurewa High School were involved in the creation of this episode, to ensure that the messages are understood and that the storyline is engaging.

Question No. 10—Transport

10. Hon DAVID BENNETT (National) to the Minister of Transport: Does he agree with the Motor Industry Association that “When combining fees under the clean car discount with penalties under the clean car standard, the price for light vehicles will need to increase on average by about 15 to 20 percent to offset the penalties”, and what advice has he received on any likely increase in the price of light vehicles as a result of his policies?

Hon JAMES SHAW (Minister of Climate Change) on behalf of the Minister of Transport: To the first part of the question, no. The fees and rebates under the clean-car discount are applied at the point of registration of the vehicle, so do not apply to importers and sellers. As the standard is based on the fleet of vehicles imported by importers, they can use a range of vehicles to achieve an average emission that meets the target—for example, this allows importers to sell electric and hybrid cars to offset higher-emitting vehicles and achieve compliance. In those instances, importers would not be subject to any penalty and, therefore, it should not affect buyers. To the second part of the question, as I said to the previous transport spokesperson on 29 June on this very matter, I have received a range of advice on that matter, including “a meta-analysis of CO2 standards in OECD and non-OECD countries suggest they do not necessarily lead to noticeable price increases.” The ministry’s projections expect the price of electric vehicles and petrol hybrids to fall over the period. The risk of supply constraints and price rises is also mitigated by the design of the standard. Its design has been substantially modified from the standard that was consulted upon.

Hon David Bennett: Does he stand by Annex 1 of his Cabinet paper “Clean car discount finalising our standing decisions”, which details that the car fees will be progressively phased in so that in 2028 even a small car like a Suzuki Swift will be taxed?

SPEAKER: I’m going to ask the member to rephrase his question so it relates to either of the parts of the primary question or the answer that was given.

Hon David Bennett: When the Minister said that he has received advice on the price impact on new cars that buyers will have when they purchase under these new rules, then does he stand by his Cabinet paper which details that car fees will be progressively phased in so that in 2028 even a small car like a Suzuki Swift will be taxed?

SPEAKER: No. No, advice given to a Minister and Ministers’ Cabinet papers are quite different things.

Hon David Bennett: Well, I’ll try again, then. Supplementary question—

SPEAKER: That’s fine, but this is your next supplementary. You had one extra go at it.

Hon Member: Oh, that’s a bit unfair.

SPEAKER: No, it’s not unfair if the member can’t get it right. He’s been a Minister. He knows the difference between advice and Cabinet papers.

Hon Michael Woodhouse: Point of order, Mr Speaker.

SPEAKER: A point of order, the Hon Michael Woodhouse—[Interruption]—and people over there will be quiet.

Hon Gerry Brownlee: Well, if that’s the case, we could help you.

SPEAKER: Order! Mr Brownlee, they made their comments before I called Mr Woodhouse. You made them afterwards. Your breach is, if possible, worse than theirs.

Hon Michael Woodhouse: Mr Speaker, it’s very clear to anybody reading Cabinet papers that the recommendations are the Minister’s, but the information that is contained in an annex that supports it is the advice that the Minister receives. I think we’re dancing on the head of a definitional pin to say that that supplementary question is out of order.

SPEAKER: Well, my view is that if the member was right, it would be the end of ministerial responsibility.

Hon Michael Woodhouse: Well, speaking to that point, the—

SPEAKER: No, I’m not going to have a debate. I’m going back to David Bennett.

Hon David Bennett: Can he confirm that if taxes are phased in on light vehicles, the Ministry of Transport modelling shows only a 0.2 percent reduction in New Zealand’s emissions in 2030?

Hon JAMES SHAW: The combination of policies here are projected to reduce New Zealand’s projected greenhouse gas emissions by over 5 million tonnes.

Hon David Bennett: Why won’t he release a finalised fees schedule before the submissions begin on the clean vehicles bill so that people know what vehicles will be taxed and when?

Hon JAMES SHAW: Well, I understand that the submissions are important. We actually want to hear from the industry and other people who are involved.

Hon David Bennett: Point of order, Mr Speaker. He didn’t answer the question. He said that submissions were important. I said why wouldn’t he release—he should surely answer that.

SPEAKER: I will ask the Minister to be more—to have an answer which relates more to the question about the release.

Hon JAMES SHAW: Well, on behalf of the Minister: I’m actually unable to discuss the release without talking to the Minister, but the Government does want to hear from the industry. That’s why we’ve got a full select committee hearing, and those issues will be canvassed at the select committee.

Question No. 11—Customs

11. GLEN BENNETT (Labour—New Plymouth) to the Minister of Customs: What is Customs doing to facilitate trade and support New Zealand’s economic recovery from COVID-19?

Hon MEKA WHAITIRI (Minister of Customs): Customs is increasing trade opportunities and helping goods to flow more efficiently across the border, contributing to the economic recovery of New Zealand’s economy from the impacts of COVID-19. Internationally, Customs is advancing work to upgrade the ASEAN-Australia-New Zealand Free Trade Agreement and is contributing to new free-trade agreements with the United Kingdom and the European Union. In June, a work plan towards a mutual recognition agreement with Thailand and the United Kingdom was agreed to, while work on a secure trade lane with Australia continues to progress. Customs has expanded its Authorised Economic Operator programme, the Secure Exports Scheme, and made it easier for businesses to join—in particular, Māori exporters. It has marketed the service so approved traders can benefit from certainty of supply chain and delivery time frames. Customs continues to engage with small to medium sized enterprises (SMEs) through its work on APEC 2021 to learn more about some of the challenges and opportunities these enterprises face as they navigate the COVID-19 environment and ways in which Customs administration can support the economic growth of SMEs in the region. Supporting small to medium sized enterprises is a valuable way of increasing the diversity of New Zealand’s export base and encouraging economic growth in the regions.

SPEAKER: Can I just say to the Minister that that answer was far too long.

Glen Bennett: How is Customs supporting the import of critical supplies here in Aotearoa as well as overseas?

Hon MEKA WHAITIRI: Customs is working closely with industry groups and other Government agencies to ensure there are no delays in clearing critical supply chain goods, including the COVID-19 vaccine. Customs recently led work to deliver a set of best-practice guidelines for Customs administration to support the roll-out of COVID-19 vaccines in the APEC region. This was a great win not just for New Zealand but also the 21 member economies to ensure that COVID-19 vaccine and related goods flowed across borders as quickly and as efficiently as possible.

Glen Bennett: How is Customs supporting New Zealand traders to navigate the impacts of COVID-19?

Hon MEKA WHAITIRI: Since the onset of COVID-19, Customs has negotiated repayment plans with 350 businesses on around $130 million worth of debt. Of that amount, only $30,000 remains outstanding. Customs has also lessened the load by allowing refunds of interest and penalties on repayment plans. Measures like these provide much-needed breathing space, allowing affected businesses to pivot if needed and, ultimately, build back better.

Question No. 12—Local Government

12. BARBARA KURIGER (National—Taranaki - King Country) to the Minister of Local Government: Does she stand by all of her statements and actions?

Hon NANAIA MAHUTA (Minister of Local Government): Yes, in particular when I thank the Federated Farmers and Irrigation New Zealand for their involvement to ensure the workability of the Water Services Bill and to confirm that Taumata Arowai will work according to the scale, complexity, and risk profile of drinking-water suppliers so that there are more appropriate responses for small and rural communities.

Barbara Kuriger: What is her response to Local Government New Zealand president Stuart Crosby’s request to her and the Prime Minister, with respect to three waters, “There needs to be more time to work through the key outstanding issues beyond the current eight weeks.”?

Hon NANAIA MAHUTA: My response to Stuart Crosby has been what it has always been: we will continue to work with local government to ensure that the water reform proposals that are being forwarded are done in partnership with the sector.

Barbara Kuriger: Will she pause or halt the three waters reforms given Local Government New Zealand and numerous mayors, councils, and communities across the country have called for her to do so, and, if not, why not?

Hon NANAIA MAHUTA: No. Pausing the conversation around the reform agenda will not change the scale, size, or complexity of the challenge confronting councils. We’ve provided evidence and research that shows that the looming costs facing councils will be unbearable by ratepayers. We’ve also highlighted the need for councils to consider this seriously, because once Taumata Arowai is stood up, higher drinking-water standards and environmental standards are enforced, the several councils that are operating their waste-water treatment plants on expired consents will significantly bear the load of infrastructure investment.

Barbara Kuriger: Will she take to Cabinet any changes to the water entity model; if so, what will they be, and, if not, why not?

Hon NANAIA MAHUTA: I’ve given an undertaking to Local Government New Zealand that we will work with them and councils to understand the information. They will have up until 1 October. At that point, I will present information to Cabinet and identify the range of issues that we can work on with the sector to address many of the challenges that they’ve identified during that period. I’ve given an indication in an earlier question of what those challenges are: governance arrangements, the way in which councils will work with iwi and their communities around the benefits of reform, and also the way in which economic regulation will help deliver those benefits.

Bills

Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill

First Reading

Debate resumed from 21 September.

SPEAKER: The question is that the motion be agreed to. Those of that opinion will say Aye; to the contrary will say No. The Ayes have it.

Motion agreed to.

Bill read a first time.

SPEAKER: I call on—sorry. The question is, That the Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill be considered by the Finance and Expenditure Committee.

Motion agreed to.

Bill referred to the Finance and Expenditure Committee.

Hon MICHAEL WOODHOUSE (National): I seek leave for there to be a party vote on the first reading, in order that the National Party can record its 33 votes in opposition.

SPEAKER: Is there any—I see no objection to that. We will have a party vote on the second to last question.

A party vote was called for on the question, That the Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Bill be now read a first time.

Ayes 67

New Zealand Labour 65; Te Paati Māori 2.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Abstentions 10

Green Party of Aotearoa New Zealand 10.

Bill read a first time.

Motion agreed to.

SPEAKER: I declare the House in committee for the Water Services Bill.

Bills

Water Services Bill

In Committee

Part 1 Preliminary provisions

CHAIRPERSON (Adrian Rurawhe): Members, the House is in committee on the Water Services Bill. Part 1: this is the debate on clauses 3 to 20, and Schedule 1. The question is that Part 1 stand part.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Chair. I wanted to speak, in Part 1, to clause 8 of the bill, and I wanted to speak to the Supplementary Order Paper in the name of Christopher Luxon. And, clause 8, the request is that we insert a new clause 8(f), for which the wording is “does not include a supplier who supplies drinking water to fewer than 30 end point users.” And the reason I wish to speak to that, and perhaps ask some questions to the Minister around that, is that we see that this clause is going to be quite an administrative burden not just for the farmers, for the bach owners, for the marae but also for the people in Taumata Arowai who have to go through the process of setting up the administration functions for this particular piece of legislation. And, while we accept that the Minister has her own Supplementary Order Paper which proposes to extend the time, we still feel that to go to this level and have water sources under 30 end point users will create a lot of angst amongst smaller suppliers.

And a second question for the Minister is: firstly, is she confident that the administration will be able to be set up around it? Secondly: is she confident that a lot of water suppliers who currently supply a neighbour or somebody else are not going to simply disconnect those water pipes and expect those neighbouring houses to supply their own water?

Hon NANAIA MAHUTA (Minister of Local Government): Firstly, can I thank the member for speaking to the Supplementary Order Paper introduced by her colleague Chris Luxon, who was a member of the Health Committee. Our first premise around the approach to small suppliers is to ensure that every small and rural water supply is brought into a higher-standards framework. We don’t want to abandon any community. We want the assurance of every drinking-water supplier to be included. I think, helpfully, and the select committee will be aware of this through the consideration of this particular issue, it’s simply not true that drinking-water contamination is only experienced through metro suppliers; it is also experienced in smaller suppliers.

The Ministry of Health’s annual report on drinking-water quality gave some information that, between the period 2019 to 2020, it reported that suppliers serving 501 to 5,000 consumers were 43.8 in compliance and those suppliers serving 100 to 500 consumers were at a compliance rate of 31.3 percent. And, again, it was very unknown as to what the level of compliance was for those water suppliers, drinking suppliers, serving 100 customers or less.

But, practically, the benefit of including small suppliers into the regime that we are proposing, that is overseen by Taumata Arowai, is that Taumata Arowai will be responsible for working with small suppliers towards practical solutions, and “practical” is the operative word, because we want to ensure that small suppliers and the nature and profile of how they supply water according to the scale, size, and complexity, as we’ve said in this House, is taken into account as we come up with solutions that work for small suppliers.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Chair. Just a further question to follow up on that one, we know that there are options around water filters and UV filters and things like that. Were there any other options that were discussed that would have perhaps suited the purposes of the small water suppliers, other than a registration process?

Hon NANAIA MAHUTA (Minister of Local Government): There may well be other options, but the point that we were trying to get to—and there’s some experience of Taumata Arowai as the bill was being considered because they were working with small suppliers and rural communities around practical considerations. So there may well be in the future. That’s probably the best answer. But as it stands now, the opportunity to make provisions for UV devices at the point of—like, at the house, will enable small suppliers to ensure that they can provide the household safe drinking water.

Now, I have some experience of this to the extent that part of my electorate has large rural areas. You only need to visit the rural parts of your communities to know that there could be some 5 kilometres between where water is sourced, to stock being fed, and then the house falls after that particular set of challenges around water supply.

So Taumata Arowai, according, again, to the scale and profile of what they’re dealing with in small rural supplies, will take all of this practically into account. There is no sense whatsoever in our conversations with rural advocates that they have misunderstood the intention of the legislation. I think there is a fair reflection back from them, as we want to be assured, that when Taumata Arowai is working with them to seek out practical solutions those solutions are practical. And that is the intention.

MARK CAMERON (ACT): Thank you, Minister. As you’d be acutely aware, I live in a rural community. Seventy-five percent of the Kaipara is on self-served water. You know, this, to rural people, is actually a real concern. You’ve used the word “abandoned”—“We’re not going to abandon anyone”. Well, a lot of rural communities actually feel abandoned by this legislation in so much as what it proposes to do is, firstly, and I think the National member Barbara Kuriger alluded to the fact, it doesn’t give a carve-out for people in small rural communities or irrigation schemes which often have—like, for example, under 30 homes, six homes, seven homes, and this is going to put huge amounts of fiscal onus on them, which they don’t actually need.

Can the Minister speak to what financial penalties they might be facing if they get encapsulated by this scheme, and who is that legal onus on? We’ve got irrigation schemes, farm water schemes, all over New Zealand, that this piece of legislation takes the rights of ownership away from.

Hon NANAIA MAHUTA (Minister of Local Government): At the fear of going right down the tunnel hole in the wrong direction in terms of the intent of this legislation, can I say that the solution that we came up with, in consultation with rural advocates who wanted to ensure a practical solution, is something that goes along these lines. Firstly, a supplier that chooses to comply with an acceptable solution doesn’t need to have a drinking-water safety plan or a source water risk management plan. So the compliance issues that you’re talking about largely relate to, kind of, some of those perceived challenges.

In addition to that, consumer complaints will not apply to very small suppliers, only public suppliers. The registration process is intended to be simplified, especially for small suppliers, and made free. And there will be tailored online templates and guidance for small suppliers, because we’ve heard the concerns from rural communities that if there is too much red tape around the way in which we’re expected to engage with the legislation, that would be problematic.

The other area is that, as I said, Taumata Arowai, by and large, will work with the Ministry for Primary Industries, especially in rural communities such as the member’s, to simplify any compliance issues that are unnecessary and not in keeping with the intent of the legislation again. The clear intention from the outset with the Water Services Bill is to tailor solutions for rural and small suppliers in a very practical way, to ensure workability.

MARK CAMERON (ACT): Minister, just if I may, just to get some clarity here, can she give the rural community some certainty that those that are offering the service of supplying safe drinking water to half a dozen homes won’t opt out of this piece of legislation, and, by virtue of doing so, affect the wellbeing of half a dozen houses that are now, effectively, cut off because of this piece of legislation?

Hon NANAIA MAHUTA (Minister of Local Government): I think the way that the question is framed is difficult, because it’s not an opt-out scenario. This is an opportunity where the Health Committee has argued and brought forward, and I have accepted, that the period of times for rural suppliers to be included into this regime should be extended. We have pushed that time frame out to around about seven years, and we’ve ensured that Taumata Arowai will have some working examples of how to accommodate some of the challenges in the rural profile and the nature of how water is supplied to their communities so that practical solutions are achieved.

PENNY SIMMONDS (National—Invercargill): Thank you, Mr Chair. Could the Minister explain to us what she said, earlier in the day in the House, that she was very pleased with the consultative work that had gone on with Federated Farmers, and how that aligns with the comments from Federated Farmers—under the headline, “Feds’ worst fears realised on drinking water reforms—that said, “We wanted the government to recognise the folly of trying to track down every single little supplier. We asked for anyone supplying less than fifty people be exempted, but in the end were not heard.”? And does the Minister agree that, in fact, this could put people in a worse position—if suppliers opt out of continuing to supply and people are forced into collecting rain water for their drinking water, they would actually be in a much worse situation?

Hon NANAIA MAHUTA (Minister of Local Government): I want to take from a letter that I received on 21 September, from Andrew Hoggard, national president of Federated Farmers, the following quote—and I apologise for the length of time taken to extract this quote, for the committee’s benefit. He has said, “It is encouraging that compliance with acceptable solutions, including end point treatment, will remove the need for drinking water safety plans and source water risk management plans, and that consumer complaints processes will not apply to very small suppliers. We support more time being provided in the legislation for registration of water suppliers, and we welcome your assurance that registration processes will be simple and free with templates and guidance available. Much will depend on the detail of acceptable solutions for small rural water supplies. Federated Farmers is committed to engaging with Taumata Arowai to ensure that acceptable solutions are fit for purpose and provide for safe drinking water at a reasonable cost, with as little compliance hassle as possible. However, at this stage at least, there are still many uncertainties.” In saying that, they’ve indicated at the end of the letter: “Thank you again for hearing our concerns and responding to them.” and they would welcome maintaining a dialogue with myself and officials to develop win-win solutions. I seek to table the letter in the Chamber today.

CHAIRPERSON (Adrian Rurawhe): Leave is sought for that purpose. Is there any objection? There is not. It may be tabled.

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

PENNY SIMMONDS (National—Invercargill): Thank you, Mr Chair. Could the Minister, then, please, guarantee and have those comments put into the legislation, that with smaller rural water schemes, they will not be required to have all the compliance matters that she just listed from that letter from Andrew Hoggard?

Hon NANAIA MAHUTA (Minister of Local Government): At this juncture let me speak to the Supplementary Order Paper (SOP) that I’ve tabled on this bill. I’ve been listening to submissions made to the Health Committee, the concerns raised by committee members, and I thank them for their diligence, because they responded to my request to ensure that we had workable solutions, and the subsequent public discussion following the bill’s report back to Parliament. My SOP responds to concerns that have been raised. I want to speak about the measures in it so that other parliamentarians who were not a part of the select committee may understand it in a fulsome way.

Firstly, the SOP extends the time in which unregistered drinking-water suppliers will come into the new regime. Unregistered suppliers will have four years to register with Taumata Arowai, and seven years to comply with the new requirements. This responds to concerns raised by small suppliers about compliance with the new regime, including those in the rural sector. The extension will give time for small suppliers to understand the new requirements and give Taumata Arowai time to work with them, fully tailor the system to them, and provide support to small suppliers. It also aligns with the time frames in which the new water service entities will be established. This was important to the Health Committee—again, I acknowledge them—which had already extended time frames for registration based on submissions on the bill.

I know that National MP Chris Luxon has tabled an SOP proposing that the bill does not apply to suppliers serving fewer than 30 consumers. The Government cannot support this. It abandons small communities, as I’ve said, and gives them no clear way forward to have safe drinking water. The better approach, I would’ve thought, is to tailor the new regime to the needs of small suppliers and give them treatment options—like, for example, UV filter devices that are simple and cost-effective. This is what the bill does, and the legacy of this approach, I believe, will be safe drinking water throughout New Zealand irrespective of where people live.

Secondly, my SOP extends waste-water powers and functions for Taumata Arowai. This is important as many submissions to the Health Committee said that the sewage that is discharging into our rivers and beaches is simply not acceptable. I agree with those submissions and want to ensure that Taumata Arowai has much stronger powers in this area. Taumata Arowai will have the power to make environmental performance standards for publicly owned waste-water networks. These are minimum standards which must be included in the new resource consent, or if they relate to trade waste in bylaws. This power brings New Zealand into line with other countries, including member States of the European Union, the UK, Canada, USA, Australia, and South Africa, which all impose some form of minimum standards on publicly owned waste-water networks.

Every publicly owned waste-water network will be required to have a risk management plan. These plans are subject to oversight by Taumata Arowai and will considerably improve planning and safety for waste-water networks. The SOP clarifies that all of Taumata Arowai’s oversight powers for waste-water networks extend to trade waste. This was always the intention of the bill, but some organisations—Forest & Bird—questioned whether this is the case. It will mean that Taumata Arowai will provide much-needed oversight to trade waste. Taumata Arowai will be able to set targets for publicly owned three waters infrastructure which network operators will have to report against.

Thirdly, the SOP extends Taumata Arowai’s environmental performance powers in the bill to drinking-water network infrastructure. This means that Taumata Arowai will have the ability to shine a light on the impact of drinking-water networks on the environment and report, for example, on rates of leakage of drinking water. Its powers here will be analogous to those that already exist in the bill for waste- and stormwater networks and their operators.

Finally, the SOP will also make refinements and technical amendments across a range of clauses. I do want to acknowledge and thank the Hon Eugenie Sage for some of her technical amendments. This follows detailed ongoing review of the provisions by officials to make sure the legislation is as good as it can be.

Hon EUGENIE SAGE (Green): Tēnā koe, Mr Chair, thank you. It’s on a different topic, but in Part 1—because I’ll have some questions when we get to Part 3 on waste water—clause 14 is about giving effect to Te Mana o te Wai for anyone performing a function, power, or duty under the Act. This is something new that is in this legislation. Taumata Arowai has recourse to a Māori advisory committee. But just to ask the Minister: what progress has Taumata Arowai made in providing or developing some guidance on how Te Mana o te Wai is given effect to, and what does she see as the major benefit of having this in the legislation? Because there were a lot of submissions on it. Kia ora.

Hon NANAIA MAHUTA (Minister of Local Government): Thank you for the question. It would be fair to say that Taumata Arowai—the board, alongside the Māori advisory council—is still working through the matter in which the Māori advisory council can offer up advice to give recognition for Te Mana o te Wai obligations. They have some time to be able to do that. I expect, in my next report, to be able to receive some detail of how those conversations have progressed, but they’re still very much at the early stages of (1) identifying their role and responsibility, and then assessing the nature of the opportunity in so far as contributing to Te Mana o te Wai considerations within a dedicated water regulator.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Chair. Look, to the Minister, I really understand your concern for clean water, as we all have, but just speaking to Christopher Luxon’s Supplementary Order Paper (SOP) again, I understand that the Minister very kindly has agreed to extend the time frame—and I’m looking for a way forward here. I wonder if there was a possibility that the Minister could perhaps see her way clear to accept Christopher Luxon’s SOP to the point where those things that were just discussed in a previous speech of hers related to Federated Farmers and Andrew Hoggard and the simplified answers that we’re looking for, or the simple ways of doing this. Could we actually exempt those small water providers, within that time frame that the Minister has provided, until we can have a look at those simplified regulations and have another chance to have a look through? So build Christopher’s SOP into her time frames. Would that be a possibility?

Hon NANAIA MAHUTA (Minister of Local Government): The greatest possibility that those small suppliers will have under the proposed approach is to work with Taumata Arowai to understand the scale and complexity of the challenges that might be more perceptual than real. So we have made all the changes that have been offered up by rural communities to reduce the complexity and compliance challenges that they foreshadow could be impacting on them, and also the cost; then, in a very practical way, opened up the opportunity for Taumata Arowai to work according to local variances and characteristics. I think that’s a really positive way forward, because it then means that the challenge of achieving safe drinking water for every community and every household, no matter whether they’re in a rural, metro, or provincial part of the country, can be achieved.

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair. Minister, earlier this year, the Minister fast-tracked the passage of the Local Government (Rating of Whenua Māori) Amendment Bill to reduce the financial burden on marae. What would the Minister say to marae about the cost and obligations that this bill will impose on marae to meet the requisite infrastructure and resources necessary to meet the duties imposed in the regime? A corollary to that, the explanatory note to the bill states that the bill provides mechanisms that enable many aspects of drinking-water regulation to be proportionate to the scale, complexity, and risk profile of a supply. However, the relevant clauses that refer to that are 3, 31, and 32. I note that those are simply a restatement of the explanatory note, and I’d ask how that provides certainty to anyone, in respect of how that is going to be assessed and determined for both suppliers and the regulatory authority?

Hon NANAIA MAHUTA (Minister of Local Government): I thank the member for the question. Many of the issues facing marae communities are facing small rural suppliers. So, much in the same way that I’ve responded in so far as Taumata Arowai, working with small rural suppliers, the same approach will apply to Māori suppliers in the nature of their scheme. Several marae throughout the country are not connected to the core of the public infrastructure; they do have to find on-site solutions. They do periodically hold significant hui. So Taumata Arowai, just as it’s been working with small rural suppliers has also been working alongside a cluster of marae that have very different ways of sourcing and providing water within their community—but that’s, again, to find practical solutions.

MARK CAMERON (ACT): Thank you. Minister, just quickly, if you could clarify—and I think this is quite a salient point. Does the Minister realistically accept that small suppliers who are not corporate bodies and who are not commercial users, to sign up to a penalty regime, which in many instances, if there’s a compliance failure, could cost them several hundred thousand dollars—and how could she speak to that, when we’re talking about often rural schemes with under 30 houses or dwellings?

JOSEPH MOONEY (National—Southland): I just go further on my colleague Mark Cameron’s point. I have spoken to people who do manage rural water suppliers now, and they say that the penalty regime will, basically, mean for them that they cannot continue in their role. These are people who are very experienced in the provision of water. They’ve done a very good job over many, many years ensuring water is supplied to their rural communities. So I would ask the Minister to explain to them whether it is worth them continuing in the role providing water to their communities with a punitive penalty regime that exposes them to a very high level of risk.

PENNY SIMMONDS (National—Invercargill): Thank you, Mr Chair. Just following on again from both of those questions. The Minister has said that Taumata Arowai would work through acceptable solutions that simplify and reduce compliance, and perhaps address the sort of questions that have just been asked in terms of the noncompliance penalties. But the problem is that once this bill is passed and they are in this legislation, they have no power for that discussion around those simplified, acceptable solutions or that reduced compliance or those reduced penalties. So is the Minister able to either do as my colleague Barbara Kuriger has said, carve those small water schemes of under 30 out until those simplified, reduced compliance standards have been made clear, so that there is this level of uncertainty taken away from those small, rural water suppliers, and not only the level of uncertainty but the fear that, indeed, they may not be able to reach an acceptable solution that does reduce that compliance acceptably.

Hon NANAIA MAHUTA (Minister of Local Government): Mr Speaker, I seek some guidance. I’m happy to vote on Part 1 and Part 2 and jump straight to Part 3, where there are compliance issues being raised.

CHAIRPERSON (Adrian Rurawhe): Someone in the committee would need to move that we take this as one debate and one vote. I’ll just comment on it. I have been generous in allowing people to speak on not only Part 1 but people have drifted out on to other parts—might I say, including the Minister; however, that was in response to those. So I thank her. So, if the committee is of a mind to do that, I’ll gladly have that.

KIERAN McANULTY (Chief Whip—Labour): I seek leave for all parts to be taken as one question.

CHAIRPERSON (Adrian Rurawhe): Leave is sought for that purpose. Is there any objection? There appears to be none. I’ll just get the correct wording. Thank you very much. The question now is that Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 2 stand part.

Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 2

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair. I would ask the Minister, just regarding the potential carve-out—I just go back to the question about the commentary, which says that the bill would provide “the mechanisms that would enable the regulation of drinking water to be proportionate to the scale, complexity, and risk profile of each drinking water supply.” However, it does not, in my reading of this, have any more clarity or clarification for Taumata Arowai or for water suppliers on what the level of scale, the level of complexity, and the risk profile will be, beyond a reiteration of that wording in clauses 3, 31, and 32.

So I would ask whether the Minister would consider this carve-out of a relatively small number—we’re proposing 30 end point users—to ensure that there is some clarity for both Taumata Arowai and for those end point small-scheme users, given that there is a lack of definition or clarity around what the scale, complexity, and risk profile of each drinking-water supply is or is not.

Hon NANAIA MAHUTA (Minister of Local Government): I think it is very difficult to kind of give the responses in relation to the issues, because we’ve had such a general conversation. But if I think about the range of exclusions that apply to small suppliers, which, effectively, have responded to the majority of the issues that have been raised with us by rural advocates, the only outstanding issue is whether or not there will be an exemption regime for a small number of users. And I’ve said, time and time again in the House, no, because we want to make sure that all users are going to be included in that. Will that lead to a cost burden on that small number of users? No, because we’ve tried to ensure that we’ve eliminated the issues that have been of most concern to them.

Also, what we have tried to ensure, on an even-handed basis, is that when we’re thinking about small suppliers in rural communities, which may range from farmers to marae communities, we have been even-handed in the way that we’ve tried to respond to the concerns that don’t create additional complexities that are unnecessary.

MARK CAMERON (ACT): Minister, could you just clarify—you just made a statement then that you said it wouldn’t add any additional fiscal burden on rural small communities. Can you clarify how that could be so, and what would be the annual cost of compliance to rural small communities with under 30 or less dwellings?

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair. Minister, I would ask if there will be a consideration of the percentage of water used for household use and the percentage of water used for stock use, which, as the Minister will, no doubt, be aware, is very common in water schemes around rural New Zealand.

Hon NANAIA MAHUTA (Minister of Local Government): In terms of the compliance costs on—and I just want to be really clear which users I’m referring to, as you’re quoting the statements that I’m making in relation to these compliance issues. So I am referring solely to small suppliers, often rural. So the costs that have been identified that might be a cost burden we’ve tried to alleviate—so, for example, having an approved device such as the UV filter at entry point is a way in which to give confidence to users about what Taumata Arowai will accept in terms of assurance of drinking water at the house, in terms of a device.

The other things that we’ve done is how we accredit and approve, for example, plumbers to be able to install the device, again, lessening some of the cost burden. I think that some of the administrative costs that were perceived we’ve simplified that by having templates. That will make it easier to engage with if they have to.

So those are the various aspects of costs that we’ve made very simple, and then, obviously, the registration process—we’ve simplified the process and it will be free. Again, another area that can be seen to be a cost benefit, because we’ve responded to the concerns that rural communities have raised.

IAN McKELVIE (National—Rangitīkei): Thank you, Mr Chair. I’ve listened with interest to the Minister for the last little while, and I just want to take us back in history a bit, because, if you think about three other pieces of legislation that have gone through this House in my time—the workplace safety Act, the anti-money laundering Act, and the food safety Act—they all had the same span or range of business scale, I guess, that this has, from very big business to very small business. So the Minister has talked about small rural water supplies. I’d like her to, I guess, tell us what a small rural water supply is, for one.

But the second thing, I guess, that concerns me is that, if you think about registering a drinking-water supply or even providing a source water risk management plan, it’s going to cost the same amount to supply that plan for a water supplier supplying 10,000 end-users, for example, as it is for 10 end-users. And I’m interested to know what a small rural water supply—or a small water supply, actually; it doesn’t have to be rural—is, effectively, going to be, and how are we going to guarantee that the Minister’s descriptions to us are going to apply to the Act, because it’s not apparent in the Act. So those are basically my questions.

BARBARA KURIGER (National—Taranaki - King Country): I would like to ask the Minister—there are a lot of water sources around where areas have been subdivided off farms into lifestyle blocks. You’ve got sections being subdivided where people are supplying water to other people. How much litigation—or has the Minister looked into the clarity of who, in many, many, many of these situations, is actually supplying the water, because there’s going to be a lot schemes where that’s very unclear, and I just wonder how much court litigation will actually go on around who actually is supplying the water.

PENNY SIMMONDS (National—Invercargill): Thank you, Mr Chair. I’m intrigued by the Minister saying that there would be no cost to these smaller rural schemes. Even if there are templates, I would have imagined that there would be a cost to preparing a safety plan, a risk management plan, a complaints process, an annual audit, reports on the audit, and end point UV filters are around $4,000 each. So could the Minister explain how there would be no cost?

Hon NANAIA MAHUTA (Minister of Local Government): A couple of things. Firstly, to member McKelvie’s point, the changes that I foreshadowed in the Supplementary Order Paper are the changes that significantly improve the bill, based on reflection from what the Health Committee had suggested and the submission process. Much of those changes cover off rural small suppliers as well as the areas of trade waste. But part of the conversation around small suppliers is not the conversation that we would have as legislators. So can I draw the member’s attention, in the bill, to clause 10, which gives the interpretation of the “Meaning of domestic self-supply and domestic dwelling”. For the most part, I think the nature of the changes that, certainly, Opposition members have raised with me, are in that particular area. So I didn’t want to rehash the legislation, the Health Committee has made some changes to the way in which clause 10 is to be read and understood, I accept that. But, again, that is the reference.

The other point in relation to other bits of legislation that member McKelvie raised, can I just say that the Water Services Bill is based on a risk management regime. It’s the same approach if we consider the Health and Safety Act and the Food Act, and both of those Acts, as the member will know, deal with small businesses and those interests, much in the way that we’re trying to deal with small rural suppliers and self-supply for drinking water.

MARK CAMERON (ACT): Just clarity, if I may, Minister. In the section you just mentioned—“Meaning of domestic self-supply and domestic dwelling”—I see in the examples offered: a multiple-dwelling building, for example, it says, are “multiple separate apartments contained in a single building”. Well, does that encapsulate a farmhouse, a worker’s house which is off the same scheme, and a woolshed, and would they be liable for any penalties therein should they not be compliant?

PENNY SIMMONDS (National—Invercargill): I feel we haven’t had an answer around the Minister of Local Government ’s assertion that there would be no additional costs. Given the acceptable solutions haven’t been devised yet, so we don’t know how simplified and how much the reduced compliance would be, even though there are going to be templates, surely there would be a cost to those schemes, even with a template of having to prepare a safety plan, a risk management plan, a complaints process, annual audits, reports on audits—and UV filters cost around $4,000 each for each end user. Could the Minister clarify how there would be no additional costs, please?

Hon NANAIA MAHUTA (Minister of Local Government): In relation to the UV filter, costs would be significantly minimised because they would be part of an acceptable solution that Taumata Arowai will have approved. So that gives some guidance.

The other area of cost benefit—and I know that the member received this information at the Health Committee—is that these small suppliers will not be audited; again, another cost benefit, back to that nature and profile of user.

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair. Minister, can you just explain—for example, I’ve been on a farm with mountains immediately behind it, and the water comes straight off the mountain and goes straight to the house, and it also goes to another house but it’s coming from one set of pipes. Could the Minister explain: is this caught by the meaning of “a supply”? And would the operator of that therefore be liable under clause 162, potentially, to a fine not exceeding $600,000 or a term of imprisonment not exceeding five years if they are found guilty of recklessness in supply of unsafe drinking water.

BARBARA KURIGER (National—Taranaki - King Country): Yeah, just to the Minister in the chair, the Hon Nanaia Mahuta, I really want to say, on this side of the House, the National caucus supports the intent of this bill and really does support Taumata Arowai, but the questions around the simplicity of those small suppliers—in not wanting to repeat myself, I would just ask one more time, really our issue is around the small suppliers, to see if we could have some leeway in the Minister supporting Christopher Luxon’s Supplementary Order Paper to the point where her time frames kick in and we could have some certainty around what the regulation looks like. The reason I’m labouring that point is: often in the House when we do legislation and then it goes off to become regulation, people get really concerned because they don’t know what that looks like. Some of the things that Mr McKelvie referred to before around the Food Act and things like that—you know, it’s always the biggest fear of what happens next. I genuinely would like the Minister to reconsider with a time frame that meets the time frame that she has put for those small suppliers.

Hon NANAIA MAHUTA (Minister of Local Government): I genuinely want to acknowledge the advocacy of the member in relation to the concerns she’s presenting. However, the longer lead-in time for Taumata Arowai to mature its regulatory system while it’s working with rural suppliers of drinking water, in effect, provides an exemption—well, I wouldn’t say an exemption, but a lead-in time to be able to come up with a practical solution. Now, that’s got to be a good thing, because Taumata Arowai has expressed, certainly to me—and certainly that is the intent of the changes in the bill—that they’re going to need about that much time because of the differing profile of New Zealand’s rural water supply arrangements. So I think that that’s actually going to have the effect that the member might be seeking in a very practical way while working towards one system that will be fairly applied to all small supply users. Again, we could probably contest this space for a period of time, but the simple response to the member, in relation to an exemption, is that we certainly don’t see any need for that type of an exemption based on a working approach that Taumata Arowai must observe in the way that it seeks out practical, workable solutions for rural small suppliers.

IAN McKELVIE (National—Rangitīkei): Thank you, Mr Chair. Just with respect to the answer to the last question, and some of the answers that we’ve had earlier, with respect to the exemption process, there is an exemption process proposed in the bill, and I wonder if it’s possible that that exemption process might, in the course of further work done by Taumata Arowai, eventually lead to exemption, or it is possible that it might eventually lead to exemption on some of those schemes if they’re not considered to be, I guess—well, there’s a whole lot of exemption clauses in the bill that provide potential for exemption. I wonder if it’s possible that that would happen to those schemes that we’re talking about now, and that it’s a possibility that some of those schemes could in the future be exempted, although included in the bill initially.

Hon NANAIA MAHUTA (Minister of Local Government): Can I come back to the basic premise of the bill, and it is very much targeted at public supplies. Then there’s a mechanism by which Taumata Arowai will work through some of the complexities around self-supplies, private supplies, of drinking water, and while much of the debate is very much focused in that area, the majority of the emphasis of the bill’s workings is very much geared towards council—public—supplies of drinking water.

Then, what we’ve tried to do is ensure that there are workable, practical solutions based on the nature and profile of the geography of how drinking water is supplied to rural and small suppliers, and that we’re giving it a longer lead-in time to be able to work through the issues. And it’s not as simple as saying that there’s going to be a one-size-fits-all approach.

I think, the way in which Taumata Arowai have been offering advice and insight into the nature of the challenge but the opportunity to work with the rural sector certainly gives me confidence as Minister that they are sensitive to the challenges and opportunities in this space. That is why, on the back of the Health Committee, again, signalling it needed a longer lead-in time, I encouraged and supported a further additional bit of time so that we enable the system to mature and enable Taumata Arowai to gather good information to be able to work with the rural sector to be able to enable better solutions for them, and that’s been the intention.

PENNY SIMMONDS (National—Invercargill): Thank you, Mr Chair. Thank you, Minister, and we do acknowledge that the bulk of this bill is around council and public supplies, which is why we support it so fulsomely in those areas. And, in many ways, this is just a distraction from that, because the concern is that, while the assurances are given that workable and practical solutions will be found for those smaller rural schemes, it’s that lack of clarity and that lack of certainty and that lack of understanding of what the costs might be that is causing the anxiety around having these included in the legislation. So, in many ways, some sort of compromise where they could be kept out until there is surety around those issues would perhaps take away the anxiety that our small rural schemes have.

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

Hon EUGENIE SAGE (Green): Thank you, Mr Chair. Turning to the Supplementary Order Paper (SOP), Minister. Thank you for the explanation you gave before, but when the Health Committee considered the whole issue of the performance standards, we had a letter from the Parliamentary Commissioner for the Environment, who raised some quite significant concerns about the risk of having Taumata Arowai being established as a regulator when it is the Minister for the Environment under the Resource Management Act and regional councils which have those major regulation functions. So the parliamentary commissioner was particularly concerned about the wording around waste water and stormwater in Subpart 7 of the bill, especially the references to environmental performance measures in clauses 136 and 140, because that created the impression of Taumata Arowai being a regulator.

So, in response to those concerns, the select committee recommended some changes, including the use of the words “infrastructure performance measures”, and so the focus of Taumata Arowai would be on the performance of the waste-water, stormwater, and drinking-water infrastructure. No one wants sewerage discharges that don’t comply with resource consent conditions that lead to polluted waterways. No one wants those sorts of spills. But the parliamentary commissioner, having done a very thorough report on the state of the environment reporting in New Zealand, and environmental research in New Zealand, was sufficiently concerned to raise these issues with the select committee. But I noticed in the Supplementary Order Paper that it goes back to referring to “environmental performance standards”, and I just ask the Minister to expand on how to avoid the risk of our environmental regulation system becoming quite confused if we’ve got Taumata Arowai setting these standards as well as regional councils setting the standards. I think the Minister referred to some standards being included in resource consents. So, my concern there is that there is the potential that if two agencies—regional councils and Taumata Arowai—had this responsibility, it potentially could fall between the cracks or it results in a regulatory system that is not integrated.

The Minister will be well aware that the Environment Committee’s had a number of hearings on the inquiry on the Natural and Built Environments Bill, and the proposal for a national planning framework where you have consistent standards set now through the national policy statements, and national environmental standards under the Resource Management Act (RMA) going on to be set under a new national planning framework. But how will Taumata Arowai fit with the existing regime under the RMA and with the—I may be looking a bit too far into the future, so I’ll stick with: how will Taumata Arowai’s responsibilities in relation to environmental performance of waste water, in particular, fit with regional councils responsibilities under the RMA? And there were submissions from some regional councils expressing some concern about having to provide information—because of the cost of that. So it’s just that the SOP goes quite a lot further than what the select committee did, and changes the language.

The question also is: what engagement has there been with the Parliamentary Commissioner for the Environment, who raised these significant issues and brought them to the attention of the select committee? Kia ora.

GINNY ANDERSEN (Labour—Hutt South): I move, That the question be now put.

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair. Minister, I’d just note that 15,000 people have signed a petition by the National Party asking for an exemption for small suppliers. One of the questions that would be on the mind of some of those would be an example I’ve seen of a group of properties that have a bore on one of the properties and the water scheme is, effectively, owned by all the properties that come off it—so about 15 households, in effect. So my question is around clause 13, “Meaning of point of supply”, and is each property who is connected to that bore responsible for the end point installation and maintenance schedule or is the property owner who has the bore on their property responsible for not only the bore or the source but also the network right up to the end point treatment device?

MARK CAMERON (ACT): Yeah, I’ll just add to that if I can, and I’ll probably truncate it a little bit more, Minister. A single property with multiple farm buildings on it—and quite often we’ve seen rather large dairy farms, especially down in the South Island, with several properties on it; they’re reticulated together from a single source. Would the owner of that property therefore be considered a provider and be subject to any punitive legislation therein because of it?

Hon NANAIA MAHUTA (Minister of Local Government): Can I just come to the Hon Eugenie Sage’s question around the role of regional councils in relation to Taumata Arowai. We’ve been very clear from the outset that the regulatory function of regional councils will remain, in relation to environmental standards. However, one of the reasons why we ensured that Taumata Arowai could play a role to ensure greater coherence in reporting oversight of storm- and waste-water systems is because there was a variable way in which reporting occurred in this area. So the member is right to highlight that we did amend the Supplementary Order Paper to ensure that there was a greater emphasis on environmental performance, because we are not, effectively, talking about infrastructure. And within the scheme of the approach for Taumata Arowai, we needed to ensure that if there was going to be a higher obligation on compliance monitoring and enforcement, we needed a more coherent picture to understand what was happening. That does not impact on the regulatory role of regional councils, and we have stressed this in the way that we’ve designed Taumata Arowai’s responsibilities, and we’ve tried to ensure that that is at the heart of the oversight and reporting role that Taumata Arowai will have.

Hon KIRITAPU ALLAN (Minister of Conservation): I move, That the question be now put.

CHAIRPERSON (Adrian Rurawhe): Before I give the call to Joseph Mooney, I will say that we have had nearly an hour of this debate—most of it has been on Part 1. Members can address, therefore, other parts as well. The Government side has moved closure motions, and I’d just encourage members to use the time wisely.

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair. Minister, I’m just having a look at the meaning of “drinking-water supplier”, and my understanding is that, if there is a bore where the water is sourced and it goes to more than one household, then the person who is responsible for that bore is a drinking-water supplier. I’ll point to an example—actually, I’ll come to that.

I’ll just move again to offences, which I raised earlier, and I note that, in clause 162, a water supplier who is responsible for the supply of unsafe drinking water is subject to a maximum penalty of imprisonment not exceeding five years or a fine not exceeding $600,000. I have an example in my electorate where a farmer who has four households taking water from his bore has disconnected those in anticipation that this would pass, given the Government’s majority, and concern about the offence provisions and that it would place too onerous a burden on him, and that those households will now be reliant on rainwater if and when they can get it, which is not always a guarantee in parts of my region. So I would ask, Minister, if it is appropriate for persons in that small water scheme to be subject to an offence of such magnitude—whether that is proportionate.

CHAIRPERSON (Adrian Rurawhe): I call Joseph Mooney.

JOSEPH MOONEY (National—Southland): Maybe I’ll let the Minister—the Minister is conferring. I’ll wait for the Minister.

CHAIRPERSON (Adrian Rurawhe): Well, you need to speak.

JOSEPH MOONEY: OK, very well; I’ll speak in the meantime. There was a question I had earlier that I would be interested in—and I know that many people in rural New Zealand would be interested in—and that is whether there is intention for Taumata Arowai to take into account the percentage of water that is used for stock and the percentage of water that is used for households, because it’s very difficult—well, in fact, impossible—to distinguish between the uses of the two in many rural water schemes.

Hon NANAIA MAHUTA (Minister of Local Government): My apologies, in responding to the member, but just to get clarity of my own in terms of the way that the legislation is intended to apply. The whole reason why we want to ensure that drinking-water suppliers of a small category such as that that you’ve explained, and other members in the Chamber, is that if they go through the process that is outlined in the bill, which is to apply for an acceptable solution in the provision of drinking water, therein is the regime by which they will be regulated by, if you like, or managed by. If they do not provide safe drinking water, then there is a level of liability that will fall to them, to the drinking-water supplier.

IAN McKELVIE (National—Rangitīkei): Thank you, Mr Chair. I just wanted to get on to one or two other issues. I think that one of the challenges that we have in our communities at the moment is that this bill is very much confused and, I guess, mixed up with, effectively, what is the three waters proposal. So a lot of the challenges that we have, as MPs and people explaining this in our regions, and, in fact, councils have got the same issue, is that a lot of the issues that arise in this bill are actually issues that could be compromised—or not compromised so much, as could change as a result of the three waters bill.

I want to go to a couple of things where, effectively, we’re merging—and the Supplementary Order Paper, to some extent, merges—the link between drinking water, stormwater, and waste water. In my history in local government, we’ve often talked about water metering and how you might utilise that. And one of the things that occurs to me is that this bill, and the regulator, could eventually—not this bill but the regulator could then start to impose conditions on whatever arises from the three waters proposals, that adds significant costs that may not have been foreseen in the process of the three waters work being done, or, in fact, in the cost relating to the smaller water supplies involved in this. If, for example, you put water meters into a system like this—I’m not going to argue the value of them, because, actually, I think they’re quite valuable; the problem is they’re hugely expensive. So you could add a massive amount of cost because of the actions of the regulator. They might end up adding a massive amount of cost to a process that we don’t fully understand.

So, I guess, that’s another fear that I think’s been raised in our community, not only around water meters but also around how you might link the water-in, water-out process, effectively, because a lot of talk has happened in my lifetime, or in my experience in local and central government, around how if you put the water into something, you’ve got to take the water out again. So I think there’s some fear in the community, particularly the smaller communities and particularly the small rural towns, around the implementation of cost in those instances that might then add significantly to the cost of those small water supplies.

I know I’m taking the Minister down a bit of a path into the three waters stuff, but I don’t really want to go there. I think the question relates to what the water regulator will have the power to do and what they’re likely to do. I know that’s a bit of a difficult question too.

KIERAN McANULTY (Labour—Wairarapa): To the Minister the Hon Nanaia Mahuta, if a water supplier stops providing water to households that were drawing from their source, what happens?

Hon NANAIA MAHUTA (Minister of Local Government): Actually, that’s a really good, practical question, because if that did happen, then it would be beholden on the council to provide drinking water. Those provisions are within the Act. I would have hoped that where those arrangements are currently in place, those drinking-water suppliers would see the benefit of looking at the acceptable solution process to give assurances as to what their responsibilities are, let’s say, because they could be providing drinking water to the local farmhand living on their property before they just cut the lines. But if they cut the lines, then the obligation will fall to the councils.

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

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair. Mr McAnulty’s very keen! Has the Minister received any advice on the anticipated number of small water-suppliers who will disconnect their schemes, given this, and, therefore, the number which will fall on local councils to supply an alternative solution?

Hon NANAIA MAHUTA (Minister of Local Government): Only from members of the Opposition, speculative though it is.

MARK CAMERON (ACT): Very quickly, Minister—just Part 2, clause 47. It talks about the aesthetic values of the drinking water. Notwithstanding we’re, obviously, now encapsulating properties with 30 or less dwellings in this, is the Minister concerned that that is potentially purely subjective when it talks of what is deemed to be aesthetic values without limitation?

Hon NANAIA MAHUTA (Minister of Local Government): I thank the member for the question. The reference to clause 47 was, in fact, a provision that’s been carried over from the Health Act into this legislation.

Hon KIRITAPU ALLAN (Minister of Conservation): I move, That the question be now put.

MAUREEN PUGH (Junior Whip—National): Point of order, Mr Chairman. I couldn’t find the Standing Order, but I understand that a member can only move a closure motion once.

CHAIRPERSON (Adrian Rurawhe): No, that is not correct.

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

Ayes 75

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

Noes 45

New Zealand National 33; ACT New Zealand 10; Te Paati Māori 2.

Motion agreed to.

CHAIRPERSON (Adrian Rurawhe): The question is that the Minister’s amendments set out on Supplementary Order Paper 62 be agreed to.

Amendments agreed to.

CHAIRPERSON (Adrian Rurawhe): The question is that Christopher Luxon’s amendment to clause 8 set out on Supplementary Order Paper 61 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.

A party vote was called for on the question, That Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 2, as amended, be agreed to.

Ayes 75

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

Noes 45

New Zealand National 33; ACT New Zealand 10; Te Paati Māori 2.

Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 2, as amended, agreed to.

House resumed.

CHAIRPERSON (Adrian Rurawhe): Madam Speaker, the committee has considered the Water Services Bill and reports it with amendment. I move, That the report be adopted.

A party vote was called for on the question, That the report be adopted.

Ayes 85

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

Noes 35

New Zealand National 33; Te Paati Māori 2.

Motion agreed to.

Report adopted.

Bills

Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill

Second Reading

Hon JAMES SHAW (Minister of Climate Change) on behalf of the Minister of Commerce and Consumer Affairs: I present a legislative statement on the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill.

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

Hon JAMES SHAW: I move, That the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill be now read a second time.

This bill forms a key part of our Government’s response to the climate emergency. I’d like to thank the Economic Development, Science and Innovation Committee for its consideration of the bill. I’d also like to acknowledge those who have made written and oral submissions, and I also want to thank the Hon Dr David Clark for his work on this bill. The committee considered 55 submission from industry groups and individuals, covering a range of matters. All submitters supported the policy intent of the bill. The committee has reported that key substantive decisions be retained, but have recommended some changes which will refine the policy intent of the bill. These changes will assist in bringing climate risks and resilience into the heart of financial and business decision-making.

Aotearoa New Zealand is the first country in the world to introduce legislation to require all large listed companies and large financial institutions to report on their climate-related risks in accordance with standards. This bill will make a significant contribution to the transition towards carbon neutrality by 2050. While we all have a part to play in reaching that goal, the financial sector is in a position to generate real and significant momentum towards that goal. This legislation ensures that financial organisations disclose and ultimately take action to mitigate climate-related risks, and take advantage of opportunities. It will do this by requiring the largest and most important businesses participating in New Zealand financial markets to disclose clear, comparable, and consistent information about the risks and opportunities presented by climate change. The current lack of reliable information about the impact of climate change on businesses is serious, because it can lead to the mispricing of assets, and the misallocation of capital. Investors, lenders, and insurance underwriters cannot make informed decisions if information about material risks is unavailable. The asset mispricing and capital misallocation risks also raise financial stability concerns, because markets can be vulnerable to abrupt corrections.

This bill has already caught the attention of Governments and people around the world because it provides accountability for the actions of large listed businesses and financial institutions in relation to climate change. This will help the sector to be a part of the solution rather than a part of the problem in the face of the climate change challenge. Trillions of dollars will need to be invested globally by 2050 to achieve the Paris Agreement goal of keeping the increase in global average temperatures to 1.5 degrees Celsius above pre-industrial levels. New Zealand businesses are well-placed to seize emissions-reducing opportunities in such areas as energy production, food production, and pollution reduction. The disclosure regime will contribute to this because it will provide a sound framework for identifying business opportunities. This bill helps investors to redirect capital to cleaner ways of doing business.

I’d like to turn to changes from select committee. There are three key issues included in the report, which balance the key areas of, first, not expanding the definition of climate reporting entities; second, allowing an exemption for growth markets and small listed issuers; and third, removing the disclose-or-explain provisions.

So, first, the definition of a climate reporting entity is unchanged in the bill. The committee received a significant number of submissions proposing that the definition of climate reporting entities should include public entities, and a range of private sector entities including large private companies.

The original scope of climate reporting entities has been retained, because focusing on the financial sector provides the most effective impact within the time frame needed to urgently respond to the climate emergency.

The financial sector influences every part of the economy. As banks, non-bank deposit takers, insurers, and scheme managers assess their own climate risks and opportunities, they can demand climate information as a condition of doing business or investing in business. The financial sector was chosen, as widening the scope of the disclosures would have caused a delay in introducing this bill. The Government will look at widening a scope after the legislation has been enacted.

And when it comes to public entities, they are covered by the reporting requirements of the Carbon Neutral Government Programme. Those reporting requirements will have some parallels to those in this bill, but, of course, public entities access capital differently from private companies, and so the parallels can only go so far.

When it comes to small listed issuers with a market capitalisation below $60 million, and entities listed on growth markets such as those of Catalist, they will be exempted from the mandatory climate disclosure regime. However, such entities may still choose to make climate-related disclosures. Catalist is a new public market licensed under the Financial Markets Conduct Act, and is targeted as a stepping-stone market for small issuers to access growth capital. Growth markets and small issuers will be exempted from the regime due to the risk that requiring all listed issuers to be climate-reporting entities will put up barriers to entry for such entities to access capital. We want entities to still be able to access capital, without disproportionate compliance cost barriers.

Small issuers contribute less than 1 percent of the total NZX market capitalisation. The NZX has 54 issuers, with a market capitalisation of less than $60 million, representing only 0.7 percent of the NZX’s total market capitalisation. The exemption of small issuers in growth markets still means that the majority of the financial sector are captured by the bill.

The bill originally provided a disclose-or-explain exception if a climate reporting entity reasonably determined that it is not materially affected by climate change. However, this still created a reporting requirement for such entities. The disclose-or-explain provisions have been removed from the bill, to remove a two-tier reporting system. All climate reporting entities will prepare climate statements using the same climate standards. Any need for differential reporting could be achieved through the application of climate standards. This ensures that users are able to compare reports and that all climate reporting entities are analysing their climate risks and opportunities.

To address the concerns of a few key stakeholders following the select committee process, the Hon David Clark will be tabling some amendments in a Supplementary Order Paper prior to the committee of the whole House stage of the bill.

Now, in closing, these refinements and changes the select committee have made have assisted the bill to achieve its aims of supporting intergenerational equity through informed investment decision-making. The Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill will provide investors with the information that they need to make informed investment decisions. The bill will encourage disclosing entities to become more sustainable, by factoring the short-, medium-, and long-term effects of climate change into their business decisions.

Finally, I’d like to take this opportunity to, once again, thank the Hon David Clark, as well as the members of the Economic Development, Science and Innovation Committee, for their work in considering the bill, and all those who have participated in consultation during the development of this bill for their contributions. Now, on behalf of the Hon Dr David Clark, I am proud to commend this bill to the House.

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

Hon TODD McCLAY (National—Rotorua): Thank you very much, Madam Speaker. National is supporting this legislation, the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill, at second reading but we will be seeking Supplementary Order Papers to clarify the effect and lessen cost but at the same time ensure that the legislation will meet its intent. However, therein lies the challenge, because the intent of the bill is not actually to directly have any effect upon a company and climate change, or that company’s part in climate change; it’s merely to have them report upon how climate change might affect their business in the future.

When I listened to the Minister James Shaw’s speech just a moment ago, I think he oversells the benefit and the likelihood that this bill will achieve the things the Government says they want to, albeit their intention is well meaning, because it’s not about the carbon footprint of a company or a business covered by the legislation; it’s how climate change might affect that business now or some time in the future.

The purpose of the bill is very clearly set out: “ensure that the effects of climate change are routinely considered in business, investment, lending, and insurance underwriting decisions”. Well, risk already is by these companies. These are large entities that are, more often, listed on stock exchanges in New Zealand, or can be overseas, and they already have significant obligations to report risk, to consider risk. In the case of this, therefore, when it comes to climate change, where it doesn’t move them directly, or actually indirectly, to do anything about their own activity when it comes to their carbon footprint, then it is well meaning but actually won’t make the changes that the Minister has just spoken about.

For instance, they need to prepare an annual climate statement that discloses information about the effects of climate change on their business or any fund they manage. Well, they get to say, “Here is the effect”, but they don’t actually have to do anything about it. Now, a debate as to whether they should is secondary, because, actually, they already report, they already consider these things, and I fear that the New Zealand public that believe that climate change is an important issue, and listening to the Minister’s speech, or, secondly, in considering what the Government has said this will achieve, will end up being disappointed, because I’m not sure it will achieve that.

Once they produce this report, they have to obtain independent assurance about the part of the climate change statement that relates to the disclosure of greenhouse gas emissions. So the Government is saying, “We need you; you’re a large entity that is on the stock exchange, that has absolute scrutiny as to your activities, that takes other people’s funds and lends them or invests them and must report through the stock exchange, through the media, to those shareholders or those investors, but actually we need you to go out and get this independently verified—this piece of work that you have done under this bill—to talk about what effect climate change might have on those investments some time in the future, at a cost, because we don’t trust you.”

There are two examples of this I want to make that I think don’t make a lot of sense. The first is a bank that lends predominantly in the housing sector, and perhaps they have portfolios that look to lend to build houses, beachfront sea resorts, or hotels for the tourism sector. Well, they’re going to have to go out and have an assessment done as to whether or not climate change will have an impact upon those assessments based on sea-level rise or, more than that, Government policy that makes it more expensive, more difficult to build at some point close to the sea, because of the Government’s view or a council’s decision as to whether or not, with sea-level rise, that is something that is acceptable—putting aside that, actually, the banks themselves already have to consider risk.

Well, they’ll come out and they’ll give the report that says, “Actually, we believe we have covered this risk off for our investors. There isn’t a great risk to us, except if the Government keeps changing the rules every time they come to Parliament, because they have a piece of legislation like this that is well intentioned and wants to suggest to the public that they are taking the issues seriously and actually doing something but they’re not. Costs will go up and, therefore, actually there could be a risk.” And so the Government already plays quite a significant role, when it comes to risk, that these businesses need to consider, but it not saying to them, if you find there is a risk, you must change your behaviour and not lend in that case to build the houses that we need, it’s saying you just need to report on it.

There is a second example here when it comes to the assurances around greenhouse gases, and it’s the agricultural sector, because, actually, banks in New Zealand lend to the agricultural sector across the board, including when it comes to animal farming—dairy. Well, the banks that are lending already have to factor in climate change requirements now and perhaps in the future when it comes to Government requirements on land. So a bank in New Zealand will have to go out and have an assessment done as to the risk of climate change to their investments—them lending to people in New Zealand to buy farms and to farm, to produce the food that we need to sell overseas for our economy. And it might come back and say, “Actually, we don’t believe there is a significant risk here, except when it comes to Government policy.” because if the Greens got their way and there were no more cows in New Zealand, actually, there would be a great risk to lending because of the uncertainty that creates. Now, that’s not the intention of this bill, because it doesn’t make them change, it makes the Green Party and the Government feel good, and perhaps some New Zealanders, but it isn’t having the effect that the Minister said that it would, other than reporting and cost and change. And I would say the Government has a very large role to play in this.

The National Party is very proud of its record when it comes to climate change and activity that is taken and things that actually will make a difference. We recognise that New Zealand must play its part on climate change issues in New Zealand and internationally. That’s why our climate change spokesman will Zoom into the other side of the world—he won’t get on a plane with nine or 10 other people and fly all the way over there to a climate change conference, as James Shaw as Minister will, with a lot of people at a time when, actually, most things in the world are being done by Zoom, and Mr Shaw and members opposite wanted Parliament to be done by Zoom, but he’ll jump on a plane and go off over there. The point of this is we think we need to play our part, and actions are louder than words. This piece of legislation is words, albeit well-meaning. James Shaw jumping on an airplane with 10 others and flying to the other side of the world, and then having to come back and take spaces that are desperately needed in MIQ is action, not words—action that actually probably makes climate change worse, not better.

We will be seeking change in three areas when we come to the committee of the whole House stage, and the Minister’s mentioned this. The first is around time frames. The time frames were changed in committee, and I hear from the Minister that the Minister responsible will bring forward Supplementary Order Papers (SOPs). It’s disappointing that, actually, through his MPs and the officials that wasn’t presented in the committee for us to consider them if they are that important. It’s almost as if he’s realised afterwards he’s made a mistake and wants to change it. But we think the time frame of the current legislation—it will enter into force within 12 months after Royal assent—is too soon because the standards that these businesses will need to report to are not set yet, and actually they are significant companies and large companies that take their responsibility seriously. They will want to meet this requirement. We think it should be longer and will bring forward an SOP to make that time frame longer—not so long they don’t have to report, even though it won’t make a change to climate change, but a reasonable period of time.

We also think that the public sector and the private sector should be treated the same. So what the Government has said is this will be an obligation on the private sector, but Crown entities actually will have to meet a different requirement based on a letter from a Minister. They are giving themselves an exemption and an opt-out and they shouldn’t. If it’s good enough for the private sector, it’s got to be good enough for the entities that the Government controls—the standards should be the same, because it sets a very, very bad precedent: “Do not what we do, just do as we say.”, and the private sector is sick of that.

The final one is the comply-or-explain approach. The comply-or-explain approach was taken out in committee, and the Minister mentioned that’s to level the playing field. Well, it actually doesn’t, because if there is a business that goes to an extent to find that climate change has no direct, meaningful impact upon their business, they should be able to say that. If it does have an impact upon their business and they don’t report it, they fall foul of the legislation, they have broken the law, and they will be held to account, but, again, what the Government is saying is “We don’t trust you, so we are going to make you go to the extent of reporting on something you have nothing to report on.” And I think that comply-or-explain is a better approach; it wouldn’t be used by many businesses, but it could be by some—it should be there. They are not allowed to break the law. They must still report if it has an impact upon them, but if it doesn’t, they shouldn’t have to go to the expense or the extent of meeting a requirement that doesn’t have an impact upon them and for them then to report, “We have nothing to show here”, they should be able to see it.

In those three areas, we will be tabling SOPs and hope the Government will work with us to make sure the legislation is not onerous upon these businesses but actually at least is around the intent of what the Government wants to do, which is send a signal, not actually have any impact upon climate change. The best way Mr Shaw can have an impact upon climate change is to Zoom to that conference over in Glasgow, not get on a plane with 10 other people.

JAMIE STRANGE (Labour—Hamilton East): Thank you, Madam Speaker. I appreciate the opportunity to take a call on this bill as the chair of the Economic Development, Science and Innovation Committee. As the Minister outlined in his opening speech—the Minister on behalf of the Minister—we had 55 submissions to this committee, and I’d also like, on behalf of the committee, to thank all of those submitters who spent an incredible amount of time on those submissions. They’re quite detailed submissions that we received, and a number presented oral submissions as well, so we’d like to thank them.

There were some common themes that came out. Overall, most of the submitters were supportive of the intent of the bill. They recognise the need for New Zealand to do our bit on climate change. We have signed up to the Paris Accord, and it is important that we do our bit. The reality is that this legislation is actually world-leading, and that was commented on by quite a few of the submitters around the aspect that no other country has legislation like this. So we’re the first country to bring this legislation into law. I expect other countries will be following suit when this passes.

There was another theme which was around widening the scope, and that came from quite a few submitters, and we heard in the first speech, in this debate on the second reading, from the Minister the reasons why the scope was retained. But I was pleased to hear and I’m sure the submitters will be pleased to hear from the Minister that there is an intention to look at widening the scope to include other entities, potentially including Government agencies and other businesses who are not associated with the financial markets. That will certainly be looked at at a later date, after this legislation is passed into law. So I think that’s something positive.

We heard from the previous speaker, the member from the National Party, Todd McClay, that businesses have to report but don’t have to actually do anything about it.

Hon Michael Woodhouse: That is not what he said. That is not what he said, Mr Strange.

JAMIE STRANGE: Well, he said that Ministers need to report but there is no enforcement for them to actually change their practices. That’s what he was saying and he did raise it during the committee a number of times, and, look, that is a fair point. But I believe that the market will force change from businesses. I believe that the market will force and, at the very least, encourage businesses to become more climate friendly. Investors are becoming more savvy. Investors are certainly very much switched on to climate-related aspects and they’re starting to look quite closely at the investment portfolios of businesses. They’re starting to look quite closely at the actions of businesses and how they affect climate change. I believe that investors, as the reporting increases, will make decisions on where they invest accordingly. So, yes, there is no regulation around businesses being forced to change their environmental practices but the market will, I believe, cause that to happen.

I’d just like to highlight a couple of submissions. One in particular which was quite interesting was from Business and Professional Women (BPW). They’re an international agency, and they highlighted the aspect that New Zealand will become the first country to introduce such legislation, and they hope that BPW International will support the introduction of this type of reporting globally, across other countries. So we’re already starting to see groups here in New Zealand who see this world-leading legislation come in, starting to talk to their groups in other countries, saying, “Start lobbying your Governments in order to bring some similar legislation.” They also highlighted the fact that climate change will affect women and girls disproportionately as they are more vulnerable to its effects, constituting the majority of the world’s poor and being more likely to rely on natural resources for their livelihood. They spoke very strongly in support of this legislation in terms of the aspect around climate change and the importance of climate change.

I’ll just touch on one final submission, which was the submission from 350 Aotearoa. In their submission they said that they recognise the climate change risk data in accounting is lacking, and that many industries and investors need more information to make prudent decisions. And that’s what this is about. This is about giving information to investors to inform their decisions, and I believe that those investment decisions will then cause businesses to become more environmentally friendly. The reality is that most businesses are doing a fairly good job in this area, but we can always do better, and the investors will make their decisions accordingly once the reporting increases.

I commend this bill to the House and look forward to hearing the rest of the debate.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Speaker. I want to firstly join with the chair of the Economic Development, Science and Innovation Committee in thanking the submitters on this bill, and the officials for the good work that they have done. As my colleague Mr McClay has pointed out, National will continue to support this, but with some caveats.

Now, I wasn’t on the committee that considered the bill, but I did speak on this bill in the first reading and I’m pleased to do so again in the second reading, having watched progress from the bleachers. I heard Mr Shaw, who was introducing the bill, make what I believe was a Nostradamus-like faux pas in leaving out the word “large” from his description of the list of companies that are going to be affected by that. It is true that at the moment, the requirements are going to be for all large listed companies, but he did show an indication and stated an indication that the Government’s intention would be, once the regime is in place, to widen the scope of the reporting requirements to a larger number of listed companies, then large private companies, and then probably small private companies, and then it becomes part of the international sort of financial reporting requirements that companies need to go through.

What was interesting was that he was very clear that public entities would be excluded from that on the basis that there are already expectations on them for similar reporting, and I want to remind the House of the comment I made in the first reading. MPs who have been here for a few years have heard successive reports from the Office of the Auditor-General about the relatively poor quality of the non-financial performance reporting of public entities, and it’s something that’s been a bit of an irritant to me that when we look at the audit reports and we hear from the auditors for annual review that we get the same kind of “should do better” reports that I’ve been hearing since about 2013.

It’s a source of frustration for the auditors, as well. They would like to be able to see improvements in the quality of non-financial information, and I’m not saying it’s easy. It is actually quite difficult, but it shouldn’t be as difficult as it has transpired. I think there needs to be a much more common taxonomy for statements of service performance and non-financial information from public entities more generally, and if that’s the track record of our public entities, I think it would behove the Government to consider a much higher standard for environmental reporting on them, rather than just leaving it to them to deal with.

This is a fascinating description, actually, of what we’re talking in respect of. I think what most people thought about when this bill came in was the impact of business on climate, but, actually, it’s very clear that this is about the impact of climate change on business, and that changes and makes much more complicated the regime for reporting.

I had expressed a hope at first reading that through the committee process we would get some sort of sense of what the reporting regime would look like, but not only did that not happen; we’ve actually kicked the can down the road a little bit by the extension of time for the requirements to come in, in order that the Financial Markets Authority and the External Reporting Board can actually devise those standards. I do have a bit of a problem with that on a couple of fronts. One is the provision of information comes at a cost. These are not costless reports. There’s quite an investment that needs to be made in them, and the cost of providing that information needs to be exceeded by the benefits to the users, and those users are going to be a number of stakeholders—banks, shareholders, regulators, customers, and so on—and we’re actually none the wiser. It’s only a minor irritant, but I do think we should have a bit better clarity about what the costs and benefits of these reporting regimes will be before we start to put them in.

I also want to just come back to this issue about sort of the impact that that kind of reverse thing of the impact of climate change on business and not the other way round, and also, as Mr McClay mentioned—and I want to elaborate on this—there’s actually not only the direct impact of climate change on business but the equally direct impact of Government responses to climate change through the regulatory process on business.

I want to use an example of that and try and, sort of, imagine how a reporting regime might, for example, cope with the oil and gas ban that has been imposed, or as it’s euphemistically known, by this Government in the previous Parliament, because regardless of the platitudes of the Minister of Energy and Resources about how much time we have to adjust and what little difference that’s going to make to organisations in the oil and gas industry, the province of Taranaki has a quite different view. The stakeholders have a different view. And a report on the impact of climate change on business is going to have some interesting things to say about the reality rather than the rhetoric of the impact of Government policies on business as they relate to climate change.

I think we can also use another example of, for example, the Overseas Investment Act changes enabling farm to forestry conversions, which is a direct climate change response but it could have negative impacts on large businesses who are not in that field, particularly, for example, Fonterra—it may have an impact on their ability to be able to source milkfat, for example. I mean, the impact of Government regulation on this is real. There are a plethora of examples I could use, and how that’s going to be folded into a reporting regime I think is going to be very, very important.

The last thing I would say about this is that most reporting requirements are ex post—what we call ex post. They are reports of what has happened in the past. The easiest ones to look at are financial reports because they are, firstly, a balance sheet, a snapshot of the statements of assets and liabilities of the company, as well as the statements of income and expenditure. So readers—banks and shareholders—can get a pretty good assessment of the past activity, compare it against the budgeted reports, and then look at, for example, if there’s a prospectus in capital raising, statements of projected financial performance, and so on. These are about predictions of the future, and that’s going to make these much more nebulous, potentially quite subjective. That’s where their value is going to be really, really interesting.

Now, I’m a strong supporter of this, and I talked about in my first reading the research from Professor David Lont at the University of Otago, where he had looked at greenhouse gas emissions reporting and the immediacy of the effect on the share price, not only of the organisations that reported on it but other organisations in the same industry that did not—had an effect on both of those groups of companies. But this is much more difficult to look at because we are looking at, sometimes, decades into the future of the impact of climate change on business, and the predictability and certainty of that will become less and less and less the further out we are looking. So, you know, we have the sense that climate change is certain, we don’t know the quantum or the timing of it, and so we’re going to have similar subjectivity and variability in these sorts of reports. So it’s going to be very difficult, I think, for the Financial Markets Authority to try and come up with a reporting framework that accommodates all of those variables.

I just want to finish by agreeing with Mr McClay on the need for an exemption framework and our opposition to the removal of that from the bill—and we will put it back in by an amendment at the committee of the whole House. The risk we run is that we have reporting for its own sake. I think entities should be able to make statements about the lack of any impact of climate change on them and leave it for the readers to determine whether or not that is accurate, and for regulators to decide whether that’s appropriate. But to force people into a reporting regime that they don’t believe applies to them I think is wrong. There are examples of this in New Zealand’s financial reporting standards, with differential reporting requirements for smaller companies or with different ownership models. So it’s not unusual to have variations from a default reporting position. So I think we need to think more carefully about whether or not that change should be made.

But with those caveats, and with a sense that it’s probably not going to set the world on fire—that’s not a pun on climate change—it is a move in the right direction, albeit slowly and subjectively.

GLEN BENNETT (Labour—New Plymouth): Kia ora, Madam Speaker. Thank you for the opportunity to speak on this piece of legislation, the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill. I’m a member of the Economic Development, Science and Innovation Committee, so was a part of the select committee process and hearing the 55 submissions—again, as was spoken earlier about—all supporting the intent of this piece of legislation.

Now, just listening to our previous speaker, Michael Woodhouse, who’s just resumed his seat, I think this is a really timely piece of legislation and a piece of legislation that people are actually wanting. I did some research. I was looking around particularly in terms of people wanting to invest in companies, people wanting to actually invest, obviously, for their own families, for their own interests. And there was a US study back in 2019 that indicated that 85 percent of investors—85 percent of investors—expressed an interest in climate-related matters when it came to their investment portfolios, what they looked at.

Now, here in New Zealand, we have a high level of interest and most investors are still getting their climate information around companies they’re looking at through the news, at 49 percent; through companies’ websites, at 41 percent—rather than through a company’s annual report, which was around 36 percent, or if a company had a sustainability report that was only 32 percent. So we can see that local investors here in New Zealand are still getting their information through news sources and websites rather than actually through the companies that they’re looking at investing in.

Now, my colleague and chair of the select committee, Jamie Strange, commented—and then earlier we had the Hon Todd McClay, who’s also a member of our select committee, who was obviously talking around the fact this piece of legislation is around disclosure, but this piece of legislation wasn’t necessarily about any actions or companies having to do anything. Now, when I heard that comment, it got me thinking that back in—I think it was the early 1990s when the fair trade brand, the fair trade empire, came into existence, and suddenly it changed the way that people shopped. Suddenly it changed the way people purchased and went about their very lives, not because a company had to tell anyone what they were doing but because people then sought out, wanted to obviously support fair trade initiatives. So that’s become a global brand where people are making decisions because they are informed, and this piece of legislation is around informing people.

The other one, and for me personally, as a member of KiwiSaver, is that when I was for many years just passive on that service, to suddenly realise I can actually look at where my investments are going—so I was able to look at ethical investments. And again, I could have invested in whatever company I wanted, but I could then look and see, and I had opportunities. And again, with this piece of legislation, it allows people to look, to see, because it’s around the future, as the Hon James Shaw said. It’s around looking at the generations coming through. This is around intergenerational equity. And so having this piece of legislation in place, I think, is really important for the future of New Zealand.

I’m really proud, as a member of Parliament, that we’re the first country in the world to be initiating this. I look forward to the continuing conversation as we move on to our third reading and I commend this bill to the House.

Hon EUGENIE SAGE (Green): Tēnā koe, Madam Speaker. I’m very pleased to take a call on the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill. I wasn’t on the Economic Development, Science and Innovation Committee, but, like others, really thank the submitters on it. Just looking through some of the submissions, there was a lot of support for this and also suggestions around making some changes, which the work of the select committee has picked up, in terms of a lot of the amendments that have been recommended.

The climate crisis is the biggest challenge facing us. All organisations and institutions have got a responsibility to reduce emissions. So this bill is really important, not just because it is world-leading but because of the transparency that it will provide with our large financial institutions, the big insurance companies, the large registered banks, the registered managers of investment schemes all being required to disclose and, ultimately, take action against climate-related risks.

So this bill is really consistent with Green Party policy. We like regulatory tools that encourage businesses to reduce their emissions, and this disclosure, and, as other speakers have noted, the transparency that it provides to markets, to potential investors, about what those risks are.

The National Party has talked quite a bit about the legislation being applied to the public sector, but I would remind members that the public sector legislation that was passed last year, the Public Service Act—has a new requirement in it on Government agencies to publish long-term insight briefings at least once every three years, about medium- and long-term risks, trends, and opportunities. They’re think pieces for the future.

It would be almost unthinkable that those briefings do not deal with a changing climate. So the public sector already has that responsibility, and there’s been an increasing amount of guidance being provided by the Department of the Prime Minister and Cabinet on how these long-term insight briefings are to be developed, the process for them, some of the criteria, and I really look forward in select committee to receiving those and considering them. So, this bill, in applying to some of our 200 biggest financial institutions—the large ones—is providing a similar requirement on the private sector.

The bill has got three main goals. It will, I think, really help ensure that the effects of climate change are routinely considered in business, investment, lending, and insurance underwriting decisions. It will help those entities demonstrate their responsibilities and their foresight in looking at how climate issues are considered in relation to their businesses, and it should lead to the better allocation of capital and help really smooth that transition to a sustainable, low-emissions economy. It should also make our financial system more resilient, which was what the national climate change risk assessment highlighted needed to be done.

So the 200 large businesses comprise more than 90 percent of New Zealand’s financial assets—it’s 200, so it is the major part of the financial market participants. As Minister Shaw mentioned, it is being looked at by actors overseas. Because our finance sector is so connected with other international markets and with players that have interests here and overseas, this bill is likely to impact on what those companies do overseas, as well. So we have got that major responsibility for doing something about climate change, and this bill is one of the steps towards that.

Just one other thing. One of the things that the National Party has commented on was the removal of the disclose-or-explain provision, which was recommended by our select committee. The removal of this exemption means that disclosures for all entities will be on a common basis. The disclose-or-explain provision would have potentially led to a two-tier differential system, and this recommendation of the select committee actually makes the bill simpler. So I commend the bill to the House and look forward to further readings.

Dr JAMES McDOWALL (ACT): Thank you, Madam Speaker. I rise on behalf of ACT to take a short call on this bill. The objective of this bill is to ensure that the effects of climate change are routinely considered in business, investment, lending, and insurance underwriting decisions. However, these effects are already routinely considered by business. We have sensible, incentive-based mechanisms in place, and, furthermore, successful businesses are those that are responsive to changing consumer demands. There is little doubt that the companies covered by this bill respond to those demands and publish information about their sustainability initiatives, including around climate change. Just look at any annual report over the last 10 years at the very least, and I don’t think we need to mandate greenwashing.

The people who work in these companies are everyday New Zealanders who deliver products and services to us, provide employment, and for the most part, work to make New Zealand a better place. The good news for the Government is that even if they don’t want to trust businesses, there is already a system in place to account for climate change: that is the emissions trading scheme (ETS). It puts a price on carbon under a national cap. This imposes costs, and businesses will respond by innovating and adjusting their operations. So we don’t believe this bill is needed. It also adds unnecessary reporting regulation, and frankly, the idea of forcing companies to better demonstrate responsibility is cynical because it assumes a lack of foresight. However, under the ETS, carbon prices are known to businesses. They can see longer-term price signals and respond and account for them.

If the Government really wants to look for entities that need better foresight, perhaps they should reflect on their woeful uptake of electric vehicles (EVs) in their fleets, or maybe they’ve just been waiting a little bit of time to give themselves a discount. Record coal imports and an increase in carbon emissions under their watch. At least businesses operate under a carbon cap.

This bill will have little to no impact on reducing emissions or meeting our international climate change commitments, but it will increase costs to businesses. We sometimes hear that convoluted tax bills are a tax lawyer’s best friend. Well, I think this bill is a marketer’s best friend, and with fines going up to $2.5 million, maybe the title of this bill should be changed to “Go Woke or Go Broke”. Thank you, Madam Speaker. We oppose this bill.

Tāmati Coffey: Madam Speaker?

ASSISTANT SPEAKER (Hon Jacqui Dean): Oh! I call Tāmati Coffey—just in time.

TĀMATI COFFEY (Labour): There’s a little process that needs to be gone through now, a little system, and I get that and I embrace it wholeheartedly. Thank you, Madam Speaker. I will take a short call on this. I don’t sit on the Economic Development, Science and Innovation Committee, but I understand the work that’s gone into this.

I want to, first of all, start by thanking, as we do, the many submitters who have come before the committee and put forward their thoughts. I also want to just acknowledge that this is a ground-breaking piece of legislation here. This is a first-in-the-world piece of legislation: the ability to be able to require financial institutions to be able to disclose the impacts of climate change on their business and explain how they’re going to manage that. The previous speakers said it; there are some businesses that are already doing that and I congratulate them.

I sit on a philanthropic trust. And actually one of the key measures that we talk about is how we’re going to respond to the impacts of climate change. There are businesses all around the country that are really taking this into consideration. This is becoming a common conversation around the water cooler these days, the effect of climate change, the protests that are happening out in the streets with our kids are striking because they think that this is important enough to actually take the issue out on to the streets and make sure that we, that all of us, from the business sector to us here in Parliament, to the education system, are actually recognising the impact that climate change is having on our environment and making sure that we respond to it.

We’ve declared a climate emergency and plenty of councils around the country have followed suit. So what this is is actually part of that journey. As we work to negate the effects of climate change, which is just the position that we’ve ended up with, then we have to acknowledge that actually there’s going to be many steps on that journey and this piece of legislation is just one of them.

Again, thank you to all of the submitters that put in their submission. We’ve traversed a couple of the tension points from previous speeches that were raised in committee and some of the ways that they’ve been dealt with. I won’t go back over that again—just to say that it’s nice to see that there is cross-party support for this with the big parties in the House. And I too commend this bill to the House.

ASSISTANT SPEAKER (Hon Jacqui Dean): This debate is interrupted and set down for resumption next sitting day. The House stands adjourned until 2.00 p.m. Tuesday, 28 September. Good afternoon.

Debate interrupted.

The House adjourned at 4.58 p.m.