Tuesday, 19 October 2021
Continued to Wednesday, 20 October 2021 — Volume 755
Sitting date: 19 October 2021
TUESDAY, 19 OCTOBER 2021
TUESDAY, 19 OCTOBER 2021
The Speaker took the Chair at 2 p.m.
KARAKIA/PRAYERS
KARAKIA/PRAYERS
ADRIAN RURAWHE (Deputy Speaker): Ā kāti rā, kia tau anō te rangimārie. 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.
[And so, may peace be with us. 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.]
Obituaries
Hon Sir Michael Cullen KNZM
Taito Phillip Field
Jenny Kirk MNZM
John Murray Rose QSM
SPEAKER: Members, I regret to inform the House of the death on 19 August 2021 of the Hon Sir Michael Cullen KNZM, who represented the electorates of St Kilda and Dunedin South between 1981 and 1999 and continued to serve as a list member until 2009. Sir Michael was Deputy Prime Minister from 2002 to 2008. During his membership of this House, he held a number of ministerial positions, including Minister of Social Welfare, Minister of Finance, Minister in Charge of Treaty of Waitangi Negotiations, Minister of Tertiary Education, Attorney-General, as well as Leader of the House.
I desire on behalf of this House to express our sense of the loss we have sustained and our sympathy with the relatives of the late former member. I now ask members to stand with me and observe a period of silence as a mark of respect to his memory.
Members stood as a mark of respect.
SPEAKER: Thank you, members. I further regret to inform the House of the death on 5 August 2021 of John Murray Rose QSM, who represented the Otago Central electorate between 1969 and 1972.
I also regret to inform the House of the death on 23 September 2021 of Taito Phillip Field, who represented the Ōtara electorate between 1993 and 1996, and the electorate of Māngere between 1996 and 2008. He was New Zealand’s first member of Parliament who was of Pacific Island descent. Taito Phillip Field was the Minister of State, Associate Minister of Justice, Associate Minister of Pacific Island Affairs, and Associate Minister of Social Development and Employment from 2003 to 2005. He was awarded the 1990 Commemoration Medal for services to the community.
I also regret to inform the House of the death on 30 September 2021 of Jenny Kirk MNZM, who represented the Birkenhead electorate between 1987 and 1990. She was awarded the New Zealand Suffrage Centennial Medal in 1993.
I desire on behalf of this House to express our sense of the loss we have sustained and our sympathy with the relatives of the late former members. I now ask members to stand with me and observe a period of silence as a mark of respect to their memories.
Members stood as a mark of respect.
Sir David Amess
Hon CHRIS HIPKINS (Leader of the House): I seek leave for a motion without notice or debate to be moved on the murder of British MP Sir David Amess.
SPEAKER: Is there any objection to that process being followed? There appears to be none.
Hon JUDITH COLLINS (Leader of the Opposition): Thank you, Mr Speaker. I move, That this House express its sympathy to the family, friends, and colleagues of British member of Parliament Sir David Amess, who was attacked and killed as he went about his duties as a local MP on 15 October, and to pass its condolences to the Westminster Parliament.
Motion agreed to.
PETITIONS, PAPERS, SELECT COMMITTEE REPORTS, AND INTRODUCTION OF BILLS
PETITIONS, PAPERS, SELECT COMMITTEE REPORTS, AND INTRODUCTION OF BILLS
SPEAKER: Petitions have been delivered to the Clerk for presentation.
CLERK:
Petition of Brian Mullane requesting that the House initiate an inquiry into the Chief Ombudsman
petition of Catherine Overend requesting that the House pass legislation for New Zealand university-trained counsellors to be recognised as a professional mental health practitioner
petition of Robert Forsyth requesting that the House pass legislation mandating use of masks in secondary schools at COVID-19 alert level 2
petition of James Boland requesting that the House pass legislation recognising the human right to a healthy environment
petition of Patricia Fabish and the Sensible Sentencing Trust requesting that the House pass legislation to allow victims to present unedited victim impact statements in court
petition of Emily Shute requesting that the House urge the Government to change the time frame of the cervical cancer self-testing roll-out to begin at the start of 2022
petition of Rachel Swann requesting that the House urge the Government to expand the eligibility for the 2021 Resident Visa to all types of visa holders
petition of Eliana Darroch requesting that the House urge the Government to reinstate the emergency benefit for temporary visa holders for the duration of the COVID-19 pandemic
petition of Jay Shak requesting that the House urge the Government to stage a diplomatic boycott of the 2022 Winter Olympics.
SPEAKER: Those petitions stand referred to the Petitions Committee. Ministers have delivered papers.
CLERK:
Annual reports for 2021 of:
Public Trust
Pike River Recovery Agency
Education Review Office
Statistics New Zealand
Guardians of New Zealand Superannuation
Ministry for Pacific Peoples
Real Estate Authority
Earthquake Commission
Government Superannuation Fund
Government Superannuation Fund Authority
Ministry for the Environment, and
Environmental Protection Authority
annual reports for 2021 of the Treasury and the Minister of Finance’s report on non-departmental appropriations
reports on:
non-departmental appropriations 2020/21 for Vote Business, Science, and Innovation; Commerce and Consumer Affairs Portfolio
Vote Environment—Climate Change Portfolio and Vote Environment—Environment Portfolio
erratum to the annual report for 2020/21 of the Reserve Bank of New Zealand
statements of performance expectations 2021/22 for:
Kāinga Ora Homes and Communities
Tāmaki Regeneration Company Limited
Guardians of New Zealand Superannuation
Government Superannuation Fund Authority
statements of intent for:
Tāmaki Regeneration Company Limited
Guardians of New Zealand Superannuation
Māori Television Service
financial statements of the Government of New Zealand for the year ending
30 June 2021
Government Response to the Report of the Justice Committee on the Inquiry into 2019 Local Elections and Liquor Licensing Trust Elections and Recent Energy Trust Elections.
SPEAKER: I present the 2021 annual reports of:
the Parliament Sector for the Office of the Clerk of the House of Representatives and the Parliamentary Service
the Controller and Auditor-General, and
the Office of the Ombudsmen.
I also present the 2021/26 Strategic Intentions of the Office of the Ombudsmen. Those papers are published under the authority of the House. Select committee reports have been delivered for presentation.
CLERK:
Report of the Finance and Expenditure Committee on the COVID-19 Response (Management Measures) Legislation Bill
report of the Health Committee on the Sunscreen (Product Safety Standard) Bill
reports of the Petitions Committee on the petition of Jane Sutherland and Rebecca Greer, and the petition of Pauline Latta
report of the Regulations Review Committee on the:
COVID-19 Public Health Response Alert Level Requirements Order (No 11) 2021
COVID-19 Public Health Response Alert Level Requirements Order (No 11) Amendment Order 2021
COVID-19 Public Health Response Alert Level Requirements Order (No 11) Amendment Order (No 2) 2021
COVID-19 Public Health Response Alert Level Requirements Order (No 11) Amendment Order (No 3) 2021
COVID-19 Public Health Response Alert Level Requirements Order (No 11) Amendment Order (No 4) 2021.
SPEAKER: The bills are set down for second reading. The COVID-19 orders are set down for consideration. The Clerk has been informed of the introduction of bills.
CLERK:
Retail Payment System Bill, introduction
Data and Statistics Bill, introduction
Remuneration Authority Legislation Bill, introduction
Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill, introduction.
SPEAKER: Those bills are set down for first reading.
Oral Questions
Questions to Ministers
Question No. 1—Finance
1. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What Government economic support has been provided to businesses since the Delta outbreak on 17 August?
Hon GRANT ROBERTSON (Minister of Finance): The Government moved swiftly to provide significant support to businesses and workers in response to the Delta COVID-19 outbreak. The wage subsidy scheme and resurgence support payment were reactivated. Other existing supports such as the leave support scheme, the short-term absence payment, and the small-business cash-flow scheme have also been available, as appropriate. In total, the wage subsidy scheme has now paid out $3.35 billion, and the resurgence support payment, $1.13 billion, totalling close to $4.5 billion. I am very well aware of the strain that the restrictions that are in place are putting on businesses and workers, and we are continuing to talk to businesses and evolve our response. The Government has been working on an enhanced business support package which will have a particular focus on supporting businesses in the Auckland area, and I’ll have more to say about that on Friday.
Dr Duncan Webb: Where has the support been targeted to business?
Hon GRANT ROBERTSON: Under the wage subsidy scheme, the data shows that as of 14 October, 1.267 million jobs have been paid at least one payment. Some 39 percent of employees and 46 percent of self-employed have been supported by at least three payments. The analysis also shows that 65 percent of the employees supported by payments three and four are located within Auckland. A growing share of the jobs outside of Auckland that are being supported are in the accommodation and food services sector, as industries such as construction return to normal outside of the Auckland area. Under the resurgence support payment, which helps businesses with their fixed costs, the proportion of payments Auckland businesses have received has increased for each successive round, from 43 percent in the first payment to 64 percent in the second and, currently, 70 percent for the third. By sector, construction has received the largest amount for the first two rounds of payments. For the first week of the third payment, however, that has changed, with the accommodation and food services sector receiving the largest amount.
Dr Duncan Webb: What other support is available to help businesses in response to Delta COVID-19?
Hon GRANT ROBERTSON: As I said, these are stressful times for businesses and business owners—particularly in Auckland—who are doing it tough. Every week during lockdown, the Ministry of Business, Innovation and Employment (MBIE) has put out a specialist business support newsletter to more than 800,000 businesses, with help and advice on issues such as mental wellbeing. There is also a range of other resources available for small and medium sized business owners on the MBIE website, which has a lot of practical resources and advice. On Friday, we will have more to say about the support that we’ll be providing to businesses.
Question No. 2—Prime Minister
2. Hon JUDITH COLLINS (Leader of the Opposition) to the Prime Minister: Does she stand by her statement in relation to COVID-19 restrictions, “We know that in the future we cannot ask people to live week by week, not knowing when things will change”; if so, when will she announce clear milestones for lifting current COVID-related restrictions?
Rt Hon JACINDA ARDERN (Prime Minister): I stand by my full statement: “We know that in the future we cannot ask people to live week by week, not knowing when things will change or how to help things speed up. We know that needs to change and we have a plan on how. While the announcements today will be about the next few weeks, on Friday we’ll provide the detail around the system we’ll use to protect ourselves in a highly vaccinated environment. We’ll give details on how we’ll move into that new system and what will help us to get there.”
Hon Judith Collins: Why did she not announce clear milestones three weeks ago when she released a three-step plan for lifting lockdown in Auckland?
Rt Hon JACINDA ARDERN: Because as we’ve always said, our outbreak has been and continues to be different than those outbreaks we’ve seen in Australia, where they were using vaccine to exit their outbreak. What we wanted to do was maintain the ability to continue to assess the progress of the outbreak alongside our vaccination, so not necessarily say that everything would be contingent on single vaccination rates but to continue to assess the containment of the outbreak. That is why we made the decision, of course, as you know, in level 3 to have a step 1 change that allows people to gather outdoors.
Hon Judith Collins: Can she commit to telling students in Auckland and Waikato this week what the criteria are for when they can return to school, so that they don’t have to live week to week?
Rt Hon JACINDA ARDERN: I’ve already signalled that the Ministry of Education will be making announcements around the near future around education in Auckland on Wednesday, and, obviously, as I’ve already said in my primary answer, we’ll be looking to the framework for a highly vaccinated environment and the details of that being released on Friday.
Hon Judith Collins: Can she commit to telling South Islanders this week the conditions for when level 2 restrictions will be lifted so that South Island businesses don’t have to live week to week?
Rt Hon JACINDA ARDERN: As I’ve already said in my primary answer, we’ve set out the time line for when we will be releasing the details of a framework for a highly vaccinated environment. What I will say, in the meantime, for the South Island is that you’ll see that we continue to assess the parameters and restrictions that sat alongside level 2. Of course, we’ve kept a level 2 environment in the rest of the country because we know the mobility of New Zealanders. We know that we’re continuing to have to ship and transport goods out of Auckland into the South Island. But we did assess that we could lift the caps for, for instance, hospitality and those sites that are using the seated and separated rule to try and just ease a bit of pressure there, acknowledging that the restrictions do have an impact.
Hon Judith Collins: Does she accept that the Government’s failure to deliver a plan to ease restrictions has seen small businesses living week to week, and many destroyed?
Rt Hon JACINDA ARDERN: I accept that COVID has destroyed many people’s lives, and affected, in a disastrous way, many people’s businesses. Of course, no country has had zero impact from COVID, but it is fair to say that our country has had far fewer impacts than many when it comes to case numbers, hospitalisations, deaths, and—of course—unemployment and the impacts of restrictions on business. We absolutely acknowledge this has been an incredibly difficult period for many, but when we look at the overall impact of COVID around the world, we have had a very different and far better situation than many, many others.
Hon Judith Collins: Can she commit to announcing the conditions this week for lifting the Auckland regional boundaries so split families across New Zealand don’t have to live week to week?
Rt Hon JACINDA ARDERN: I’ve already talked a little bit this morning about some of the thinking that we’re doing around the Auckland boundary, and one of the issues we have is, of course, the desire of the South Island, for instance, to be without any restrictions, but, equally, the member has now raised also the desire of Aucklanders to be able to move around. So we, as Government, have to navigate those two competing interests and keep people safe, but also acknowledge that there are, of course, incredibly important reasons that Aucklanders wish to move again. So we are doing some thinking around how, regardless of the situation of the outbreak in Auckland, we might be better able to enable that safely.
Hon Judith Collins: Does she now accept that when she said earlier this year, “I support the fact that we have been later in the pecking order”, her decision not to prioritise vaccinations for New Zealanders resulted in Auckland’s 62-day lockdown?
Rt Hon JACINDA ARDERN: I utterly reject the premise of that member’s question.
Hon Judith Collins: Will she apologise to New Zealanders for failing to get them vaccinated earlier and leaving us as sitting ducks for Delta?
Rt Hon JACINDA ARDERN: I also completely reject the premise of that question. We entered into talks with pharmaceutical companies before they’d even finished their clinical trials. We were purchasing vaccines across multiple portfolios before it was even clear that they would necessarily be successful. Despite the constant misrepresentation of the Opposition on this issue, we were very early in our purchasing. Whether or not we were amongst the first to be delivered to is a very different question, but I utterly reject any suggestion that we did not do everything that we could to ensure that we had access to vaccines.
David Seymour: Does the Prime Minister accept or not accept that New Zealand has been one of the last countries in the OECD to get its population vaccinated?
Rt Hon JACINDA ARDERN: We’ve already overtaken many other countries for whom the member would compare us to. Of course, when it comes to first doses, I believe we’ve overtaken Australia now, the UK—a number of other countries that the member continued to compare us to, we have overtaken. The difference is that we’ve always taken our own approach on COVID. We’ve always said that we want a situation where we keep people as safe as possible and, at the moment, that means trying to keep the outbreak as low as possible while we get very high vaccination rates, because that means that when we move, we will be able to continue to try and keep that outbreak and those numbers as low as possible. There’s very few countries that have been in that position and there are few countries that have been in ours. But I don’t, for a moment, trivialise the impacts of lockdown.
Question No. 3—COVID-19 Response
3. IBRAHIM OMER (Labour) to the Minister for COVID-19 Response: What recent progress has been made in the Government’s COVID-19 vaccination roll-out?
Hon CHRIS HIPKINS (Minister for COVID-19 Response): Over the weekend, New Zealanders came together across the motu to get behind Super Saturday, and I want to acknowledge the support of Super Saturday from all parties across the House. Nationwide, we had 700 vaccination sites open on Super Saturday—a number of them running into the evening in order to allow people the opportunity to get their vaccinations. A number of people from across the country went out of their way to get vaccinated—130,000 doses administered on a single day, the biggest day that we have had. I do want to thank everybody who played a role in Super Saturday’s event, whether it was leading up to, or on, the day; whether it was involved in organising the vaccination sites, or a barbecue, or driving someone to be vaccinated, and—very importantly—encouraging friends and family to show up and to do their part in keeping New Zealand safe from COVID-19. Everybody had a role to play.
Ibrahim Omer: What areas did particularly well on Super Saturday, and where does this leave our current vaccination levels?
Hon CHRIS HIPKINS: There are some particular places that deserve specific mention, and I want to mention the Kawerau District which, before Super Saturday, had the lowest first-dose rate of vaccination in the country. The Kawerau community came out with huge support and they ended up with the largest percentage increase in first doses of any district in Aotearoa New Zealand—so a massive effort there. We saw high uptake amongst Māori on Super Saturday: 10,825 first doses and 10,877 second doses. That was particularly pleasing to see, a 5.4 percent jump in the overall vaccination rate for Māori in a single week, and the days leading up to it as well. So a big, big boost there, and the momentum is continuing.
Ibrahim Omer: What support did he see for Super Saturday across the country?
Hon CHRIS HIPKINS: I want to acknowledge the communities and businesses that got behind the Super Saturday events. For example, we saw community groups, businesses, councils, health providers, and a whole lot of individuals doing a fantastic job to encourage people to be vaccinated. There was a lot of fun on the day, including Air New Zealand’s Jabaseat, where they had a 787 Dreamliner parked on the runway where people were able to be vaccinated in business class and wait out their time in economy class. We saw businesses across the country donating significantly to the cause, and I’d like to thank them for that. I’d like to also just extend the message that Super Saturday can’t be the end of this; we need to see that momentum continue. We still have more people who we need to get vaccinated.
Ibrahim Omer: What further works are planned in the vaccination roll-out to build off Super Saturday?
Hon CHRIS HIPKINS: We now need to redouble our efforts to target those communities where vaccination rates continue to be low. One of the things that we know is that people in those areas are less likely to come forward and seek out vaccination, and so we need to make vaccination as available as close as possible to them. That includes things like the Delta Buster, which we launched in Waiwhetū over the weekend, making sure that we have buses, vans, campervans, mobile vaccination clinics heading out into those communities where we have lower vaccination rates. Every New Zealander can continue to contribute here. Every additional person we encourage to get their first dose, or to get their second dose if they’re reluctant to get their second dose, is a step closer to getting back to the freedoms that we all want to see the country getting back to.
Question No. 4—Finance
4. Hon JULIE ANNE GENTER (Green) to the Minister of Finance: Does he stand by his statement, “We must not allow inequality to take hold in our recovery. In fact we need to take this opportunity to improve the prospects of all New Zealanders and tackle those long-standing divisions”; if not, why not?
Hon GRANT ROBERTSON (Minister of Finance): I do stand by the statement, which was made in April 2020, ahead of the 2020 Budget. Since then, the hard work of all New Zealanders and Government policy has driven a strong recovery, which has delivered more people in jobs and tens of thousands fewer people on income support than was forecast; the largest increase to benefit rates in a generation on top of an indexation of main benefits to the average wage; and one of the strongest economic performances during COVID in the OECD, which in turn has seen more jobs and opportunities for all New Zealanders. This is not to deny that there is more to do. There is, and that is why we are continuously updating our response, and we’ll have more to say about that on Friday.
Hon Julie Anne Genter: Will the enhanced business support package for Auckland he is announcing on Friday include direct financial support for Auckland students, renters, beneficiaries, and those in transitional housing; if not, why not?
Hon GRANT ROBERTSON: Obviously I’m not going to pre-empt the announcement, but what I would say is that the package of supports that the Government has already put in place has been providing support to those groups, many of whom are part of receipt of the wage subsidy scheme, for example, but I will leave more details until Friday.
Hon Julie Anne Genter: Why has the Government provided less than half the financial support to tertiary students in the 2021 COVID response than they provided in 2020?
Hon GRANT ROBERTSON: There was an initial boost to student allowances and student loan living cost support payments then. Obviously that continues to flow through. We have also, in this particular outbreak, increased funding for the student hardship fund, which enables us to target the support to those students who are the most in need.
Hon Julie Anne Genter: Has he asked for or received any advice about the impact of high inflation and whether increases in living costs and rents will erode the previous increases to benefits and the minimum wage?
Hon GRANT ROBERTSON: I haven’t sought specific advice since yesterday with the material that came in then, but the general advice is that, yes, higher inflation does impact more on those with the lowest incomes. Over the course of the last 20 months, we’ve seen not only the things I outlined in my primary answer but also increases to the minimum wage, and we continue to look for ways to support low-income New Zealanders.
Hon Julie Anne Genter: Will the Government freeze rents, as they did during the COVID lockdowns last year, to address the needs of people in Auckland as they face the longest period of level 4 and level 3 restrictions?
Hon GRANT ROBERTSON: That’s not currently on the Government’s agenda, no.
Hon Julie Anne Genter: Will he provide direct financial support to low-income and marginalised communities in Auckland so people can afford to stay home and stop spreading the virus and look after their families during this extended lockdown?
Hon GRANT ROBERTSON: There have been a number of investments made by the Government in supporting those on low incomes and in vulnerable communities in the Auckland area. That is included through additional funding for Pasifika health and community providers for Whānau Ora and other iwi and Māori providers, and we continue to provide support, obviously, through the Ministry of Social Development.
Question No. 5—Finance
5. ANDREW BAYLY (National—Port Waikato) to the Minister of Finance: What new plans, if any, will he announce to support those businesses that are currently affected by alert levels in New Zealand?
Hon GRANT ROBERTSON (Minister of Finance): The Government, as I outlined in my answer to question No. 1, has provided significant support to businesses across New Zealand affected by the change in alert levels. We know that the impact on some sectors and regions, such as those in Auckland, has been hard, and we will continue to work with them and provide support. Again, as I said in question No. 1, the Government’s been working on an enhanced business support package with a particular focus on Auckland, and I’ll have more to say about that on Friday.
Andrew Bayly: Has he seen the Auckland Business Chamber survey from October, which shows that two-thirds of Auckland businesses are not confident about the state of the economy over the next six months; and, if so, will he restore confidence by committing to allow the wage subsidy to be accessed at alert level 2?
Hon GRANT ROBERTSON: I have been in regular contact with the Auckland business chamber of commerce and, indeed, many of their members over the last couple of months. In terms of what we will be doing, that will happen on Friday.
Andrew Bayly: Has he seen the Retail New Zealand report from 30 September, which shows that a third of all retailers are not confident that their business will survive the next 12 months; and, if so, what plan does he have to ensure that this does not happen?
Hon GRANT ROBERTSON: The focus of the Government over the course of the last 20 months has been on cash flow and confidence within the economy. That’s the reason why we have put out such a significant amount of resources—as I mentioned, close to $4.5 billion going to businesses since the August outbreak. I know the member has his own announcements that he plans to make tomorrow; if there’s any new ones in there on top of what’s previously been announced, I look forward to seeing them.
Andrew Bayly: Has he seen, in the same Retail New Zealand report, that 87 percent of retailers want the Government to provide a plan for rental support in the form of a financial payment; and, if so, will he be adopting National’s rental support package?
Hon GRANT ROBERTSON: As I previously said, the resurgence support payment was specifically designed to help businesses meet their fixed costs. We’ve obviously expanded access to that over the course of the last couple of months; the member will have to wait till Friday. But, again, I look forward to any further new announcements he has tomorrow.
Andrew Bayly: Has he seen the report from the New Zealand Institute of Economic Research, which shows that 43 percent of the building sector expect weaker economic conditions ahead; and, if so, what plan does he have to make it easier to supply and transport building products across the Auckland regional boundary?
Hon GRANT ROBERTSON: It’s very clear that there’ll be no new announcements tomorrow from the National Party, given this particular line of questioning. As the member knows, we have facilitated the movement of building supplies across the boundary over recent times in order to meet some of the needs that exist there. And the construction industry, bear in mind, continues to operate at alert level 3, and, indeed, around the country.
Question No. 6—Building and Construction
6. TERISA NGOBI (Labour—Ōtaki) to the Minister for Building and Construction: What recent reports has she seen regarding building consents?
Hon POTO WILLIAMS (Minister for Building and Construction): I’ve seen a report from Statistics New Zealand that shows that for the sixth month in a row, the annual number of residential building consents has reached another all-time high. The number of new homes consented in the year ended June 2021 is at a record high of 46,453. This is an increase of 24 percent from the August 2020 year. These figures show the Government’s commitment to responding to increased housing demand is delivering the warm, dry, safe, and durable houses New Zealanders need.
Terisa Ngobi: What other trends does this report show?
Hon POTO WILLIAMS: The report shows a steady increase in the demand for multi-unit homes, with the total number of multi-unit homes consented in August 2021 at 21,164, an increase of 35 percent from the year prior. There’s no doubt that New Zealanders’ needs are changing and the building landscape is evolving. It’s encouraging to see a shift in the type of homes we’re building, as more apartments and townhouses will help us deliver affordable and healthy and energy-efficient homes.
Terisa Ngobi: How is the Government supporting the building and construction sector to build this growth in consents?
Hon POTO WILLIAMS: This Government’s investment in the construction sector is creating more jobs, helping us to retain and grow construction skills, and building warmer, drier, secure housing at a critical time. More people have moved into construction than any other sector since the start of COVID-19. This is fantastic for our communities, our economy, and our housing delivery programme. A strong sector means we can build back better.
Question No. 7—Prime Minister
7. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does she stand by her statement in relation to vaccine targets, “It is not as simple as that. If only the world were that simple”?
Rt Hon JACINDA ARDERN (Prime Minister): I stand by my full statement: “If we have a proportion of New Zealanders who opt out, we will have outbreaks that will lead to restrictions, and that will impinge on everyone’s lives. So it is not a simple equation of ‘If you’ve just had a chance, then unfortunately game’s up and it’s all over for everyone.’ It is not as simple as that. If only the world were that simple.”
David Seymour: Is the Government’s policy now to have no numerical target, one numerical target, or a series of targets for different groups and locations in terms of vaccination rates?
Rt Hon JACINDA ARDERN: I’ll refer the member to the comments that I made yesterday—that we are continuing to do work to finalise the detail around the COVID protection framework that we’ll be releasing on Friday. But I have indicated that we will give direction and guidance on the trigger into that framework and what will need to be achieved in order to move into it, and we’ll be providing that detail on Friday.
David Seymour: Can the Prime Minister describe the work that is required to finalise those details between now and Friday?
Rt Hon JACINDA ARDERN: As the member will have seen from some of the public commentary, we have been engaging with those who’ll be most directly affected by the framework as we finalise the details, keeping in mind that this is the kind of framework that acts in a similar way to what you’ve seen with the alert levels, so it actually does need to have quite a significant amount of work around it.
David Seymour: Has Cabinet already decided at what vaccination rates Auckland and New Zealand will be able to remove current restrictions, and did it make that decision at Cabinet yesterday?
Rt Hon JACINDA ARDERN: As I just said, there are elements of the work programme that we continue to finalise in preparation for release on Friday, and that will be my consistent response to those questions.
David Seymour: Point of order, Mr Speaker. It was a very specific question about a specific aspect of the plan that’s under scrutiny here. The Prime Minister hasn’t addressed that. She’s just said that there’s a generic range of questions that she’s working on. If she won’t answer specific questions, then there’s really no point in having question time and asking her questions.
SPEAKER: Well, whether or not there’s a point of having a question time and whether the member wants to take part in it is something for him. But leaving that to one side, the member does know that, one, if he wants a very specific question, he should ask it, but even then he cannot require a yes/no answer. Speakers have made that clear I think for at least the last 100 years and probably quite a long way before that.
David Seymour: Point of order. With respect, sir—
SPEAKER: Well, the member doesn’t mean “with respect”, but carry on.
David Seymour: Oh, Mr Speaker, I’m hurt by that comment. You should have more respect for yourself. The fact is I didn’t ask for a yes or no answer; I asked a specific question about a specific aspect of a plan to be addressed and, clearly, the Prime Minister hasn’t done that. All she’s done is persisted in saying there are details. The point of a supplementary question is if a member asks what those details are, they’ve at least got to address the question about those details.
SPEAKER: And the Prime Minister very clearly said that those matters would be the subject of comments further or later in week, and while I’m sure the member won’t be satisfied with that answer, the question was addressed.
David Seymour: What new information has the Government received, or is it waiting to receive, about school openings, between yesterday when the announcement was announced and tomorrow when the announcement will be made about school openings?
Rt Hon JACINDA ARDERN: Every decision that we’ve made is based on the most up-to-date information about the nature of the outbreak that we have. I think it’s particularly interesting, of course, to see, as you would have heard me say today, that under-39s—in fact, if I were to give the member the precise number, 16 percent of our cases today are 10- to 19-year-olds and 12 are zero- to 9-year-olds. So we even factor in that level of detail in the decisions that we make. We also look, overall, at things like vaccination rates amongst those who may be eligible for schools reconvening. All of that is material as we look to the safety of decision making around schools reconvening. As I’ve just said earlier in the House, in House time, Minister Hipkins will be setting out some of those plans tomorrow. But we had in fact already signalled that schools would not be reopening this week, so there was no expectation that they were.
David Seymour: If the plans announced this week can change with information received by the day, how can the public have confidence that those plans will endure for longer than, say, the roadmap released a few weeks ago?
Rt Hon JACINDA ARDERN: The member is conflating two completely different things. We’ve always said that the decisions that we’re making relative to this individual outbreak, whilst we are vaccinating we will continue to look at our ability—even while we do not have high rates of vaccination—to see if we can make alterations to restrictions based on our ability to contain the outbreak. Secondly, we’ve also said that vaccinations do make a difference to what you’re able to do in the future if you have high vaccination rates—that we intend to operate differently when we have high vaccination rates. And so, of course, alongside with dealing with this outbreak, as it stands, we’re also looking to the future and setting out a framework that incorporates vaccination rates at a high level.
David Seymour: Why do double-vaccinated Kiwis with a negative pre-departure test returning to their country still have to go through 14 days of managed isolation and quarantine (MIQ), if they can get it, when people with a positive COVID test are being allowed to home isolate?
Rt Hon JACINDA ARDERN: Of course, when we identify a positive COVID case in the community, there’s an assessment undertaken as to whether or not that person would be best placed in managed isolation or continue to be cared for in their home, in the same way that we are also now piloting the idea of having people coming in at the border being able to isolate at home. We do still have cases coming in at the border. Knowing where those cases are and who they are and that they are being properly contained continues to be important to New Zealand, because every modeller demonstrates that even when you’re operating with a slightly high tolerance of COVID in the community, if you’re seeding too many cases, then that does have an exponential effect. But we are looking at our MIQ arrangements in our current environment. We already have the reconnecting New Zealand work. We are expediting some of that work and looking at things like shortened MIQ and home isolation. Some of that work was already well under way.
David Seymour: In what assessment does a person with a negative COVID test have more chance of passing on COVID than someone the Government knows has COVID because they just had a positive test but are still allowed to isolate at home?
Rt Hon JACINDA ARDERN: So I don’t think these two scenarios that the member presents—of course, one group you could almost say, coming in at the border, essentially you’re almost treating them as contacts, and so we do have requirements of the way that we treat contacts. Some of them do still go into facilities, even if they’ve been in the community. We have contacts that will go into facilities if they’re unable to isolate safely at home. So it’s just about looking at those two different groups and making sure we’re consistent between the two. We are in a transition period. But we’ve already set out that the bones of that needs to include the ability to isolate at home, which, as I’ve already said, we’re piloting and we’re doing that both for positive community cases where it is appropriate, and we’re looking to do that for travellers where it is appropriate, and we’re also looking at things like shortened MIQ. So I think the things that the member is seeking we do have under way.
Question No. 8—COVID-19 Response
8. CHRIS BISHOP (National) to the Minister for COVID-19 Response: Did Cabinet agree yesterday to vaccination rate targets in Auckland and New Zealand to allow COVID-19 restrictions to lift; if so, what are they?
Hon CHRIS HIPKINS (Minister for COVID-19 Response): The Government’s overall target for COVID-19 remains to get every New Zealander taking up the opportunity to be vaccinated. Everyone who can be vaccinated should be vaccinated. As the Prime Minister has just indicated in the answer to her question, an announcement on the thresholds for shifting to a new COVID-19 protection framework for a highly vaccinated population will be made on Friday. We are working through the final details of that, including the interrelationship between the rates of vaccination and the potential new requirements in the new framework.
Chris Bishop: Point of order, Mr Speaker. The question was very specific as to whether or not Cabinet agreed to vaccination rate targets. I think the Minister said words to the effect of they’re working that through. It doesn’t actually answer or address the question.
SPEAKER: Is there any response to that?
Hon CHRIS HIPKINS: I’m happy to elaborate further on the answer if that would be helpful.
SPEAKER: I think it would be. I think at least the first leg should be addressed.
Hon CHRIS HIPKINS: The Cabinet made some in principle decisions. Details are still being finalised.
Hon Simon Bridges: Still writing the press release.
SPEAKER: Order! Order! The member can take a call if he wants to.
Chris Bishop: Does the Minister mean, therefore, that Cabinet will finalise the decisions reached in principle yesterday before the announcement on Friday?
Hon CHRIS HIPKINS: There are specific Ministers working through the details of that, and, of course, the announcement will be finalised before the announcement is made.
Chris Bishop: Why has the Government not published the vaccination rate target agreed at Cabinet yesterday and given some certainty to Aucklanders and New Zealanders desperate for a roadmap out of the situation they find themselves in?
Hon CHRIS HIPKINS: Probably for a similar reason to the fact that the Leader of the Opposition demanded to know what the Government’s targets were and then refused to release her own, despite the fact that they’ve clearly already decided what they are, which is that we’re working through the details. We want to be able to answer all of the detailed questions that will flow from the announcement when we make it, and so, therefore, we will do that on Friday.
Rt Hon Jacinda Ardern: Has the member seen any reports of any other parties in this House and whether they’ve finalised the no less than three different targets that they’ve had around vaccination rates across New Zealand?
SPEAKER: Now, I think the Prime Minister knew that was out of order. Therefore, she will withdraw and apologise.
Rt Hon Jacinda Ardern: I withdraw and apologise.
Chris Bishop: Why didn’t the Government announce yesterday their in principle decisions, to use his words, around what the vaccination targets that Auckland and the country needs to get to to have COVID-19 restrictions loosened?
Hon CHRIS HIPKINS: The Cabinet made some in principle decisions. The details of that have been delegated to a group of Ministers to finalise, and that is the process that we’re going through at the moment.
Chris Bishop: Why is the country waiting until 63 days into this Delta outbreak before finding out what vaccination rate New Zealand needs to get to in order for restrictions to loosen?
Hon CHRIS HIPKINS: I note that the member asks that question on the day that we have recorded the highest number of COVID-19 cases that we have had since the pandemic began. There is still a lot of uncertainty around the pandemic, and the Government continues every day to get new information, new modelling, new projections, and we want to make the most informed decisions that we possibly can. We are acutely aware of the fact that when we make these decisions, going backwards isn’t an option. Once COVID-19 cases take off, it’s very difficult to contain them. We want to make sure that the success that New Zealand’s had in containing COVID-19 continues in as much as that is possible in light of the Delta variant that we are dealing with. This isn’t a fast and easy process; there are a lot of different things that needed to be weighed up and traded off. The fact that the Opposition themselves haven’t been able to maintain a consistent position over the last few weeks, despite not being responsible for anything, shows that it is actually a complicated set of issues.
Question No. 9—Conservation
9. RACHEL BROOKING (Labour) to the Minister of Conservation: What recent announcement has she made regarding investment in a project to protect kea?
Hon KIRITAPU ALLAN (Minister of Conservation): Last week, I announced Jobs for Nature funding for a two-year project aimed at reducing lead poisoning of the endangered kea, the world’s only alpine parrot. Lead poisoning is a serious threat to this charismatic and cheeky mountain parrot, as it is attracted to the sweet-tasting but toxic metal commonly used in building materials prior to the 1990s, and the effects can be devastating. Kea are a taonga, an icon in the mountains of Te Waipounamu, but they are in trouble and need all the help we can give them to overcome threats like lead and predators.
Rachel Brooking: How will this project be delivered and what will it involve?
Hon KIRITAPU ALLAN: This project has been spearheaded by the Kea Conservation Trust. Government funding of $950,000 will allow the trust to take on eight people from areas most affected by the COVID-related downturn in tourism. These people will be trained to work at heights and in roofing maintenance. Work will involve removing lead from private dwellings and replacing it with non-toxic alternatives, working with property owners in areas surrounding the South Island, including in the Tasman District, Abel Tasman, Golden Bay, Arthur’s Pass, Aoraki, Ōkārito, Franz Josef, Fox Glacier, Haast, Mount Aspiring, and Piopiotahi. The trust project complements the Department of Conservation’s own programme to remove lead materials from huts and other buildings on public conservation land.
Rachel Brooking: Can the Minister reveal which bird or bat she is backing for Forest & Bird’s 2021 Bird of the Year Competition?
Hon KIRITAPU ALLAN: Well, yes, I can. This year, I am proud to say I am backing the kea—a highly intelligent, resourceful, and a little bit of a rascal. Some characteristics could perhaps describe a few people in here. Some fun facts about the kea: a kea once learnt to turn on the water tap at the Aspiring Hut campground, a kea once locked a mountaineer inside the toilet at the Moa Hut, a kea once learnt to use tools to set off stoat traps to get the eggs. As I said earlier, the kea is a threatened, nationally endangered bird numbering between 3,000 and 7,000 and is under pressure from predators and human impacts. But through sustained action by the Department of Conservation, the Kea Conservation Trust, and countless others, we can protect this taonga species if we put our all into it.
SPEAKER: Yes, I’m tempted to ask why the Minister hasn’t re-opened the office at Arthur’s Pass so visitors can see it better, but—Penny Simmonds.
Question No. 10—Education
PENNY SIMMONDS (National—Invercargill): Thank you, Mr Speaker. My question is for the Minister of Education. Does he have confidence—
SPEAKER: Order! There are two members who haven’t got their masks on. Please put them on. Thank you.
10. PENNY SIMMONDS (National—Invercargill) to the Minister of Education: Does he have confidence the Government’s actions and statements have provided schools clarity about how they can operate under COVID-19 alert level restrictions?
Hon CHRIS HIPKINS (Minister of Education): Broadly, yes. I’m confident that the Government has appropriately balanced schools’ need for timely and clear information with the need to make considered decisions in the interests of all New Zealanders in an evolving situation.
Penny Simmonds: Why has the Government still not told Auckland schools, with students anxious about exams, the date they can reopen?
Hon CHRIS HIPKINS: I’ve committed to making final decisions around that by tomorrow. No final decisions have been made on that at this point. We’re working through a number of details, including logistical and practical considerations around having students back on school sites, and so I hope to be able to provide as much clarity as possible. We have provided, in recognition of the disruption that those senior secondary school students have faced, some pretty clear guidance around the additional support that will be provided for those aiming to complete their NCEA—that was provided some weeks ago—and we are now working through further guidance on having a larger number of students returning to school sites. I would note that under our current alert levels, there are some provisions for senior secondary school students to be on site where the only place that they can complete assessments and so on is on a school site. There are some limited provisions for that at the moment, and I’ll have more to say on that in the next 24 hours.
Penny Simmonds: How will schools ever get clarity around the impact of lockdown on students’ progress when officials say, “Our curricula don’t yet clearly signal important markers of progress” and current assessment tools are of variable quality?
Hon CHRIS HIPKINS: Oh, that’s always been the case. In fact, there has never been a nationally consistent set of measures of student progress outside of the senior secondary school, and some of the measures that have been put in place have proven to be neither national nor standard. They weren’t particularly consistent. We do have studies available, including the national monitoring project, which gives us pretty good and robust information. There are some other sources of information available as well, including through some of the digital tools that are available that do provide some aggregatable data that can be drawn on for research purposes in measuring students’ progress in some of those earlier year levels.
Penny Simmonds: Does the Minister accept the Government’s lack of clarity about how schools should operate in lockdown means education is a lottery for students, with one Auckland principal calling online learning “just a joke”?
Hon CHRIS HIPKINS: I think the Government’s provided a lot of clarity for how schools should operate during alert levels 3 and 4, which is, by and large, to be supporting young people to learn from home. Whether that’s using digital learning platforms or using hard packs of materials, the teaching methods that teachers use when using those tools are ultimately up to the judgments of the individual teachers. We don’t tell teachers specifically how to teach within their classrooms; we leave that to their professional judgments. Similarly, in this environment, teachers will be making judgments. In some cases, it’s better to support students using digital technology; in other cases, it is better to support them using hard packs of materials. Those are ultimately judgments for the teachers and for the schools.
Penny Simmonds: Why didn’t the Government outline schools’ options where teachers refused to be vaccinated when they announced the vaccine mandate and, instead, tell them all to get legal advice?
Hon CHRIS HIPKINS: The last part of the question is not correct. The Government is working through further guidance to schools about what they should do at the end of this year in terms of the employment process for teachers who have chosen not to be vaccinated. That does have some significant impact on the teachers’ collective employment agreement. The Ministry of Education are working through that process with the teacher unions at the moment. We needed to announce the requirement to be vaccinated before that process could begin. That process is now being expedited.
Question No. 11—Research, Science and Innovation
11. TĀMATI COFFEY (Labour) to the Associate Minister of Research, Science and Innovation: What progress has been made on allowing more widespread use of rapid antigen testing for COVID-19?
Hon Dr AYESHA VERRALL (Associate Minister of Research, Science and Innovation): As we enter a new phase of our COVID-19 response, with more and more New Zealanders gaining protection through vaccination, we can expand the tools we use to combat the virus. Last week, the Government gave the green light to importation of 300,000 approved rapid antigen tests, that will be used by some of the country’s biggest employers. These tests can provide a result within around 15 minutes and will be used for workforce surveillance testing. However, they do tend to be less sensitive at detecting cases, so PCR tests will remain the mainstay of our COVID-19 testing in most situations.
Tāmati Coffey: Why is the use of these tests being limited to 29 businesses initially?
Hon Dr AYESHA VERRALL: It’s important that we step through the introduction of new technologies carefully as part of our COVID-19 response. Rapid antigen testing was first introduced at Middlemore Hospital and is being rolled out in other hospitals. It will also be used as a point of arrival test in self-isolation pilots in Auckland and Christchurch, starting later this month. Trialling workplace use of rapid antigen testing gives us the chance to refine, learn, and iron out any other issues before we look at how this testing can be rolled out more widely. It’s important to note that some of New Zealand’s biggest companies are involved in the scheme, including Mainfreight, Foodstuffs, Summerset Group, Vodafone, The Warehouse, and Auckland International Airport. Some of the businesses in this group are already using rapid antigen tests successfully overseas, and their international experience has helped them develop this scheme in New Zealand.
Tāmati Coffey: What reaction has she seen from businesses to the wider use of rapid antigen testing?
Hon Dr AYESHA VERRALL: Oh, I’ve been pleased with the positive response from those involved. Foodstuffs’ North Island chief executive officer, Chris Quin, said, “At a time where the challenge of Delta in New Zealand is greater than ever, it’s been renewing for everyone to be able to work together across Government and business to enable this additional testing solution. We need to do everything we can and this is a positive step in helping to further look after our teams in stores and the supply chain New Zealanders depend on.” Auckland Airport’s chief executive, Adrian Littlewood, thanked the Government, the Ministry of Business, Innovation, and Employment and the Ministry of Health “for their quick response to our request to import rapid antigen tests”, and said rapid antigen testing “is a vital added layer of protection to help identify chains of transmission and ensure workplace continuity.”
Question No. 12—Prime Minister
12. Hon JUDITH COLLINS (Leader of the Opposition) to the Prime Minister: Does she stand by all of her Government’s policies and actions?
Rt Hon JACINDA ARDERN (Prime Minister): Yes. I especially stand by the Government’s actions and the actions of all parties in this Parliament, in fact, alongside those incredible providers on the ground that ensured Super Saturday was a success and worked so hard to make it so. Working together, every single person, providers, business, nurses, vaccinators—everyone—we smashed through our target of 100,000 vaccinations by mid-afternoon and went on to see 130,000 doses administered in just one day. Most heartening: 39,000 of those doses were people receiving their very first dose, a quarter of which were amongst Māori. Kawerau led the country in first doses administered per capita, and Ashburton led on second doses, seeing nearly 5 percent of their population become fully vaccinated on Saturday. There are countless other great stories from Super Saturday right across the country, but, in short, to everyone vaccinated on the day, and to all those already vaccinated, I just want to say thank you very much for your vaccination.
Hon Judith Collins: Has Cabinet considered any proposals to make the three waters reforms compulsory?
Rt Hon JACINDA ARDERN: Of course, Cabinet discussions remain in Cabinet until such a time as those decisions are publicly released. When it comes generally to the three waters proposals, the member will know that we feel very strongly about the fact that the status quo is not an option. Without change, ratepayers will face increasing costs. Their bills will go up. Our infrastructure will continue to deteriorate. Already we have sewage regularly pumped into our oceans and our beaches, and if we’re all being honest, decades of under-investment in our infrastructure is contributing to our housing crisis. The status quo is not an option.
Hon Judith Collins: Will she rule out her Government mandating the three waters reforms on all councils, thereby forcibly seizing ratepayer water assets?
Rt Hon JACINDA ARDERN: I totally reject the premise of that question. The idea of seizing assets, I would completely reject. What we all have a duty to do—and I would’ve thought that the Opposition would be, of course, all too familiar with the reason that this work started: people in Havelock North were made incredibly sick and some died because of issues with water in New Zealand and its provision. Work was started and completed and then, as a result, we’ve undertaken a reform process. Our desire has always been to work alongside local government to try and find the best way to ensure we gain efficiencies and outcomes from our water infrastructure that we can all be proud of: safe drinking water, decent investment in infrastructure that allows the housing growth we need, and for our environment to no longer see sewage pumped into our waterways. That is why we’ve undergone this process. If the member wants to stand still and allow all of that to continue, it’s her prerogative.
Hon Judith Collins: Will she continue to take the path of forcibly seizing council water assets with the Opposition confirming today that a future National Government will return all confiscated assets to the local councils from which they have been taken?
Rt Hon JACINDA ARDERN: All the member has confirmed is that under a potential National Government, ratepayers would experience thousands of dollars in increases in their bills and the continuation of under-investment that means we have an ongoing housing crisis and sewage pumped into our oceans.
Sittings of the House
Sittings of the House
Hon CHRIS HIPKINS (Leader of the House): Thank you, Mr Speaker. I move—
Hon Member: Slowly!
Hon CHRIS HIPKINS: Slowly! I move, That the sitting of the House today be extended into tomorrow morning for the committee stages of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill and the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill; the second readings of the Mental Health (Compulsory Assessment and Treatment) Amendment Bill and the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill; the first readings and referral to select committee of the Animal Welfare Amendment Bill and the Digital Identity Services Trust Framework Bill; and the second readings of the Education and Training (Teaching Council Fees and Costs) Amendment Bill, the Education and Training Amendment Bill, the Commerce Amendment Bill, the Crown Pastoral Land Reform Bill, the Organic Products Bill, and the Financial Markets (Conduct of Institutions) Amendment Bill.
A party vote was called for on the question, That the motion be agreed to.
Ayes 75
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.
Noes 43
New Zealand National 33; ACT New Zealand 10.
Motion agreed to.
Standing Orders
Sessional
Hon CHRIS HIPKINS (Leader of the House): I move, That the following rule be adopted and come into effect on 28 October 2021:
Time for presentation of secondary legislation
For the purposes of section 114 of the Legislation Act 2019, the relevant Minister must present secondary legislation to the House within 16 sitting days after the day on which the secondary legislation is made.
Motion agreed to.
Bills
COVID-19 Response (Management Measures) Legislation Bill
Second Reading
Hon CHRIS HIPKINS (Minister for COVID-19 Response): I present a legislative statement on the COVID-19 Response (Management Measures) Legislation Bill.
SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon CHRIS HIPKINS: I move, That the COVID-19 Response (Management Measures) Legislation Bill be now read a second time.
This bill is part of the Government’s continuing response to COVID-19. It amends 16 different Acts of Parliament, I think in part recognising the complexity of the situation that we continue to deal with. It also amends one set of regulations. These are common-sense, practical solutions to problems that have been created by the Delta outbreak of COVID-19 and our response to it. We often find—and we did find this last year and we found this again this year—that compliance with existing statutes can be incredibly challenging. There are often deadlines that can’t be met. People find it difficult to work in a digital environment with some of the constraints that the legislation currently places upon them. So this particular bill, the second of these types of bills—I think it’s at least the second of these types of bills—that we’ve brought before the House deals with a raft of issues, with some relatively pragmatic changes.
As the Minister in charge of the bill, I am in a bit of an unusual position, in that the policy advanced in this bill doesn’t relate to my ministerial portfolios. So I do want to thank all of the Ministers and officials who have contributed to this bill. It is, effectively, a compendium of different legislative changes. Unlike previous legislation, when we dealt with similar bills previously, we have referred this bill to a select committee for a very short period of time. So I want to thank the Finance and Expenditure Committee, who did an excellent job of scrutinising the bill. I’m advised they received more than 200 submissions and had heard from 41 different submitters on aspects of the bill. The Regulations Review Committee has also added its analysis of aspects of the bill as well. Many of the amendments in the bill recommended by the committee will now form part of the bill being considered by the committee of the whole House next week.
The Property Law Act changes attracted the most attention from submitters. These are the changes being made around commercial leases. The Property Law Act amendments have two main purposes: firstly, to support commercial tenants and landlords to come to agreements to adjust the rent due under the leases so that the parties share the financial burden of the COVID-19 response, which will help to enable more businesses to remain solvent during the response; and secondly, it provides a way for disputes to be resolved if no agreement can be reached. Many submitters on the property law amendments discussed the behaviour of landlords towards tenants during the epidemic so far to date and highlighted their own experiences, so it was good to hear from landlords and tenants through that process. It is a difficult situation. I want to acknowledge it’s a difficult situation for everyone—the landlords and the tenants—and there are clearly some parties that haven’t been able to reach agreement, so those dispute provisions will be very important.
Other issues raised included whether the bill should provide criteria around the types of businesses or leases to which it should apply, whether we should be limiting eligibility to only small and medium sized businesses, whether there should be a linkage with the eligibility of the wage subsidy scheme or income and capital levels. The period for which the rent reduction should apply was debated, and so on. A key theme that was raised by the submitters was what constitutes a fair portion of rent. I’m sure when we come to the committee stage of the debate, there will be some discussion about that. The Ministry of Justice is preparing guidance on its website that will go up shortly. That will give businesses more clarity.
There was also quite a bit of debate about the Residential Tenancies Act amendments. These are the ones that enable tenants to stay in their rental homes during any future COVID-19 alert level periods where people can’t move houses, and that will help us to stop the spread of the virus in that way. The amendments also make it clear what notice periods apply after the termination restrictions lift.
So these are similar to the temporary restrictions that were put in place last year. They very much continue that work. Submitters overwhelmingly supported the nature and intent of those changes, and there is a forthcoming Supplementary Order Paper that will include some of the changes that were suggested by submitters. For example, it will propose that the Minister must give seven days’ notice prior to switching off a COVID19 tenancies order. So the Government is working its way through that, and we will have a Supplementary Order Paper before the House before the bill completes its remaining stages next week. Tenants will be given two days’ notice to cancel or terminate tenancy agreements where they’re prevented by a COVID-19 public health order from taking possession, to avoid tenants being liable for both rent at their current property, where they need to remain, and the new property which they can’t yet move into.
Very briefly—I’ll try and keep this fairly brief—the bill amends the Land Transport Act to include electronic service and infringement notices, infringement reminder notices, and regulatory notices. I hope these particular provisions will be relatively uncontroversial. There will be some further clarification on the point at which an electronic communication is deemed to be delivered, and so there will be some further clarity there. The committee has noted its concerns about the proposal applying to criminal matters having the potential to create some confusion. So to be very clear: if someone’s charged with a criminal offence, such as driving while unlicensed or while suspended, the bill does not amend those criminal procedure provisions.
There was some debate around the Electoral Act provisions. I want to provide some reassurance to the House that the Cabinet has picked up on those concerns. We’ve had further discussions around the Electoral Act provisions, and we will come back to the House again on that next week during the committee stages. Final decisions have not been taken, but we have taken on board the concerns that were raised there.
In terms of the environment-related legislation, some submitters have been concerned that the proposals extend statutory deadlines by which the Minister of Climate Change must set the three emissions budgets in the first emissions reduction plan. They have expressed concern that that could have an impact on New Zealand’s overall action on climate change. I want to be clear about this: it’s not expected to delay significantly the action to address climate change over the time frame of the first three emissions budgets. It will also not preclude the Government from taking updated or additional commitments under the Paris Agreement in advance of COP26. Similarly, despite the concerns of some submitters, the extension of the repeal date for the COVID-19 Recovery (Fast-track Consenting) Act 2020 for an additional year is unlikely to have a negative impact on the environment, and there isn’t any evidence to date that suggests that it has. Members will have the opportunity to consider further these and other provisions of the bill at the committee stage next week. So I commend the bill to the House.
ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.
CHRIS BISHOP (National): Thank you very much, Madam Speaker. Now, the National Party supported this bill, the COVID-19 Response (Management Measures) Legislation Bill, at first reading in good faith on the basis that we are a bipartisan—for the most part—constructive Opposition when it comes to COVID matters. We wanted to send it to committee to kick it around and then see where we got to at the end of the committee process. Unfortunately, we are going to oppose the legislation at second reading, and beyond, for two major reasons. The first is in relation to the amendments to the Property Law Act that I want to spend a bit of time dealing with, and the second is in relation to the matters the Minister has just referred to, which is the Local Electoral Act amendments. It is good to see that the Minister will be bringing a Supplementary Order Paper, I think he signalled, at the committee of the whole House stage in relation to that—that’s an example of the Government listening; we encourage that. So we’ll wait and see the details of that. But at the moment, we are very disappointed in the attitude of the Government to its amendments to the local electoral legislation through this omnibus bill.
I want to make a point at the start in relation to process. It was poor form for the Government to only provide around a day’s notice to the Opposition before this bill was introduced. Many of the amendments in this omnibus bill are non-controversial; many of them are very sensible. So the Gambling Act amendments in relation to lotteries, class 3 operators, are very sensible. Some of the amendments around the Land Transport Act are, again, very sensible. We can have a debate around the climate change amendments. But most of the amendments put forward through this omnibus bill are reasonably non-controversial. But a couple are quite controversial, and good process means that they should be sorted out through good consultation, particularly when it comes to an omnibus bill like this which deals with a whole range of pieces of legislation.
As a related point, the process at the select committee was very, very shortened—very straitened circumstances. I accept that the Finance and Expenditure Committee did what they could in the time that they had, but the point is that they didn’t have enough time. So the bill’s only just come back to the House. It was referred to the committee in the last sitting period of the Parliament—so, not enough time for the committee to get into the nitty-gritty of this legislation.
So just with that process point, I come to the substance of the legislation. I want to deal, firstly, with the property law amendments. Members on this side—National members, in particular—spent quite a bit of time in the first reading expressing some misgivings about these sections. It is quite outrageous, actually, what the Government is seeking to do. We voted for the bill at the first reading in good faith to see what the submitters would say and to kick it around a bit at the committee. But the fact that the Government has not made any substantial changes to this provision is quite appalling.
The starting point is that retrospectivity is a bad thing, and what this bill does is retrospectively interfere in contracts that have been signed by people in the private sector. That is wrong as a matter of principle. It requires a very good justification from the Government before they retrospectively legislate. The reason retrospective lawmaking is bad is because people are entitled to know what the law is at the time that they sign contracts and make decisions on the basis of what the law is at that moment. Obviously, Parliament altering what that law was at that particular time undermines the certainty or undermines the very idea of the rule of law, because if you can’t know what the law is at a particular moment, because Parliament might come along in a few years’ time and change what the law actually is, how can you have certainty in what you are signing? So of course retrospective law is a bad thing. It is terrible, obviously, in relation to the criminal law. Everyone accepts that you shouldn’t retrospectively change criminality; it’s not quite as bad, but it’s still very bad in relation to commercial contracts, which is exactly what this bill does.
So this bill undermines the rule of law, undermines the sanctity of contract law. Now, to do that the Government has got to have a very good reason before they do that. What is the Government’s reason? It’s not actually clear what it is, because Kris Faafoi’s own rationale for the bill is that he has anecdotally heard from some tenants in commercial landlord relationships that the existing law and existing rental-relief arrangements are a problem. That’s it: just anecdotal evidence. This is how Government makes policy that is an affront to the rule of law now. The Government makes policy on the basis of anecdata—anecdotes that someone talked to Kris Faafoi about in the Koru lounge. That’s how the Government makes policy that is an affront to the principles against retrospectivity and an affront to the rule of law. It’s anecdotal evidence, that is it. It’s just outrageous.
Unsurprisingly, everyone involved in the commercial property sector lined up to oppose this bill at the select committee. All the property firms, the Real Estate Institute, Infrastructure New Zealand, Bayleys, Business New Zealand, New Zealand Law Society, the Auckland District Law Society (ADLS), they all lined up to oppose it and said, “This is a dumb idea.”, and that the bill doesn’t make any sense, it won’t improve things, and you need to throw it out. And what’s the Government decided to do? Not listen to people actually involved in the commercial world, people who actually are involved in the signing of contracts on a daily basis and enforcing those contracts. No, no, the Government knows best, and instead we are going to proceed with this.
Minister Kris Faafoi had an embarrassing little moment when the Auckland District Law Society had to, basically, put out a press release, which is quite an amazing thing for them to do, to criticise the Minister of Justice. The Auckland District Law Society had to put out a press release criticising the Minister and correcting him on his claim that the Government had consulted with the ADLS. Nothing was true in relation to that. In fact, the first that the Auckland District Law Society heard about the legislation was when the Minister put out a press release about it on 28 September. So there was no consultation with people involved in the sector, no consultation with people actually affected by this provision; the Government has just decided to go ahead with it on the basis of anecdote. It undermines the sanctity of contract, there has been no consultation as to how it will actually work, and the bill as drafted is way too wide. Companies who don’t even suffer economic loss will be entitled to seek rent relief.
The real issue when it comes to this issue is cash flow. As numerous submitters said to the committee, the issue is cash flow. If the Government was serious about solving cash-flow problems for businesses that have disputes with landlords, they should pick up Andrew Bayly’s suggestion proposed by the Opposition, which actually goes—
Anna Lorck: No way.
CHRIS BISHOP: —to the problem. Members opposite go: “Oh ya, ya, no way.” Well, actually, Mr Bayly’s proposal enjoys the support of people involved in the sector, because he’s actually gone and talked to them about what would work and has got wide-ranging support from people, and that’s why it enjoys their support. The Government’s proposal, the Government’s solution, enjoys no such support. No one supports it. So the Government should listen to Mr Bayly’s proposal.
Finally, in relation to the local electoral changes—the Government’s signalled some changes here, so I won’t dwell on it too much—it is just appalling that the Government is giving itself the power to delay local elections. Now, we accept that there should, of course, be power in emergency circumstances, but what this bill will allow the Government to do is to do that over and over again in six-week increments all the way through 2023. It has never been justified to the Parliament or the committee why the Government needs such a wide-ranging power. That has never been justified. We accept that in extreme circumstances clearly you need the power to delay an election. But the wide-ranging power that the Government seeks for itself has never been justified. And it, of course, has set people’s minds racing out there, in the wider community, about what plans the Government does have to delay local elections and why they might do that—three waters, potentially, for example. Now, I’m not alleging that that’s what the Government’s ulterior motive is, but I’m saying that the Government, of course, is going to leave itself open to accusations and allegations like that at the same time as they are engaged in a massive bun fight with the local government sector, and people are clearly going to be worked up about—
Hon Scott Simpson: Joining the dots.
CHRIS BISHOP: —the Government giving itself the power—they’re joining the dots, as the Hon Scott Simpson says, and I think that is precisely the point.
So we will oppose this legislation. It’s got some decent things in it but we’ll oppose it on the grounds that the amendments to the Property Law Act are an affront to the rule of law, and the Local Electoral Act amendments are not justified. Thank you.
BARBARA EDMONDS (Labour—Mana): Thank you, Madam Speaker. It’s a privilege to be able to talk on this bill, particularly because I was a member of the Finance and Expenditure Committee that scrutinised the bill and listened to the numerous submissions that had come through over that two-week period. And, as Chris Bishop, the previous member who has just sat down, says: it’s anecdotal—well, clearly he was not in the submission hearing period, where you had business after business after business say, “It’s not anecdotal. Our business is being affected because our landlord is not willing to give us a fair proportion of rent reduction.” That is not Koru lounge discussion; those are actual businesses on the ground in New Zealand who are coming to the select committee saying, “We support this.”
What that member also fails to recognise is the bill has a gate; the gate is that, if you have this clause, you don’t need this implied clause. There was no reference to that by the previous member in his conversation, and that’s why, when the committee reviewed those particular rent relief provisions, we thought about the retrospectivity aspect of it, and there were a number of submitters who said to us—including Retail New Zealand, including hospitality, the association—“It needs to be retrospective back to when lockdown was actually announced.” So that’s why the Labour and the Green members in our report back for this committee report have asked the Minister to give it serious consideration. This is not Koru lounge discussions. These are actual businesses, small business—businesses like Acquisitions across the country, businesses like Butlers Chocolate across the country—who are asking us as parliamentarians to give them some relief.
So that member also said we’ve given them no relief, we should try and give them some other sort of relief—$4.4 billion of relief has gone through the wage subsidy and the COVID resurgence payment. That’s all I’m going to say on this particular aspect of the bill, because I think it speaks for itself. Had that member been a member of the committee and sat through the hours and sat through with those submitters, he’d understand that there is pain on the ground by those businesses. They’ve asked us for help; they’re looking for retrospectivity. So I look forward to the Minister coming back to the House with a Supplementary Order Paper on that point.
ANDREW BAYLY (National—Port Waikato): Thank you, Madam Speaker. It is a pleasure to be talking on the COVID-19 Response (Management Measures) Legislation Bill. So the first thing I’d like to say is there are elements in this bill that we do support, and it is a wide-ranging bill. It affects many, many Acts. But particular measures around allowing lotteries to run at alert level 3—there’s three entities that have been provided for specifically, which are important, and I think in the current environment for them to be able to get funds to continue to operate during this difficult time is very appropriate.
Changes to allow councils to delay rating valuations—obviously with restrictions, particularly in Auckland, now that we’re going into week nine. Thirdly, empowering the coroner to allow remote participation—obviously, pretty logical stuff—and deferring a number of regulatory requirements as a result of changes or the alert levels that are going on at the moment. So that is fine, and most of that didn’t need to go through under urgency. In fact, you’ve struggled to understand why on earth they were passed as part of this bill that needed to be passed—well, debated, and in the Finance and Expenditure Committee over the last 10 days.
The biggest issue that we have and the main reason why we’re opposing this bill is that the two significant things should have been subject to a proper debate. That’s namely around the rent proposal elements, and the second one is around the local body and how elections can be delayed. Those are very significant. The first because of the financial consequences to people, and, secondly, the constitutional issues that relate to the second around the holding of council elections, which are due at 8 October this time next year.
So I want to just turn to the Property Law Act changes, and the previous speaker, Barbara Edmonds, just said, “Well, hey, we have to do something and this is going to be fine and dandy.” Well, as I mentioned in my question to the Minister of Finance at question time, I just remind the speaker that Retail New Zealand, when they did a survey at 30 September—so it’s not that long ago—showed that a third of retailers are not confident that their businesses will survive the next 12 months, and specifically asked for a financial payment to be made in terms of rent support. So they are looking for cash, unlike what the previous speaker spoke of.
We are now in Auckland, and I’ve come down here after having been locked up for nine weeks in Auckland, and I’ve seen what’s going on there. You walk down the main streets of North Shore and over 40 businesses have closed their doors—40 since the start of this lockdown. If you go through the CBD, it’s like a wasteland. That is the scale of what’s going on. Whilst the Minister keeps talking about the level of wage support that’s going to make these companies survive and the level of resurgence, it is clear from the various surveys—and the retail one is the most significant, showing that a third of businesses think that they’re going to fail over the next 12 months—that it is absolutely essential that we are putting in place mechanisms that get cash in the hands of those desperate mums and dads that own businesses, particularly in the area of Auckland. This bill does nothing for it.
What this bill does is socialises the cost of a Government-imposed lockdown and transfers the responsibility for the financial cost of that from the Government, who is the one who has imposed the lockdown, and transferred that cost to landlords. The Government has, in this bill, effectively socialised the cost of the lockdown and transferred it to landlords. That is fundamentally wrong. The solution that should have been put up 18 months ago, not when we are now entering week nine of an Auckland lockdown—what the Government should have done 18 months ago is dealt with this properly and substantially. Of course, the same mechanism was proposed all that period ago, and, of course, was turned down by New Zealand First, and quite rightly so.
Now that we’ve got a Government that has total power on its own merits to be able to do anything, not only have they chosen to reactivate the same proposal that was roundly rejected, but they’ve done it under urgency. I think that is terribly wrong and shows a Government that is using absolute power to achieve its means by doing so in a manner that does not allow for adequate consultation. I applaud all the companies and people who fronted up to the select committee over a matter of three days to present their case in the short period of time that they’ve had to prepare it, and they’ve presented well.
The reality is that this proposal, what it does is it forces that cost to the landlords to provide some rent relief. It is wrong the way that it’s gone about, and we have four principal issues with it. The first one: the bill refers to what is called a fair proportion of rent. So when we asked the advisers to the committee, “What is meant by the term ‘a fair proportion’? Can you elaborate on that? Can you provide some guidance?”, it was unclear that they could. It has been a deliberate decision by the Government to leave it as an unclear definition. That means that it has to be defined, probably in the courts. That also means a time delay. So the first issue is around what is understood by the term “fair proportion”.
The second thing is that this whole approach cuts to the core of the sanctity of contract law, and that is one of the principal concerns we have with this piece of legislation. Because when you start to interfere, when you have a Government starting to interfere between agreements agreed by two parties and impose themselves, and not only just impose themselves but also to reallocate how money is to be paid between those two parties, that is fundamentally wrong, and that is why this is an incredibly shoddy piece of legislation.
The third thing is that the proposals apply to all commercial tenancy arrangements. Many, many submitters made a strong proposition that it should be linked to small to medium businesses. At least put a criteria on it, or, very logically, link it to the wage subsidy scheme—which is, by the way, what I’d link the National Party’s rental package to, to the 40 percent decline in revenue—or to a loss in income or capital.
Those were four very good grounds for setting some criteria, because many people were concerned that what you might have is very large companies taking advantage of this. Many may be not even New Zealand resident-type companies, or owned by New Zealanders, taking advantage of these new unclear laws to benefit themselves financially.
The other issue—the fourth one—is the issue of lack of access. This is a very significant issue. Of course, what we ended up with in the bill is a reference to the Auckland District Law Society—27.5. This is about where a business is unable to fully conduct its business from its premises. We heard from many submitters, including Michael LeRoy-Dyson, who actually has a 27.5 clause in his tenancy arrangement, and he cannot get agreement with his landlord.
This is wrong—this whole approach. The lack of clarity around it is a fundamental flaw. And that is even before I start to talk about the local government elements of this bill. It is wrong. We will oppose it.
ANNA LORCK (Labour—Tukituki): I rise to speak on the COVID-19 Response (Management Measures) Legislation Bill, and I’ll pick up on what the other side of the House said in talking about the Local Government Act. An example that I can use is that during the recent lockdown, Hawke’s Bay Regional Council had a by-election that was to be undertaken during this time, and because of that it had to extend its election time to enable people to be able to vote, to be able to legally post their ballot papers, and, of course, to enable the people that were standing for election to be given the opportunity to campaign, which is quite difficult during the level 3 restrictions that were faced in Hawke’s Bay at the time.
So this bill looks to enable the extension of elections beyond a six-week by six-week date. I think it’s important to stand in this House and say that there is absolutely no intention on this side of the House to delay local government elections. It is to enable elections to take place, to enable voters to have their democratic election process, and to ensure candidates are elected fairly. On that, I would like to congratulate our new regional councillor Jacqueline Taylor on her election. Thank you, Mr Speaker.
Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. I’m going to speak to a couple of areas. Obviously, this was a huge piece of legislation that had a shortened select committee period with a good number of submitters and a good portion of the recess dedicated to hearings in the Finance and Expenditure Committee, where my colleague Chlöe Swarbrick was representing the Green Party. The Green Party’s broadly supportive of the bill, but there are some areas where we have a differing view than the Government.
I’ll start with the emissions reduction plan, just noting that there were many submitters who highlighted the urgency with which we must tackle the climate crisis, and that we absolutely note the delay to the emissions reduction plan is not ideal or something that we wanted to see happen. Now that Cabinet has made that decision, it is vitally important that when the final emissions reduction plans are released and in the next Budget, what is proposed is equal to what the science says that we must do to have a habitable climate in the future and for New Zealand to be pulling its weight.
We also oppose the fast track of the Resource Management Act—the fast-track process, which we opposed initially last year in the COVID response. We don’t believe that disregarding local submitters and a proper assessment of environmental effects is necessary for our economic response to COVID-19, and, indeed, we want to make sure that there is a thorough and proper process before we’re investing huge amounts of money and potentially taking up land with infrastructure.
Obviously, the biggest part of the debate was around rent changes and commercial tenancies. I note that at the select committee, the majority of submitters speaking to it did want a rent freeze, if not also rent controls. The Green Party absolutely backs this call. You know, it is true that the Government’s made a change to the number of times a rent can be increased, but that is simply not sufficient to deal with the scale and escalation of rent prices in the past—I mean, going back more than COVID, but certainly since COVID, the rent freeze ended after the last lockdown, and there was a significant increase in rents. What this is driving is a huge increase in the cost of living for some of our most vulnerable people. Unfortunately, the increases to benefits and the increases to the minimum wage are unlikely to have actually benefited those people who are the most vulnerable, because of the rapid escalation of house prices, the increase in rents, and the increase in general cost of living. So we think that there needs to be further action on that from the Government, and that is what submitters were calling for at the select committee.
When it comes to commercial tenancies, it was quite astounding to listen to the speeches from the National Party members—I’m sure the ACT Party speech will be similar. Truly the parties of rent seekers and the landed gentry in this country, they want to make sure that the owners of property don’t contribute anything to our economic response in COVID, that they continue raking in profits just because they happen to own the land and the property, and that the Government should subsidise them directly but they shouldn’t pay their fair share of tax, because these are the parties that have consistently argued against a capital gains tax, against a wealth tax. Arguably, the owners of property have done the best out of the Government’s economic response to COVID19. We’ve seen massive increases in the capital values of property, most of which—the vast majority of which—will be untaxed; that is, untaxed, private windfall gains due to Government policy. We had Andrew Bayly arguing that somehow they were socialising the gains—no, did he say “socialising the gains” or “socialising losses”? It really was truly astounding, as he seemed to be saying God forbid the owners of property should do anything but just continue to profit massively from Government policy, and then Government should, without having any revenue source from these property owners, go ahead and subsidise them during a time when the economy is virtually shut down. I just thought that was amazing.
My view’s obviously the exact opposite. The owners of property could, if they’re reliant on their income, claim the wage subsidy, just like any other business, and there’s no reason why they should continue raking in surplus profits at a time when the economy is shut down. The Greens support the idea of going back to the start of the pandemic when it comes to the commercial tenancies changes, and hospo and retailers obviously support this as well. The only people who are opposed are the landlords, ACT, and National, who would like to continue to see the people who happen to own property profit from our economic system while everyone else pays, basically.
One thing I also found interesting was that Local Government New Zealand totally supported the changes to the Local Government Act around the timing of elections. I think that is a really relevant point. I think it makes it pretty doubtful that, you know, the criticisms or concerns—one could call them scaremongering—from the National Party about some ulterior motive or agenda around those changes—clearly, it is a practical change that’s supported by Local Government New Zealand, which is not at all politically aligned and does represent the interests of local government.
I was disappointed that the Green Party was the only party advocating for overseas voters. I think that’s probably the electoral issue that I would like to see the National Party join us on or the Labour Government act on. Our laws around voting in New Zealand are quite unusual. Most countries allow citizens to vote even if they have lived overseas for some period of time, without there being any requirement to come back and visit the country. Of course, many, many New Zealanders would like to and feel a very deep connection with Aotearoa New Zealand, even though they are living overseas for whatever reason, for whatever period of time. Not all of them have the financial means to travel back to New Zealand every three years. Indeed, in the past 18 months, it has been extremely constrained, the ability of New Zealanders living overseas to come back to New Zealand, and this situation is likely to persist for quite some time. There will be a good two-year period where most New Zealanders living overseas will have been advised by the Government not to come back to New Zealand. That doesn’t mean they should be disenfranchised in their right to vote in local and central government elections. They care about the future of this country. They are citizens, they should have a right to their vote, and I think that is a change that really urgently needs to be considered.
So the Green Party will be moving four amendments at the committee stages to deal with some of these issues I’ve raised, including around rent freeze, the right for overseas voting, and some of the changes to commercial tenancies to make sure that those small businesses that haven’t been able to operate are able to get the rent relief that they deserve. Of course, it’s only fair for the owners of property who’ve massively benefited from Government policy in the last year to contribute their fair share. They are able to access Government support just like any other business. There’s no reason they should be privileged over and above the rest of the economy.
DAVID SEYMOUR (Leader—ACT): Well, thank you very much, Madam Speaker. I rise on behalf of the ACT Party in opposition to this COVID-19 Response (Management Measures) Legislation Bill. This bill is what they call an omnibus bill: it amends quite a wide range of laws and the people putting these bills forward always claim it does so with a common purpose—to manage COVID-19 in this case.
Hon Simon Bridges: Like totalitarianism.
DAVID SEYMOUR: Simon Bridges says “Like totalitarianism.” and he’s not entirely wrong about that. I was amused, actually—Simon Bridges will like this. One of the new Labour members—I’m sorry, I can’t remember their name right now, but one of the Labour members was talking about the policies being cooked up in the Koru lounge. That member might like to reflect that because of the Government she supports the Koru lounge in Auckland’s been closed for 62 days. You know, they can’t go to the Koru lounge because Auckland Airport is more or less closed and much of Auckland is closed. It’s a very strange thing. We’re counting the days that it’s been closed.
As I was saying, this legislation, it makes quite a number of relatively benign adjustments. For example, it allows a charity running a raffle to do it digitally so people can still raise cash for good causes under COVID restrictions. That’s a pretty good idea and something that could be put through in a bill like this in an uncontroversial way. We could even rush it through and get rid of the usual consultation: have a couple of weeks for select committee, just rush it through, don’t worry about giving the people a say because I don’t think there’s a lot of people in New Zealand who would be worried that a charity could run a raffle digitally under COVID conditions. There’s a bunch of changes like that that are well worth supporting. So we’re not opposed to a lot of it.
But there are two parts of this legislation that most certainly did deserve a much greater debate and consultation than they’ve had, and indeed the ACT Party believes should never have been introduced to this House and should never have been passed. The two parts of this legislation that we are absolutely opposed to on principle are: the Government’s ability to delay local body elections. Well, most local body elections are done by postal voting and you think about this: this is the Government that just two months ago said this Parliament can operate by Zoom. That was the big idea. We were all going to come together by Zoom, and that was going to be enough democracy for the whole of New Zealand. We were going to ask questions, pass laws, raise taxes off people, spend the money—all of that, according to this Government, was going to be done by Zoom. Now they’re telling us that under COVID conditions it is too hard to have a local body election, which, by the way, is all done by postal ballot. Now someone might ask: if you can have a Parliament by Zoom why do you have to delay a local body election by postal ballot? It’s not as though—
Hon Scott Simpson: Three waters.
DAVID SEYMOUR: Scott Simpson says it’s three waters. He’s been going on to some of those funny websites, getting some theories. Well, the real issue is this—
Greg O’Connor: The ACT website.
DAVID SEYMOUR: Greg O’Connor says it’s the ACT Party website. Well, let me just ask Greg O’Connor: how would he know? Has he been on the ACT Party website? Hey, hey—oh! I’ll tell you what. I’ll tell Greg O’Connor we’re going to try and get it down to an 11-year-old reading age and then he can come and visit the ACT Party website. But until that time, he should probably stick to the picture books.
Greg O’Connor: He might let his own MPs speak then.
DAVID SEYMOUR: In any case, there is no logical reason—there he goes yapping away. You wait till after dinner, Madam Speaker; he’ll be much looser.
Here’s the question: why would a Government that believed in a Zoom Parliament want to delay a postal ballot election? There is no reason for this Parliament to delay people’s right to elect their councillors. That’s the first step.
But far more critical than that is this: this legislation changes the results or the meaning of commercial rental contracts that may have been written 10 years ago. This is far more important than any other legislation that this Government will try and pass in this two-week sitting block and perhaps actually this year. The significance of it is that normally when we pass a law in this Parliament, we pass a law but you can’t be done for it if you broke it in the past. For example, if somebody was to catch a fish that was undersized now, if we raise the length of snapper that you’re allowed to catch, you can’t be prosecuted for having caught a fish that was too small 10 years ago by today’s standards. You caught a 25-centimetre snapper. That was legal back in the day. Now the limit is much longer: 29, I think. You can’t get done for catching an undersized snapper, by today’s standards, 10 years ago. The laws don’t apply to things you did in the past.
But what this commercial lease law says is it doesn’t matter. If you made a contract 10 years ago to lease a premise, a commercial premise, well, actually, we’re going to change what that contract means. It doesn’t matter that when you signed the contract, the law said you will be paid according to the contract or you will pay according to the contract. Actually, we’re going to say, “Here’s the new law, and it doesn’t matter what you agreed back then, you have to follow the law today.” That’s what they call retrospective legislation. The problem with retrospective legislation is that people who want to be good citizens, who want to follow the law, who want to plan their futures can’t do those things if they might find the goalposts get moved after they did the thing. That’s the problem—that’s the problem—and this Parliament, as far as I’m aware, certainly not in the time I’ve been here, has never changed the legislation in a way that is retrospective in any significant way. We’ve never changed the law on people after the fact, not like this. If we live in a country where you make a contract, you sign an agreement between two adults voluntarily, and the Government comes along maybe 10 years later and says, “Actually, it doesn’t matter what the law was when you signed it, here’s the new law. You no longer have to pay the rent, or you can no longer expect the rent, we’ve actually just changed at all.”, that is a very dangerous precedent for any country. Labour Governments, National Governments, all sorts of Governments we’ve had in this country over a long period of time have never gone where this Government is going.
What’s interesting, and it’s one of those observations about New Zealand politics, is that only one political party stood up three weeks ago when we first voted on this law and said it is wrong on principle. The National Party stood up and—you know, I mean, the Greens, you can forgive them. The Māori Party, they don’t always remember to vote on legislation. But the Labour Party, I mean, they’re behind it, they wouldn’t have a clue, frankly, about business and law in the real world that actually provides the wealth they tax and give out to their supporters. But the National Party, even they got up and voted for it, and said, “Well, maybe, perhaps in some circumstance we could support retrospective legislation.” I think that’s, frankly, unforgivable. They should have opposed it right from the start. The ACT Party stands for a country where the laws are reliable. You know what they are. And you don’t change the laws so that what people did in the past can be judged by laws they couldn’t anticipate at the time. That is the rule of law. That is property rights. That is the environment that allows wealth creation. This law, more than anything Parliament’s done, violates that, and the ACT Party is proud to stand consistently alone against it.
ASSISTANT SPEAKER (Hon Jacqui Dean): The member’s time is expired.
INGRID LEARY (Labour—Taieri): Fakaalofa atu, Madam Speaker. I’d just like to pick up on a couple of points relating to retrospectivity and sanctity of contract referred to by the members Chris Bishop and David Seymour, and also the alleged transfer of responsibility from Government to business alleged by Andrew Bayly. There was a lot of discussion actually about retrospectivity. The lawyers of us who sat in the Finance and Expenditure Committee are well aware of the sanctity of contract, but sanctity of contract is not absolute and the courts historically have intervened in cases where there is a need to balance between freedom of contract and social duty. That happened in the 1940s, when good faith and conscionability came into play. It happens in marriage contracts; I don’t think anyone would dispute that. And it happens where there is material unfairness and extraordinary circumstances.
Nobody can dispute that COVID is extraordinary, because what it has done is it has made businesses legally unable to operate. That is extraordinary. It was not envisaged. It would not have been envisaged by many of those signing contracts. If it was, they would have opted to contract out specifically, as some did, with the Auckland District Law Society clause. But for many, many of them, they didn’t, and that is why we need this clause, why we need this amendment to the Property Law Act 2007. The question actually is: how retrospective should it be? Should it go back to the introduction of the bill? Or actually should it go back to the beginning of lockdown? There was some discussion about that as well with many submitters saying that the legislation, the omnibus bill, would be a toothless tiger in this respect if it didn’t go back.
I now refer to what Andrew Bayly spoke about, which was the peak body for retail, Retail New Zealand. It has 27,000 members, 95 percent of whom employ less than 20 staff. He was saying that there was a transfer of responsibility from Government to business. But what he failed to say is that 70 percent of their members have sought rent relief and 50 percent of those are in dispute with their landlords. It’s my contention that if this bill was legislated already, they would have that relief and that cash flow that they need to do business.
If we look at the impact of what will happen when this goes through, it is that the fair players will actually have nothing to worry about. So the legislation only captures those who have not been playing fairly. That is the intention of this bill. It is to create fairness in unprecedented circumstances, in circumstances that weren’t envisaged at the time contracts were entered into. So for that reason, I commend this bill to the House. I think this is a great piece of legislation to be able to provide more fairness and certainty and also more economic stability for our business sector.
Hon SIMON BRIDGES (National—Tauranga): I’ve only got a five-minute split call. I’ve got so much to say. I’ve already said at first reading that I don’t like this bill one little bit. Legally, constitutionally, I don’t like it. That may sound a bit dramatic to the punters watching at home. But, I’ll tell you what, this is a bill that delays the ordinary provisions of many a law, that gets in the way of the ordinary everyday rights of New Zealanders, and, on that basis alone, I say it’s wrong. By the way, it does that—oftentimes in 2022 and 2023. This Government’s just come along and they’ve said, “You know, we’re just gonna put off all this stuff. We’re just gonna say, ‘We don’t need to go there, we don’t want to go there on this.’ ” I say that’s constitutionally high-handed and wrong. I want to just focus on three of the worst bits, and David Seymour’s talked about a couple of them. There’s one, though, he missed out and that I, as I know the other member’s in the National Party, take seriously.
The first is the suspension of local democracy in an election year, and that’s wrong. Take my city, the city I’m privileged to represent, of Tauranga. We have already, because of Nanaia Mahuta—“trigger-happy Mahuta”—decided to get rid of our council and put in place nice people, good people, but, ultimately, unelected people: commissioners. Someone was unkindly saying to me just yesterday, “commissars”. I think that’s a bit unkind. They are running our city now, because, I tell you what, the Government certainly isn’t. I don’t know that they’d know where Tauranga was if it slapped them in the face. They are running the city and this bill says we don’t even get local democracy in a regular election year, necessarily. Next year, they’re going to put it off again. Nanaia Mahuta has taken those powers themselves. I have heard a rumour that’s because Angie Warren-Clark is so disillusioned with Parliament and the Labour Party that she’s thinking about standing for mayor next year and they don’t want to see that happen and so they’re putting that off. I’ve also heard the one about Rongotai, of course: “Eddie the Eagle”—I’m sorry, Paul Eagle, his worship, who is thinking about standing, and they don’t want to see that as well. But I would say it is wrong, in all seriousness, to suspend local democracy. Actually, when all you’ve got here is a postal ballot, it’s not as if there are health and safety issues around COVID that require that.
The next thing I want to mention is commercial leases. What we’ve got here—where the Government comes in and rides roughshod over contract law—is the doing away, actually, with centuries and centuries of precedents and certainty, in the name of fairness. Their version of fairness, they say—“Well, actually, we don’t like those fat cat landlords, so we’re going to do something for the retailers.” And look, there’ll be some New Zealanders who say, “Oh well, that sounds fair enough.” I say, number one, actually, it undermines contract law and that in itself, and the freedom of people to come together and sign contracts, makes it wrong. But even if you say, “Well, maybe, Simon Bridges, you’re being a bit unfair about that.”, the reality is that landlords are often mortgage holders as well. They often find it tough to pay their mortgage. And if you take, for example—I can think of many examples in the city of Tauranga—chain store lessees where the landlord, actually, is the one of the two of them that’s hard up. In the name of fairness, doing away with ordinary principles of contract—and, certainly, I say that’s just not right.
But here’s the kicker in this bill from a Government that’s, let’s be frank, not very good at much: it hasn’t delivered in roads, it hasn’t delivered in housing, it hasn’t delivered in really anything I can think of that conventional, decent Governments have done. You would have thought, though, for Jacinda Ardern on their nuclear-free moment, they might actually deliver something, anything, maybe in climate change. What does this bill do? It delays their obligations when it comes to climate. It is literally, according to Jacinda Ardern, the most important issue the world has right now, and they’ve just blithely—is James Shaw too busy? I mean, can they only do one thing—and not that well—at once, and that’s think about COVID and nothing else?
I say, actually, to all those young New Zealanders out there who are worried about this issue, who are concerned about this issue—not just young ones, actually; let’s say that clearly—this Government in this bill is delaying its climate obligations by another year, I think it is. It’s lazy, it’s arrogant, and the reason, ultimately, for it is because this Labour Government doesn’t actually have a plan. So they just put stuff off. They take the lazy, the arrogant approach when they should, if they’d had plans on borders, vaccines, ICU beds, and our economy, have no need for this wrongful bill.
ASSISTANT SPEAKER (Hon Jacqui Dean): The member’s time has expired.
TANGI UTIKERE (Labour—Palmerston North): Fakaalofa lahi atu, Madam Speaker. It’s a pleasure to take a call on this bill and to follow the next mayor of Tauranga City in that sense. I think that’s part of the reason as to why he is so keen to see an alternative view with a local election just around the corner in the city that he so much loves.
I just want to reflect on a couple of contributions from Mr Seymour. I want to thank him for outlining that this is in fact an omnibus bill. My analysis of the bill indicated that, but I want to thank him for his confirmation in that space. Secondly, it’s also no wonder that he was not able to recall the name, as he said, of the new Labour member who suggested that this was a policy decision that was concocted in the Koru Club, because it came from Mr Bishop rather than actually any member on this particular side of the House.
When we look at this bill, essentially it is seeking to extend some statutory time frames and also allow some flexibility in terms of regulations as well. While I’m not a member of the Finance and Expenditure Committee that looked at this, the select committee’s report is a very good one. It clearly articulates the various issues and contributions that were made as part of that process. So I want to thank the select committee for looking at what is a very broad opportunity in terms of some of the issues that were raised.
I want to very briefly touch on the proposals as they relate to the local government sector. I actually agree with the Hon Julie Anne Genter in that the fact that both Local Government New Zealand and Taituarā, previously known as SOLGM—the NZ Society of Local Government Managers—have lent their support to this indicates that there is an independent lens that suggests that this is the right thing to do in a context-dependent environment. So it’s pleasing to see that they have effectively lent their support to this, and on that basis I commend this bill to the House.
GREG O’CONNOR (Labour—Ōhāriu): Thank you, Madam Speaker. I was fortunate enough with this bill to sit through the vast majority of the submissions, and I’d actually describe it as a little bit of a ramble through the New Zealand legislative system: 16 Acts and one set of regulations. A great learning experience.
But I’d just like to concentrate on the Property Law Act, which seems to have so aggravated and excited speakers on the opposite side of the House. I would just say to the Hon Simon Bridges that far from Tauranga being unknown to the rest of New Zealand, in fact, people like yourself have put it on the map. In fact, finally, it’s good to see that it took an ex - National Party politician to actually try and bring the place together—a well-thought-out appointment, I would have thought.
So the Property Law Act: one advantage of sitting through the submissions is that you get a feel for New Zealanders and how they’re being impacted, and I can’t help but be moved by one particular submitter who had an Airbnb in downtown Auckland and who was looking at losing his house. He was on a personal guarantee. He had sought relief from his landlord. Not only had he not received that relief, he had actually had a rent rise imposed on him. And for any member of this House who had the opportunity to hear from that member of the public, they could hardly help but be moved, and would understand just what the intent of this bill is.
All it will mean is that the landlord must enter into negotiations with that tenant and that there will be available to them some form of arbitration, and that’s really all it does. This is a very humane piece of legislation, because most landlords have behaved very well, but, like with most legislation that we look at in this House, it is designed for those who ignore it—those who need to be legislated just to be humane.
So I have no hesitation in recommending and commending that particular part of the bill and the rest of the legislation to this House. Thank you, Madam Speaker.
NICOLA WILLIS (National): This bill is emblematic of the Government’s lack of a plan to deal with Delta in our communities. Because the very reason we are having to have a COVID response bill—that, by the way, had its first reading under urgency: a comment made by many select committee submissions who raised concern at that process—the very reason a bill has had to progress in that way is that the Government in this matter, as with so many matters of our COVID response, has taken a “just in time; sorry, it’s a bit late” approach. And it’s not good enough, Madam Speaker.
I want to, in this contribution, focus on a couple of parts of the bill that National thinks are particularly egregious, and those are the provisions relating to the delaying of local government elections, and intervening into private contracts and making changes to the Property Law Act. I will also return to this issue of process, which we think is significant and which we think could cause problems down the line in terms of the provisions in this legislation.
So first of all, delaying local government elections. This bill allows local government elections to be delayed for up to a year into 2023. Now, members of this House are aware of it because we have studied this piece of legislation, but was this announced by the Government in one of its COVID announcements? No, it wasn’t. This was not something that the Government sought to highlight, and we on this side of the House think that it is pretty poor form that that significant change to electoral law was snuck in in this omnibus measure—and in fact, in a way that will have a binding long-term effect on electoral law. We also think that this delay speaks to the Government’s lack of confidence in its own plan—
Hon Scott Simpson: What plan?
NICOLA WILLIS: —because why is it that the Government is envisaging having—well, my colleague the Hon Scott Simpson says, “Well, what plan?” And he’s absolutely right because, actually, a Government with a plan would have ensured that we had vaccination rates that meant Aucklanders, today, weren’t heading into day 63 of lockdown, and a Government with a plan wouldn’t be saying, “Well, we may need to delay local government elections for up to a year.” So the Government hasn’t at any stage done a good job of setting out what exactly the concerns and anxieties are that they have that have led them to introduce these rather dramatic provisions.
The second part of this bill that National takes particular issue with are the changes to the Property Law Act, which are in Schedule 6 of this bill. This inserts a clause into commercial leases requiring rent to be paid in certain circumstances. It is a direct intervention into private contracts. Not only that, it is a retrospective intervention that was not telegraphed or signalled by Ministers, and which submitters said may wreak havoc in the relationships between commercial landlords and their tenants.
Now, when the Minister of Finance appeared before the Finance and Expenditure Committee to discuss COVID response some weeks ago when we first headed into lockdown, I asked him, “Was he, or his agencies, considering steps to help out landlords and renters in difficult situations as a result of COVID”—so particularly those people, for example, who can’t access their business premise, but are required to keep paying rent. And what National, of course, has proposed as a solution to that is a rental support package, a direct approach to account for the fact that Government intervention is wreaking havoc for many businesses, for many tenants, for many landlords. When I asked the Minister of Finance, Grant Robertson, about that, he said that they were considering a range of options, and almost laughed off the idea that they would look at intervening into private contracts—and is it any wonder that he did, because this is actually an extreme step.
There was nothing at that hearing that telegraphed this level of intervention. Of course, we know the history of these clauses, which are these are clauses that those who understand commercial dealings, who understand the importance of private contracts, worked hard to oppose last year when the Government mused about introducing them. And yet still, they haven’t learnt. So National opposes those measures, and we advocate for a rental support package that would mean that private contracts could stand, but support was available. It sets a very bad precedent when the Government is happy to introduce, under urgency, under the cover of lockdown, changes that intervene into private contracts. I will, and members on this side of the House will remember this when the members opposite try and say that they stand on the side of business. You cannot be on the side of business if you take retrospective steps of this sort that create uncertainty for all involved.
Finally, as I said, I would, I do want to raise questions about the process applied to this bill, because, actually, I think what New Zealanders have seen—and not the least of which at the vaccination Super Saturday this weekend—is that, where appropriate, National has been prepared to work constructively with the Government on its COVID response. In fact, my colleague Chris Bishop has made a number of constructive suggestions which tend to end up as Government policy—whether it’s rapid antigen testing, whether it’s saliva testing, whether it’s reforming managed isolation and quarantine, these are all things that we have been very constructive about. But in order to keep that spirit, it is vitally important that the Government show that they are prepared to put their proposals to appropriate parliamentary scrutiny, that they telegraph them well in advance, and provide members of the public absolutely fulsome opportunities to submit on what are significant law changes. That has not been provided for with this bill, and those who sat on the select committee have noted that many submitters asked themselves, “Why the urgency?”
And I would put to you, Madam Speaker, what I said at the beginning of this contribution, which is that we have, here, a seat-of-their-pants, just-in-time Government who didn’t plan for Delta to come to New Zealand, who didn’t roll out vaccinations fast, who were complacent, who sat back. Now New Zealanders are paying the price, and this legislation is but one example of it.
Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe, Madam Speaker. It’s funny, isn’t it? “Why the urgency?”, we hear from the Opposition, and then, in the same breath, “We’re not moving fast enough.” The reason this bill is being dealt with under urgency and was introduced under urgency is because the problem is urgent. Businesses are crying out for help, and we are going to deliver it. I’m going to go to the Property Law Act amendments, because I’m absolutely flummoxed with the view of the other side. They don’t seem to think that these measures are necessary, and they raise the issue of retrospectivity. So let me deal with some of those issues.
Firstly, the Property Law Act, which is being amended, implies numerous clauses into leases across the board, and this is just in addition to an existing framework of implied clauses. Secondly, we have a law of frustration already that looks backwards in time when there are extraordinary circumstances and adjusts the relationships appropriately in the benefits and burdens of the contract. In a sense, this clause is simply doing that. It’s saying the parties cannot have been expected to contemplate that their lease would be affected by a global pandemic. We are going to assist them in resolving that tension in a fair way. Thirdly, the Auckland District Law Society believes the common lease used in commercial premises in New Zealand has pretty much an identical framework, and that is being used as a template for what parties would have negotiated had they turned their mind to it.
In terms of retrospectivity, it is absolutely essential that this relief is given. In a sense, it’s no more retrospective than any addressing of a frustrating event would be. Anything where the parties can’t make the contract which they contemplated it to be at the outset. So this reform of the law is greatly needed.
In terms of what is a fair proportion, we received many useful submissions on that, some of which suggested we set out a list of factors. We took careful advice and reflected on it, and we thought that that wouldn’t be useful. But I do want to make it clear that things like whether someone has received the wage subsidy would be relevant. Whether someone has been able to conduct a profitable business even though they’ve been locked out of their premises would be relevant. All of those things will be relevant, and, obviously, the revenue that a company has, the tenant has, would be relevant as well.
There is one other important thing I want to say. In respect of the claim—I think it was Mr Bayly who was talking about large tenants and landlords with mortgages. Landlords can use this clause too. If a large tenant simply says, “Go away. I’m not paying my rent. I don’t want to.”, this is a clause that the landlord can use to say, “You have to pay a fair proportion of the rent.” So it’s a really useful and important clarification of the law.
In terms of if it’s going to be effective, we absolutely think it’s appropriate to look at how far back we should go, whether we should go to the beginning of lockdown on 18 August or not.
Lastly, I’ll talk about dispute resolution. We absolutely need a speedy dispute resolution process. Arbitration can work, but it can also be expensive and a little unwieldy. This is really a prompt for parties to get together and sort their problems out themselves if they can, to mediate if need be, and arbitrate if necessary.
This Property Law Act reform is not a great shift in the law. What it’s doing is it’s imposing a clause on the parties which, if the parties were asked two years ago “What would you do if there was a global pandemic and you were locked out of your building?”, would be the fair place to land. That is why I commend this bill to the House.
A party vote was called for on the question, That the COVID-19 Response (Management Measures) Legislation Bill be now read a second time.
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.
Bill read a second time.
ASSISTANT SPEAKER (Hon Jacqui Dean): I declare the House in committee for consideration of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill and the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill.
HOUSE IN COMMITTEE
HOUSE IN COMMITTEE
CHAIRPERSON (Adrian Rurawhe): Members, the House is in committee on the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill and the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill.
Bills
Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill
In Committee
Part 1 Amendments to Financial Markets Conduct Act 2013 to come into force by first anniversary of Royal assent
CHAIRPERSON (Adrian Rurawhe): Members, we come first to the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill, Part 1. This is the debate on clauses 3 to 20 and Schedule 1—Amendments to Financial Markets Conduct Act 2013 to come into force by first anniversary of Royal assent. The question is that Part 1 stand part.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): It is a pleasure to bring proceedings on Part 1 of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill. The bill forms a key part of the Government’s commitment to addressing climate change, and I would like to make at the outset a number of points as I thank the Economic Development, Science and Innovation Committee for its consideration of the bill, and intend to seek perhaps one or two calls at the beginning just to cover off some of the changes that are proposed as a consequence of the work of that committee and other matters that have come to light. I do want to thank at the outset also not just the committee but the Hon James Shaw for the work that he has done alongside the Prime Minister in the background to get this bill to the House.
I’d like to highlight some of the key features of Part 1 of this bill. New Part 7A, inserted by clause 7, inserts new climate-related disclosures provisions into the Financial Markets Conduct Act. 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 global standards. Others are following fast behind. We’ve seen the UK make progress in that regard, and I’m sure many other countries will too, but New Zealand is the first to bring this legislation into the House, so it is world leading.
The legislation ensures that financial organisations disclose and ultimately take action against climate-related risks and opportunities. It will do that by requiring the largest and most important businesses in the New Zealand context and those that participate in the financial markets to disclose clear, comparable, and consistent information about the risks and opportunities presented by climate change.
The original scope of the climate-reporting entities is unchanged in the bill. Some submitters had suggested that the disclosure regime should cover a wider range of entities including public sector organisations and large companies that are not listed on the NZX. The definition of climate-related entities in the bill is sector neutral. Approximately 15 public entities are climate-related entities. Four Crown financial institutions including ACC and the New Zealand Superannuation Fund, with more than $1 billion under management, will be required to make climate-related disclosures, and that will be done through the letters of expectation process. The Minister of Finance will write to those entities in the usual process, stating that they must prepare climate statements in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures, and that, of course, is the same advice that informs this regime and produced advice, I believe, in 2017. So those are kind of well understood parameters.
There are potential reasons for extending the disclosure obligation to large non-issuer companies. However, requiring these companies to do so does not fit within the scope of the bill. Furthermore, climate-related disclosures are intended to be read in the context of an entity’s financial reports, and, of course, large non-issuer companies are not required to make their financial statements available to the public, so it’s questionable how useful stand-alone climate statements might be to investors.
New section 461OA excludes small listed issuers and issuers on growth markets, and that’s kind of a pragmatic response. The select committee recommended excluding small listed issuers with market capitalisation below $60 million and entities listed on growth markets, like Catalist, from the mandatory disclosure regime. Small issuers—to give some context to the committee—are less than 1 percent of total NZX market capitalisation. So that gives you a sense of the scale of those issuers. The exemption of small issuers and growth markets still means that the majority of the financial sector are captured by the bill.
New Subparts 2, 3, and 5: to keep climate-related disclosure records, prepare and lodge climate statements—so climate-related entities will be required to prepare statements in according with climate standards issued by the External Reporting Board (XRB). Climate statements have to be lodged with the Registrar of Financial Service Providers within four months of the climate-related entity’s (CRE’s) balance date, and CREs also have to keep climate-related disclosure records and make them available for inspection. There’s a new Subpart 7: climate-related contraventions are added to the Financial Markets Conduct Act’s existing civil liability regime. That means that contraventions will attract pecuniary penalties not exceeding $1 million for individuals or $5 million in other cases.
Schedule 1, new section 92, which concerns transitionals—I’m mindful of concerns around the industry’s preparedness to comply with the disclosure requirements while the standards are being prepared. The transitional provisions clarify that the disclosure and record-keeping requirements do not come into force until after the XRB has published and issued at least one climate standard. The XRB standard, of course, as I’ve mentioned already, will be based on the recommendations of the Task Force on Climate-related Financial Disclosures, and that material has been available for some time. None the less, there is a due process consideration here. The XRB therefore is required to adequately consult with those likely to be affected by the standards before those standards are issued. That’s a part of due process.
The XRB has already started consulting with affected entities. On 20 October, which is tomorrow, it will launch its consultation on the governance and risk management sections of the proposed climate-related disclosure standards. Climate reporting entities will have ample opportunity to provide feedback on the proposed climate standard that may apply to them. That is the fundamental point. Once the XRB has issued a climate standard that applies to that entity, the disclosure obligations apply to accounting periods that commence on or after the date that standard is issued.
Now, there’s also been a removal of the disclose-or-explain provision. The bill originally provided an exception if a climate reporting entity reasonably determined that it is not materially affected by climate change, but what was recognised was that that would’ve created a two-tier reporting system. Far better to have a simple, single standard for reporting and then investors can compare, even if those that are not materially affected—well, that will be clear in their disclosure that that is the case. It ensures that the records are easy to compare and that all climate reporting entities are analysing the climate risks and opportunities in the same way.
There’s been a removal of the assurance practitioner accreditation and licensing regime. The select committee recommended removing the licensing regime proposed in the bill as introduced because it would not be effective, and that removal responds to concerns that non-accountants would be excluded from carrying out greenhouse gas assurance engagements. The Financial Markets Authority (FMA) also supported removing the proposed licensing regime. Now, despite removal of the licensing regime, the greenhouse gas assurance engagements that are carried out up to three years after Royal assent will still be robust, and that’s because new section 461ZDA would require assurance practitioners to “comply with all applicable auditing and assurance standards” when carrying out an assurance engagement.
Now, in respect of assurance of greenhouse gas emissions required three years after Royal assent, to allow entities and the assurance industry time to build assurance capability, assurance engagements for climate statements that are required to disclose greenhouse gas emissions will only be required three years after Royal assent.
Now, I want to speak also briefly to the Government’s Supplementary Order Paper (SOP). I’m going to be tabling a Supplementary Order Paper which makes three small changes to two provisions in Part 1 that implement the select committee changes. The first change is to close a loophole in the definition of market capitalisation. The definition was added to the bill as part of the decision to exempt small listed issuers from climate-related disclosures. For listed debt issuers the current test is based on the net assets of the issuer and its subsidiaries. That’s not a measure suitable for economic significance of debt instruments. It’s the amount of debt that the issuer is seeking to raise that matters most, not the size of the issuing entity. I’m not disagreeing with the fundamental principle introduced by the select committee but making an amendment. The current provision could also have the effect of excluding issuers that raise debt through a special purpose entity, and that’s not an uncommon practice. The SOP therefore changes the test for a listed debt issuer from net assets of the issuer and its subsidiaries to the aggregate dollar value of all of the entity’s quoted debt instruments when they are issued. That is the face value.
The second and third changes both relate to an assurance practitioner’s report on parts of climate statements relating to greenhouse gas emissions. This provision was changed at select committee to address the legal consequences for assurance practitioners when their report does not comply with the requirements of all applicable auditing and assurance standards or if a qualified report is not sent to the FMA, XRB, and the supervisor within seven working days. There will still be a fine if instead it doesn’t meet the new 20 working day deadline. As it stood, though, assurance practitioners if convicted would have been liable on conviction to a fine not exceeding $50,000 for either of those requirements as they stood in the legislation. The SOP amends the bill so it’s not an offence if an assurance report fails to comply with applicable auditing and assurance standards. The risks of criminal conviction could deter high-quality assurance practitioners from taking on greenhouse gas assurance engagements. Assurance standards for greenhouse gas emissions is new territory for the industry. We want to make it permissive for folks to turn their hand to it. Practitioners may not want to risk, as the bill currently stood, committing an offence by not meeting the standard. So that’s why we have made that change.
In closing, the refinements and changes that we’ve made will help the bill to achieve its aims of ensuring that climate change risks and opportunities are routinely considered in business and financial market decisions. It will also support intergenerational equity through informed investment decision making. We are seeking here to make sure that New Zealand’s financial markets disclose clear, comparable, and consistent information about the risks and opportunities presented by climate change and believe that that transparency will enable the efficient allocation of capital and effective markets. I commend this bill to the House.
Hon TODD McCLAY (National—Rotorua): Mr Chair, thank you very much. I want to thank the Minister for his intervention there, which ran for almost 13 or 14 minutes. I do commend him for that, because I remember, during the second reading, members opposite—members of the Government, his backbenchers—standing up and saying how very important this is and the amazing things, the important things, it will do to address climate change, and saying that they are a responsible Government and they take this seriously, and they spoke for about a minute and 14 seconds each, each time, it was so important to them. I did have a constituent email and it said, “Well, I suppose they’re not adding to greenhouse gases through their long speeches.” But I do want to thank the Minister for taking the time to actually set out the reason that he’s brought the bill, the importance of it.
Can I start by saying how I feel for him. I remember when I was a Minister and things were passed to me when I got a new portfolio after an election, and I would look it at and think, well, it doesn’t actually achieve what the last person—the last Minister—said that it would; it feels like it’s overhyped, but you’ve just got to grin and bear it and get through it and keep reading from the paper, and he’s done that admirably. I think, actually, if the Minister had been here with his portfolio in the last term of Government, he would have actually done a proper job of it, and I think the previous Minister, of course, as support partners they needed before—they don’t need the Green Party now, but, of course, they’re still nice to them in case they need them in the future. You’ve got to pay credit to the former Minister James Shaw, but, actually, this Minister knows, as we do, that whilst it sends a signal to the world, it doesn’t achieve anything else and doesn’t do anything more than that. It does run the risk of burdening business in areas that it shouldn’t, because every time there’s a regulation, there is a cost of that to business. In some cases, I suppose, for the very large insurance companies, the banks, it’s not significant, but it is getting them to do something they do already, and for those companies that are listed on stock exchanges in New Zealand or around the world, they already need to do these sorts of things.
National is supporting this, but we have three Supplementary Order Papers (SOPs); two are tabled to this part, they’re on the Table already, and they are in my name. We think that, actually, there needs to be things done here to address this so that any unreasonable burden that’s placed upon businesses and companies is met, it’s not there, it’s not unreasonable—we want to give them good time frames to get through this—and that Government entities and private sector entities are treated the same.
The Minister mentioned earlier in his intervention that there’s another way to deal with public sector entities. Well, if it’s good enough for the private sector, it has to be good enough for the public sector, and it’s not enough to say, well, public sector companies are under a duty of care when Ministers write to them with their expectations every year, and we could go further—actually, of course the Government can go further, but if you are going to have a requirement on a like-minded, same business in the private sector, why is the Government exempting itself? It’s not reasonable, it sends the wrong signal. That’s an SOP that I’ve put down to include public sector entities in this, and I will speak to that in Part 1A. Is that right? The Minister wants to respond to that—yeah, go ahead.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I do thank the member for his contribution. Whilst I don’t agree with some of the sentiments he expressed at the beginning, I sincerely do believe this is a very important piece of legislation, actually. This is about the fair, transparent, and efficient running of public markets, and if we believe in the efficient allocation of capital and we believe that there’s also a climate crisis, we do want to see that capital used in a way that doesn’t endanger markets because the information is not clear or transparent or comparable and creates risks in our market—volatility and so forth. Those who believe in the value of markets want to see an efficient market with good information, and so consistency of information is important.
So I do think this is incredibly important, and, equally, as to the allocation of capital, those who are concerned about climate risk, and they are many, will also want to see that they are supporting companies that don’t have risks in the future on their balance sheet that are climate related and/or that are taking appropriate mitigation where they do have risks on their balance sheets that are climate-related. So I think this is incredibly important legislation. I pay, again, tribute to the Hon James Shaw for the work that he’s done to develop this legislation, working with the Government during the last term.
What I also want to respond to the member on is in respect of his SOP to require public entities to make climate-related disclosures. Here he is suggesting a whole lot more red tape when there are other measures. There are 4,000 entities that qualify as public entities in the Public Audit Act. He is wanting them to, essentially, go through two processes. For a Minister that claims that “We don’t want red tape.”—and I have heard him say that before—I’m just a bit bemused by that desire. There are 15 public climate-reporting entities that are captured under the bill: Kiwibank, Air New Zealand, some port companies, some energy companies, and so on. So these companies are captured, and it’s a matter of scale and it’s a matter of public markets working efficiently. This is a bill that is focused on public markets. I expect investors in the future will demand more climate-related disclosure from private equity companies and concerns as well. But this bill is targeted, clearly, at those that are public reporting entities.
Hon TODD McCLAY (National—Rotorua): I thank the member for that. In fact, my Supplementary Order Paper is very specific. It doesn’t deal with all of those. Of course, he mentioned Air New Zealand. Air New Zealand’s already on the stock exchange, and it actually wouldn’t be deemed under the scope of the bill to be covered anyway because it’s not a lender or borrower or insurance company. But there are five that I have mentioned here. So it’s not all; it’s Crown financial institutions.
If we take the example the Minister’s just given of investors wanting to know about any liability or effect that climate change might have upon the investments or conduct that a business has, an issuer or a lender, well, the New Zealand Superannuation Fund or ACC corporation, whilst they’re Crown entities, are actually not owned by or benefit the Government. They are taxpayers. They are New Zealanders. If it is good enough for the private sector to have to meet these requirements, then it should also be good enough for like-minded or similar or the same entities that are Crown financial institutions, the Super Fund or the ACC, to also be covered.
The point that we’re making here is—and I agree with him—too much red tape, bureaucracy, is a cost. His Government is bringing this forward and saying to the private sector that they must do this, but there are entities that are the same, and if they are covered by the scope of $1 billion or the $60 million—everything else that’s in here—then they too should have to comply. If a Minister wants them to go further, they get to instruct them to do that. Although, in the case of the New Zealand Superannuation Fund or ACC, there is some direction, but there is independence when it comes to investment, unless a law is passed in this Parliament. They get to decide what the investment is. If the Government doesn’t like the way they’re investing, they can change the board, but they don’t get to sit there and decide upon every single investment. They can ask them to do levels of reporting, I suppose, or bear things in mind each year, but, actually, they don’t get to do it by statute—and this is statute.
So we’re saying to the private sector, to a bank or an insurance company, “You must do the following things because of climate change and to see the impact of climate change on your company—not your activities but on your investments and the liability, perhaps, or the effect it might have in the future.” If it’s good enough for them, why not the Superannuation Fund or ACC, because in the end, to the investor or the taxpayer, they are the same. If there is a requirement and if the Minister says he thinks that the private sector investors will ask more in the future of private companies in as far as climate change is concerned, well, I guess the New Zealand public doesn’t get to do that as taxpayers unless the Government wants to. But the Government can only go so far, because this statute, this piece of legislation, won’t apply.
I have other interventions, but I’ll allow the Minister to respond.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I’ll spell it out, perhaps, as clearly as I can. The four Crown financial institutions that have more than a $1 billion of assets under management, which are the ones the member’s referring to, will be required to make climate-related disclosures. The decision’s being implemented through letters of expectation, and I give the member my undertaking that this Government will implement that. If ever in the future he and his members were on this side of the House, I would anticipate they would do similarly, because this is the rhetoric he is putting forward—that he thinks they should be making those same disclosures.
So rather than broadening the scope of this legislation, which is quite specific, ACC, New Zealand Superannuation Fund, Government Superannuation Fund Authority, and the National Provident Fund will be required, through the letter of expectation process that Ministers have legislatively to use, to make climate-related disclosures. Further, I give him an undertaking that if the Earthquake Commission fund reaches $1 billion, it too will be required through the letter of expectation process to do the same thing. This is the direction of travel.
Hon TODD McCLAY (National—Rotorua): I thank the Minister in the chair for that, that his Government has given an undertaking, but this is legislation that specifically sets things out. Now, unless the letters of expectation—that he doesn’t get to write but other Ministers do—set out the exact same requirements as will be agreed at some time in the future via the External Reporting Board (XRB), then, actually, there will be a difference. So it’s good that the Minister has said he wants to do that, but it actually is an exemption. Those businesses, those Crown entities, that he is speaking of are exempt from a piece of legislation when you have two companies that are identical, are the same, the only difference in this case is the ownership—and one is owned by the Crown, one is not owned by the Crown; it is owned by the private sector. Why has he decided to treat them differently?
If his argument is that the Government wants to go further and doesn’t want to place those requirements—or that burden, perhaps—upon the private sector, then that’s reasonable, but he hasn’t said that. He said it will be the same, although he doesn’t know what the reporting requirements will be yet because they are not yet set. He said that the XRB is consulting, but we don’t know what they will be and how that will happen. It could be that in the future, the Government says, in their letters of expectation, “You must abide by the following:”, but, actually not by law, because if they decide not to, the Minister or the Government has to call them and tell them off or would have to sack a board member, and that’s not necessary.
Now, I know that the boards are responsible. They act and react to letters of expectation. But there have been many occasions where the letter of expectation—the interpretation between the Government and a board of a Crown-owned entity is different. In the case of this law that’s being passed, that has support of the House, it is very, very clear, the obligation, the intention, and the requirement, and the XRB will make a decision.
So, ultimately, I’m actually not arguing for more regulation and more red tape; I think there should be less cost. But if it is fair enough for the Minister to say that there is an exemption for Crown entities from this legislation, then he should say why, not: “Well, we’re doing it anyway and we can write letters.”, because he’s writing a letter, or his Government is as the owner, but he is not giving the same ability to the private sector owners; he is requiring something by law. He should treat the private sector and the public sector the same in as far as this legislation is concerned. If he wants to take it further, his Government, he has the ability to do that through letters of expectation.
But, ultimately, where a company in the private sector is covered by this legislation and they don’t meet the requirements, they break the law, there is a fine; well, that’s not actually going to happen. If anything—and I’ve seen how these things work because it is very, very political; it’s a slap on the hand, or a telling off, or a “fix it next year”—actually, they should be treated the same.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Obviously, I mean, the member’s argument is becoming fairly repetitive, so I won’t respond to the same points that I have responded to again. But what I will do is I’ll just give the wider piece of context, which, of course, is that the Government has a carbon-neutral programme from the 2021-22 financial year. All departments, departmental agencies, and non - Public Service departments will be required to measure and publicly report on their emissions, and offset any emissions necessary to reach carbon neutrality by 2025.
On this side of the House, we are ambitious for achieving carbon neutrality. So we are setting expectations that are significant on our Public Service departments and those things that report into the Government. So that is the wider piece of context which I think is very important that the member conveniently omits or neglects to mention in his arguments.
Hon TODD McCLAY (National—Rotorua): Look, I thank the Minister, but this legislation has nothing to do with the Government’s target of being carbon neutral by a certain date. It doesn’t do that; it asks the private sector to report upon climate change upon their balance sheet and risk to them. It doesn’t make a single private sector company change how they act, just report, and so they are two very different things.
So the Government may, in their letters of expectation to these Crown institutions, say to them, “We want you to be carbon neutral by a certain date.”, but they don’t get to say to the superannuation fund, “And we want all your investments to be carbon neutral or to be the following to do with climate change.”, unless they change the law. They don’t get to direct them in that way, because it’s important there is independence in as far as the super fund and ACC and how they go about their investments. There are times when this House has passed a law that says, “We don’t want these entities, these Crown entities, to invest in a certain way.” That has happened previously around weapons and so on. But the Minister is trying to confuse things by saying that the Government has a target of all Crown entities or the Government being carbon neutral by a certain date and suggesting that that is the same here. It’s not.
Ultimately, what the Government is doing is putting a legal requirement upon businesses, a number of businesses, to report the impact of climate change upon their business, not what they’re doing about climate change, but upon their business. In the same breath, they’re saying that businesses that are the same, with the same size assets that invest in the same ways but are owned by the Government, don’t have to do that and this Government knows better and will just direct them themselves.
The case that I’m making is that that’s not right. If it is good enough for the private sector in this case, there should not be an exemption from this legislation for certain Crown financial institutions. The Minister has mentioned that, you know, my arguments are repetitive. It’s because he hasn’t actually addressed the reason that there isn’t a difference yet.
Hon JAMES SHAW (Minister of Climate Change): Thank you, Mr Chair. I wonder if I may assist in this and perhaps accelerate moving through this point by talking about the relationship between the Carbon Neutral Government Programme and the legislation that’s being debated today. So, as the Minister has said, the Carbon Neutral Government Programme includes reporting requirements for all public entities. Those reporting requirements are intended to be similar to or as close as possible to those that will be the reporting requirements under this legislation. However, as the member who’s been on his feet a lot recently has mentioned, you know, private entities do have slightly different requirements. They have shareholder requirements and allocation of capital requirements that are different from public entities, and so the precise nature of the reporting won’t be, you know, a perfect apples for apples comparison. But the intention is that all Public Service departments—all departmental agencies, the New Zealand Defence Force, the Police, the Parliamentary Counsel Office, etc.—will be required to report on their metrics and targets from 2021-2022, which is a year ahead of where the private sector will be required to report under this piece of legislation here.
Now, entities under this amendment bill, of course, are required from 2023, according to the standards in the External Reporting Board. Now, it may be that the member would be more comfortable if the Carbon Neutral Government Programme itself had legal backing, and so it would be good to hear if they would support legislation that, essentially, took what is currently a governmental requirement on every single Public Service agency to report to a similar standard—if they would be prepared to support legislation that would require that of the public sector so that the public sector entities are required under the law, just as these large reporting entities are under this legislation.
The member has put forward a Supplementary Order Paper. I think it’s good that he’s thinking this way, that it’s obviously important for the public sector and publicly owned funds and other entities to take the lead. That is why, under the Carbon Neutral Government Programme, we said that they had to report earlier than under this programme, because we agree with the member on that point and look forward to his wholehearted support for the Carbon Neutral Government Programme and the reporting requirements therein.
ANDREW BAYLY (National—Port Waikato): Thank you, Mr Chair. Well, the first thing I would say is—I think my learned colleague has just raised the issue of consistency, and I think that’s a fundamental principle that should be adopted: what is good for the private sector should be good for the Government sector. I think the argument that if you’re going to make a distinction, then the best way to do that is to make the legislation which we are talking about today consistent, and it’s not. I think he makes a very valid point.
I haven’t sat on this committee, so I’m a little bit new to it, but I was just looking at the new Supplementary Order Paper 63 that the Minister’s put up, which is the one that deals with the issue of value of $60 million, which, from what I understand, less than 1 percent of companies have on market listings, so the proposition’s been that a small number of companies will be affected by that. The first thing is I’d just be keen to get some clarification from the Minister: when the figure of $60 million is quoted, what does that include? Is it merely equities and does that mean share capital? Does it mean debt? Does it mean pseudo or quasi-capital—auctions, warrants? Are they part of that valuation? That’s my first point. So maybe we’ll deal with that and then we’ll deal with the billion-dollar question in a minute.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I’ll come back to the member with more detail on that point. I’m happy to deal with his next question.
ANDREW BAYLY (National—Port Waikato): Thank you. Well, I am a little bit surprised, because the Supplementary Order Paper is in your name. So let’s maybe go back. First point is why $60 million, which is the—and I see that you’ve changed that clause in the bill. You’ve replaced new section 461OA in clause 7, which previously just talked about a large issuer, and now you’ve defined it as being $60 million.
So the second question, while we’re waiting for an answer from the Minister: the big question I’ve got around the use of value is at what point is the value determined? Because as we all know, listed companies, and with all companies, have to value their assets, and normally on a mark-to-market basis. Is this only at the end of the financial year? Or what happens if the value of the assets goes up during the course of the year but declines, and therefore it’d be under the threshold at, say, 31 March, which is the normal balance sheet? So how are those inconsistencies or irregularities or increases and decreases in value actually accounted for?
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I want to make sure that I come back to the member with the appropriate technical answers to his questions. I imagine the normal process will apply, as with other accounting provisions, but I will come back to him with the further technical advice on that. I expect that’s what he expects too, but it’s always good to have these things clarified.
ANDREW BAYLY (National—Port Waikato): I must admit, Mr Chair, I’ve only spent the past 15 minutes looking at the bill. I don’t proclaim to be an expert but it was an issue that sort of seemed blindingly obvious to me. So, hopefully, we’re going to get an answer quickly.
So the second aspect I was going to talk about is we’ve now got a $1 billion threshold. So we’ve got the change that Supplementary Order Paper 63 put up by the Minister—that was talking about $60 million. Then we’ve also got this issue around a $1 billion, which I think assumes that relates to fund managers. I don’t know and I’m hoping I’m going to get clarity from the Minister on that.
Again, it is interesting from a fund manager’s perspective. First of all, maybe we’ll just clarify some scenarios. So if I’m a private fund manager, but I have $1 billion and $1 in listed entities, am I captured? Secondly, am I going to be captured if I’m still that private entity with a mixture of investments in equities listed on the stock exchange and a mixture of bonds listed on the stock exchange, and then a range of private bonds and private equities, which are not listed and, obviously, there’s not a readily available market price for? So, again, I’d be quite interested in that scenario.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): For listed debt issuers, the current test is based on the net assets of the issuer and its subsidiaries.
ANDREW BAYLY (National—Port Waikato): OK, so I don’t quite understand that and I’d be hopeful that the Minister might be a little bit—when you talk about the net assets, presumably, is that total investments, and is it total market investments or does it include non-market related investments? Secondly, does it include non - quasi-equity instruments such as warrants, options, whatever, that do have a true value but are not readily valued? So, again, I’d be keen for some update on that.
OK, well, while we’re waiting for that, the issue—just going back to our $1 billion, because, hopefully, we’re going to have some answers soon on this. The issue around the fund manager: I’ve put up a proposition where you’ve got a private fund manager with a range of investments, both listed and unlisted—so I see the adviser’s come back, so maybe I’ll just wait for a response before I carry on.
STUART SMITH (National—Kaikōura): Thank you, Mr Chair. Perhaps I can fill a little time in while the Minister does some homework. Look, I think we have to be clear about what this bill is about. I think it was all laid out by the Minister in his opening statement, where he said we are world leading—others are following, and they’re following fast, but we are world leading. That’s what this is all about. We’re trying to get ahead of the game and do something around climate change, because, actually, we haven’t done anything other than declare a climate emergency. The only urgency that’s been shown around climate has been the declaration of a climate emergency, and nothing else has followed.
It would seem strange that this would be the bill that would seem to be their “get out of jail free” card, particularly when we don’t actually have the standards, and we won’t have the standards until 2022—December of 2022, actually, is when we’ll get the standards—and the Minister said that public entities are going to have to report in 2021-22, which will be ahead of the standards that will be set for the private companies and public companies. So the public entities are going to report—what? What exactly are they going to report, because we don’t know what the standards are? Are we going to have a whole lot of a hotchpotch of reporting and the Government entities sitting back there congratulating themselves on how well they’ve done, but how well against what? That will be the question.
I note also that the one thing the licensed insurers and the banks and the credit unions are in the business of is actually measuring risk. Everything they do is measured against risk, and climate change is just another one of those risks and they are very well aware of it, so I think this is just another needless impost on business.
I would like to know what assessments were done by officials into the costs of reporting to these standards. Are we expecting that all that will be required will be the normal risk, which will probably cover all this anyway? Will it be acceptable if they’re lifted off their records and collated into a form to meet their standard, or are we going to have to go back through and reinvent the wheel and actually come up with the same result but do it in a different way, which will add significant costs to business?
Actually, all business at the moment is struggling when we have something really real and present out there that we need to deal with in a business sense, when businesses that are going to be captured by this are already doing probably way more than they’re going to be required to—and way more, I suspect, Minister, than the letters of expectation that will go to the public entities. They understand risk, but they also understand what their customers want and need, and their customers are interested in climate change and in seeing that the people that they deal with on a day-to-day basis are living up to their expectations.
So I just see this as a solution running around looking for a problem, and I think, as I said in the beginning, it’s all about having something to announce in Glasgow so that the Minister can puff his chest out, as he walks around in Glasgow, saying, “Well, we’ve actually done something. We’re world leading.” Yeah, we’re world-leading—at what, exactly? So I look forward to the Minister’s answers to the questions. Hopefully, he’s got the very insightful questions that Andrew Bayly has asked; he should have the answers to those. And, given that they revolve around the Minister’s own Supplementary Order Paper, I would have thought they would have been top of mind. So we look forward to hearing the Minister in his response to those questions. Thank you.
ANDREW BAYLY (National—Port Waikato): Mr Chair, I’m just waiting to—
CHAIRPERSON (Adrian Rurawhe): Andrew Bayly.
ANDREW BAYLY: OK. I was just hoping the Minister was going to take the opportunity, but maybe we’ll move on to a new topic. I just want to talk about the change around the assurance practitioner licensing arrangement. This relates to clause 7, of course, in Part 1. There’s been quite a change to this, as I seem to read here, and it’s around the question of who is a qualified assurance practitioner, to be able to do what’s called CRDs, which are climate-related disclosures. I suppose there’s been quite a change in the bill, moving away from the concept of having approved climate assurance practitioners to one that really revolves around more of a process—that reports are tabled and lodged within, I think, 60 working days, from what I could see here.
So my issue is, first of all—maybe the Minister can just help us—who can be a qualified assurance practitioner now. I just read the commentary, and it talked about accounting firms and whether they were actually precluded from being an assurance practitioner. So, one, is I’d quite like to understand who can’t be one, and, secondly, who might be one and what is the process for them to do it other than what may be suggested? I don’t know if my assumptions are right about whether you just put yourself out as someone suitably qualified and the company makes sure it files your report in 60 days, but I’d just like a bit of clarity around that assurance practitioner arrangement.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): There are already greenhouse-gas assurance practitioners, but it won’t be till the third anniversary before any standard around that needs to be lined up. We’re expecting new people to take this on, as I outlined in my introductory comments.
I do want to come back to a couple of other questions that have been raised. The member Stuart Smith raised a question around what standards would be applied to the public reporting entities—to those listed on public markets; prior to that what were public entities. Again, as I mentioned in my introductory material, the standards will be based on the recommendations of the task force of climate-related financial disclosures, and that material, of course, was confirmed in 2017. So this is not a new area. There’s not going to be great surprises in here, and at the same time, the External Reporting Board, of course, is obliged to give those who it’s issuing the standard to a chance to be comfortable with the standard, to go through due process and raise any concerns.
In respect of the previous question of the member opposite, the new section 461OA(1), set out in clause 7, is amended so that the size of a listed issuer of quoted debt securities is measured by the face value of their quoted debt securities at any time during the last two accounting periods, instead of the value of their net assets as at the balance date of those two accounting periods. A listed issuer of both quoted debt securities and quoted equity securities will be a large listed issuer if they are large in terms of the value of their equity securities or in terms of the face value of their debt securities or both. But you cannot combine equity and debt securities for that total, and the amount that must be exceeded is $60 million.
The member will appreciate that many of these matters are technical and I want to be absolutely spot on when I report back to the House. Unfortunately, many of our officials who have worked away on this are out in a back room because we have some COVID restrictions on how we operate in the House today. So if members are patient, if they do have technical questions, I will come back to them because I regard them as important and I do want to make sure that we are providing that technical information. Most of the rest of the argument, obviously that raised by Mr McClay, is more of a rhetorical nature. Happy to respond to those arguments one by one, but obviously where’s there’s repetition, we’ll just let the argument and debate continue.
Hon TODD McCLAY (National—Rotorua): Thank you, Mr Chair, and I thank the Minister of Commerce and Consumer Affairs for his explanation of the officials in the back room—I was worried they’d gone fishing or something, but they’re still here.
There’s another part of the legislation I want to come to—sorry, this part but another section of it—and that’s around the comply or explain provision. Very clearly, for people listening in, where an entity is of the view that, actually, they have no exposure or risk from climate change, they could explain why they were not reporting. That was in the original legislation at first reading, as tabled in the House. During committee, that was changed based on perhaps a submission, but advice from Government. I have a Supplementary Order Paper in my name to put that back in, and the reason I think this is very important is, look, we want entities to meet their obligation, to do what the legislation says, but in the case that there is an entity, a private sector entity, that actually does not have any effect of climate change upon it for whatever reason, it’s unreasonable and unnecessary for them to have to go through this procedure—a very long procedure—to report on something to say “We have nothing to report.”, when they could just explain why it is they’re not reporting.
Now, the legislation says you must comply. In the case that a business says “We explain that we’re not affected by this.” and they are, they have broken the law. It’s not an exemption from meeting their obligation; it just says there’s a shortened procedure in a case that you are not affected by climate change. I would say that it was in the original legislation the Minister brought to the House and spoke of, and then it was changed. I think it’s a mistake that we’ve made that change. It doesn’t lessen the impact of the bill—although the bill doesn’t have a lot of impact anyway, but it doesn’t lessen the impact. It doesn’t alter the requirements of the entities that are covered by this legislation to report properly based on the standards that are being set, but if there is an entity that has no obligation, no consequence of climate change upon them as a result of the legislation, then, actually, we shouldn’t be asking them to go to the extent of what would be a very costly and long procedure to come back and say, “Nothing to see here.”
I don’t think it would be used very often, but it’s actually good lawmaking to say, “If this doesn’t apply to you, we’re not going to burden you with it.” The Minister did say in his introductory remarks it would create a two-tier system. It wouldn’t. It actually wouldn’t be a two-tier system; it would be a one-tier system where if somebody’s not covered, they could explain why, and if they got the explanation wrong, then they’ve broken the law under this legislation and they’d be held to account.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Well, obviously, I did cover this off in my introductory remarks, as the member notes. I stand by the view that a system that enables two records to be compared with each other is better than one that has two different types of records. The whole point here is to have comparable records. So if somebody is a climate reporting entity and they don’t believe they have substantial matters to disclose, they still would have to, as the bill was originally worded, demonstrate that. That was believed to be quite onerous, actually, because they would have to go through a process of providing an alternative type of report. We would have two different types of report then: one which demonstrates and seeks assurance around not needing to disclose, and one which is around disclosure. So it was deemed to be much more sensible to have a system where all reporting entities prepare the same climate statements, and those that identify minimal climate risks will have less to disclose.
ANDREW BAYLY (National—Port Waikato): Thank you, Mr Chair. Hopefully, we’re going to get some answers before this debate gets closed down, unless the honourable members opposite are, hopefully, standing up to ask some questions, which they haven’t to date.
CHAIRPERSON (Adrian Rurawhe): That’s entirely the Chair’s decision, so you should carry on.
ANDREW BAYLY: I just don’t understand the explanation the Minister provided before; I’m grateful he attempted to.
So let me give you a scenario. There’s a listed investment company. It has $50 million of equities on the market and it has $9 million of debt securities on the market. It actually has a portfolio of investments that have a value of $900 million, but alongside it, outside the listed debt bonds that are issued on the market, it has a huge amount of bank borrowings. During the course of a year, the value of the business goes up. The value of the equities goes up from $50 million to $60 million; therefore, breaching the $60 million test—if I understand it—but by balance sheet, it comes down to being within the $60 million cap. Is that company captured under the rules?
That was my point before around at what point in a year over the two-year period—is it a balance date or is it at a different date, because the value of the assets, not only its own value of its equity or debt instruments but also the value of its investments, might have gone up and down during the course of the year. So, hopefully, we’re going to get an answer.
GREG O’CONNOR (Labour—Ōhāriu): I move, That the question be now put.
Hon TODD McCLAY (National—Rotorua): Thank you, Mr Chair. Minister Clark, the final Supplementary Order Paper (SOP) of the three that I’ve put in there is around when these obligations will be placed upon the businesses covered by the scope of the legislation. As I understand, as it’s currently written, it will be 12 months after Royal assent—so, entering into force. However, the External Reporting Board (XRB), although the Minister has said they’re currently consulting, they haven’t set the standards yet, and there isn’t a requirement in the legislation as to when they might do that. Look, I think the XRB will take its responsibility seriously, but I am concerned that there won’t be enough time for companies to take their responsibility seriously and meet these requirements. So this isn’t about not having to meet the requirements; it’s about a fair period of time. What I’ve suggested is a—
CHAIRPERSON (Adrian Rurawhe): Is that in the commencement clause?
Hon TODD McCLAY: So there are two parts. I think it’s in Part 1 and Part 1A, is my understanding.
CHAIRPERSON (Adrian Rurawhe): OK.
Hon TODD McCLAY: Part 1 amends a date and then Part 1A also does, but maybe the Clerk can clarify that for me. I understood that—[Chairperson seeks advice]
CHAIRPERSON (Adrian Rurawhe): Yeah, you can actually have that debate under clause 2, but I’m happy that you’ve mentioned it in passing. It is a little bit irrelevant.
Hon TODD McCLAY: Yeah, so, well, I’m at your guidance, Mr Chair, but with the exception of 1A, my colleagues finding it erroneous, we probably won’t debate much longer since we’re supporting. But in this respect, the suggestion is that, actually, the dates be changed so from when the XRB brings forward the reporting requirements, companies have two years to be able to meet those requirements. Look, it’s actually not about an extended period of time, because these companies will take it seriously; in many respects, they’re probably already considering this. It is good that the XRB is talking to them, but, ultimately, for some of these very large businesses, particularly when one considers they do have investments around the world, it could be quite some amount of work, and we don’t want undue pressure to come on them, or unreasonable cost, because whether they meet it in the first year or two years afterwards actually means the same to the climate. The reason for that is this legislation doesn’t make them alter anything they’re doing, in meeting lower levels of climate emissions or anything else.
So I’ll have one more question after this, but, to the Minister, the SOP suggests allowing more time—not unreasonably, I think—for the entities covered by the scope of this legislation to meet the requirement once the XRB publishes the standards.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): This is a new point the member’s raised. In addition to climate standards, the XRB intends to issue an adoption standard which lays out a pathway for climate reporting entities to adopt some of the more challenging disclosure requirements. Adoption standards offer various provisions to entities when a new standard or new requirements are to be applied for the first time and can include practical expedience, phased adoption, or relief from providing comparative information. It’s a recognition that for those who are doing it the first time, a more pragmatic approach will be taken.
ANDREW BAYLY (National—Port Waikato): Thank you, Mr Chair. I just remind the Minister that I’m still waiting for some answers that were to be provided, and I appreciate the officials who are out the back doing their bit. But there was a difference between—I gave him a scenario about the value changing over the course of a year and at what point is it valued. It’s the same with the fund manager, the $1 billion one. There’s a fundamental question about when do you assess the value, and the second element of that was if you’re a fund manager, for instance, do you have to value non-listed investments as part of getting to your total of $1 billion. So, hopefully, we’re going to hear a response on that, and, hopefully, we’re getting a response back now.
But in the meantime, I did ask about the assurance practitioner arrangements. I think, from the Minister’s response, all this is to be decided in due course, and maybe he can confirm that, but who’s going to be deciding? Is it the Financial Markets Authority or was it going to be a recommendation, and to what extend can the Minister assure businesses that they’re not going to be lumped with exaggeration and excessive requirements around regulations imposed on businesses—so that we actually get to an outcome that means that the practitioners who can operate and have due skill are not exposed unduly to liability, because, frankly, trying to quantify climate change impacts on certain industries and businesses would be a pretty heroic mission in some cases.
So I’m just understanding the framework that’s being proposed, and when might the framework be available, because given the due date—and I just acknowledge my colleague’s suggestion, which on the face of it sounds a good one, which is to delay the commencement date for three years, rather than one year. That might give sufficient time to put those arrangements in place, because if people do want to become a climate change assurance provider, then, obviously, they’ve got to set up the processes, get the right skills in place, talent, and all that sort of stuff, and you don’t do that overnight.
So, again, those two key questions. Hopefully, we’re going to get a response.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I’m happy to answer those two specific questions. Working through, I confess I misheard the member’s example the first time, and the officials have, rightly—because I couldn’t make his numbers add up, but the officials tell me they do. So—
Andrew Bayly: They do add up.
Hon Dr DAVID CLARK: So they do add up, on this occasion.
So in respect of the equity securities listed of investment $50 million equity, $9 million debt, a portfolio of $9 million, and huge bank borrowings, the company goes over $60 million. So the entity must be above one of the thresholds, is the answer: $60 million equity debt or $1 billion assets under management at their balance date for two consecutive years.
The second question was around who can be a climate-related disclosures assurance practitioner. Anyone who is independent from the entity may assure their disclosures, as long as they assure against the Expert Reporting Board’s standards for auditing and assurance.
ANDREW BAYLY (National—Port Waikato): Thank you, we’re just about there. What about the unlisted components? So we’ve got a classic example, New Zealand super, that, obviously, has, I think, $59 billion of investments but is now increasingly investing in private sector, so in the unlisted. And also related to that, I keep talking about quasi-equity instruments—are they part of the $1 billion, are they part of that calculation?
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I’m advised that they’re not.
BARBARA EDMONDS (Associate Whip—Labour): I move, That the question be now put.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 63 be agreed to—no, not that one. The question is that the question be now put.
Motion agreed to.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 63 be agreed to.
Amendments agreed to.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Hon Todd McClay’s amendment to Part 1 set out on Supplementary Order Paper 65 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 43
New Zealand National 33; ACT New Zealand 10.
Noes 75
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.
Amendment not agreed to.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Hon Todd McClay’s amendments to Part 1 set out on Supplementary Order Paper 66 be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 43
New Zealand National 33; ACT New Zealand 10.
Noes 75
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.
Amendments not agreed to.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Hon Todd McClay’s amendments to Part 1 set out on Supplementary Order Paper 67 be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 43
New Zealand National 33; ACT New Zealand 10.
Noes 75
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.
Amendments not agreed to.
Part 1 as amended agreed to.
Part 1A Amendments to Financial Markets Conduct Act 2013 to come into force by third anniversary of Royal assent
CHAIRPERSON (Hon Jacqui Dean): Members, we now come to Part 1A. Part 1A is the debate on clauses 20A to 20J in Schedule 1A, Amendments to Financial Markets Conduct Act 2013 to come into force by third anniversary of Royal assent. The question is that Part 1A stand part.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendment to Part 1A set out on Supplementary Order Paper 63 be agreed to.
Amendment agreed to.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Hon Todd McClay’s amendment to Part 1A set out on Supplementary Order Paper 65 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 43
New Zealand National 33; ACT New Zealand 10.
Noes 75
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.
Amendment not agreed to.
CHAIRPERSON (Hon Jacqui Dean): The Hon Todd McClay’s amendment to Part 1A set out on Supplementary Order Paper 67 is ruled out of order as inconsistent with a previous decision of the committee.
Part 1A as amended agreed to.
Part 2 Amendments to Financial Reporting Act 2013
CHAIRPERSON (Hon Jacqui Dean): Members, we now come to Part 2. This is the debate—
Andrew Bayly: Madam—
CHAIRPERSON (Hon Jacqui Dean): —on clauses 21 to 35 and Schedule 2 amendments to the Financial Reporting Act 2013. The question is that Part 2 stand part.
ANDREW BAYLY (National—Port Waikato): Sorry, I was so enthusiastic. I just want to ask a little bit about new section 19B in Part 2, which relates to the climate standards. And of course, as I said at the outset, I haven’t been on the Economic Development, Science and Innovation Committee, so I haven’t had all the liberty of hearing all the arguments. But new section 19B sets out that “The purpose of climate standards is to provide for, or promote, climate-related disclosures, … [to] (a) encourage [any] entities to routinely consider the short-, medium-, and long-term risks and opportunities that climate change presents for the activities of the entity … (b) enable entities to show how they are considering those risks and opportunities; and (c) enable investors and other stakeholders to assess the merits of how entities are considering those risks and opportunities.”
Hey, those are quite significant issues, particularly where you start to put it in a way that investors will be in a position where they can rely on those statements and, obviously, other stakeholders, which are customers, etc. And I don’t think anyone is suggesting for a moment that companies should be shirking their obligations around climate change. What it seems is that these are wonderful, broad principles, but I was just wondering whether the Minister might be able to enlighten us, because “broad” sounds great in a piece of legislation that takes up a few lines, but what does it actually mean and how will it be implemented? And that gives rise—if they’re extensive and you’re requiring a whole lot of financial modelling, as well as environmental modelling, on not only cost factors but on risk factors, taking into account what might happen, you start to get into a whole range of different aspects.
What this doesn’t do is put a limit on it or provide any clarity. What it does is a never-ending course. And you can imagine over time, what might start out with relatively brief statements actually turns into being a meal, and under Government-proposed legislation that is often the case. So there doesn’t seem to be any limit to it, and one of the reasons I’m highlighting this and seeking the Minister’s response to it is that the wider and the deeper this goes and who is exercising the discretion of how far you go when you write that report will also give rise to the issue of indemnities, particularly where investors are involved, and who is going to pay for that, given that we don’t have clarity around who the insurance practitioners are, as the Minister responded to in Part 1. And so it just looks like we’re creating what seems good on a piece of paper. Wonderful for the Hon James Shaw to announce overseas what he’s done, but without any clarity around actually what it is seeking to achieve and how far it goes.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): For those who are at home, new section 19B lays out—because not everyone will have the benefit of this fine, fine legislation in front of them—you know, we’re looking at “the short-, medium-, and long-term risks and opportunities that climate change presents for the activities of the entity or [the] entity’s group; … (b) [enabling] entities to show how they are considering those risks and opportunities; and (c) [enabling] investors and other stakeholders to assess the merits of how entities are considering those risks and opportunities.”
Now, I mean, it goes back to the point which I covered in my introductory remarks, but also in terms of the transitional—I mean, all of this, the recommendations of the XRB, will be based upon the Task Force on Climate-related Financial Disclosures work from 2017. So, you know, that’s all out there. That’s been out there for a long time. It’s pretty well understood and that will form the basis of that thinking. So I don’t think there’s a lot more to say on that. Those standards may be reformed over time. There may be further meetings, but it’s actually not new or surprising. It’s kind of out there for businesses to see and look at. And indeed, many businesses already are.
ANDREW BAYLY (National—Port Waikato): Well, thank you for that. So I think what the Minister in the chair is trying to suggest is that there is enough clarity with the standards now that if you apply those three concepts, and particularly the one where you’ve got investors investing in a company on the basis of what is included in those reports—are you suggesting that there is a clear limit? Because what happens is, in many cases, you can set objectives like these, which are great sounding, but it is the extent of the requirements. So does it set out, for instance, the need to do economic modelling around it? Does it have to have taken into account assessment of risk factors, and, therefore, who do you rely on to provide those? Are you looking at impact of climate change on infrastructure or housing or shoreline or rising water tables or more frequent, intense storms? To what extent is there clarity in the standards? Because, otherwise, this will end up being a situation that in 10 years’ time we’ll all be sitting here and the reports cost hundreds of thousands for these large entities to do—and, no doubt, the Government will extend the mandate beyond that—and they will just grow without any clarity, because as people do more and more, they’ll get deeper and deeper and they’ll cost more and more and they’ll take longer to do.
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I probably should have also repeated my other point that while the External Reporting Board standards will be principle-based, guidance will also be issued. That’s the point of having the consultation: so that clear guidance can be issued to companies.
ANDREW BAYLY (National—Port Waikato): So I suppose my last point is: the rush to get this legislation out—no doubt, I suspect it is because the Hon James Shaw is rushing off to a climate change conference overseas—I’m just a little bit surprised that there hasn’t been more thinking and preparation for the introduction of this bill. We’ve got some serious issues. One is that we don’t even know what the requirements are of who will be an assurance practitioner. Secondly, there is probably a lack of clarity around the standards and how they will be applied. And we’ve just voted down the Hon Todd McClay’s Supplementary Order Paper to extend and provide more time to enable those firms to get appointed, understand their liabilities and put it in place. So, I suppose, is that correct? We are going into a bill that is going to rip through this House today and, very shortly, in the next couple of days, without enough clarity around some of those key aspects?
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I propose not to debate the points that refer to Part 1 of the bill that the member continues to raise, because we have already voted on Part 1 and he has raised those points several times before. I believe they have been well rebutted. But for the sake of the record, let me say I acknowledge that he is raising those comments again, and I refer him to my previous answers on the assurance providers. We’ve just had the debate about the principles and discussed that there’ll be guidance issued. I’m happy to respond to any new material the member might want to raise.
BARBARA EDMONDS (Associate Whip—Labour): I move, That the question be now put.
Motion agreed to.
Part 2 agreed to.
Part 3 Amendments to other Acts
CHAIRPERSON (Hon Jacqui Dean): We now come to Part 3, the debate on clauses 36 to 43 and Schedule 3, “Amendments to other Acts”. The question is that Part 3 stand part.
Part 3 agreed to.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendment to Schedule 1 set out on Supplementary Order Paper 63 be agreed to.
Amendment agreed to.
CHAIRPERSON (Hon Jacqui Dean): The Hon Todd McClay’s amendments to Schedule 1 set out on Supplementary Order Paper 67 are ruled out of order as inconsistent with a previous decision of the committee.
Schedule 1 as amended agreed to.
Schedule 1A agreed to.
Schedule 2 agreed to.
Schedule 3 agreed to.
Clauses 1 and 2
CHAIRPERSON (Hon Jacqui Dean): We now come to our final debate, clauses 1 and 2. This is the debate on the title and commencement. The question is that clause 1 stand part.
Clause 1 agreed to.
CHAIRPERSON (Hon Jacqui Dean): The question is that the Hon Todd McClay’s amendments to clause 2 set out on Supplementary Order Paper 65 be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 43
New Zealand National 33; ACT New Zealand 10.
Noes 75
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.
Amendments not agreed to.
Clause 2 agreed to.
Bill to be reported with amendment.
Bills
Regional Comprehensive Economic Partnership (RCEP) Legislation Bill
In Committee
CHAIRPERSON (Hon Jacqui Dean): Members, we now come to the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill.
Barbara Edmonds: I seek leave for all questions to be taken as one debate.
CHAIRPERSON (Hon Jacqui Dean): Leave is sought for that purpose. Is there any objection? There is objection.
Part 1 Amendments to Customs and Excise Act 2018
CHAIRPERSON (Hon Jacqui Dean): Part 1, this is the debate on clauses 3 and 4—
Barbara Kuriger: Point of order. Sorry, Madam Chair, I’ve just clarified on what I was told before, but we will take it as one question, thank you. We don’t object anymore.
CHAIRPERSON (Hon Jacqui Dean): So, leave is sought for that purpose, is there any objection? There is none.
Parts 1 to 3, and clauses 1 and 2
CHAIRPERSON (Hon Jacqui Dean): The question is that Parts 1 to 3, and clauses 1 and 2 stand part.
Hon MEKA WHAITIRI (Minister of Customs): Can I just start by thanking all those engaged in processing the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill so far: from members of the Foreign Affairs, Defence and Trade Committee, members of Parliament, and the civil society and business representatives. Your engagement has been a very critical part of this process.
It’s no secret that the international trading regime is under enormous pressure, a trend that has intensified as a result of the COVID-19 pandemic. New Zealand businesses, and exports in particular, have been facing challenging times, but we have also seen how resilient they have been. Our Government recognises how important it is to support these businesses, and RCEP is part of that. It is an agreement which reduces trade barriers, facilitates trade, and provides new market access. RCEP is important in supporting our trade-led recovery from COVID-19. RCEP is also critical to our engagement internationally. Joining RCEP ensures that we will be at the table where decisions affecting our interests will be taken and it reinforces our place in the region and sends a very important signal of New Zealand’s continued openness to trade and the importance of rules-based trade. Most of the obligations under RCEP are met through New Zealand’s existing legal frameworks and policy regimes. The RCEP bill makes a small number of legislative amendments that are needed to ratify RCEP.
The bill was introduced in the House on 4 May 2021 as an omnibus bill that amends the Tariff Act 1988, the Tariff, and the Customs and Excise Act 2018. Broadly, the bill will enable the application of preferential tariff rates under RCEP. It will enable the application of transitional safeguard measures under appropriate circumstances on imports originating from RCEP parties and the issue of New Zealand certificates of origin in respect of goods for export to the RCEP parties. RCEP will also be implemented through regulations which will amend the Tariff to enable the application of preferential tariff rates for imports originating from RCEP parties and the Customs and Excise Regulations 1996 to give effect to the rules of origin applicable to imports into New Zealand that originate from RCEP parties. The Foreign Affairs, Defence and Trade Committee extensively examined the bill and received submissions from the public, civil society, and business representatives. The select committee recommend that the bill proceed without any amendments.
So why is it important that we are ratifying RCEP? Firstly, it is a mechanism to create new opportunities for international trade for New Zealanders, contributing to and improving the wellbeing and living standards for all New Zealanders. Although RCEP does not offer the same level of tariff liberalisation as some previous free-trade agreements, bringing the broader region into a single rulebook covering all 15 markets will significantly reduce complexity and therefore compliance costs for exporters. This is a substantial achievement. Services investments are where big gains will be made, but there are also advancements in addressing non-tariff barriers. As the Minister of Customs, I must also highlight the benefit RCEP brings through enabling trade behind the border. This includes setting expectations for perishable goods like our seafood to be released within six hours of its arrival, even when outside the usual business hours of customs administration. These procedural changes will create a significant benefit for New Zealand’s perishable goods exporters. These trade benefits are material. About half of New Zealand jobs are from the tradable sector, and independent modelling predicts that once the agreement is fully in effect, New Zealand’s annual GDP will be between 0.3 percent and 0.6 percent larger as a result. That amounts to $1.5 billion to $3.2 billion in annual GDP.
But RCEP’s importance is more than what it achieves in terms of outcomes for our economy. It demonstrates New Zealand’s commitment to cooperate with other trading economies, our commitment to ASEAN and to the wider Indo-Pacific region. RCEP demonstrates even in challenging times that Governments are able to come together, make compromises, and strike deals that will lift each other up. RCEP is more than a sum of all its parts.
So in closing, RCEP demonstrates that New Zealand does not pursue trade cooperation just for its own sake. RCEP will enable future cooperation between RCEP parties across trade and economic matters and it preserves the rights that New Zealand holds close: the right to regulate for legitimate public policy purposes and to uphold our Treaty of Waitangi obligation. This bill will enable New Zealand to ratify RCEP, be part of the agreement, and to see the benefits from it.
NICOLA GRIGG (National—Selwyn): Thank you, Madam Chair. Can I acknowledge the Minister for the role she has played with her customs portfolio. Obviously, it will have ongoing importance to future trade deals and the trade of goods and services.
The Minister has acknowledged the importance of trade to New Zealand, and we know over 600,000 jobs are directly involved and we can feed and clothe 40 million people around the world so it’s essential we do have deep and enduring trade agreements around the world in order to get that product to markets; we certainly can’t eat and wear it all ourselves.
To the Minister, this Government, through this COVID response, our debt is looking at about $100 billion and climbing. The Minister’s talked a little about the economic impact that the Regional Comprehensive Economic Partnership deal will have on New Zealand economy, but I’m sure that any traders, exporters, producers, and manufacturers sitting and potentially listening to this—I’m sure they’ve got better things to do, but just in case they are—could you give some more details?
In a Government statement it said that this agreement would create more market access opportunities, especially for services and investment into China and ASEAN members’ states. Minister would you please give us some details on those, and what does the Government mean, exactly, by “less red tape for exporters and more streamlined trade”?
Hon MEKA WHAITIRI (Minister of Customs): Can I thank that member for that question. In the opening remarks, obviously with most trade agreements, and which the Regional Comprehensive Economic Partnership is doing, I do understand that there are 14 parties to this agreement. There are some bilaterals that already exist with them, but your specific question around how, I’m looking to my official so that I can actually answer that question, so could I please come back to that member with some more specificity—as far as I can—around the opportunity. Specifically, I think you’re asking around with China, I think that’s right, so if you would bear with me, I will ensure that I come back and answer that more appropriately.
NICOLA GRIGG (National—Selwyn): Would the Minister agree with the sentiment expressed by former Minister for Trade, my colleague, the Hon Todd McClay, that we are only as good as the last deal we signed, and is it the Minister’s view that the Regional Comprehensive Economic Partnership is as good as it could be?
Hon MEKA WHAITIRI (Minister of Customs): Thank you, again, to that member for that question. Absolutely, and I think in my opening statement I talked about the coming together of 15 parties in a region that is really significant to New Zealand. I think we shouldn’t underestimate the importance of getting 15 parties to agree. Of course, there were opportunities, as advised in reading the report back from the select committee, where there was more push from our end and, obviously, we didn’t get exactly what we wanted. I would draw member’s attention particularly around the environmental chapters, which I think we pursued.
But your questioning around opportunities, of course, like with any trade agreements—this is first step. We’re presenting this legislation so we then can pursue the opportunities that it will unlock. It’s a bit like saying, “How long is a piece of string?” I think we all agree that trade agreements are really important for our producers here in New Zealand, and I’m pretty sure that we can, perhaps—in my opening speeches, I talked generally about growth to GDP of somewhere between, I think, $1.5 billion and $3.2 billion per annum in GDP. So that’s where the benefit’s going to lie for exporters. And, like I said, I’m sure we can push those opportunities further once this agreement is ratified through this piece of legislation.
NICOLA GRIGG (National—Selwyn): To the Minister, I’m sure our sheep and beef producers sitting at home would want to know about market access tariff reduction quotas. Can the Minister please give some detail around what actions the Government is taking to promote the growth of New Zealand’s agricultural sector, and can you break down that promoted growth in market for dairy, horticulture, red meat, fish, and wool that this Regional Comprehensive Economic Partnership agreement will enable?
Hon MEKA WHAITIRI (Minister of Customs): Again, a very good, detailed question. I think the bill that we are presenting—I’m presenting—to this House for ratification, for agreement, obviously, addresses or enables our exporters to pursue additional markets to what we currently have. I think the question that the member’s posed about specific sectors, had I had those questions in advance, more than happy to have provided that to her. But this bill will enable, like I said in my introductory comments, the opportunity for our producers, be it in the red meat sector, be it in our seafood sector, be it in our forestry sector, to explore and pursue more markets through this agreement. But in terms of specificity, I think the bill touches on enabling that. I don’t have the figures in front of me, but I do know that we are investing and working very closely with the sector that she has mentioned.
NICOLA GRIGG (National—Selwyn): The bill acknowledges an approximately 97 percent reduction in tariff elimination, but it doesn’t give much detail around the 3 percent where there isn’t an eradication of tariff. Can the Minister please outline what that will encompass, who it will impact, what products, and what is the lost opportunity to New Zealand exporters?
Hon MEKA WHAITIRI (Minister of Customs): I have got some responses around the earlier question—and I’m sorry I’m going back to your earlier questions around market access, examples of what can be achieved for some of our exporters. Can I just report back to the House and that member that one of the examples is that New Zealand goods exporters to Indonesia will see tariff elimination on a number of primary products, including sheep meat, beef, fish, liquid milk, cheese, honey, and avocadoes. So the earlier question that the member—some specificity around helping our producers in those areas.
In terms of investment, under the Regional Comprehensive Economic Partnership (RCEP) a number of parties will provide investment market access commitments to New Zealand for the first time, in particular ASEAN countries that are not party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and China, and RCEP will reduce barriers to investment and facilitate the navigation of complex regulatory systems by establishing a consistent framework and a single set of rules for the RCEP region. And like I said earlier, bringing 15 countries and having a single agreement I think will be beneficial for our New Zealand producers as we grow our markets internationally and particularly with these 14 other countries.
NICOLA GRIGG (National—Selwyn): So therefore, what actions is the Government taking to encourage India to rejoin and what meetings or communications has the Minister had with other RCEP trade Ministers on this topic?
Hon MEKA WHAITIRI (Minister of Customs): To that member, as you will see in the report-back to the House by the Foreign Affairs, Defence and Trade Committee, unfortunately India did leave the discussions. But what I can report to that member and the committee is that the door is left open for India to return should it wish, and an obligation, as I understand—reading the advice I’ve got—to facilitate a fast-track of India’s return should they choose to come back into the agreement.
Hon TODD McCLAY (National—Rotorua): I thank the Minister in the chair, Meka Whaitiri, for her response in as far as India is concerned, but is she aware that New Zealand wine exporters to India can pay hundreds of percent in tariffs over the export price? Our kiwifruit producers that want to sell Kiwifruit into India pay a very, very high tariff. Does she think it’s good enough to New Zealand producers to say, “Well, India left—it’s a shame, but the door’s still open to them.” Is that what she means by the Regional Comprehensive Economic Partnership (RCEP), that New Zealand’s trade policy now is: where a country doesn’t want to talk to us, they can come back if they want to, but in the meantime our exporters actually are not competitive in those markets and they can’t do well? If that’s the case, this would be one of the worst trade policies this House has ever seen.
Hon MEKA WHAITIRI (Minister of Customs): Remiss of me to say that we continue to engage with India on our aspirations to improve the economic and trading relationship at a bilateral level. So we have not departed from engaging with India. I can report that the Indian Government has been signalling in recent months, in line with its self-reliance campaign launched in May 2020, that it will prioritise partnerships and in the long run grant preferential market access to those partners making significant contributions to its development, including through foreign direct investment. As such, key New Zealand companies in India have been exploring how New Zealand can expand its investment footprint in India. Like I said, the door for bilateral agreement remains open should India choose to remain outside the RCEP.
NICOLA GRIGG (National—Selwyn): Just to the Minister, again, further to my previous question, as I don’t know whether it was covered. Outside of any discussions with other regional comprehensive economic partnership trade Ministers, what direct communication is the New Zealand Government having with India to advance a free-trade agreement?
Hon MEKA WHAITIRI (Minister of Customs): Madam Chair, let me just get the answer to that question momentarily, please.
CHAIRPERSON (Hon Jacqui Dean): Sorry to interrupt the member, but the time has come for me to leave the Chair for the dinner break. This debate will resume at 7 o’clock this evening.
Sitting suspended from 6 p.m. to 7 p.m.
NICOLA GRIGG (National—Selwyn): Thank you, Mr Chair. To the Minister in the chair, Meka Whaitiri, just a resumption of the questions prior to the dinner break, if you wouldn’t mind. I was just reading through an ANZ benefits analysis of the Regional Comprehensive Economic Partnership (RCEP) agreement, and it reports that the manufacturing sector will be worse off. I just wondered what knowledge the Minister has of that assessment, and could you outline any details for any mitigation plans?
Hon MEKA WHAITIRI (Minister of Customs): To the member that’s just resumed her seat, and through the chair, I think I’ve indulged the member prior to the dinner break in terms of her questions going outside the gambit of the bill. The bill has three parts, the title, and the commencement. I am more than happy to answer questions that relate to the bill in terms of the three parts, the title, and the commencement, and I look forward to the member’s questions in relation to the bill.
NICOLA GRIGG (National—Selwyn): To the Minister, then, could you please detail the reduction of non-tariff barriers—which member States and on what products?
Hon MEKA WHAITIRI (Minister of Customs): As I said in my opening remarks, I described what this piece of legislation is attempting to do, which includes reduction of some tariff barriers to member States who sign up to this. It also, in terms of preferential tariff rates—I’ve also mentioned transitional safeguard measures under appropriate circumstances. I’ve also mentioned the issue of New Zealand certificates of origin in respect of goods for export to the RCEP parties. I’ve also indicated that through this piece of legislation—the implementation through the legislations, which will amend the tariff to enable application for preferential tariff reports for imports, and I’ve also indicated the amendment to the Customs and Excise Act 2018 to give effect to the rules of origin. I think, in my opening statement, I have addressed those questions.
NICOLA GRIGG (National—Selwyn): To the Minister, my understanding is when this bill is passed, we will be the sixth member State to ratify this agreement. Could the Minister outline her understanding of what progress is being made by Australia and South Korea towards ratification?
Hon MEKA WHAITIRI (Minister of Customs): I understand that in the bill we indicated, as discussed at the Foreign Affairs, Defence and Trade Committee, the commencement date, which goes to the heart of the question around particular countries that are part of this agreement. We suggest that it goes in Order in Council, simply to recognise that different countries will be at different timelines in terms of utilising their domestic processes. And so, in terms of the countries that we have got signed up and countries that are still working on their internal ratification processes, I am more than happy to get that note from officials and give that to the member.
NICOLA GRIGG (National—Selwyn): To the Minister, could she outline the Government’s programme of works to enter into force this RCEP agreement?
CHAIRPERSON (Adrian Rurawhe): Members, the question is that the Minister’s amendment to clause 2 set out on Supplementary Order Paper 71 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 108
New Zealand Labour 65; New Zealand National 33; ACT New Zealand 10.
Noes 10
Green Party of Aotearoa New Zealand 10.
Amendment agreed to.
A party vote was called for on the question, That Parts 1 to 3 and clauses 1 and 2 as amended be agreed to.
Ayes 108
New Zealand Labour 65; New Zealand National 33; ACT New Zealand 10.
Noes 12
Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.
Parts 1 to 3 and clauses 1 and 2 as amended agreed to.
Bill to be reported with amendment.
House resumed.
Report of Committee of the Whole House
Report of Committee of the Whole House
CHAIRPERSON (Adrian Rurawhe): Mr Speaker, the committee has considered the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill and reports it with amendment. The committee has also considered the Regional Comprehensive Economic Partnership (RCEP) Legislation Bill and reports it with amendment. I move, That the report be adopted.
Motion agreed to.
Report adopted.
Bills
Mental Health (Compulsory Assessment and Treatment) Amendment Bill
Second Reading
Debate resumed from 30 September.
TANGI UTIKERE (Labour—Palmerston North): Fakaalofa lahi atu, Mr Speaker. Thank you. I rise to take a call on this bill. As a new member of the Health Committee, I have to say that I entered at the time when deliberations in terms of finalising the select committee report were taking place. However, fundamentally, what this bill does do is, in essence, it eliminates the need for—and practice of—indefinite treatment orders, which I think is actually a really good thing. I think all members of this House will suggest that as well, because, fundamentally, this piece of legislation deals with a number of vulnerable individuals and members within our society.
There is one particular part of this bill that I do want to reserve my comments for, and it relates to the ability for notices to be served and for communication and hearings to take place by way of audiovisual link (AVL). This bill does remove the sunset clause that exists for that particular provision. While, I guess, like other members in this House, I’ve had an experience in terms of conducting hearings via AVL, they can be very efficient and, indeed, in certain circumstances they can be very appropriate, but the existing law as it currently stands in this particular field actually does not allow for patients in terms of whānau support and encouragement to be supported. So the changes outlined in this proposed piece of legislation do, in actual fact, introduce a sense of flexibility to allow exactly that.
It’s worth noting through the deliberations and questions from officials—and I want to thank the officials for their advice to the select committee. They mentioned that justices of the peace do fulfil some role in some circumstances, often because some individuals simply don’t have the whānau support that’s available to them. But ensuring that this provides for the capacity and, indeed, the capability to have whānau alongside vulnerable members of our community actually means that this field, this practice, is moving in a positive space. So, while that’s one component of the bill, I think it’s indeed a very important one, and I commend it to the House.
IAN McKELVIE (National—Rangitīkei): Got to get these [Struggles to remove face mask] off without losing my hearing aids, Mr Speaker—
SPEAKER: I know the problem.
IAN McKELVIE: —because they’re worth a lot more than what you pay me! If I can get it off—ha, ha!
SPEAKER: Yeah, I don’t have the specs—
IAN McKELVIE: You’d sympathise with me, no doubt, Mr Speaker.
SPEAKER: You don’t need to listen to yourself, I find.
IAN McKELVIE: Ha, ha! Well, that’s a very interesting point, because, of course, God gave us two ears and one mouth so that we can hear twice as much as we can speak. That’s a famous old saying.
It gives me a deal of pleasure to take a very short call on the Mental Health (Compulsory Assessment and Treatment) Amendment Bill, second reading. It’s a bill that I didn’t sit on the select committee of—haven’t sat on the Health Committee, I don’t think, in my time in Parliament, so an interesting little issue for me to deal with. But, none the less, mental health really, for electorate MPs, and for all of us, in fact, is an extraordinarily, I guess, testing issue, because in New Zealand, for a number of years now, we’ve struggled as a country to come to grips with how we manage many issues round mental health. This Government came to the Government benches in its first term in Government with a promise, I guess, to fix this issue, and they found it more difficult than most, as, indeed, a lot of Governments have. So the issues that come to us through our electorate committee are directly related to a lot of the issues that are proposed in the course of this bill.
It’s a bill we support, but, interestingly for me, the critical issue in this bill is how you get into the mental health system and how you get out of it, I guess. It’s a real challenge, I think, for people in the mental health area, for people who are operating our mental health facilities, and for people who need to access those facilities. If you think about the fact that currently in New Zealand, many people enter the mental health system via the police, which I think is extraordinarily unfortunate because we should have ways of identifying the challenges that these people face and being able to get to them and manage them in a much better manner than we have—and this bill sets out to some extent to try and achieve that.
I think, from that perspective, any progress is good progress. But, of course, the real issue we’ve got in this sector is getting, as we have in many other sectors in New Zealand at the moment, and particularly in the health sector, people who are competent and able to deal with the issues that the mental health and those types of—what would you call them?—issues that are caused by mental health challenges raise, and to get the people that are able to deal with those and manage effectively those patients in a 24-hour-a-day manner. Whether they’re in a facility or whether they’re out in the community, they certainly need to be managed and looked after. It’s a great challenge for us as a country and a challenge that this bill at least starts to, I guess—what would you call it?—address. So, with those few words, I’m happy to say National supports this bill.
SARAH PALLETT (Labour—Ilam): I have earrings to contend with, not hearing aids, so thank you, Mr Speaker. I rise to speak on the Mental Health (Compulsory Assessment and Treatment) Amendment Bill. I was a member of the Health Committee, which worked hard on this piece of legislation, and I just want to take a second to add to the thanks of my colleague Mr Utikere to thank the ministry officials and clerks of the committee for all their hard work. I’d also like to thank the 53 submitters, and 15 of those we heard from orally, some of whom have actually been subject to indefinite compulsory treatment orders themselves, so their bravery in coming forward can’t really be understated. So I would like to just acknowledge and thank them.
Of course, one of the key amendments of this bill is the elimination of indefinite treatment orders, which are widely seen to be a significant breach of human rights. Instead, we will be requiring that those are reviewed every 12 months, and that will go some way towards addressing these concerns. Another small amendment I’d just like to quickly nod to is the concerns that were raised by submitters that audiovisual link technology would be seen as the default mechanism and might be used to alleviate pressure on services when staff resources are limited. This has been addressed in this bill, and we’ve also required that reporting will be taking place to the director of mental health services—yes, I’m just checking that I’ve got that correct. I would like to just end by commending this bill to the House. Thank you.
HARETE HIPANGO (National): Thank you. I rise as the last speaker for the National Party, in support of the second reading of the Mental Health (Compulsory Assessment and Treatment) Amendment Bill. I did not sit on the Health Committee for this, but I am able to speak premised on having served as a mental health lawyer and also a district inspector appointed under this Mental Health Act.
However, it is interesting how, over the course of time, things eventuate. When I was a candidate for the National Party prior to the 2017 election, I went along to the review that had been led by Ron Paterson, who was a former law professor of mine, was also a former commissioner for health and disability, and he happened to lead the review where their report, He Ara Oranga: Report of the Government Inquiry into Mental Health and Addiction, was released to the public in November 2018. Members of the House, and also those who in the public may be listening in, this amendment bill is a consequence of that review.
The first reading of this bill was on 6 April this year. The second reading commenced on 28 September, and it happened to come before the House at the time when it was the week for mental health. People were speaking about the impact of mental health on our lives, particularly focused on that week, but we know that mental health is not just something that occurs once a week every year; it is a daily incursion for many people, and for many it is also an affliction. During these COVID times, what isn’t reported, and it will prevail and play out in time, is the impact of what has happened with COVID on people’s lives and the mental health consequences that will flow on from that.
The purpose of the amendments in this bill are intended to improve the protection of individual rights and the safety of patients in the public. The bill had been drafted, and, after the first reading, it went before the Health Committee, where there were 53 written submissions and 15 oral submissions spoken to from people’s experiences. Not having had the privilege of listening to that, I have had the privilege of engaging with people who have lived with mental disorders and afflictions for a good part of their life. My job as a servant in the legal forum and arena was to advocate and represent the mental health patients, and then that, in time, transitioned to being what was called a “district inspector”, where the requirement of district inspectors as lawyers was an oversight view to ensure legal compliance with the law. That is touched on, in part, by the amendment to this in terms of reporting—the reporting provisions and the transparency of ensuring that there is accountability in what comes about by way of these amendments.
The amendments, as had been outlined by Minister Little when he addressed the House at the second reading, is that the bill proposes to amend the key factors of eliminating indefinite treatment orders. Now, when we talk about indefinite treatment orders, those are compulsory treatment orders, where the patients are compulsorily, as opposed to voluntarily, detained in a mental health facility. The sequence was that an application would be made and, if the evidence was in support of establishing a mental disorder under the requirements of the Act, an order would be made for an initial period of six months, it would come back for review, and then would have another six months if the court was satisfied based on the clinicians’ evidence, the psychiatric evidence, that a compulsory treatment order was required to sustain for another six months, then after that it would go into an indefinite period of time. This law will ensure that there is accountability by requiring that it is a definite period of time of six months plus six months plus 12 months, not indefinitely.
In the day, again, for the practitioners of mental health, if we were seeking that indefinite status to be dispensed with, it would require an application for what was called a “section 76 review” under the Act. However, that would seldom, not often, occur, because the patients who were under the affliction of a mental disorder were struggling on a day-by-day basis just to cope with living, and the last thing on their mind was to apply for a dispensing of that compulsory treatment order. So this amendment to the Act will go about dealing with that.
There is also a provision there that deals with minimising the risk of harm for the transportation of special patients. A special patient is a patient who has been deemed legally by the court as not meeting the mental competency, and therefore are deemed to be either unfit of mind and not having the legal propensity to be able to make decisions—deemed otherwise insane. Those special patients are always placed into what is called the criminal section of a mental health unit, which is the forensic unit. So this deals with the transportation of the forensic patients who are special patients, from the facility that they are detained in to the court arena for the hearing. It deems that the contracting of the transportation can be to another Government agent—often those will be corrections officers or police who are trained in it—where our health service providers are compromised by time to be able to do that.
Another amendment, of course, is removing the sunset provision, which is deemed a technical amendment, which had been imposed during the COVID-stricken times for the hearing of these mental health matters to be not by physical presence but by the audiovisual links. So these are practical amendments that are being proposed within this bill.
It is interesting, also, that the bill, as had been drafted, presented to the Health Committee on scrutiny, and after hearing submissions from those persons who have been affected by the imposition of the Mental Health Act, giving their contribution that is relevant, the Health Committee decided also to make some adjustments to the bill as had been drafted and presented to them. So that has been outlined by a report that had been submitted by the select committee to the House. And, again, that touches on the use of audiovisual links, the practicality of that for patient assessments and for any court determinations.
The member across the House talked about, in other jurisdictions, the fact that AVLs—the audiovisual links—have become a matter of standard practice now in this day of technology, where there may be bail applications heard from counsel on behalf of prisoners who are no longer required, subject to certain circumstances or conditions being satisfied, for them to be transported out of town to a court house. The audiovisual links are a practicality and they facilitate the application and the due process of the law that meets with the needs of the person who is required to make those appearances and be accountable to the courts. So there are those practicalities.
The Health Committee also talked about the monitoring of the use of that, with requirement of reports to the director of mental health. It hadn’t been touched on in the select committee that that is what the lawyers appointed to the specialist role as district inspectors—our role was to go into the mental health units. I travelled to most of the mental health units within the North Island, and our purpose was to ensure legal compliance by the health practitioners and psychiatrists, with the detention of the mentally disordered patients, and that we would report any anomalies or inconsistencies. So the Health Committee has reported the requirement that this would be covered by the directors of area mental health services and also the director of the Ministry of Health. But just to say that these are areas that district inspectors will look out for, and that is what they are required to do.
So this is an appropriate bill before the House, as I say, supported by the National Party. We are a party that recognises due process and the importance of addressing the needs of our vulnerable within the community. It is very fair to say, endorsing my colleague Ian McKelvie, that mental health and our people who are afflicted by that has become more of a regularity in these COVID-stricken times, and this proposed law, and amendment, is practical, it makes sense, and, in saying that, I totally support and commend the bill to the House.
Dr LIZ CRAIG (Labour): Thank you, Mr Speaker. One of the most important recommendations arising out of the Government’s inquiry into mental health and addiction was that New Zealand’s mental health Act, which is now about 30 years old, be repealed and replaced, and be replaced with something that reflected modern approaches to human rights - supported decision-making and informed consent. The issue is that given the complexity of these issues, it’s important that we take the time to get this right, but there are a number of issues that we do need to address now, and this bill makes a number of these changes.
One of the most important is eliminating indefinite treatment orders, because I think these are seen widely as a serious breach to human rights because people can be detained indefinitely without access to the justice system. Basically, what the bill does is it requires courts to review the treatment orders every 12 months, and, certainly, the majority of submitters that discussed this when they presented their submissions to the Health Committee were in support of this change.
One of the other important things it does is it makes permanent some of the changes that were brought in in response to COVID-19, and one of those was the use of audiovisual (AV) technology for making patient assessments and examinations. Basically, this legislation is due to expire shortly, but it’s really important that we continue it because I think it’s important for where the physical presence of a patient is not deemed to be practicable. But a number of the submitters raised concerns about the fact that if you just have a default of audiovisual technology, that may mean that many people miss out on some of the benefits of an in-person examination, and so what we’ve put in as a select committee is just a number of protections wrapped around that. So the first one is that practitioners actually have to record why it wasn’t practicable for the patient to be physically present, and then, secondly, is that if you’re going to be using the AV technology, then you need to report back to the director of area mental health services. In that way, we can actually, as a country, keep an eye on the use of AV technology and detect any trends if there are any concerns.
So this is a really important first step in ensuring that our mental health legislation is fit for purpose, and I commend this bill to the House.
Motion agreed to.
Bill read a second time.
Bills
Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill
Second Reading
Hon JAN TINETTI (Minister of Internal Affairs): I present a legislative statement on the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill to the House.
SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon JAN TINETTI: I move, That the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill be now read a second time.
That’s a very long title, Mr Speaker, of this bill, and I hope that you forgive me for just reading this first part of my speech so I don’t get that title wrong. This bill amends the Films, Videos, and Publications Classification Act 1993, also known as the Classifications Act. I think that title I like better, being able to say it. It does make really important changes that come as a direct response from the atrocities of the March 15 Christchurch mosque attack, where it became really clear that our legislation needed quick improvements to protect New Zealanders from objectionable material, such as the terrorist attack being livestreamed online. Prior to this time, the actual act of livestreaming wasn’t illegal.
The bill updates the Act to take urgent steps to prevent and mitigate harms being caused by objectionable publications. The objectives are to ensure that the Government and internet service providers and online content hosts can swiftly and consistently take action against objectionable material. Now, I need to be clear that when I say “objectionable”, this is already referring to a legally defined category of content, which is already defined in our primary legislation. This is the worst type of material that is already illegal in New Zealand. It includes child exploitation material and violent extremist and terrorist content. Now, the bar for determining objectionable material is already extremely high, and it is the job of the Chief Censor to apply the legal test. In that legal test, the Chief Censor already takes freedom of expression considerations into account. Once a publication is deemed objectionable, it is illegal to possess the content or distribute it; that already exists in law today. I say that because people have got that confused, that this bill was about redefining that definition that exists in current law; it doesn’t. We’re talking about something that already exists in law.
Since the bill has been at select committee, we have made some significant improvements. Firstly, I said in my first reading speech that I had reservations about the way that the filtering provisions in the bill had been drafted, but I wanted them to go through to select committee to see what submitters were presenting at select committee and to see if improvements were being made. It became clear to me, from the select committee submissions, that there was a high level of concern around the filtering provisions and how they would work. So both the select committee and Cabinet agreed to my recommendations to remove new sections 119L to 119O and all references to the electronic filter, including the regulations in the bill. Given the purpose of this bill was to enable the swift response if another attack or another incident, such as livestreaming of a terror attack, were to occur, I think that what the select committee has sent back for this second reading now creates a really good place that we have landed, and that means that we will be able to act effectively and efficiently without the use of an electronic filter system.
I’d like to take a moment to thank the Governance and Administration Committee for their work and their careful consideration of this particular bill and the valuable improvements that they have made and recommended for it. I’d also like to thank the 163 submitters who gave careful consideration to this bill, but particularly those who made oral submissions on it. Overall, I feel that the work that was done in the select committee by the members, but also those submitters, has added to the bill and made it very much stronger. They’ve made some sound recommendations to improve the bill, inserting clause 5C to add a new section 14A to the principal Act. This amendment would provide a process for online content hosts to submit online publications for classifications. It would provide more clarity to the process for online content hosts, as currently they are not specified in the Act.
The majority of the remaining recommendations that the committee suggested clarified existing provisions, increased transparency, or were technical in nature. But there are a couple that I’d just like to highlight here today. The first one is around the “safe harbour” provisions. When the bill was first introduced, it included a provision intended to ensure that online content hosts were held liable under the Films, Videos, and Publications Classifications Act 1993 where they had knowledge that objectionable content was being hosted on their platforms and refused to take this down. In order to achieve this, the bill recommended removing those “safe harbour” provisions that were under the Harmful Digital Communications Act 2015 for online content hosts. Those provisions do provide protection to online content hosts from liability when illegal content is posted on their platform without their knowledge, providing they take certain steps set out in the Act.
Following the submissions on this clause, it was acknowledged that a blanket removal of the “safe harbour” provisions would lead to unintended consequences, and that it’s not appropriate for platforms to be held responsible for content that is uploaded or shared on their platform that they have no knowledge of. So the select committee and the officials agreed that the removal of the “safe harbour” provisions should only apply in instances where it is subject to a take-down notice and where knowledge of the element is met. So a take-down notice would specify the material that is objectionable and require it to be removed. So then they would have knowledge of that at that point. It is appropriate and consistent with existing offences in the Act that an online content host becomes liable once they have that knowledge that they are hosting objectionable content and refuse to take it down. It gets a little bit confusing, but it’s about the fact that they then know and have that knowledge, and if they refuse to then take it down after having the knowledge, then they become liable.
The bill provides safety for New Zealanders and certainty for content providers with the new ability of the Chief Censor to make interim classification assessments in urgent situations for content that is likely to be objectionable. This means that the public will know as soon as content is found to have the potential to cause significant harm. It also means we will be able to move faster on content, as enforcement agencies and online content hosts will have the legal certainty they need to remove objectionable content. So, unlike other jurisdictions, we’ve had to rely on voluntary requests to remove illegal online material. This bill now will use authorised inspectors, who will be able to then issue take-down notices. So we’ll be moving from a voluntary regime to now having inspectors, who will be able to issue those take-down notices for online content hosts to remove objectionable material on their sites.
I’d also just like to signal, before I conclude my speech, that I am giving notice of my intention to table a Supplementary Order Paper (SOP) at the committee of the whole House stage. All this SOP will do is amend the commencement date of the bill, which has since passed.
So, finally, I would just like to say that this bill is about fundamentally protecting New Zealanders from harm that we know viewing objectionable content online can cause, and I commend this bill to the House.
SPEAKER: The question is that the motion be agreed to.
BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Speaker. It was a pleasure to be the chair of the Governance and Administration Committee as we worked through the submission part of this bill. I’ve now handed over the chair of that committee to the very able Mr Ian McKelvie, who I’m sure will do a great job on the rest of the work that needs to be done on this bill. But I really did very much enjoy working on this bill because it started, as Minister Tinetti just said, with a very abhorrent event that happened in New Zealand, which we all said would change who we were in New Zealand and change things forever. We’ve had a number of things that have actually changed people’s lives, but none of them were as deliberate and as abhorrent as that one. So this bill is catching up with the technology.
So, as the Minister said, the objectionable—and that was one of the first things that we worried about: what is objectionable? Because there are people that are offended by things that other people might not be offended by. So we had all those questions that we asked, but “objectionable” is defined in the law, and it is an extremely high bar. Nobody would say that what happened on March the 15th 2019 wasn’t objectionable. So the Minister laid out very well what the bill was intended to do and some of the changes we made. I just want to, at this point, acknowledge Minister Tinetti, because I always admire a Minister that sees a problem in a bill and makes some changes to do something about it. As the Minister said, the filter was causing a huge problem. We were concerned about it. We can now support this bill. We couldn’t support this bill in the first reading because people were really concerned about the filter and that actually came through in the select committee process from the majority of the submitters that were concerned about it.
The other person I’d like to mention tonight is Melissa Lee. Melissa Lee is our spokesperson for all things digital. Melissa, we haven’t seen in person for two months; we’ve only seen her in digital forums, in little boxes on computer screens. But Melissa was the person who questioned a lot of the detail of technology in this bill, and her knowledge around things digital far exceeds mine.
The other change that’s happened with that select committee is that the member Tangi Utikere was the deputy chair. The Minister mentioned that this bill had a very long name, and I can remember the day that the clerks came to my office with Tangi Utikere and we had to make a video launching the submissions on this bill. They actually ended up holding up a piece of paper with the name of the bill as we sat there and tried to get it out on a video, tried to be natural, talking about the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill, second reading. So, well done, Tangi. I think we did a good job of that video considering the material that we had to work with.
There’s another group that I would like to mention and that is the Department of Internal Affairs (DIA) and the advisers. They were so thorough in the work that they did. We actually went across to DIA, we had some visits, and we were able to sit around a table and talk about some of the things they do over there and how they protect people from online harms. So it really was a great, thorough investigation. It was very much, I think, a joint committee effort, and while we had a very serious subject to deal with, we really enjoyed what we did.
So, as I said before, we had significant concerns about this bill. The removal of the filter has been a massive step for National in being able to support this, because it was the key. Is the bill perfect? Melissa tells me, “No, it could be improved, but it’s way better than what it was.” If Melissa was here, she’d probably be able to explain very clearly in some of the clauses why she feels that way. I’m sure her view is correct because you can always improve legislation post the point that you’ve done it. But will it protect New Zealanders from seeing horrific videos? Yes, it should, and it may. I think the point that we discussed the most was that we may not be able to hide that forever, but it should stop our children and grandchildren from going on Facebook and accidentally picking up their phone and seeing something that they really, really shouldn’t see as those things happen. So, yeah, of course, anyone can find anything if they go looking for it, but it is actually a protection.
So Melissa’s line, I guess, that I’ll put across tonight is while she sees a number of technical inadequacies that may still be in the bill, the view is that the bill will no longer do more harm than good after the removal of the filter. So we really do thank you for that, Minister.
So what it does is it grants the Chief Censor the power to make swift, time limited, interim classification assessments that can have legal effect for up to 20 working days. So that was also a concern of submitters, that once the censor had made the classification, it needed to be time bound because while it’s pretty clear under the law what “objectionable” is, people just needed the guarantee that this was a limited time frame, just in case the censor had done something that wasn’t considered by everybody to be the right thing to do. I don’t think anybody would have disagreed that it would have been, had it been available in March 2019.
So there were 163 written submissions, dozens of oral submissions, and there was a wide group of New Zealanders that participated in this. One of the main reasons that people were concerned about the filter was that they were really concerned that anything that we did in this bill around the filter would have had an effect on their ability to have freedom of speech. And, I guess, that was probably the biggest thing that concerned National at the time as well, because we don’t want people not to feel free to say what they want to say. Of course, that doesn’t need to be hateful and, certainly, we’re really pleased now that we have the ability to stop this.
So, even as we were going through the provisions of the bill, the Chief Censor, David Shanks, had said to us at the time that there was too little detail around how internet filters would be used and too few safeguards around their use. So we even had it from the person who was going to do the job. So, well done, Minister, we respect you for making that choice to change something that you felt wasn’t perfect.
And with that, it may take me the rest of my speech tonight, but I’m going to say that the National Party caucus supports the second reading of the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill. May we never have anything again in New Zealand. Hopefully we make this bill and, hopefully, the Chief Censor doesn’t have too much work to do, because it’s an awful thought that we would be using this bill a lot, but it’s great to be able to capture what happens in this bill should we have another awful event, and we all really hope that doesn’t happen. It’s my pleasure to support this bill on behalf of the National caucus. Thank you.
GLEN BENNETT (Labour—New Plymouth): Kia ora, Mr Speaker. Thank you to the previous member, my colleague Barbara Kuriger for your support and for the National Party’s support. When I came into this House a year ago—today, actually, was my first day here—it was very much around “How do I be constructive? How do we work together for the betterment of New Zealand?” Hearing those conversations that we’ve just had, hearing Melissa Lee’s critique and work, and hearing the hard work of the select committee very much shows me how we can work together and make our nation a better place.
I want to say a thankyou to our Minister of Internal Affairs, the Hon Jan Tinetti, for bringing this piece of legislation forward, and as someone who’s worked for many years with young people, it’s really important to me and for me to ensure that we protect our rangatahi, and, knowing the content that is out there—not even objectionable, but just stuff that’s unhealthy and not good for young minds—I’m glad that we can come to a place where we can ensure that it is an offence to make, possess, supply, or distribute objectionable publications such as this.
For me, I’ve been paying attention over the last few weeks to what’s been going on in America, around Facebook and Frances Haugen, and the fact that they talked about—it really pricked my ears up when they mentioned, “It’s easier to inspire people to anger than to any other emotion.”, and creating anger, creating division is something that social media is an expert at, and we want to stop that. So I’m glad that we’ve made it through to this reading, we’ve had the select committee, and I commend this bill to the House.
IAN McKELVIE (National—Rangitīkei): Thank you, Mr Speaker. Well, I find myself in somewhat uncharted territory again, as the member Barbara Kuriger pointed out, not only uncharted territory but, of course, when I was young, if we wanted to see anything objectionable we had to go to the movie theatre—ha, ha! There was no other way of seeing it because we didn’t even have a TV, and that just shows how the world’s—
SPEAKER: A blue-movie theatre!
IAN McKELVIE: Ha, ha! Oh, I never saw one of those. That just shows, though, how the world’s changed.
And, I guess, the other thing that I’ve observed about how the world’s changed is that when this bill went to the Governance and Administration Committee, I don’t think anyone but the governing party supported it. It’s come out of select committee, certainly, with us able to support it, and I think that’s a tribute to the select committee process, and it’s one you don’t often find happens in this House. I don’t really recall a bill that wasn’t supported at first reading coming back to the House and being supported by an Opposition party in the second reading. So that’s certainly a tribute to the select committee.
As the former chair, Barbara Kuriger, said, Melissa Lee contributed a lot to that. Unfortunately, because of the environment we live in, the three Government members on that committee are locked down in other places than Wellington, and that’s just how it is. So you get to have a whole lot of people speaking on this bill who weren’t necessarily part of the deliberation and all of the hard work that went into getting it to this point. Of course, the only part I played in this bill was actually to be there for the very last part of it. I had no part in anything other than the final deliberation. But we were pleased to be able to support the bill, because, I think, whilst it creates a lot of doubt, and I’ll get into that in a minute, it also does make an effort to deal with what, I think, is one of the most challenging things we’ve got going on today.
I just want to give a bit of an example of that, because we’ve had one or two relatively contentious bills through the select committee in recent times in this House, and it really intrigues me what technology, the internet, and Facebook’s actually done to the way people submit on bills in this House. I think we’re going to have to be very careful in the future how we manage that process, and this bill touches on exactly that point, because the publicity and the public exposure you get through instant streaming of select committee processes, of submissions, and submissions that are made in good faith, often, and the negative comment and the comment that comes almost instantly as a result of those submissions, right in front of our faces and in front of the submitters’ faces, actually, I think, is intimidating people in a manner that I think is completely unacceptable.
I think, if we don’t manage that process—and it’s very relevant to this bill—in the future, we’re going to have people who refuse to submit to this House simply because they don’t like the unfortunate attack, I guess, that takes place—they see it as an attack—on them. And we’ve got to remember that people who submit to this House are not—we put ourselves out there and expect to get a degree of criticism. I don’t think people who come here to submit on things—they come here to submit here in good faith—necessarily expect to get criticised. So I think that’s going to be a great challenge for us in the future, or for this House in the future, as technology makes things that used to take a long while to assimilate through and to get through to a point—it’s instant now, and so people are instantly getting criticised or getting attacked for things they believe in, rightly or wrongly. I think it’s, at times, toxic and highly unpleasant. So I think that we’re going to have to manage that process, as well, as we go through this bill.
So this bill—of course, one of the things that intrigued me was the Chief Censor, who I briefly referred to earlier, because the censor has been around as long as I have. I remember, in the early days of my life, the contentious issue of what the censor cut out of those movies you were talking about, Mr Speaker, before we got to see them. But now, of course, the Chief Censor’s job’s much more complicated, and this bill, again, includes him. But I was really intrigued by the fact that he argued that—and I’ll quote him—“We need to embed in such a potentially powerful tool, fundamental protections around human rights and freedom of expression”. I think that’s the great challenge of this bill.
One of the sections that I think is going to raise some doubt in the future is—if you look at section 119C in new Part 7A, inserted by clause 9, this reinforces my point, because it will be very interesting to see how that is implemented in the future. I think we need to monitor those kinds of things, because the worry that the National Party initially had about this bill was the impediment it could have or imposition it could put on freedom of speech and expression. And I think that those particular clauses in this bill, or sections in this bill, are the critical ones that we’ll need to watch closely what happens, as it’s implemented. I think this topic is a very big topic and needs a lot of discussion going forward. So this bill will be a bit of a test for it in some ways.
I think it’s been said already that the bill is not necessarily perfect. It’s very hard to make it perfect. But I do think it’s one of the real challenges that this Parliament will face in the next few years: how we manage this massive rush and the huge advancement in technology, almost on a daily basis, that enables things that we never would have dreamt of happening a year or two ago suddenly to happen. And so that’s one of the things I think is going to be really challenging for the bill.
The other thing that I think is challenging in the implementation of this bill will be how you judge what’s right and wrong—and I know the Minister said that there was some pretty clear definition around some of that, but there’s always going to be grey areas around what the bill intends to be right and wrong and what actually is judged to be right and wrong, and there’s going to be some personalities come into that as well. So that’s a challenge for the bill as it goes forward, as well.
I think that the select committee has done a pretty good job of this bill given, as I said, that not everyone in the House agreed with it when it started. So I’m pretty confident that going forward it will turn out to be OK. I didn’t have the benefit of sitting on the select committee until, as I said, its deliberation and as it’s reported back. It sort of becomes very clear when you read the bill what a minefield it potentially is. So I think the committee has done a really good job of it. I think we’ll wait and see what the outcome long term of that is, but, none the less, I think it’s a pretty good effort, and I’ve got no problem in commending it to the House, and I look forward to the discussion in the committee stage of the bill.
It’s interesting that the Minister responsible for this bill is responsible for another bill that’s before the same select committee at the moment. I notice a fair few of the select committee got changed before the next bill got to us, but it’s equally as contentious as this one could have been, I’ve got to say. That’s the one I was really referring to earlier when I talked about the divisive nature of some of the comments that are made as a result of what comes into these bills. So I commend the bill to the House.
TANGI UTIKERE (Labour—Palmerston North): Kia orana, Mr Speaker. It’s a pleasure to take a call on this bill, and I do recall, actually, sitting in Barbara Kuriger’s office, and I think we actually did it in two or three takes—getting the name of the bill out—which I thought was OK, but, clearly, this has got to be one of the longest titles of a bill in history.
But I do want to acknowledge the members of that particular committee. I’m no longer a member of it, but I know my colleague the member for Nelson, Rachel Boyack, has taken on the mantle as deputy and will do a fine job there. The bill itself, we did hear from 22 submitters orally and the majority of those concerns were around the filter provision, and so I do want to acknowledge the Minister, the Hon Jan Tinetti, for working closely with the select committee. I found it to be a very collegial opportunity for members of the select committee, alongside the responsible Minister, and what we have in front of us is a testament to that. So thank you to the Minister for her efforts in that space.
I also want to acknowledge the hard-working officials. This is—as I think the speaker who spoke before me referred to it—a potential minefield in terms of a digital environment where many things can mean many things to different people, and so time after time, officials were tasked with providing responses to some tricky questions. So I do want to acknowledge the work that they have done. But I also want to acknowledge the hard work of the Department of Internal Affairs, but also the New Zealand Classification Office because, as Barbara Kuriger has already mentioned, the select committee did go on somewhat of a couple of site visits and were able to see behind the scenes the hard work in trying circumstances, in terms of content, that those officers and officials have to deal with. So I’m delighted that the select committee process has actually delivered to this House a bill that is workable, a bill that responds to the concerns that were raised by the Minister initially and through the public opportunities as well, and I’m delighted to be able to commend it to the House.
TEANAU TUIONO (Green): Thank you, Mr Speaker. I’m going to give it a go, the longest bill name: the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill. The Greens will be supporting this bill. Like many of the submitters, and a number of the parties in the House as well, we had a number of significant reservations around the internet filter, so it’s good to hear that the Minister of Internal Affairs worked with the Governance and Administration Committee to make a bill that is workable, and I do want to acknowledge the select committee for that. I didn’t have the pleasure of sitting in on the select committee process as well. The report was very thorough, and I really appreciate being able to look back on what the different submitters said in terms of all of the issues presented.
This bill addresses the specific legislative and regulatory gaps in our current online content regulation. These were highlighted in the tragic events of the Christchurch mosque attacks on the 15th of March 2019, and I think it’s really important for us all around the House to continue to hold on to that in terms of how we respond to what happened in Christchurch in all the bits of legislation that come to this House. The terrorist of the Christchurch attacks sought to exploit online platforms to promote his acts of hate-based violence. Following the original livestream broadcast, footage of the attacks spread across the internet through social media, and in the days that followed we saw thousands of links appear across our social media platforms.
When I was reading up about this bill as well it kind of made me reflect on the 1990s, and the 1980s maybe, because when this bill originally came out, it was for, you know, things that came out in the films or came out on DVD or came out on cassette tapes or VHS tapes as well. I think all of us in the House probably remember those times, and so having that legislation updated to respond to social media and the power of social media is really, really important. The bill proposed to address this through a number of the following changes: creating a new offence of livestreaming objectionable content; allowing the Chief Censor to make interim classification decisions lasting for a maximum of 20 days—and it was interesting and good to know that, actually, the select committee and the Minister have sat down with the Chief Censor to really take a look at this legislation to get something that will be workable for him and his staff—allowing take-down notices to be issued to require the removal of objectionable online content, and then, of course, the “safe harbour” provisions that the Minister talked about earlier as well.
You know, censorship is a really difficult issue, and so I will say thank you again to the Minister for qualifying what that was and what that meant in that context as well. I think people around New Zealand will now know that that is actually codified in another piece of legislation, and what this is about is trying to make that all, kind of, usable for the Chief Censor and other officials. It is a difficult issue, and the Greens have expressed the complexity of the problem in the past. It really needs to be consistent with the New Zealand Bill of Rights Act framework, protecting freedom of expression is a primary consideration and recognising the very real need to affect and address significant harms and create transparent and reviewable frameworks for any restriction.
Clearly, the internet filter that was proposed—to me, it was an inadequate tool trying to deal with a very, very horrendous problem, and I also note what the Chief Censor said as well. But I have a quote here from one of the submitters, Thomas Beagle of the New Zealand Council for Civil Liberties, who said, “We can’t meaningfully stop … motivated users from accessing materials. There’s just too many channels and too many mechanisms, including encrypted chat rooms, peer-to-peer file transfers, websites … overseas and of course Virtual Private Networks … to ensure that no one in New Zealand can even [access what they’re getting at]”.
But as I was going through some of the other submitters, I was reading the Inclusive Aotearoa submission by Anjum Rahman, and she focused on, in one of the pieces of her submission, algorithms. In that, she said, “Further, algorithms have caused documented harm in moving individuals to more extreme and radicalised positions. Algorithms, AI and machine learning systems should be subject to independent audit, to ensure that outcomes of such systems are not causing harm. Such an audit must be a requirement for any electronic system envisaged in legislation.” If you don’t know what an algorithm is, it’s when you’ve got your phone and you only see about 100 pieces of content but, actually, because it’s Facebook and all that, there’s, like, thousands and millions of pieces of content. So the algorithm prioritises actually what’s in there.
We often get caught up talking about the right to freedom of speech, but maybe we need to start talking about the freedom of reach: the ability for objectionable content, wherever it might be, or particular opinions, to actually be disseminated far and wide across social media networks. The algorithm picks from those options based on the kind of content you engaged with most of all in the past.
I was watching the news—not on Facebook or not on Twitter; actually, on the TV for a change—and there was an article by the whistleblower Frances Haugen, who was a product manager on the civic integrity team at Facebook. She was talking about—she was a whistleblower, and, you know, Facebook is a trillion-dollar company. I can’t even imagine a trillion dollars, let alone a billion dollars. One of the things she said is that one of the consequences of how Facebook is picking up that content today is it is optimising for content that gets engagement or reaction, but its own research has shown that content that is hateful, that is divisive, that is polarising is easier to inspire people to anger than it is to other emotions. And, yes, Facebook has realised that if they change the algorithm to be safer, people will spend less time on the site, they’ll click on less ads, and they’ll make less money. She revealed that they, kind of, turn these settings off and on. When they saw that a particular president was getting incredibly problematic, they turned on a whole lot of settings; he disappeared. They turned them off again, and next thing you know, the events at the Capitol house happened as well.
So we need to get that balance right for freedom of speech, but let’s start thinking about freedom of reach, because possibly this is where the issue is. Through the pandemic, you know, I’ve talked to anti-vaxxers that have gone down the rabbit hole. We know that the proliferation—for vulnerable young men in particular, they can disappear down these rabbit holes, and next thing you know it radicalises them in very, very dangerous, dangerous, dangerous ways.
So my reading of this bill is it does improve things. It will make things better for us. But what it has also done for me is actually open up a whole lot of other questions, because, at the end of the day, what we want to do, I think, right around the House, is to make sure that we reduce harm, that we mitigate harm, and that we promote a peaceful Aotearoa. So we know the algorithm’s really good at making Facebook money and stuff like that—good at making the social media giants money—but what about an algorithm for conflict resolution? What about an algorithm for, I don’t know, climate justice, an algorithm for world peace, and an algorithm which actually helps to deal with the problems that we have around the world? So we will be supporting this bill, but we’ve got a lot of work ahead of us. Thank you, Mr Speaker.
NICOLE McKEE (ACT): Well, I have to have a go at saying the name of this bill because everybody else has. I stand to speak on the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill.
Hon Member: Well done.
NICOLE McKEE: Thank you.
At the first reading we had wondered what would this confusingly titled bill actually do. Will it improve online safety? Will it improve the harm? Will it improve the access? And we questioned, do we actually need this bill? Don’t we already have adequate censorship laws in place? During the first speech, ACT’s leader, David Seymour, retold the story of where he was on the 15th of March 2019, at the university down in Christchurch, with 500 students locked in a hall with the Speaker of this House, watching online what was unfolding and wondering whether it was going to come to them in the university hall. I, myself, recall actually driving down the road with my daughter and I received a text, an urgent message that had a link on it telling me to look at it urgently. Because I was driving, I actually gave the phone to my daughter and asked her to click on it and to have a look, tell me what was going on. She told me to pull over, and when I pulled over and watched some of the mayhem that was unfolding we quickly turned it off. I will never do that again, where I ask one of my children to have a look at a link because I had no idea what was going on nor did I suspect it was going to be as horrific as what we actually watched.
What I did do, though, is when I got home, at that time I was with the Council of Licensed Firearms Owners, and I tried to get that link and link it to an email to ask them if this is true. Is this going on? Is this actually happening? But the link that I attached to the link actually didn’t work. It had already been taken down from that platform. I was confused as to whether or not this was actually happening. Was it a scam? Was it in New Zealand? What was actually going on at that time? I wonder whether there’s anything that we could have done, in retrospect, on that day in an official capacity. Could we have stopped it any sooner than what had already been done?
Well, the Government thought we could do more, and they came up with what ACT initially thought was a communist bill. We had grave concerns about the filter. The filter would have allowed the Government to censor what you watch. So we’re very grateful to the 163 submitters who expressed their concerns in the select committee, Governance and Administration Committee, that stated that most submitters were against the filter. It seemed to me that the reason why was because the Government was unable to actually tell them what the filter was going to look like, how it was going to work, and what it was going to restrict. With that lack of detail, we are, of course, going to get a large number of submitters wanting to know more precisely what they would be restricted in watching. The main proposal, of course, included a filter for objectionable online content. Again, without the detail on what this filter would look like and how it would work, it left submitters and the Opposition concerned as to how far this filter could eventually be used. So I’m really glad that the select committee listened to their submitters.
Maybe all select committees should be led by Opposition members, Ms Barbara Kuriger. We tend to work well when we have Opposition-led select committee chairs. So I’d like to commend that select committee for most of the improvements that they’ve made, and I’d like to acknowledge the Minister as well for listening to the voices of the people and making those changes, especially in regard to the filter, and the fact that you deleted every reference to filters. Part 7A actually now only refers to the take-down orders. But again we’ve got to ask: why is this needed? Our legislation cannot be flexed internationally. Wasn’t the Christchurch Call meant to fix this? So has that failed?
The submitters raised concerns. They raised concerns about freedom of expression being impacted. They wanted to make their own minds up on what it is that they will access. They don’t want to be dictated to by the State as to what they can watch and what they can’t, what they can share, and if they’ll get prosecuted for sharing posts. I note recently that a friend of mine shot a good-sized stag and he placed an image of it on “Stalk book”. It was covered because it could cause offence. But this is the way of life for many people, and for many people when they look at what looks gruesome to them they have concerns that, actually, this is just the way that they live. So while it’s gruesome for others, it’s a way of life for many. We wonder whether that could become objectionable in the future.
In a democratic society, we should be able to express our views with freedom. We should be able to share content and have it taken down later if it’s deemed objectionable. I mean, Facebook do it all the time. What ACT does have concerns about is a new offence in section 132C(1), which is sharing objectionable livestreamed material when it’s not necessarily been made objectionable yet. We see this as just going after innocent people. It was actually noted by the select committee that the intent can be difficult to determine, and it gave examples of where it would be OK to share certain types of objectionable material. It was warning people that a judgment needs to be made on background factors. Well, it seems a bit to me like, “You know it when you see it.” It’s not needed. It will potentially capture youth and the unsuspecting internet users. I am witnessing a few laws which are going through, where the police or our judiciary are the ones that are being left to interpret what we mean, because our laws are becoming so unclear, probably because they’re unnecessary.
ACT understands the inherent need to keep our society safe, and we also feel that this is important. What we don’t support is unnecessary laws that will potentially criminalise everyday people going about their everyday activities, posting unsuspecting objectionable material, and being prosecuted for it before it’s been made objectionable, just because they shared it. ACT cannot support this bill while it seeks to criminalise potentially innocent people, restricting our ability to decide for ourselves what we should not be watching, and the laws that we already have that make that determination. So, in that respect, ACT cannot support this bill in the second reading.
ANGELA ROBERTS (Labour): Thank you, Mr Speaker. I’m grateful to rise and take a call on the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill.
I’d just like to, first of all, thank the Minister and the Governance and Administration Committee and acknowledge that they remained focused on the original intent that was expressed by the previous Minister, Tracey Martin, that this bill is about protecting New Zealanders from harmful content they can be exposed to on their everyday social media feeds. The innocence of our young people as they’re scrolling through their virtual lives and coming across such horrific images is something that is a really, really valid pursuit. So I thank them for staying focused on the prize, and acknowledge the changes that they made to ensure that this goal is met.
They have enabled, with the changes with this bill, to allow those involved to be more effective in playing their part; both the Chief Censor’s abilities to respond more nimbly and the obligations for those who host content to ensure, swiftly and effectively, to minimise the impact—the negative impact—of such content.
In my previous life as an educator, and as a mother, I am very, very aware of the profound scale and pace of reach—something that’s already been referred to in the House this evening—of social media, and it changes every day. Many of us have acknowledged, tonight, that it’s really hard to keep up with the technology. So I’m really pleased that this is able to help us to better respond, and it’s an ongoing piece of work about making content a safer place to be in the future, and I commend this bill to the House.
NICOLA GRIGG (National—Selwyn): Thank you, Mr Speaker. As has been canvassed by many speakers tonight, this is a bill with a very complicated name, but I think it’s also important to note it’s very complicated by nature. By that I mean, as many other speakers have referred to as well, the speed and nature of change occurring in the digital environment, the complexity of the multinational digital environment that most of us operate in these days, is very, very hard to police. But this bill is viewed as a necessity born out of that horrific terrorist attack on the 15th of March 2019, and I think it is important that we as members of this House do always bear that in mind: that is the reason why we are here.
We must also remember the families of those impacted, a number of which have actually moved into my electorate as a result, wanting to get out of Christchurch City. So I do see the ongoing harm that this event has occurred on a very regular basis. The harm that the bill seeks to address is urgent, and the intentions of this bill are laudable. National did oppose it at its first reading because we felt that the internet filter was too much of an overreach and it didn’t achieve the bill’s objectives. The submission that stood out to me the most was from InternetNZ, which colourfully described the filter as “a blunt tool which is a mile wide and an inch deep.” and was “purely symbolic … which anyone can get around”. I sat in on the select committee, and we took the view that society needed to be protected from seeing the kinds of content that the bill was seeking to block, but we also had to balance that with those critical rights and freedoms.
Some of the comments made a little earlier in the House I’m not sure are entirely correct. This bill has been very, very carefully drafted and redrafted so that it will not criminalise everyday users simply for sharing something. It’s really important to note that it targets livestreaming of objectionable material. I think, going back through the submissions that we as a select committee both read and heard, it was telling and worth acknowledging that many of the providers—that’s the ISPs and the platforms—were really quick to respond, actually a lot faster than the bureaucracy of Government. Facebook, for example, almost immediately halted the autoplay functionality that it has, and there were other multinationals, like Microsoft, that, in responding to the inquiry, pointed to work that they’ve already completed outside of legislation to develop technology that detects and removes known images of child exploitation and abuse.
So given we as a party saw it as an overreach, the removal of that filter was a really important step for us to be able to support this bill. It is really important, I think, in an environment like this that we do listen to the users, the experts, the user groups, the stakeholders, and they were unanimous in their opposition. The filter itself also was a key concern for many of the objectors to the bill.
I think my colleague Ian McKelvie mentioned the Chief Censor, David Shanks. It was quite significant for us to hear from him that the proposal initially offered too little detail and that there were too few safeguards around the usage, a And so we’re very grateful for the opportunity to go to the Department of Internal Affairs and spend some time with them and the officials to observe for ourselves the great lengths that they were prepared to go to satisfy the concerns of the committee, and also for us to be able to see that very trying work that a lot of people in those positions, in those roles, are asked to do. We as a society I think, should be very grateful for them for that work. They’re, effectively, protecting all of us—I think, sometimes at their own expense.
So I just have to wrap up quickly. Obviously, we as a party very much do support this bill, but we also just would like to caution future Governments, and the challenge for future Parliaments, to ensure that legislations and regulations like this are written and enabled to keep up with that pace of change, and we do commend this bill to the House.
DEPUTY SPEAKER: Dr Duncan Webb—five minutes.
Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe e te Māngai Whakawā. I rise to speak on this bill, and I must say that was an excellent speech by the member for Selwyn touching on the main points. I do want to, essentially, just emphasise that it’s an excellent thing that we agree that there should be reasonable limits on freedom of speech and, unlike the member for the ACT Party who would apparently have people able to share pretty much any information without any constraints, most of us in the House—the vast majority—agree that reasonable, proper constraints which are correctly tailored are absolutely appropriate constraints on freedom of speech in a free and democratic society. That’s what this bill achieves, it’s what the select committee has refined, and that’s always been the intention of the Minister. For that reason, I commend this bill to the House.
TĀMATI COFFEY (Labour): Thank you, Mr Speaker, and thank you to the member for Christchurch Central. He’s so wise—very wise—and the people of Christchurch Central are well served by that member right there.
Can I say, having not sat on this committee, that this is one of the first times that I’ve seen this bill, but I must say that I’ve been convinced by the various arguments around the House tonight—especially from our main parties—on the justification for it. If I was on the Governance and Administration Committee, I probably would have argued to rename it. But, actually, this name made it through—let’s have a go—the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill. After all of that select committee process, that’s where they’ve landed—good on you.
The law often chases advances in technology. In the short time that I’ve been a member of Parliament, what I’ve noticed is that, often, we’ve stood in this House and we’ve talked about how technology is running away and, actually, we as lawmakers need to try and catch up with that, and that’s exactly what this bill has gone and done.
The World Wide Web has very few controls. It’s up to each country to decide how they implement those controls, and having gone through a select committee process, having had this brought to the House by the Hon Jan Tinetti, who is also a brilliant member of Parliament and a Minister, our Minister of Internal Affairs—she has brought this forward because she believed it was something that needed to be talked about. It’s been through a select committee process. We do have the numbers around the House to be able to support it. So, for that reason, I commend it to the House.
HARETE HIPANGO (National): Thank you, Mr Speaker. I didn’t sit on the Governance and Administration Committee, and I’m not going to attempt to say the title of this bill, as everybody else has done. But what it does remind me of a little bit, particularly listening to my friend Ian McKelvie, is it takes me back to the days of the movies, and that was referenced. In the days we’d go to the old picture theatres—that was the days after they were silent movies. But the title of this bill reminds me a little bit of the song “Supercalifragilisticexpialidocious”, which was the very well-renowned song sung by Julie Andrews and Dick Van Dyke, the paragons of virtue. There’s been an element of levity in the House this evening, just with the pronouncement of this bill to the House this evening.
But moving to the seriousness of what this represents and depicts, and it is about ensuring that the protections are there for our vulnerable, who are our children, but are people who are prone to things that weren’t intended really for them to see. This has been prompted very much by—it’s etched in our memories and in our history—the events of the Christchurch massacre on the 15th of March 2019, and the livestreamed video that people unintentionally tuned to, not realising what it was until they did. So it is appropriate that this legislation, the National Party now supports.
There were initial reservations about the overreach that came with this. That’s been remedied through the submissions having been heard, the members on the select committee appropriately responding to that, taking heed of the Chief Censor, David Shanks, and also other specialist leading international digital technology giants, who gave the expertise of their experience and their advice that’s been taken into account by the select committee, and commend them for doing so.
It’s also interesting, because these bills coming before the House cause us to reflect on our life experience, and we draw and share that from different generations—don’t we, Ian? For those of us who have been around for a little while now—and I conferred with my colleague, because I reflect back to the days of the 1960s and the 1970s, a very renowned woman. She became renowned as being the paragon of virtue—in fact, the person who deemed that she was the censor of social morality in New Zealand; her name was Miss Patricia Bartlett. I remember her for the fact that she drew very much on her experience and deemed that New Zealand was going down a pathway which required recalibration of the social fibre and moralities of our society. So, for those of us who are a little bit more seasoned and experienced in life, Patricia Bartlett was one of the first who is imprinted in our memory for censoring the appropriateness of what should be viewed—in those days in the picture theatre on the big screen, but also through what we had access to as children in our literature and in our reading.
So this films, videos, publications, classifications—in short—amendment bill is doing that. It’s recalibrating and ensuring that there are those censors that are in place with the technology that we have today that is very rapidly evolving, and that with that rapid evolvement, it means that there is more accessibility to that.
So the National Party originally did not support this bill for some of the reasons that have been shared in the House by my colleague Nicole McKee. However, we’ve recalibrated and take the view that we support this bill before the House and that it’s not perfect, but it’s a very good start to ensure that there are those safeties and precautions in place. Accordingly, the National Party commends this bill to the House.
ANGIE WARREN-CLARK (Labour): Thank you, Mr Speaker. It is a real pleasure to stand and take a call on this very long-named bill, which I will not repeat because I want to say a couple more things first, before we carry on.
First of all, to my colleague the Hon Jan Tinetti, this has been a difficult piece of legislation to think through, and I really want to commend my Minister for the work that she has progressed and her determination to fix something that needed to be fixed. I really appreciate that she has done that. I’d also like to acknowledge the 163 submitters—22 of whom gave oral evidence—and the Governance and Administration Committee and the officials, etc., etc.
Now, I was not a member like many of tonight’s speakers on this bill. However, I had a really good read of the legislation and this is my understanding: objectionable publications have a very high bar and definition. So this bill has brought to balance, I believe, the freedom of expression and speech versus the harm that objectionable material may give, and I think that that is very important. Of course, we all, each and every one of us, recall the events of March 15th 2019. We also recall the harm that occurred when people saw and watched live and then had it relayed time and time again around the country. It was horrific.
I do want to acknowledge, however, that prior to that event, there was all sorts of harmful digital exposures occurring. My own daughter was at school some 12 years ago and had the experience of someone showing her someone being murdered on social media. They thought it was very funny. It was incredibly harmful for my daughter; I had to go and pick her up and take her home from school at the time. So this is a matter that has needed to be looked at for quite some time, and I’m really pleased and grateful that we have actually got to the point where most in this House have supported this bill at second reading. I commend the bill to this House.
A party vote was called for on the question, That the Films, Videos, and Publications Classification (Urgent Interim Classification of Publications and Prevention of Online Harm) Amendment Bill be now read a second time.
Ayes 110
New Zealand Labour 65; New Zealand National 33; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.
Noes 10
ACT New Zealand 10.
Motion agreed to.
Bill read a second time.
Bills
Animal Welfare Amendment Bill
First Reading
Hon MEKA WHAITIRI (Associate Minister of Agriculture (Animal Welfare)) on behalf of the Minister of Agriculture: On behalf of the Minister of Agriculture, the Hon Damien O’Connor, I present a legislative statement on the Animal Welfare Amendment Bill.
DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon MEKA WHAITIRI: I move, That the Animal Welfare Amendment Bill be now read a first time. I nominate the Primary Production Committee to consider the bill.
The bill amends the Animal Welfare Act 1999 to ban the export of livestock by sea and shows the Government’s commitment to upholding New Zealand’s reputation for high standards of animal welfare. It’s vital we stay ahead of the curve in a world where animal welfare is under more and more scrutiny. The Government started a review of the livestock export trade in 2019. Following the independent Heron report, which was carried out after the tragic loss of the Gulf Livestock 1 in September 2020, on 29 March 2021, the Government decided to ban the export of cattle, deer, goats, and sheep by ship with a transition period of up to two years.
The Government, like some in the farming sector, believes the livestock trade opens New Zealand and its farmers to long-term reputational damage no matter how high we set animal welfare standards for the voyages and everyone’s best efforts. We acknowledge the economic benefits some farmers get from the trade, but support for it is not universal. There are different opinions on its long-term value amongst farmers, how it affects New Zealand’s commitment to animal welfare, and our image in the eyes of international consumers. Those involved in the trade have made improvements over recent years, but the voyage times to the Northern Hemisphere markets will always impose animal welfare challenges.
In submission to the live export review, it is important to note that the independent National Animal Welfare Advisory Committee (NAWAC), which advises Ministers on animal welfare issues, said that the practice should stop. The tragic sinking of the Gulf Livestock 1 highlighted the possible risk of the trade. Because of New Zealand’s strong reputation for farming, livestock exports by sea have increased in recent years, but they amount to approximately 0.2 percent of our primary exports revenue since 2015. The Government has set a two-year transition period for the trade, which will end on 30 April 2023, to allow our trading partners time to adopt alternative options and to give those farmers involved enough time to change their business models. It’s hard to estimate the total number of farmers who use the trade as that can be dependent on conditions and on-farm decisions from year to year. We recognise the importance of our relationships with international partners and are committed to working with them to boost trade through other means, such as scientific work into dairy cow genetics and germplasm use.
Implementing the ban through primary legislation will enable people in the industry to give their views through the select committee process and Parliament to vote on the final proposal. I am informed that most affected parties—exporters, farmers, trading partners, and importers—are aware of the ban and understand the intent of the transition period. These actions do not set a precedent for other animal exports. Primarily, animals such as chickens are exported by plane and the travel times are much shorter. The journey time via ship for New Zealand livestock is far longer than by air, raising animal welfare concerns.
During the transition period, improvements are being made to the trade. Following the loss of the Gulf Livestock 1 and the independent Heron review, a series of recommendations were implemented, including reducing stock density to no more than 90 percent of previous limits, increasing minimum fodder requirements, introducing a more comprehensive stockperson declaration to verify competency, increased voyage reporting and improved quality of reporting from exporters, and requiring additional information on animal welfare and on the voyage. Longer-term improvements will be implemented as part of the livestock exports continuous improvements work programme. I encourage all interested parties to involve themselves in the select committee processes.
On behalf of Minister O’Connor, making this change to the Animal Welfare Act 1999 will prohibit the live export of cattle, deer, goats, and sheep by ship from 30 April 2023, reinforcing and building on New Zealand’s reputation as a safe producer of high-quality products. I commend this bill to the House.
DEPUTY SPEAKER: The question is that the motion be agreed to.
BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Speaker. Listening to the speech that Minister Whaitiri has just made, she said that this would be very small when it comes to the agriculture sector. But it is a big cost for those people who take part in the live export industry.
Also, I picked up on the fact that the Minister said it was really hard to estimate the number of farmers who do it. Now, before I go on to that, I just wanted to make mention of the people who died on the boat, because often we see that everyone talks about this being an animal welfare tragedy, and of course many cattle died on that boat and it was a tragedy that that boat obviously wasn’t up to spec and went somewhere that it shouldn’t go. As a result of that, over 40 people actually lost their lives on that boat too, and it’s something that’s very seldom ever mentioned. It sort of reminds me that, you know, we have a car accident, but we don’t ban every car. You know, there’s tragedies from time to time, but it doesn’t mean to say we stop doing it because it happens to one boat. Even reading in here, the Ministry for Primary Industries (MPI) didn’t actually count this in their animal welfare figure or their animal death stats because it was actually a transport and a boat-sinking episode, not an animal welfare episode.
Look, it does appear that there was something absolutely not right about the Gulf Livestock 1 ship that sank and the decisions that some people made with that ship. I’ve got a press release here that came out of Australia: “It has been 12 months since the live export ship sank off the Japanese coast, but a number of details about the tragedy remain a mystery. … It’s understood there was an inquiry and it’s been concluded, but for whatever reason the outcome has not been made publicly available and that’s pretty disappointing.” So the Australian Government is actually still trying to get their hands on the information around that inquiry, because it didn’t happen in their waters.
Look, I’ve been visiting people who partake in live exports, and their ships and their practices look nothing like what we have seen and the conditions that we’ve seen on that boat. So I question whether we need to take this giant step to do this, and so do my colleagues in National.
The Ministry for Primary Industries, in September 2020, announced an independent review and launched into the animal welfare assurances for safe transport of livestock by sea. It made a number of recommendations, including ongoing review of rules, guidance, and regulations, and you can see that in Part 4 of the review—and we don’t have time to go into the whole review tonight. But we in National believe that this bill is a knee-jerk reaction to the tragedy of one ship sinking.
Export mortality rates are, typically, about 0.1 percent and it does contribute about $261 million to the economy, and I know that there are a range of views around this practice. But when it’s done well, it’s actually really—for someone who is exporting animals or any product to the value that some of these animals are, you don’t want your product to turn up at the other end not in a good shape, because you wouldn’t be in the business for very long anyway, and many of these people take a huge pride in what they do. If the industry is to be phased out, it should be due to changing market demand, not to a Government edict based on one event.
So in 2020, the mortality rate of livestock was 0.12 percent, and in 2019, the mortality rate for livestock was 0.08 percent, and, as I’ve said before, MPI didn’t count that. That was a transport misadventure, and they didn’t count that in the stats.
So the regulatory impact statement says that there are two approaches that the Government could have taken to this to respond to this tragedy. The first would be to “allow trade to continue, but with stronger regulations through maintaining strong animal welfare standards and enhancing New Zealand’s long-term trade relationships.”, and this is the approach that National agrees with. The second was to “ban the export of livestock”, and this is what this bill is about tonight, which is why National is opposing this.
There is currently no ban on other types of livestock, and it’s only the ones that are mentioned in this bill. All animals undergo a pre-departure check, and I visited some people who are in the livestock export trade recently. They always keep extra days of feed on hand for these animals just in case they come across a storm like the one that this boat should never have gone into. So I say, again, that nobody’s going to want to export animals that don’t turn up in good shape.
But the Minister of Agriculture, Damien O’Connor, said that the Government’s decision was about animal welfare and protecting and positioning New Zealand’s reputation. What happened on this ship was not a New Zealand situation, and we can actually put regulations in and we can take control over what happens within our own country. So even if it could be proven that the incident did not involve New Zealand animals, the Minister thinks that the public may conclude that our animals could face a similar outcome. But why?
We don’t have too many people going on cruise ships at the moment. I’ve done a few cruises in my life, and, actually, a year before that captain caught the attention of his girlfriend over in Italy, and that boat tipped over, I was on the sister ship of that ship a year before, and it was fine. So we react to one thing, which isn’t always necessary. We don’t have to ban everything because of one incident.
Look, I’m dealing with another bill at the moment, which is the decommissioning one on the gas. You have one incident, and everybody else is bad and everything seems to need to be banned under the edict of this Government.
So for the policy to be given effect by this bill—and this is from the regulatory impact statement—is there analysis available on the size of the potential costs and benefits, and the answer is yes; and (b) the potential for any group of persons to suffer a substantial, unavoidable loss of income or wealth, and the statement says that the analysis noted “rural communities where livestock exports are a source of income would suffer economic losses. This would likely have flow on effects to wider primary industry businesses related to the trade e.g., vet services, transport companies, stock handlers etc.” Exporters and related businesses would suffer grave economic losses that would likely result in their businesses ceasing to operate.
Now, animal exports have done and can be done safely, and there were a number of conditions that the Ministry for Primary Industries put in when they went through, like having focused maritime inspection of livestock carrier ships entering New Zealand to transport livestock by Maritime New Zealand as a safeguard; restricting stock density on vessels to 90 percent of the current limits; increasing requirements for voyage recording, including daily vet reports during voyages; and increasing minimum fodder, as I said before. So who would really want their livestock to turn up overseas in less than a good state, because it’s not going to be an export business for very long?
I just want people to know that, hopefully, during the select committee process, we will be able to have time to hear all the arguments and look at what the general live animal export official assurance programme in this country by the Ministry for Primary Industries actually does. I just want people to know tonight that the Ministry for Primary Industries have put some extra conditions on exporting livestock. It was actually the Government that decided to make the move to ban this approach, and that is why National is opposing this. But we will work constructively at the select committee, and in the last bill we talked about tonight, we managed to make some changes at select committee. So here’s hoping.
DEPUTY SPEAKER: Order! The member’s time has expired.
JO LUXTON (Labour—Rangitata): Thank you, Mr Speaker. It’s a pleasure to rise and take a call on this Animal Welfare Amendment Bill. The previous speaker did talk about the fact that this is something that has been happening for some time, and she is quite correct in that. But it doesn’t make it right. Just because it’s something that we’ve always done doesn’t make it right.
It’s not as simple as the cows—let’s say we’re talking about cows, cattle—being walked off the paddock and on to a ship for a lovely cruise. They do spend quite some time having to be fed certain foods and getting ready to be able to adapt to the ship. And yes, the travel on the ship. But yes, the member was right—you know, there are procedures in place, there are checks and balances in place. But we in New Zealand here, we pride ourselves, we pride ourselves on our clean, green image. We pride ourselves on the way that we farm our animals. They’re pasture fed, they’re this, they’re that, and the other thing, and we do look after them. I just don’t see how this fits into that picture.
You know, the member previously did talk about the people who lost their lives. And, actually, I think that’s a really important thing that we do acknowledge here tonight. She was right that that hasn’t been talked about enough. It’s been mostly about the animals and their welfare. So I do also wish to acknowledge those that lost their lives on that particular ship.
But we’ve deliberately put in place a transition period where this won’t come into effect until 2023, to allow those that are going to be impacted—and there is definitely an impact, a cost for some farmers, exporters, importers, etc. But that’s why this two-year period has been put in place: as a transition, so people can adapt their business models and look to do other things, whether it be different types of farming or something else that doesn’t include sending animals off for live export. So I commend this bill to the House.
IAN McKELVIE (National—Rangitīkei): Hang on, Mr Speaker—it’s costing me a lot of money, this one. [Removes face mask] Ha! I’ve got it. Thank you, Mr Speaker. I was a bit intrigued listening to the Minister—hang on, I can’t hear. I was a bit intrigued listening to the Minister, because I’d set out with a view as to what I was going to say, and I was really quite interested in some of the things the Minister said in her introduction to this bill. As Barbara Kuriger has said, we’re opposed to the bill for a number of reasons, and I’m going to outline some of those as I go along.
I think we’ve got to remember—and the previous speaker, Jo Luxton, talked about it—that just because we’ve always done it doesn’t mean we should always do it. I quite agree with that, but, of course, we wouldn’t be in the position we’re in in New Zealand today if it hadn’t been for the live import of stock into New Zealand via the very same method that we’re now banning the export of them for.
One of the funny things about this place, of course, is that you get to speak third or fourth or fifth on a bill. Almost everything that needs to be said has been said. So I’m going to take a slightly different tack on this issue, because I think there’s some issues that haven’t been considered in the course of us getting to a point of banning the issue. I think it’s quite clear, for me, that it was always the intention of this Government to ban the live shipment of livestock, as they call it. In fact, there’s four different types of livestock involved in this: cattle, sheep, goats, and deer, I think it is. So those are banned from, effectively, live shipment. I take it it doesn’t mean they can’t be shipped by plane if necessary, because there are numerous other livestock types that are shipped by plane, the most notable, of course, being horses to Australia to try and win the Melbourne Cup, which is not far away. Of course, in the last couple of weeks, we won some pretty big races in Australia, including a $12 million race last Saturday.
So the export of livestock and import of livestock into New Zealand has always been a very important part of New Zealand’s way and how we go about things. Sometimes the good intentions of legislation have unforeseen negative impacts on society and the animals concerned, and that’s almost certainly the case with this bill, because if you think about our place in agriculture in the world—and the Minister did appease me to some extent by talking about genomic export and stuff like that, which is all very well for big, highly technological, competent industries, but many parts of the world that farm livestock in this form are not in that position. Therefore, the acquisition of a real cow, for example, is much more important to them or much more useful to them than, in fact, other types of technology and science.
So I think that one of the real issues of this bill is the fact that we were able to benefit other food-producing nations by exporting a better class of livestock to them and enabling them to either milk them or breed—whatever they want to do with them—in a manner they couldn’t have otherwise done. I know the argument that the Minister put up, and I think so did Barbara Kuriger to some extent: that there are farmers who are opposed to this bill, and opposed to it for the reason, basically, that they see those animals going to another country and competing with our exports of milk or of any other product, for that matter. But when you think about it, we in New Zealand are capable of producing enough food to feed about 40 million people. There are bigger cities than that in China by far, and, of course, they’ve got to then feed themselves, those countries. So I think that’s one aspect of this bill that I think will undoubtedly lessen the world’s ability to produce food.
The other issue I want to raise with respect to the live shipments of breeding cattle is that the dairy industry inevitably will always have surplus heifers. Those heifers have, over the last few years and in increasing numbers, been exported, creating advantage to other countries in the world and creating advantage to those people involved in the business in New Zealand, whether they’re vets, transport companies, feedlots—whatever they are. Those cattle or those heifers born in that dairy industry are now going to end up as four-day-old bobbies. I don’t think that’s a great livestock or animal welfare benefit to the country or to the world, actually. So it has a negative effect, and the reason that that’s going to happen is because they have no value to the New Zealand beef herd, because, effectively, people aren’t going to take on something that’s half as efficient to deal with an issue that otherwise could have—so it’s no good us thinking that they’re going to end up in the beef herd, because they won’t. So there’s always some negative impacts, I think, that come about as a result of good intention.
Now, the other thing that’s been raised tonight is the issue of, I guess, acclimatising those cattle, and how we can’t get them acclimatised to going on ships and things like that. But a considerable effort is put into acclimatising those cattle that are then shipped across the world on a ship. So when us humans go on a cruise, we don’t go and spend a couple or three weeks in a hotel on our way just to get acclimatised to being locked in a hotel while we’re locked on the cruise ship. But they do. So the heifers do actually exactly get that treatment in New Zealand, so they’re slowly educated into getting on those ships.
So I think the issue that raises for me is that if we’d wanted to, we could have put measures in place to very effectively and efficiently export livestock to other parts of the world for breeding purposes. The other thing we could have done—and I know that people think this is too hard, but we most certainly could have had a significant influence on the treatment of those animals when they got to their destination. In fact, it would have done probably a great service to some of those countries to have been involved in the acclimatisation of those heifers and the assimilation of them into their new environment, because it would have got them treated better, it would have got a better result for the people who took those animals at the other end, and I think it would have made quite a bit of difference too. So we could have, if we wished to, in my view, turned this industry into a showcase and enabled a whole lot of benefits to food production around the world that we now will not be able to achieve.
So there’s some interesting issues for us to discuss at select committee, and I look forward to that discussion, because I think the Minister, in her opening remarks, raised a few interesting issues that could be teased out further. But I guess the thing about this bill is that whilst Barbara Kuriger was optimistic that we might create change at the select committee, in fact, the bill says very clearly that it’s going to prohibit the export of cattle, because it effectively bans completely people making applications to export animals. So it’s not going to happen. So in respect of the discussion we have in the select committee, unless that clause is removed from the bill, nothing’s going to change. So that’s a pretty clear signal that the Government has no intention of either listening to submissions or changing any part of the bill for the better in the long term.
So on balance, I think it’s a shame we’ve gone down this path. I think we could have done better with it. I think we could have done better for world food production, I think we could have done better for animal welfare, and I think we could have done better for our farming community in New Zealand. Finally, I think that all these issues, all these matters that make up things like live export of animals, export of anything we choose to do as a country—because at the end of the day, we are very good as a trading nation. We are very good as a farming nation. We’re the best there is, actually, and I think we should maintain that. The crux of this bill is that the Government are of the opinion that we can’t maintain that unless we pass a bill banning the shipment of livestock. I don’t accept that. So I think the National Party—we don’t agree with it, and we’ll look forward to whatever discussion does take place at select committee. I’m not optimistic we’ll change it, though. Thank you, Madam Speaker.
STEPH LEWIS (Labour—Whanganui): Thank you, Madam Speaker. I want to begin by touching on a point Mr McKelvie raised when he said that we have relied on the importation of livestock to kick-start, I guess, our agricultural sector way back when, and he’s not wrong. But history also shows us quite clearly that thousands of people and animals died on those ships to New Zealand. I would like to think, I hope, that we have come a long way in terms of our knowledge of animal rights, animal welfare, and animal safety. He also talked about New Zealand’s way and our place in agriculture in the world. Well, the point behind this bill is that we are in a time where we’re facing increased scrutiny of animal welfare, including from the countries that we export to. The continued export of livestock may be a risk to New Zealand’s brand. So the time has come to have this discussion and to reconsider whether this is something that fits within our brand as a country. It’s about our reputation, including as seen by our exporters.
I’ve also seen, since the sinking of Gulf Livestock 1, stories from farmers who previously exported livestock on ships overseas and they acknowledged that it was quite distressing not being able to know, once their livestock left their farm, whether or not their livestock were on those ships or not. They found that incredibly distressing and that led them to looking further into the exporting of livestock.
Since 2015, we’ve exported close to 200,000 cattle, which have been shipped to countries including Mexico, the Philippines, and Sri Lanka. The majority, though, 94 percent, go to China. All farmers care about their animals and to not know where the animals have ended up, they’ve acknowledged, is actually something that they find quite distressing. While there are rules about the welfare and conditions of livestock on export ships, including the space per animal, the amount of water required, there are still livestock that die. So excluding those who died on Gulf Livestock 1, 70 cattle died between 2019 and 2020, and after arrival there were 39 deaths recorded. That is why I commend this bill to the House.
TEANAU TUIONO (Green): Thank you, Madam Speaker. It’s my privilege to take a call on this bill, and acknowledging that I’m replacing Chlöe Swarbrick, who is our usual spokesperson, but Chlöe, along with many of our Auckland MPs, is doing her bit to keep Auckland safe—in particular, her electorate of Auckland Central.
This bill amends the Animal Welfare Act 1999 to ban live export of cattle, deer, sheep, and goats by sea. The ban was announced earlier in 2021 by the Government, and the ban is intended to come into effect on 30 April 2023, a transition period of approximately two years after its announcement. This is being done to allow time for those affected to plan.
Many of the people that we interact with think the two years is too late and would have preferred to actually just get on with it. But I did note that previous spokesperson for animal welfare Mojo Mathers actually has brought this up about 10 years ago. So I wanted to read a quote from Mojo from around about 2013, which places the position of the Greens: “In New Zealand animals work very hard for us. They form the backbone of our economy, with animal products forming 45 percent of New Zealand exports last year. As well as food, fibre, entertainment, and income, animals provide us with companionship, affection, and security. We should, as an absolute minimum, ensure decent lives for them. And quite apart from doing the right thing for animals, our reputation as an ethical food producer relies upon this.”
The Green Party envisions a world in which animals are recognised and treated as sentient beings with intrinsic worth; that domestic animals, including farmed animals and other animals in captivity, have a high quality of life; and that people act compassionately in their interactions with animals.
I want to acknowledge the previous speaker who—and I’ve seen some of these news articles of farmers who have been concerned about live exports, concerned about where their stock have ended up, and the condition of their stock as well. I hope in the select committee process that we will get to hear from those people as well.
But I also—because I get that some people are all about the economics and all that kind of thing as well, but there is a way to actually move the genetic material without actually having to transport animals. I get we’ve done what we’ve always done, if we always do what we’ve always done, we should always do what we’ve always done. But actually, there could be better ways to do that. So I hope in the select committee process that those voices that actually show that there could be a different way to do this also make themselves available to make submissions as well. There are also questions like if you’re exporting genetic material or live exports anyway, that you’re actually giving over your competitive edge; you are giving animals to people you might be competing with anyway. So hopefully that gets picked up by the select committee as well.
Live export subjects animals to cruel and inhumane conditions with few safeguards for their welfare. Once overseas, animals are outside our jurisdiction, and New Zealand cannot guarantee their safety and humane treatment. Several high-profile and tragic incidents over the years at sea and at destination have highlighted the validity of these concerns. The practice is also a significant ongoing risk to New Zealand’s international reputation, and like everyone around the House, I acknowledge those lives—human lives—that have been lost in the transport of live exports as well, and noting that in the last Parliament, our spokesperson Gareth Hughes, who’s now on the board of Save Animals from Exploitation, brought this up a number of times in the media, recognising the sometimes appalling conditions that workers have on some of those ships as well, but also the impacts on animals. So we would have liked to have this banned years ago, and also to not have the transition period, but we are where we are right now.
Back in 2008, because of appalling conditions, New Zealand decided we would not allow live exports for slaughter, and yet we continue to do live exports in general. So this bill is catching up, and we welcome that. We know the reports that the voyage is very harrowing for the animals; the high stocking densities, heat stress, unnatural diet, and rough seas can make the voyage acutely distressing for animals, with some dying during the voyage. The movement of the ship, especially when large waves slam into the side of the vessel, is highly stressful and may result in injuries. Some animals are shipped while pregnant, and some of these give birth on board the ships. Animals spend weeks on board ships; long distance transport is stressful for animals. Animals transported by sea, for example to China, could endure a voyage of around 17 days.
As we’ve talked about as well, it can also be quite fatal. So, like on 2 September in 2020, the Gulf Livestock 1 capsized and sank off the coast of Japan on the way to China with a shipment of New Zealand cows. All 5,867 of those cows died on board, but there are many other examples of just how risky live exports by sea are, especially when unplanned delays happen. In 2003, Saudi Arabia rejected a shipment of over 57,000 New Zealand and Australian sheep on board the MBIE Cormo Express on alleged disease grounds. After two months at sea, and with the ship unable to port, around 6,000 sheep died on board. Live export can be fatal for humans; we’ve heard that. Gulf Livestock 1 tragically resulted in the loss of not only animal, but human lives.
Most ships are not designed for export. Recent analysis undertaken by The Guardian revealed that live export ships are at greater risk of sinking or grounding than standard cargo vessels. Arriving alive doesn’t mean animals don’t suffer, and it’s important that they are not suffering in pain as well. The journey also doesn’t end once they are there; we don’t know what’s going to happen to them once they get off the boat, and so that’s important to actually keep that in scope as well.
I also wanted to give a shout-out to all the activists that have been campaigning for this for quite some time—in particular, in 2019, when animal welfare campaigners came to Parliament to hand over a petition signed by more than 30,000 people to end live exports. I think it’s really wonderful to see all of this and to see that this mahi has created this change, and I would like to acknowledge all of those activists, and I hope that they will continue to keep up the struggle for this kaupapa.
Just in my closing moments, I was wondering what I could offer to this conversation—probably two conversations. I’ve probably got time for one conversation. I was talking to a friend of mine who is a Sami, and they’re the indigenous peoples—and they are pastoralists; they have a very close relationship with reindeer. They go across Norway, Finland, and into Russia. I talked to her because I was interested in terms of their way that they look after their animals and their relationship with their animals as well. Because even though we’ve had agriculture here in the way that we see it in the last couple of hundred years max—100 to 200 years—the Sami people have been looking after reindeer for 10,000 years.
When I asked her about this, she said this to me: “The environment is very sensitive, so we have to learn to listen, which means people tend to be quiet. We have a special connection with reindeer; without them we could not have survived here for 10,000 years, because on the tundra nothing is grown. Reindeer give us everything: clothing, food, eating the stomach gives us much-needed minerals—we use every part. My grandmother made even her own soap with reindeer bones. We do not own them, instead we say that they are owned by the wind. We do not farm them because they are free-grazing animals who are meant to wander. We migrate with them. It is a colonial way to see animals as lesser. Animals are equal to people; they are our first priority. When they suffer, we suffer.” Thank you, Madam Speaker.
BROOKE VAN VELDEN (Deputy Leader—ACT): Thank you, Madam Speaker. I rise on behalf of the ACT Party tonight in opposition to the Animal Welfare Amendment Bill. But I also rise in opposition on behalf of my colleague Mark Cameron, who, sadly, can’t be with us tonight because he’s stuck up in Northland under the alert level 3 restrictions. And I do wish that he could be here tonight to give this speech on behalf of ACT, because I know that he would give it great gusto.
Mark is probably the best person placed in Parliament to talk on this bill, because he is the authentic voice of rural New Zealand—you know, whether it’s just having his gumboots in his office as a constant reminder of the livelihoods of farmers or the messages that our caucus receive when Mark is not here in Parliament, milking his cows in the Far North. And I know even during these COVID restriction times, Mark has been diligently looking after his animals on his own farm, like farmers up and down New Zealand have been doing during the COVID restrictions, and I take my hat off to them working. While others can do remote work, these people are using their hands and feet to make sure that we have livelihoods in New Zealand.
But, of course, farmers up and down in New Zealand care about animal welfare, because it is their livelihoods. You know, it is what makes our country work. And it’s also that unless farmers are looking after their animals, they don’t have good produce for the next year. It is in every farmer’s best interest to give good conditions to their animals. So animal welfare is extremely important. But why are we bringing this bill to Parliament? And I think we need to acknowledge every time that we bring a new law to this place: what is the problem that we’re actually trying to solve? What is the proposed solution? What are the benefits and the costs? A very basic question, and ACT has analysed all of these and, I’m sorry to say, but it doesn’t stack up as a good law to be made.
So for context, in mid-2019 Cabinet asked the Ministry for Primary Industries (MPI) to lead a review into the export of livestock because they were concerned about the reputation of New Zealand as a responsible exporter of animals. And I note that MPI recommended that either we had a full ban on live exportation or an increased regulatory system to manage any risks. Now, livestock export is controlled under the Animal Welfare Act, and that’s what this bill seeks to change. In New Zealand we currently have regulations about animal exportation. There are conditions for animal welfare on the voyage and for animal welfare at the destination. But we have to be clear: we can do better for the conditions of animals. We can do better to improve animal welfare. But this bill seeks to do the heavy-handed approach, which is the ban. There would be a full cessation of trade from 30 April 2023.
But if we look at MPI’s analysis of what the impacts of that actually would be, the economic loss to farmers and the economy would be significant. I’ll read a few points, if I may, from the MPI analysis, and it says, “Live animal exports provide a boost to New Zealand’s economy and rural communities. Any move to prohibit the export of livestock would cause an economic loss to these groups and make recovery from COVID-19 more difficult in the rural communities where livestock exports provide an additional source of income. For some individual businesses, that impact is likely to be significant.” It also goes on to say, “The direct value of New Zealand’s livestock exports was $261.5 million for the year ending December 2020.” It also says that “MPI’s view is that reputational impacts are real but difficult to quantify. These risks should be taken seriously, but can be managed through enhancing the regulatory framework.”
The problem is even worse than that, though, because if we truly do care about animal welfare standards, we do have to acknowledge the part that New Zealand plays in ensuring that we are upholding better standards around the world. If it’s not us that are providing livestock to other countries for their breeding programmes, somebody else will very quickly fill that void. Trade will simply go offshore. The problem won’t go away. But actually, being in that space allows for better animal welfare conditions than what the alternative would be. People do need food. People do need animals to breed. And if we can be part of that, we can uphold better animal welfare standards, but also ensure that our farmers have ongoing livelihoods that won’t be affected. I don’t want to see countries with poorer welfare standards filling the void that New Zealand currently plays in that market.
We also just have to acknowledge that COVID has been a very, very tough time for all people, but it has been hard for farmers too, who have been constantly working through this time and not getting a huge amount of credit from the Government, to be fair. It just feels like there are regulations and red tape constantly being placed upon our rural communities. But our farmers have pulled us through and this is a time when we should have their back. COVID is not a time when we should be placing more restrictions on their ability to pull themselves through this time. We don’t want to create more pain and hurt farmers any more.
In summary, there’s just a few points that I’d like to make. We can do more for animal welfare, we do need to be clear, but there was an alternative that could have been reached. And when there is an alternative, why should we go with the heavy-handed approach that will hurt farmers? If I put it plainly, in the words of my colleague Mark Cameron: “Far out! What a fiasco.” So, in summary, ACT stands in opposition to this bill. Thank you.
ANNA LORCK (Labour—Tukituki): I rise to speak on the Animal Welfare Amendment Bill, and I look back to the early to mid-1990s, when I was a rural reporter for the Hawke’s Bay Herald-Tribune—I was actually the agricultural editor—and I used to go out and cover the live export trade that was actually booming in Hawke’s Bay at the time. They had massive feedlots out at Tikokino, and it was a pretty booming industry, but I can recall also then that there was a bit of controversy around it as well, because I used to get quite a few front pages. When I look back and I look to now, I think, really, the time has come when the banning of live ship exports of animals for breeding is coming to an end.
Unlike the negative side, the other side of the House, where they seem to think the poor farmers won’t survive over a two-year transition period out of live exports, I have far greater confidence—far greater confidence—in our farmers, and when I’m going to be sitting on the select committee, listening to submissions, I’m going to ask a lot of questions from farmers about, “Really, do you think this is something for the future, or do you think that we can do more with our livestock and grow our rural economy better and stronger with better reputation, without the need for live sheep exports?” Thank you, Madam Speaker.
MAUREEN PUGH (National): Thank you, Madam Speaker. I stand in opposition to this bill, the Animal Welfare Amendment Bill, in its first reading tonight. We’ve heard some pretty pathetic contributions from the Government side and the Greens tonight about why this bill is so necessary.
But let’s go back to the beginning and how this all started. It was back on 2 September last year, when the live export ship the Gulf Livestock 1, which had just left Napier on 14 August, was traveling north-west in the East China Sea when it was capsized in strong winds and heavy seas, whipped up by not one but two typhoons. So this was an extraordinary weather event that this ship was caught in and it was only less than two days from its destination. Now, the ship was carrying almost 6,000 head of cattle and 43 crew. That included 39 Filipinos, two Australians, and two New Zealanders. Only two survivors and a body were ever found by the Japanese coast guard, and, sadly, only one of the survivors actually lived.
Now, we’ve heard a lot about the 6,000 head of cattle and the loss of those beasts, and, actually we heard about the loss for weeks—it went on for weeks. The issue was kept alive—I heard the speaker from the Green Party talk about the activists. It was kept alive by activists and the Greens, who used that tragedy as an opportunity to keep the story alive and to promote their tree-hugging, leaf-eating lifestyles, and showed no respect for alternative views. And that is all we were asking for: a bit of respect for how other people choose to live their lives. But, no, they don’t want anything to do with eating meat, they don’t want anything to do with cows, and they certainly don’t want anything to do with supporting New Zealand’s primary sector in this country. But what we didn’t hear about was the loss of those poor souls that went down with the ship. I’d like to pay tribute tonight to Lochie Bellerby and Scott Harris, our two Kiwis.
Now, as a result of the sinking of the Gulf Livestock 1, there was a review undertaken, and that was done by QC Heron. It is interesting that out of that review came four recommendations—four. They focused on the maritime inspection of livestock carrier ships entering New Zealand. They suggested restricting stocking densities on vessels to 90 percent of former limits. And it increased the requirements for voyage reporting, including the daily veterinary reports on those voyages, and, as Barbara Kuriger mentioned, about the fodder requirements, the feed stores that were to be left in reserve in case these were delays during the voyage. So this Government carried on with the review and then that review went off to the regulatory impact statement for this bill.
There were two options that were open to the Government, and one of them was to improve the quality of those transitions on to the journey of the exporting and on the boats, or to ban live exports altogether. So what did this Government do? It took the lazy option and it banned a $261 million opportunity for this country. It said thanks to the 5,000 farmers who for the last 10 years had been supplying breeding stock for live export, and it just said, “Sorry. We’re going to give you two years.” And the farmers are supposed to feel grateful that there are two years to transition away. This Government has no idea about how to grow an industry, and it is constantly ratcheting things back and making it harder. The only thing this Government knows how to do is to kill the economy, and instead of working with the shipping companies, working with the farmers to make sure that we are the very best livestock exporters in the world, this lazy Government simply bans another income earner for New Zealand.
ASSISTANT SPEAKER (Hon Jacqui Dean): I call Kieran McAnulty—five minutes.
KIERAN McANULTY (Labour—Wairarapa): Thank you very much, Madam Speaker. I wish to start my contribution tonight by acknowledging a constituent of mine, whom I won’t name, who lost a dearly loved family member in the tragedy that has been expressed tonight. I’m sure the condolences of this whole House go to them and the other family of the other member that was lost in that tragedy. But it is, I believe, disingenuous to suggest that it is solely because of that tragedy that this piece of legislation is being proposed tonight. This legislation is much more far-reaching and much more looking into the future.
There is a clear distinction on display tonight between the conservative side and the side that actually wishes to reform this nation to one that is prosperous for all New Zealanders. And they may scoff, which they do, but this is the Government that produced a plan to increase primary production exports by $40 billion in the next 10 years, and animal welfare plays a key part in that. They live in a dream world: they believe that staying where we are, and treading water, and not changing, and not reforming—
Barbara Kuriger: Didn’t say that. Didn’t say we couldn’t change.
KIERAN McANULTY: —and not trying to keep ahead of the curve, and not trying to get ahead of our competitors, will earn us more money in the future. It will not. This is a competitive market, and Barbara Kuriger should know that our value that we extract from our exports is purely dependent on our reputation on the international market, and animal welfare is a huge part of that. It is an increasing part of that. We cannot expect that our reputation as an exporter will remain just as prevalent when countries like Ireland and much of the EU and parts of South America and even the US, who has poor animal standards in part of it, are catching up with us.
And I say to that side, they do not represent all farmers. They may believe they do, but many farmers from my electorate have contacted me and said this is the right move. This is where we need to go. We need to keep New Zealand ahead of the curve and at the pinnacle of animal welfare and at the pinnacle of international primary exports. I say to them, continue as you are; we will continue to look at the future. We will continue to deliver for rural communities and for primary exporters by making decisions like this and keeping New Zealand at the forefront of primary exports.
ANGELA ROBERTS (Labour): I rise with pleasure to take a call on the Animal Welfare Amendment Bill. We’re not scared of this “just transition” conversation in Taranaki, we’re quite used to it. In Taranaki, the conversation—we’re at the pointy end of much of it. It’s not just about a zero-carbon economy, but also a sustainable future, a thriving economy. So we’re used to this and we’re not scared of the conversation. So, you know, we’ve got a lofty goal, we’re ambitious for our primary industries. We want to be known as the most ethical producer of food on the planet, and we want to be known as being able to use cutting-edge science to replace old ways of doing things with something that is better, such as using dairy cow genetics and germplasm—I didn’t know what that was until today, but there you go, we don’t need to go any further into that one.
All I need to say is that we’re not scared of setting these lofty goals for our primary industries and then supporting our industry to shift using world class, cutting edge science. So the other thing about this bill is the opportunity to have a just transition, to give our farmers the time and the support to move. We want them to be able to honour the commitments that they already have overseas. We want them to be able to sustain and grow their relationships in foreign markets, and we want them to be able to shift their business model so that we can reach that goal, that lofty goal that they deserve us to be striving for and working to support them to do, and that is, like I say, to become the most ethical producers of food. I’m really looking forward to seeing this go through select committee and to be able to make sure that we can support our primary industries in the best way possible, as they deserve. I commend this bill to the House.
PENNY SIMMONDS (National—Invercargill): Madam Speaker, thank you for the opportunity to stand and speak in opposition to this Animal Welfare Amendment Bill. As many of the speakers have already said, the catalyst for the Ministry for Primary Industries (MPI) review in September 2020 to look into animal welfare assurances for safe transport of livestock by sea was the terrible maritime tragedy that was the Gulf Livestock 1. I want to acknowledge the sinking of that vessel as a terrible maritime tragedy as it sailed into Typhoon Maysak, south of Japan, when the engine stopped and the vessel was hit broadside by a powerful wave. Over 40 people lost their lives and, of course, the 5,800-odd cows.
I particularly want to acknowledge the Bellerby family from Southland. Lochie Bellerby was a young man in his 20s from Te Ānau who lost his life in that. Lochie was described as an adventurous and hardworking young man. I had the privilege, at that time, of meeting with his father and his sister. I want to acknowledge what incredibly brave people they were and resilient as they tried to cut through that dreadful bureaucratic red tape to try and expand the searches for the much loved brother and son. So I acknowledge the terrible tragedy that that sinking of the Gulf Livestock 1 was.
It’s interesting, though, that MPI does not include the loss of those 5,876 as being killed through animal welfare mistreatment. It was a terrible maritime tragedy. It caused the catalyst, as I said, for this review, which the Government could have picked up on—the options that were made available, the options, as my colleague has talked about, to expand the regulations and expand some of the requirements for animal welfare. National would have willingly backed those improvements. New Zealand has incredibly high standards of animal welfare in transporting livestock. But we could see where there are areas where there could have been improvement.
But as my colleague Maureen Pugh said, this Government took the lazy option of banning. The banning is an option that this Government takes frequently. They banned coal mining so that we could import more coal from Indonesia. They’re banning the export of livestock, and it is just virtue signalling. They are not going to improve animal welfare. I’ve had discussions with farmers, and I’ve asked them what it means to bring this ban into place, and my colleague Ian McKelvie has already touched on it.
So when this virtue-signalling Government wants to talk to lots of overseas entities that we export to, how are they going to explain the massive increase in animal welfare when what this means is there will be a whole lot more four-day-old bobby calves killed? I don’t see that as improved animal welfare, and I’ll be interested to see how this Government spins it—because spinning is, of course, their pastime, and I’m sure they’ll try and make something of it. So instead of those animals being exported to other countries where they could be used for breeding stock and they could be used to feed more people in this world, we are going to ban it and have them killed as four-day bobby calves.
There were other things that could’ve been done, but they required the Government to take a look at a complex issue. This is a complex issue. It would’ve required some work to have a look at it. They could’ve focused on some of the things that were brought in in 2020, in October, and seen those as ways in which animal welfare could be improved on. They could’ve worked with Federated Farmers instead of surprising Federated Farmers with this outcome. Federated Farmers have pointed out that our trade in this sector operates to some of the highest animal welfare standards in the world.
So it could have been a shining example to the world of how well we treat our animals, but instead they took the easy option to ban, because banning is what they do best. They could’ve focused on greater inspections of livestock in ships entering New Zealand. They could have, as my colleague said, restricted stocking density by 90 percent, which would have matched the Australian regulations. They could have increased the reporting from vets, and they could have increased the minimum fodder requirements should something go wrong and the voyage have unplanned delays. But, again, instead of working with the primary sector on a complex issue to bring about workable solutions, they chose banning it—banning it, that will shut off around $261 million of revenue. At a time when we are going to have our greatest level of debt in this country ever, they are going about their way to ban and restrict our revenue. It defies belief that we can be entering such a period of extreme debt and at the same time be virtue signalling with bans that decrease our revenue. But I guess that’s because that’s the sort of fairy land that this Government works in.
I listened to a number of the speakers say, “Well, I’ve read about this and I’ve heard that this happens.” On our farm, we exported livestock, so I haven’t read about it; I’ve seen it. Then I went and spoke to farmers that are doing this live export and asked them what would be the impact. That’s how I heard that there would be more bobby calves killed. So instead of these lofty aspirations that we’ve heard from the other side, lofty aspirations about how wonderful this is going to be for our livestock welfare—I even heard from one member on the Government side say how this would be so much better, banning sheep. Does she even know that the basis of this tragedy was cows, not sheep? If she was the reporter for some Hawke’s Bay newspaper, I’d doubt very much if they got much accurate out of that reporter.
The issue here is that the Government has taken the lazy way out. They have not worked with the primary sector. They have not tried to save a source of revenue for this country. They have not tried to improve animal welfare by doing things that take a little bit more time and a little bit more work. They have brought in another ban. It is simply not good enough to say that this Government is doing wonderful things with the primary sector and has lofty aspirations for the primary sector. Well, if that’s the case, why the heck have 30,000 people come out for groundswell events to tell you to stop imposing unrealistic regulations on their primary sector? They must be mistaken—all 30,000 of them must be mistaken. They can’t have picked up on your lofty aspirations and your wonderful ideals and your virtue signalling over animal welfare, or that 30,000 group of farmers wouldn’t be out trying to get your attention and trying to engage in meaningful debate with you to try and find workable solutions. National opposes this bill.
GLEN BENNETT (Labour—New Plymouth): Kia ora, Madam Speaker. Thank you for allowing me to take a call on the Animal Welfare Amendment Bill. Well, what can I say, really? It’s been a night of quips, a night of just the same old, same old lines being rolled out, like “knee-jerk reaction”, “virtue signalling”, “Government edicts made on one single event”. But we know, on this side of the House, that we’re doing the right thing by our animal welfare system. We’ve got farmers on this side of the House, we’ve got people who work in primary industry, we’ve got friends and whānau who are engaged, even, as inspectors on these ships. So we’re not here tonight to debate this, because we know that we are doing the right thing by our farmers, we’re doing the right thing by our animals.
For me, as I listen tonight—I heard from the Opposition that we can get better at animal welfare. I heard lines around “If we just do what we’ve always done, we’ll always get what we’ve always got.” We need to do the right thing—and I always heard a lot around money, around money. We create $33.7 billion in income through our animal system over a year, and so I think it’s OK for us to ban this. I haven’t heard anything from the Opposition tonight about anyone who’s going to repeal this bill if you get into Government, heard nothing about that, so I think, quietly, you’re going to make a fuss, you’re going to make a song and a dance to appease your small audience, but you aren’t talking about repealing this when you—if ever you—become Government again.
So for me, I’m glad this debate is over and we take it to select committee, where we’re going to have deeper discussions, we can engage our communities. Because this side of the House, we’re committed to our rural committees, we’re committed to our farmers, and I commend this bill to the House.
A party vote was called for on the question, That the Animal Welfare Amendment Bill be now read a first time.
Ayes 77
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.
Noes 43
New Zealand National 33; ACT New Zealand 10.
Motion agreed to.
Bill read a first time.
ASSISTANT SPEAKER (Hon Jacqui Dean): The question is, That the Animal Welfare Amendment Bill be considered by the Primary Production Committee.
Motion agreed to.
Bill referred to the Primary Production Committee.
Bills
Digital Identity Services Trust Framework Bill
First Reading
Hon Dr DAVID CLARK (Minister for the Digital Economy and Communications): I present a legislative statement on the Digital Identity Services Trust Framework 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 Dr DAVID CLARK: I move, That the Digital Identity Services Trust Framework Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill.
As we move into an increasingly digital world, it’s important that Kiwis are able to prove who they are in a trusted, safe, consistent, and digital manner. We know that Kiwis find themselves more and more online, and sometimes there are challenges in proving who they are. We know that some folks don’t trust current systems; others are not sure how to use them. And sometimes the systems to operate digitally just do not yet exist, and people are required to turn up to prove their identity, in person, with physical copies of documents.
Digital identity services give people the ability to easily share trusted information about themselves so that they can access the services that they need. They basically give people more control over their own data: who they share it with, and what they choose to share about themselves. We’re talking, essentially, about critical infrastructure for the 21st century: the provision of secure, people-centred, interoperable digital services, such as social protection, healthcare, and finance. Digital identity has the potential, then, to deliver significant benefits to both the economy and to society, in both the public and private sectors.
We’ve seen this emphasized through the COVID-19 pandemic, when remote access to important services became critical. I think of things like the wage subsidy. For many New Zealanders, they learnt, they worked, and they were educated online. By modernising our approach to digital identity, we can build resilience in our system and set people up to be able to prove their identities online and share information online in a trusted way for future situations, no matter what they might be.
This framework set-up enabled by this bill creates a consistent, secure, and trusted approach to delivering digital identity services. One way of thinking about it, really, is as a set of agreed rules that accord with best practice, and if a provider wants to become accredited, they have to meet those standards to become an accredited provider of digital identity services under the framework. So those requirements that they’ll have to meet will be set out in rules and regulations, and the focus of those rules and regulations will be on privacy, confidentiality, security risk, information and data management, and the sharing and facilitation factors associated with it. To ensure that the rules reflect best practice, a governance board will be set up to oversee the administration of those rules and also to consult with the right stakeholders when any changes need to be made to those rules. That includes stakeholders like the Privacy Commissioner or others who have already been accredited as trust framework providers.
In the contemporary era, we also need to make sure that the digital identity system for our country takes account of and reflects Te Ao Māori perspectives and approaches to identity. To that end, the bill establishes a Māori advisory group to advise the board on Māori interests and knowledge. This is recognition that we want to have a partnership arrangement with Māori and to uphold Te Tiriti—the Treaty—in these arrangements. So the board is required to seek the advice of the Māori advisory group that will be set up on matters of tikanga Māori and Māori cultural perspectives, and it will also have to consult more widely with people or groups that have expertise in Te Ao Māori approaches to identity, so that they are considered in the ongoing development of the trust framework.
To guarantee enforcement and to protect the security and privacy of trust framework users, the bill also establishes a trust framework authority. Now, that authority will be responsible for reviewing accreditation applications, but also for conducting investigations into potential rule breaches. And, indeed, if it finds a rule has been breached, it will have the power to issue a public warning or to suspend or cancel the accreditation of someone who has already been accredited or an organisation that’s already been accredited to the trust framework.
The bill does also complement, I have to say, other work that I have under way in terms of a consumer data right, which will also give people more control over their own data and the way it’s shared and used. These two things will work hand in hand, and I expect to have more to say on that later this year. But you can think of use cases like banking and banking data being shared with third party applications. That’s one possible application of a consumer data right.
Through this legislation, though, we’re also supporting efforts to reduce harm to New Zealanders that are posed by cyber-threats. We know that malicious activity online is becoming more and more prevalent, so it will be important that digital identity services have sound, consistent security systems based on best practice, and that will be reflected in the accreditation standards that are to be met. It’s particularly important to note that because we are in Cyber Smart Week, this week—and I draw members of the House’s attention to that important week of the year, where we’re reminded to keep our cyber-hygiene up to date and to look at the advice that the Computer Emergency Response Team (CERT) provides for all members of the public and, of course, members of this House to follow to ensure that they are engaging in good cyber-hygiene practices. But I digress.
What we’re proposing here is a giant leap forward for the digital economy as a whole. It will enable things like the sharing of health information, providing proof of qualifications, making induction processes in workplaces, onboarding for new jobs, much easier. There are a range of use cases which will likely be enabled by the use of this trust framework. The digital identity sector is ready and willing to provide these services, but what we’ve heard is that for interoperability, innovation, and collaboration to work best, it’s important to have a clear, consistent, and coordinated approach. And that is what this trust framework achieves.
Part of what we’ll see as a result, of course, is a better user experience. There’ll be less need for physical documents for customers of institutions who are accredited to the framework. Customers will be able to be surer that their personal data is being handled safely, that shared information is in safe hands. Those things will be a real benefit to consumers.
It’s also a fact that not all sectors will be able to pick up the benefits of this framework immediately; they are moving at different paces. And so that’s why the bill makes accreditation to the trust framework an opt-in matter from the start. That ensures that providers can still deliver products to market while they work towards becoming accredited.
There is a wider benefit to this framework. It’s estimated that around $1.5 billion worth of value might be added to the economy just through the increased security that this framework would provide. That is without counting the potential productivity improvements that may result from using online tools that are associated with identity. Now, that $1.5 billion figure for improved security through avoided losses is a conservative estimate, so it may well be worth more than that to our economy. So I hope all members of the House recognise that both social and economic benefits accrue to the use of such a framework. This bill will help realise those benefits.
As I work to close, I want to also acknowledge that this digital trust framework bill brings about mutual recognition with the Australian Trusted Digital Identity Framework. There’s an attempt to coordinate to make sure there’s interoperability there, and that was a pledge made—that there was an intention for this to happen—between our Prime Minister and the Australian Prime Minister in 2019 and 2020. Overall, it’s fantastic news for the future of trade between our nations, that interoperability.
Finally, I want to stress that this bill is one part of a wider digital strategy for Aotearoa that’s being developed by this Government. It’s a crucial pillar, though, because it helps support trust, which is very important to that strategy. Kiwis can trust that such a framework will facilitate safe and secure handling of their personal data online. Many benefits accrue to that. I commend this bill to the House.
ASSISTANT SPEAKER (Hon Jacqui Dean): Members, the House is suspended, and I will resume the Chair at 9 a.m. tomorrow for the extended sitting.
Debate interrupted.
Sitting suspended from 9.58 p.m. to 9 a.m. (Wednesday)
TUESDAY, 19 OCTOBER 2021
(continued on Wednesday, 20 October 2021)
Bills
Digital Identity Services Trust Framework Bill
First Reading
Debate resumed.
DEPUTY SPEAKER: Fakaalofa lahi atu. Mōrena mai tātou. The House is resumed for the extended sitting. Members, when we concluded business last night, the Minister for the Digital Economy and Communications had moved the first reading motion and just finished his speech on the Digital Identity Services Trust Framework Bill. Therefore, the question is that the motion be agreed to.
STUART SMITH (National—Kaikōura): Thank you, Mr Speaker. It’s a pleasure to be speaking at 9 o’clock in the morning on the financial sector digital—I’ve got the wrong notes in front of me. That’s not a help. Mind you, I think I could still do a good job on that one as well. It is quite interesting that we are talking about digital identity, and it’s great; it’s very timely, I think. Certainly, on the Finance and Expenditure Committee we are doing an inquiry into cryptocurrency, so it actually fits very well with this. However, I do have one little issue, and it’s great to talk about this—and, Mr Speaker, you may have seen one of these. This Government’s talking about digital identity and when you get a vaccination you get this little bit of card that a 10-year-old could design on their home computer and print off. We really need to get our priorities right. This should have been dealt with months ago, right at the beginning, actually, with some sort of digital solution, but we didn’t have one. Instead, we get a bit of card, quite a flimsy bit of card. We’re going to talk about a passport at some point—well, we’ve got to get these things right and get our priorities right. We should have been doing that right at the beginning.
But this bill, the Digital Identity Services Trust Framework Bill, will actually make some significant difference for us. We absolutely have to take care of our digital identities. I was just having a chat before with the Hon Todd McClay and he said that actually the biggest risk that a lot of people face is all the information they put up quite willingly on social media platforms, and that comes back often to bite people later on in life. However, this bill won’t deal with that in particular. We need to have a good awareness of what it is that’s important in the digital space. If we’d like to use a motoring analogy, when cars first came out they didn’t have seat belts and they didn’t have airbags and all those sorts of things. Those things developed over time at a much slower pace. In the digital world, these things are happening at a much higher pace, and we simply are playing catch-up, and I think that’s always going to be the case. We’re playing catch-up to put good regulatory controls around the things that really matter, and this really matters—getting this right.
I was speaking yesterday to a constituent who is doing quite a bit of work in the blockchain space in terms of the authentication of digital material, and I think that’s also going to be a key part of all of this. But it was back in 2013, I believe, when RealMe came into existence—and I’m trying to think of the name of the bill that it came out under. That was a fantastic step forward but that’s now completely out of date, and I don’t think many of us actually use RealMe that much. I remember using it on two occasions, and I think it was quite an effort to use it at the time. It was quite clunky. So we do need to have those sorts of things. We all have our digital signature that our staff will use on the bottom of a newsletter or a letter that we write, and I’m sure the Minister doesn’t sign personally all of the letters that come out of his office and nor should he. But that is not exactly what we’re talking about here. What we’re talking about are transactions in the digital space and how we get security in that area.
I think the banking sector is going through that very issue at the moment, and they’ve got quite good processes in place. But there’s a heck of a lot that we can learn from cryptocurrency, actually. The individual market is ahead of central banks in this space by a long way, and I think that central banks are playing catch-up, trying to bring in their own digital currencies. But all the processes around that are being innovative, and that innovation has come from a market. And we have to be sure with all these legislative changes that we make that we allow for that innovation, which will come from competition. It certainly won’t come from a central bank. They are conservative by nature. They don’t take risks, and that’s good for us. We don’t want them to be out there taking risks that are significant.
It is quite a thing for us to spend all this time on these important areas, and the Minister talked quite a bit about it last night. I think it was actually a full 10 minutes that you took last night, Minister. I was quite looking forward to giving my speech before 10 o’clock last night, but he stole my thunder. I couldn’t get anywhere near it, but he was enjoying himself, and quite clearly it’s something that interests the Minister, and I think that’s a very positive sign for us all, because this can make a lot of people’s eyes glaze over. But it’s very important that we have somebody who knows the subject and who is going to drive it from behind. I know you’re going to do a lot of work in this space, Minister, and you’ll no doubt stay in close touch with the select committee as it works through the process because I think a lot of good evidence will come in from industry and interested parties that will help inform the forming of this bill. There is no doubt that with all the best intentions in the world, there’ll be something missing in the bill that can be improved by industry experience, and that’s what the whole select committee process is all about.
I guess you’ve got to really, as I said, get the balance right about innovation and the Government as a steward of this process. You did speak a little bit about that last night, Minister, and I’m sure you’ll have done quite a bit of work on it, but I think that’s something where we should have the main focus in our select committee roles, to see that we get that balance where it needs to be.
The leaking of personal information is, I think, where this issue comes to public attention the most. I think the Waikato DHB losing all of its digital records and being held to ransom is what the public hear about most often, and I think that’s where they see the most fear, other than losing their bank accounts. But those sorts of things have to be worked through as well as much as possible. I’m sure there’ll be strong buy-in from the sector and those companies. I am certain that the ministry will have spent some engaging with the sector in the drafting of this bill. I guess the basic principles of privacy and data protection are what are underpinning this, but whenever you have protections, of course, that also limits freedoms, and that’s something that I would like to explore more to make sure that freedoms aren’t in fact impinged on by this bill. I’m not sure how that would happen but it’s possible.
Actually, it was the Electronic Identity Verification Act 2012 that was the genesis for RealMe, which I think was introduced in 2013—I found my notes, which is quite helpful.
Hon Member: With about a minute and 47 to go.
STUART SMITH: Well, yeah. That was quite a big moment in time and that was only eight years ago—only eight years ago—and it’s already outdated. It didn’t take me eight years to find my notes.
I go back to my starting point. Actually, the biggest risk people have in the digital space is what they put up there willingly, sharing information with not a thought to the future, and that’s mostly in the social media space. But it’s also with email platforms where people are exposing their private information to the possibility of a hacker in particular.
I don’t have a lot more to say on this. I’ve had my good turn on it. I congratulate Dr Clark on bringing this bill to Parliament. I think it is something that’s timely. It came out of, of course, the iterative process, right back to the Electronic Identity Verification Act in 2012. We need it, most certainly, but we also want it to work and not impinge on innovation from the private sector where we know all the best innovations do in fact come from. So with that, I commend the bill to the House.
GLEN BENNETT (Labour—New Plymouth): Kia ora, Mr Speaker. Thank you to our previous speaker across the House, the member Stuart Smith, for that 10 minutes which did almost feel like eight years, actually. It was amazing—incredible. But here this evening—it’s still evening, isn’t it, wherever we are? I rise as a member of the Economic Development, Science and Innovation Committee, which is going to be taking this piece of legislation on, and I look forward to that, and I thank the Hon David Clark for bringing this up. As he mentioned last night, this is just one piece of our Government’s digital strategy which we are progressing with.
Now, I was listening to a podcast over the weekend, and it was around the iPhone. In 2007, I know some of us were a bit younger back then—but how quickly technology has changed, how quickly our digital footprint has changed in that time, when, once upon a time, in your bag, you had a laptop and a GPS and a camera and an iPod and some kind of mobile phone, and suddenly it was all in your pocket. We are now having to ensure that this piece of legislation, which is around our digital footprint and our identity and the framework that it brings, is fit for standard in 2021 and beyond.
This bill is about our digital identity services, giving people the ability to easily share trusted information about themselves to access the services that they need. This will also help with our consistencies, our trust, and the efficiencies of our digital identity services. It’s important work, and I look forward as a member of the select committee to hearing submissions from the public, and I commend this bill to the House.
Hon SIMON BRIDGES (National—Tauranga): Thank you. National supports this bill, as members know.
I reflected on what the member opposite has just said; it is amazing how far we’ve come. I remember in the late 1990s being very chuffed to have a Bosch—[Interruption]—it was a wee while ago—flip-top phone, and I lost it, actually, after a big night at the Loaded Hog, but that’s another story. Today, of course, we’re worlds away from that. I grew up—and I’m not that old, turned 45 a week or two ago—in an age where emails were a new thing, text messages were exciting, and now, of course, with virtual reality, alternative realities, artificial intelligence, the internet of things, it is a brave new world, as they say.
I think this bill is good. It establishes a framework, as I understand it. There’s detail in the bill about that—obviously it will need to be worked through at select committee—but it establishes a framework over digital, personal, and organisational information, and how it’s shared, it’s stored, and it’s used. In the end, that can only be a good thing if it’s done well. So the intention, I’m suggesting, is very good because it’ll provide certainty, efficiency, and a sense of trust, and even more than that, probably most importantly, a confidence if this bill hits the mark in its intent of creating that framework for digital personal information. So the intent’s good. We support that, and that’s why we support it at this stage. The how and the details will be worked through; that’s critically important.
What I think’s worth just noting though, is that that confidence and so on that comes from doing this well and providing that framework around digital personal information is hugely important because if it’s got right—and I’ll come to that actually. But if it’s got wrong, if we do that wrong, if New Zealanders, whether as individuals doing their personal banking, their tax, buying books or shoes or make up online—all of those things, and multiple other uses that New Zealanders will know about—don’t have trust and confidence in that, well, we’ve got a problem, and that is a really big deal. The undermining of the privacy and security of people’s settings would create a situation where we wouldn’t get the innovation, the creativity from the digital world and the digital economy that we want. I suppose at an extreme, if we don’t have confidence in those things in New Zealand, well, people will keep money under the bed. If people don’t have confidence, they won’t do their transactions and their interactions online, as I say, in terms of tax, purchases, trusts, and services—those sorts of things are simply not going to happen. New Zealand, at that level, wouldn’t be a part of it, and I know this is not where we’re at in New Zealand, but we wouldn’t be part of that modern global digital economy that is borderless, or should be, which is where we want to be.
So that’s, in a sense, the negative; the worry here if it’s not done well. But there is a positive. The positive, the potential, the opportunities for New Zealand if there is a great online world that New Zealanders both individually and as organisations and businesses have a trust and confidence in is limitless; it’s boundless. I’m really proud that National laid the groundwork for this in, I think, one of the most significant projects New Zealand’s had in decades, and that’s in the ultra-fast broadband (UFB) roll-out. All of this would be theoretical, talking about a framework for trust and confidence in digital settings, if we didn’t have that UFB. Of course, success has many parents—John Key, Steven Joyce, and Amy Adams, and I was the last communications Minister in that Government, and played a role in it as well, in its roll-out. It’s been revolutionary.
The future is digital—I think of New Zealand’s economy and the, as I say, boundless opportunities we have there if we have the platforms and the trust and confidence to get on and innovate and be creative. When I think of the primary sector, we obviously, I think, increasingly as a country, understand the importance to New Zealand of our farmers, our foresters, people in viticulture and horticulture, and many other areas. I think it’s a great irony, actually, of COVID that the Government has come around to farming at some level. I appreciate my colleagues laugh, but at a level we are actually more dependent on farming as a part of our economy than we’ve been for some time. Because on the other side of it we’ve got tourism, another prong, a huge, vital, exciting sector, but fundamentally in the doldrums at the moment for reasons that aren’t any Government’s fault at a level, although they could be doing much, much more to support it. Then there’s the digital, or what I would sometimes call the creative, economy, and that’s where this bill comes in to play.
I, for one, and, I know, my colleagues on this side of the House—and everyone in this House, actually—are aspirational, although the issue is how and why and getting on to it; we believe it is a hugely exciting area for New Zealand. When I was economic development Minister, it was amazing to see just the growth in—I was going to say little sectors. They’re not that little, like gaming. From $50 million, $60 million, $70 million, $80 million—and now, look, I don’t know—but by the end of the National-led Government it was a quarter-of-a-billion, $300 million sector, mainly, not entirely, but mainly here in Wellington. That is just one area where actually having trust and confidence in the platforms, in the frameworks, and personal privacy settings really matters. That’s but one example. Of course, there’s the movie sector, there’s multiple other areas where New Zealand has so much potential if we do the right things.
Of course we’ve got to get some parts of it right, and I’d argue this Government isn’t, in terms of encouraging and sometimes importing the required skilled workers that we need in that area, the capital, the tax, the regulatory settings. I was very disappointed to see under this Government Amazon’s The Lord of the Rings move off shore. I think we should’ve, personally, moved heaven and Earth to try and keep it, because it’s a multi-billion dollar deal, it has huge reputational advantages for the entire creative sector, not to mention the tourism sector in New Zealand. Set in the UK, by the way—they’re scoffing. It’s a crying shame.
My simple point of all that is this. In the end this bill isn’t the solve-all for all of that, but it’s a well-intentioned, good component of that massive digital creative sector and part of New Zealand’s way of life, fundamentally If the framework is done well it will enhance the trust and confidence New Zealanders have in that sector and the ability to keep on doing, and, in fact, grow our creativity and innovation. If it’s not there, well, as I say, at one extreme people, will keep their money under the bed.
We support the intent. There’s detail in this bill to be worked through, but I’m sure it will be, and it will help, albeit there are many other things, like I say, like skilled workers, tax settings, and the like to ensure that the third prong, in my view, of New Zealand’s economy, the digital and creative sector, goes from strength to strength to strength, and helps pay for our hospitals, our education systems, and so on to make this one of the greatest little countries in the world to live in.
ANNA LORCK (Labour—Tukituki): Good morning, Mr Speaker. I stand to speak on this bill, and must say that as the digital environment goes from strength to strength in the world that we live in today, this bill will touch the lives of every single New Zealander, young and old, as we work through how we connect in and protect our information.
What I think is significant with this legislation is the framework where we will have a choice as a consumer, from what I’ve read, in being able to choose the information that we wish to share. The digital side of technology is going to change in light years. As we put those protections forward—and I was talking to the Minister earlier this morning around what this bill will actually practically mean, how every single one of us will be using the technology to ensure that our information is shared quickly and efficiently. It will save on paperwork. It’ll enable us to do a whole lot of things faster and smarter.
But we do have some work to do still in connecting every single New Zealander to the digital world. We have work to do around rural connectivity, and ensuring that all schools and people in various suburbs of New Zealand are able to connect in cost-effectively and efficiently, and keeping up with the speed of sharing that digital data. So I’m looking forward to seeing the discussion that comes through on this bill, as it’s going to be one that, as I said, will be important to every New Zealander as we live in this very advanced digital world. Thank you, Mr Speaker.
Hon EUGENIE SAGE (Green): Tēnā koe e te Māngai o te Whare. One of the, I guess, advantages of lockdown and the fact that colleagues are in Auckland is that other MPs get to speak on legislation and have to come up to speed with legislation that they did not know a lot about, or anything about, half an hour ago. I appreciate that opportunity because it does expand one’s knowledge, so I’m pleased to take a short call on the Digital Identity Services Trust Framework Bill.
I think this bill will really highlight the importance, once again, of the select committee process—and the Green Party is supporting the bill to select committee—and the contribution that submitters will make, because in looking at the regulatory impact statement, I understand there has been an exposure draft of the bill, but because it is setting up a framework where people can trust the mechanisms by which they provide information about their identity, the contribution of businesses, individuals, Māori, and others to ensuring that this framework really does have the confidence of New Zealanders is really important. Digital identity is critical to our society. It enables both citizens and businesses to participate in the digital economy and to access Government services, but, as the regulatory impact statement points out, there are no consistently applied standards. In fact, it goes as far as saying—and I quote—“the digital identity ecosystem is characterised by incoherence, ad hoc regulation and lack of interoperability; and the way identity related information is shared is inefficient.”
I note the comments by Stuart Smith, and I would agree with him, about RealMe. That is set up as a Government service. I think it’s got about 750,000 people who verified their identity through it. It was a very good initiative at the time, but things have moved on since, and certainly my experience with it is that it is quite clunky. So this trust framework that the bill sets up, with a governance board to oversee that, is about enabling a much more consistent and secure digital identity environment for both people, businesses, and other organisations in Aotearoa and ensuring that those digital identity services are secure and that they are trusted.
One of the issues that the Green Party has with the bill—and it would benefit from submissions—is in terms of the way it incorporates Te Ao Māori approaches to identity. We acknowledge the Minister and the provisions in the bill which make sure that there is a Māori advisory organisation to the governance board ensuring that there is expertise in Māori identity in that whole Te Ao Māori perspective, because from the regulatory impact statement and the research that has been done, it’s very clear that there’s a much lower level of trust about the Government holding and sharing information amongst Māori than other sectors of the community, and the whole history of colonisation in New Zealand would make that not a surprise. There is also a major concern about misuse and abuse of information, so it’s really critical that this Te Ao Māori perspective shapes the way the trust framework develops and ensures that people can really have confidence in it through the work of the Māori advisory board. I note, I think, that there is a test in the legislation that the advice of the Māori advisory board has to be implemented unless it’s not reasonably practicable. So we know that there has been an effort there, but we would welcome submissions to just further develop and scope that out.
We note too that digital identity is potentially really important for our voting system. There has been provision made for online voting at local authority level for trials, but I don’t think any local authority took that up because of concerns about hacking and insecurity of information. So the work in this space may assist with that. With everything moving online—particularly for people—now, it seems a bit incongruous to go to a polling station or to fill out something that is on paper and send that back.
So this whole issue of identity verification should be treated as a public good because it does facilitate the inclusion of individuals in commerce, in society, and in interacting with the Government. Therefore, the funding for the development of the framework should come through general taxation, rather than through some sort of a user charge, and we hope that there’s been a commitment to do that.
The Green Party will be supporting this bill to select committee. Kia ora.
Dr JAMES McDOWALL (ACT): Thank you very much, Mr Speaker. With the risk of turning the debate into a hate on RealMe session, I would say that I’m glad to hear I’m not the only one. We are going to give the benefit of the doubt on this and support it to select committee, albeit cautiously, because we think the direction of travel is right. The intent is right. This is what has been going on overseas and I can understand why they are doing it, although I would go about it in a slightly different way. So this bill seeks to modernise identity standards, which will, in theory, give people a choice as to what services they use, if they are certified or not. I’m a little sceptical about that, but we’ll get to it.
As I say, the objectives are right, but one of the main issues that I have with this bill is just the detail. It’s the technical detail; it also relates to fees and so on. In terms of how to approach this bill—I’ve been reading through it and reading through the statements, and I’ve sort of thought, “Do I come in here as a politician or do I put my IT hat on?” having spent the majority of my career in IT or IT related fields.
Barbara Kuriger: A bit of personal experience is always good.
Dr JAMES McDOWALL: It is. Thank you, Barbara.
I’ve also been involved in a lot of pen testing and security testing, cyber-security, white hat hacking, and all that sort of thing. So seeing the bits, and especially in the legislative statement last night about cyber-security, left me with some questions that I hope the select committee can have a look at as well. So it intends to provide verification services by implementing standard rules. It’ll be opt-in, and those that opt-in and meet those and are certified will have to follow those rules or they will face penalties. So this isn’t about centralisation of identity as some might think; it is just about rules and standards, but it’s not completely clear what best practice actually is. Again, it is lacking in detail.
Regarding the penalties—in the legislative statement tabled yesterday, I’ll just point out that it was said that there’d be a public warning and/or a cancellation of accreditation if rules are broken. It didn’t actually mention that there are, in fact, quite substantial fines. I think that is something that needs to be communicated quite well through this process so that people who may be interested or organisations that may be interested in signing up are fully aware of what they’re getting into.
I’m not entirely certain that this will deliver better services at the other end. Proof will be in the pudding. I’m not sure, based on the bill, if Application Programming Interfaces are going to be used to share data between private and public organisations. And I wonder, you know; in theory, this could lead to a situation where a Government agency could, the police, for instance, issue a driver’s licence on your phone and that would be a trustworthy piece of ID. So is that the direction we’re going in? That would be quite interesting for that to happen.
Regarding application fees, again, this is one thing where some more clarity would be nice. It says in the bill, in clause 23(1)(d), “be accompanied by the fee prescribed by the regulations (if any).” So it’s a fee, if any, and that the fee, whatever it is, if there is one, may vary in amount over time. I’m sure the committee that’s being put together will decide that. So, yeah, a little bit more sort of transparency around that would be good.
I think my concern is that the intent here is right, but that the Government is trying to micromanage the economy just a little bit. And, in any case, look, the storing and using of people’s private information is a sensitive topic and trustmark or not, for lack of a better word, any database can be compromised. So what happens then? What does the risk profile look like? Who is accountable if a service provider who has opted in and meets that standard does get a breach, and how far does that breach go? What is the interoperability between databases and so on?
There are two additional issues I’d like the select committee to examine at a high level. Will organisations actually want to opt into this, given there are fines, there are penalties, because there’s nothing stopping them from just continuing as they are at present and operating like that? And secondly, will users or the customers actually care if an organisation has a trustmark or not? Because many online services are offshore anyway and they will not be a part of this. If you’ve signed up to Spotify and Netflix, that is not going to come into this. This is the selling point here—you know, the this will certify this process, the framework, you meet those requirements in terms of how you store that data identity and how you share it, how you use it and in return with that certification, you might get more customers or something along those lines. So this is pretty important to make sure this actually works.
So in addition to privacy and security concerns, I’ve had one person ask me, “What about visa status?” Being in the immigration shadow portfolio, of course, I have to slip that in there. So what about visa status? If you’re unlawful or if your visa is expiring, or your residency, or not, how does that kind of data information get shared when you sign up to something?
I’ll just move a little bit to the legislative statement, and one of the opening lines, in terms of justification for this bill, was that some people don’t trust current systems, and that sounds very anecdotal. I would actually like to know what they mean fully there and what kind of research has gone behind that. Sometimes systems do not yet exist—that was an interesting statement. And the thing about remote use, and that was another one of the cases behind this, because it increases flexibility in theory and you can prove things digitally; that sounds great. Hopefully, it works out. During the pandemic, many organisations were able to increase their flexibility. I think of lawyers, for instance. They could actually certify documents over Zoom, and I never thought that they would be able to do that and certainly not in recent times, but that’s a possibility. So there is a bit of flexibility out there already. But I do acknowledge that this kind of bill and this kind of framework will make that a little bit easier and a bit less ad hoc.
There would be more control over your data—that was another statement yesterday evening. Again, just reflecting on my cyber-security background and my white hat hacking—we’ll call it that—background, I’d like to know what that’s going to look like—having more control of your data. So, as I said, the reality is everything is hackable, everything is interceptable, etc. Another line is from the legislation: “Opt-in accreditation will allow the digital identity service providers [time] to upgrade their systems to comply with the … rules at their own pace”. Yes, I get that. My only concern there—devil’s advocate—is what kind of pressure will be applied from the State for organisations to actually sign up to this? So, you know, they’ll have time, but then will there be a bit of a marketing campaign to try and convince users, you know, customers in New Zealand, that they should be using certified services because they’re the ones that are trustworthy and those that don’t have it aren’t? You’ve got to be careful of that because it kind of sounds like a bit of a good racket in the making.
So I think, in conclusion, I wonder if we should be doing this slightly differently, as they’ve done overseas, starting with the public sector first, Government agencies, because it makes sense there. And, you know, rolling that out, seeing how the framework is used and what standards are used and what is best practice and then turning to the private sector, if they wish, at a secondary bill and giving them the option. Because I think what we’ll find—and again, the Minister referred to banks, I think, in his example yesterday—is that banks treat customers’ information very seriously. And the other thing here is you might have four or five different banks and if they’re all operating under the same standards as per this bill, you know, does just one singular point become, you know; you figure one security measure out and then suddenly you can attack all of them? So does it make it better or worse than what they’re already currently doing? So we’ve got some reservations and some concerns, but I think the direction of travel is right and we’re happy to commend this to the House.
TĀMATI COFFEY (Labour): Thank you, Mr Speaker. I’m also happy to stand in support of this bill, the Digital Identity Services Trust Framework Bill, currently being debated before the House. We have heard from previous members about the need for a digital presence, for digital identification services, to better service us in the Government of New Zealand but also our Public Service and how that works, and also the ability for people to have confidence in that system too. We’ve already heard some people and their experiences with the current RealMe service that has been rolled out, and I’ve heard frustrations from a lot of people about their inability to be able to access that service. But this isn’t necessarily just about that; this is about creating a trusted framework that New Zealanders can have faith in—that’s going to help them protect their data but also give them control over their own data as well.
One thing that I was incredibly impressed about when I saw the detail of this bill was around clause 46, which talks about the establishment of the actual board itself. It provides that “The chief executive must appoint the members of the … board. The members may include public service employees and individuals from outside the public service.” And: “When selecting the board’s members, the chief executive must ensure that members of the board include people with expert knowledge of te ao Māori approaches to identity”.
That will give a lot of whānau out there that are listening to this some comfort that, actually, we’re going to be proceeding, but with caution, especially when it comes to the identity issue. On top of that board, you’ll also have a Māori advisory group, and their advice—the advice that comes from them—must be given effect to by the board. The Māori advisory group is going to specifically focus on looking after Māori interests, Māori knowledge as they relate to the framework, and also all considerations around the identity of people in here. This is a good piece of legislation, and I support it to the House.
TODD MULLER (National—Bay of Plenty): It is great to be back in the House and taking a call. It has been a few months. A bit of water has gone under the bridge, so it’s great to be here and taking a cue from Eugenie Sage. It’s even greater to be talking about something that one hasn’t has had a huge amount of experience in, apart from setting up a RealMe account years ago when I was totally absorbed on that sort of electronic garage sale they call TradeMe—in its early days; I’m sure it is far more sophisticated now.
The merits of this bill have been well traversed by all members and it has the support of the entire House, which, I think, again reinforces the view that is perhaps not always understood out in the public—that there are issues of moment for this country that actually have significant support from both sides of the House, that it is very much a cross-party issue. It doesn’t have the profile, unfortunately, Minister, of the very good announcement yesterday on housing, but it does talk to the fact that as legislators we are focused on where we can see an obvious area to improve; let’s bring the best of our thinking to it.
I have just one simple observation that I’d like to add to the debate this morning, and that is that we have spent quite a lot of time in the last hour reflecting on how fast technology changes, particularly when we look back over a decade. It was less than a decade ago when the enabling legislation for RealMe was put in, and at the time it was seen as very far-sighted legislation, and it was a mechanism that would give security to New Zealanders in terms of their data protection.
Here we are, eight years later, arguing that, actually, it is very deficient and that for a whole raft of reasons—mainly the impact of the industrial revolution, technology and artificial intelligence, and all the new ways of thinking and operating and engaging through the cloud—that framework is now redundant. My caution is that here we are in 2021, saying that we have now established a new framework that should give us the confidence that we will be able to provide secure platforms for New Zealanders to transact with each other and with the Government, and that their information—their critical personal and commercial information—will be secure. I think that all of us in this House know that the reality is that in five years’ time technologies will have emerged that have made this point in time seem somewhat quaint.
So the question must be—and I want to build on Tāmati Coffey’s point where he talked about the board being established with a perspective of Te Ao Māori, and we support that, I think that makes sense. But the real trick in establishing this establishment board and this framework is: does it have an inbuilt culture of flexibility, an inbuilt culture to test its current norms and sense of what the future could hold, and the ability as a bureaucratic institution to breathe and adjust and move at the pace that the technology and the consumers of this country expect? That is actually a very large test and a hard test, regardless of your political persuasion: bureaucracies, once established, have an inbuilt bias for the status quo, and the inbuilt bias over time appears to look to be risk-averse, as opposed to embrace innovation, because innovation and change are uncertain.
My, I guess, request in my short contribution here this morning, as we pull this together—and it will get done because it has the support not only of the Government but of the entire House—and as this framework is operationalised, is that that culture of fleet-of-foot innovation, the capacity to imagine what tomorrow will be and actually build systems to be able to respond to those changes sits at the very core of what we are trying to establish today. Thank you very much.
TERISA NGOBI (Labour—Ōtaki): Fakaue, Mr Speaker. Faahi tapu he vagahau Niue. Happy Niue Language Week. It’s always a privilege and an honour to take a call in the House. However, given this is my first time in some time, can I just really quickly thank and acknowledge the people of the Ōtaki electorate who turned out to get vaccinated on Super Saturday before and beyond, so thank you.
COVID-19 is a really good example of why this Digital Identity Services Trust Framework Bill is timely and critical. Our Kāpiti people are 70 percent fully vaccinated and our Horowhenua people are 62 percent fully vaccinated. It’s a good start but we’ve got a really long way to go. I just also want to really quickly acknowledge and thank our health workers, volunteers, iwi and Pasifika providers, and providers as a whole who have been working tirelessly to serve our people—the people of the Ōtaki electorate included—to keep our health needs going as well as vaccinating. So kia ora for that as well.
But specifically to the bill: to ensure uptake and trust from New Zealanders who are providing their information online. New Zealanders want to know how and where their information is going, and how it will be stored. These are all online security concerns that New Zealanders will have when providing their information online, and rightly so. It’s really important that we have a digital platform or framework that is trustworthy and that New Zealanders can rely on to store their information securely.
This bill and framework gives New Zealanders that online trust, but also it modernises the approach to digital identity and it’ll provide a resilience to unexpected events like the situation we find ourselves in at the moment with COVID. And we still need to access those essential services online, so this framework provides that trust for us. Again, it’s really timely and I commend this bill to the House.
INGRID LEARY (Labour—Taieri): The digital landscape is hugely exciting, as has already been mentioned by other members. It’s democratising, as we’ve seen with the innovation around blockchain and cryptocurrency—we’re looking at that at the moment in the Finance and Expenditure Committee. It’s really empowering bringing many voices to the table, and it’s exciting in terms of the new virtual realities that are available to people. But it’s almost wholly unregulated, and we’ve seen one of the biggest challenges for our country has been the misinformation that has led to vaccine hesitancy. We’ve seen misinformation in the recent US, or not so recent US elections, and of course there’s online fraud and privacy breaches. At the heart of these issues is digital identity. It’s absolutely crucial that we are able to keep our digital identity safe so that we’re not exposed to fiscal issues around banking, that we can move freely and restrict movement where necessary, and just enjoy our freedoms in the non-digital world.
So what this bill does, really, is it provides trust, as has been mentioned. And my view is that trust is really becoming the new currency, as we move into more and more digital spaces where we need to be able to understand the authenticity of what we’re navigating. This bill gives us more control over our own information and how we share that information, whom we can trust. It also means people can access new services without having to go through a whole lot of paperwork, so it has pragmatic elements as well.
As a member of the Foreign Affairs, Defence and Trade Committee it’s also crucial we have systems that align with our friends when it comes to being able to keep our world secure and have systems that complement each other, where information can be shared safely. Security is crucial at this time, and, actually, COVID has been another reason for us to see that we need to be able to be nimble to access essential services and do so in a digital way.
Cyber-security is the key issue of our time, and digital identity and protecting that is a critical element that we need to get right as we start to navigate this brave new world. So this is a very timely and important initiative, and I commend the bill to the House.
NICOLA GRIGG (National—Selwyn): It’s quite an experience to get up in the House and speak on a bill where, clearly, all parties are in violent agreement. I trust that will happen again in future, and I’ll look forward to that occasion as well. But we’re all clearly in agreement that there is an essential need for a legislative framework that protects our online information and data.
I think every person in this House has recently experienced the need for robust data-protection and cyber-access in the recent environment of having been locked down at home and working at home on Zoom and all those online platforms that we’ve become so used to. We’ve also seen the need for legislation like this to be brought before the House because, again, this COVID environment has really thrown into sharp relief the exposure that New Zealand has to international cyber-attacks, and the fact that our borders are not as watertight and secure as we would like them to be.
All of this brings me to the point that it’s essential that a piece of legislation like this is watertight and robust, but, as a couple of other people have mentioned, it must be futureproofed. The rapid pace of change that we’re seeing in the technological environment is quite extraordinary, and, one would assume, will only continue at that pace, if not faster. I actually made some comments in the House last night on another bill that was around enabling regulations to prevent the live streaming of objectionable material, and I also made the comment that we must ensure that bills like this are written in such a way that they can adapt to the changing nature of these environments and are as flexible as the environment that they’re there to regulate.
So, of course, as my friends on this side of the House have previously mentioned, we in the National Party obviously do support a bill like this, because it is supporting the best use of data to achieve outcomes, as well as growing trust and innovation in that digital economy. And this digital economy is a growing economy. The Minister mentioned in his own comments something very close to my heart, which is the opportunity for export market potential here. His own figures had it at likely to be worth about $17 billion by 2026, and I’m certain that it could be that and more. I saw, in my time with New Zealand Trade and Enterprise—I know Simon Bridges liked to claim that most of the digital technology and innovation is coming out of Wellington, but I would argue that a lot of it is coming out of Christchurch and Canterbury. We’re seeing a number of really innovative small businesses starting up as a result of the loss of infrastructure and physical office environments from the earthquake. Everybody decided and saw that things needed to move online more, and that has seen the genesis of a huge amount of digitally based businesses coming out of Canterbury, and so I do hope that a framework like this will enable those businesses, and, indeed, enable their export opportunity offshore.
A couple of people have mentioned the need for the select committee to play a role in this, in scrutinising things, and I think one of the considerations should be ensuring that this legislation aligns with similar international jurisdictions. As I mentioned, a lot of these businesses are looking at export potential, given the multinational nature of the digital economy and environment. We do know—and, look, I am analogue, I have to confess to this House; I’m a digital dinosaur—that more and more of our data is moving into that digital cloud environment, and as other nations innovate, New Zealand needs to be proactive in regulating this evolving technological sector and aligning our legislation with countries.
I think someone else made mention earlier of the prospect of digital driver licences. I don’t know about everyone else in this House, but the only reason I carry a physical wallet nowadays is for my driver licence. Everything else is on my phone: my EFTPOS cards, my ability to pay online, my Flybuys—that’s very essential; I use that regularly as well. But the only thing that’s not on my phone is my driver licence, so I do wonder about the potential for that, and that would be a classic example of the essential need to be able to protect essential information like that.
It will also be important, on State-held information, to balance the role of the State as a digital steward with opportunities that innovative New Zealand companies can offer New Zealanders in developing new tools to verify identities online, and I do wonder as well whether the select committee might want to consider how this particular bill will interact with the Electronic Identity Verification Act, that’s been mentioned earlier.
The wonderful thing about this is that it is industry-led. Many people have mentioned the Government-led RealMe platform, and the dinosaur that that has become. But the industry-led innovation is, I would hazard a guess, as up with the play as anything else. And so the plan for a digital identity framework, I believe, has had very strong buy-in from the digital sector and New Zealand companies, most of whom are already developing in this space.
So a framework that will ensure consistency in the basic principles of privacy and data protection is welcomed by us on this side of the House, and indeed all sides of the House, and in a very quickly changing and evolving digital world it is going to be essential to incorporate a framework that will engender trust in the public. So we are pleased to commend this bill to the House.
BARBARA EDMONDS (Labour—Mana): Fakaalofa lahi atu, Mr Speaker. Thank you very much for taking my call. Now, as a member of the Finance and Expenditure Committee, I won’t have the ability to analyse this bill further because, I understand, it’s being referred to the Economic Development, Science and Innovation Committee.
But having a look at this bill, like many members of the House who have to fill in for other committee members, this morning in the House the one word that stuck out for me was in the title of the bill, and that is “trust”—Digital Identity Services Trust Framework Bill. It’s important that Kiwis need to trust that their personal data is handled securely, and this legislation hopes to be able to achieve that. Now, when I went through the bill this morning, what really stuck out for me was that this is actually the introduction of quite a fundamental regime for our country. We look at the Official Information Act regime that was brought in in 1981 or 1982. We look at the Privacy Act regime that was brought in in 1993. There are very key elements in this bill which will be—I’m looking forward to seeing what submissions come out and I want to be able to point to a number of those aspects within the particular part of the bill.
One other really key point when I was reading the regulatory impact statement was what was happening overseas. A member from the ACT Party referred to it—this legislation, if passed, obviously affects the domestic acquisition or holding of digital information, identity information. But what does that mean for the likes of Netflix and overseas jurisdictions that have digital identification information for Kiwis? So what’s really important, which I note from the regulatory impact statement, is that it talks about the international key partners like Australia and the United Kingdom, who are also modernising their digital identity systems and taking a similar approach to New Zealand. That’ll be really important to ensure that there is some sort of interoperability if we look to align with other countries. So having other countries across the world have similar frameworks means that when it comes to New Zealand establishing our framework, we can work closely with them, such as you’re seeing in other types of regimes like the base erosion profit shifting rules that happened for tax, where the OECD led that and there was consistency and alignment of rules to prevent arbitration of those rules.
So how will this bill benefit New Zealanders? Well, looking at it, obviously it provides that trusted framework for Kiwis. What is important is what the previous member from ACT also referred to: the enforcement elements of this bill; that’s in Part 6 of the bill. That’s something that I think that submitters should really provide some comment on, because you want to know whether the offences and penalties that are covered within this bill are too hard or too soft. Is that what you expect as a Kiwi if somebody breaches these particular rules if they’re passed?
The other part that’s actually quite interesting in here is that the trust framework board, a governance board which also has a Māori framework board—the secrecy and the immunity provisions that are in Part 7 of this bill. Now, to be able to have secrecy and immunity from other Acts, to be able to make sure that the information that they use in relation to enforcing this Act cannot be released in other circumstances, is really key and really quite important because in order to have secrecy and immunity, there has to be a high threshold, a high bar for it. So I’m really looking forward to seeing what the select committee and what submitters come with in relation to that particular part, Part 7.
But going back to the main key point of my speech, this is about trust. It is a fundamental new regime. It does require good scrutiny at the select committee. I’m really keen to understand how the international interoperability works with Australia and the UK and whether other international country partners are going to it, in order to protect our Kiwis’ identification or information. I’d be really interested to see how the enforcement powers sit; again, submitters being able to see whether they are too hard or too soft; and, again, has this bill met the threshold where members of that board should have secrecy and immunity from releasing any of that information? So on those points, I’d like to commend this bill to the House.
Motion agreed to.
Bill read a first time.
ASSISTANT SPEAKER (Hon Jacqui Dean): The question is, That the Digital Identity Services Trust Framework Bill be considered by the Economic Development, Science and Innovation Committee.
Motion agreed to.
Bill referred to the Economic Development, Science and Innovation Committee.
Bills
Education and Training (Teaching Council Fees and Costs) Amendment Bill
Second Reading
Hon CHRIS HIPKINS (Minister of Education): I present a legislative statement on the Education and Training (Teaching Council Fees and Costs) 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 CHRIS HIPKINS: I move, That the Education and Training (Teaching Council Fees and Costs) Amendment Bill be now read a second time.
Much has been said about this bill. Unfortunately, a lot of the things that have been said about the bill don’t actually resemble the facts, so I want to just go back and recap the history of why we are here debating this particular piece of legislation. The organisation now known as the Teaching Council was established by the last National Government. It was then known as the Education Council of Aotearoa New Zealand, the professional and regulatory body for the teaching profession in New Zealand. The clauses of legislation that are being challenged are the clauses that were passed when that organisation was established by the then National Government. The legislative provisions that have been challenged successfully in the court were not put in place by the current Government; they were put in place by the last Government. So let’s be very clear about that.
The overall effect of the court challenge which was brought by the Post Primary Teachers’ Association—the PPTA—was to overturn fees that the council had established under those legislative provisions put in place by the last Government. The Teaching Council has not had a fee increase for over a decade. They had consulted on an increased fee. They had made the decision to impose an increased fee. They had made the decision to move from a three-yearly registration to a yearly registration in order to smooth the cost of that fee increase for the teaching profession.
The courts found that they should not have done that: first of all, that they had made a mistake in law in their decision to shift from a three-yearly registration to a one-yearly registration; and, secondly, that the law, as passed by the last National Government, did not allow them to collect fees to cover all of their functions, which had been the assumption of the Parliament—and I can say this because I took part in the passage of that bill through the select committee process. It had been the intention of the Parliament that the council could collect fees for all of its functions. The courts found otherwise. That left the Teaching Council in a difficult position because it, effectively, means that every fee that they have collected for teacher registration since they were established in 2015 could, potentially, not be valid. That is not a tenable position for the council to be left in.
So this bill does not—again, contrary to some of the claims—overturn the PPTA’s win in the court. The fee that was recently established that the courts overturned remains overturned. What this bill does is validate all of the fees that were collected up to that point from 2015 onwards, because I think everybody should agree—I hope—that it would be untenable to say that all of those fees that have been collected over a six-year period were no longer valid. So it validates those previous fees, but it does not validate the fee that the court overturned. That fee remains overturned. So the fee reverts back to the one that existed prior, and that is the three-yearly lower fee.
The second thing the bill does is it allows people who have paid their one-year registration fee in the meantime to use that as a down payment towards their slightly higher three-year registration fee. So it means that they won’t have to be refunded the money only to then give a slightly higher fee back to the Teaching Council; they’ll, effectively, have to pay a top-up in order to get their three-year registration. I think most people in those circumstances would prefer it that way, rather than getting a refund and then having to pay the money back again almost straight away. So it’s a relatively simple and pragmatic decision.
So, ultimately, this bill creates certainty for the Teaching Council around what it can charge fees for, recognising that this discrepancy in the law has existed since the council was established in 2015. So it simply provides greater clarity for that.
Nicola Willis: Fees go up under Labour.
Hon CHRIS HIPKINS: Well, the member opposite says the fees go up under Labour. Hekia Parata stood in this House when the law was passed and said the fees were going to go up. That was, ultimately, the decision of the Government of the day, and they were quite open about the fact that fees were going to go up under the law change that they were passing. This Government has deferred the fee increases by continuing to provide a subsidy against the fee to defer the effect of the law change passed by National that would have increased the fees before now. The reason we are debating it now is that the Government has, ultimately, reached the point where we’re not going to continue to top up to compensate for the decision made by the last National Government, which is what we have been doing up until this point. So Nicola Willis can shout all she likes, but the ultimate reason the fees are going up is because of the law change passed by the last National Government. Those are simple facts. The records of the House will show that. The Hansard will show that—that the fees increasing now are a result of the law change back in 2015.
The other piece of feedback that did come through the select committee process which I am sympathetic to is that on the leadership provisions inserted into the law by those 2015 changes, the overwhelming feedback from the teaching profession is that they don’t believe that they should have to pay for those through their teacher registration fees. That was something that Labour expressed some concerns about at the time that law change was passed in 2015. We also shared some of that concern. So the Supplementary Order Paper that I have presented makes it very clear that the Teaching Council cannot charge the profession through the registration fees for those functions. If they are undertaking those leadership functions, they will have to do so with the agreement of the Minister, whoever that Minister is, and the Government of the day will have to pay for those functions.
Let’s, again, remember the situation that the Government inherited. When we became Government in 2017, the Government of the day that we replaced was about to transfer to the then Education Council a whole lot of additional functions, including the management of teacher professional development, which teachers would have had to pay for, and, ultimately, that would have meant that the fees would be even higher than the ones that the council has been consulting on. We made a change to reverse that decision of the last Government because we didn’t believe that the fee levels of the magnitude that would have been required under the law and under the processes put in place by the last Government were justifiable.
So the National Party may try and rewrite history, but the facts are quite simple. When we became the Government, teachers were facing an exponential fee increase because the previous National Government were transferring more and more functions to the Teaching Council, or to the Education Council, as it was then known, and expecting the profession to pay for those. They can try and rewrite history, but the teaching profession remembers that, and they know full well what they were facing under the last National Government. So this is very clear, and the Supplementary Order Paper that I have tabled makes it even clearer, that those leadership functions that the profession don’t believe that they should pay for through their registration fees, they will not pay for through their registration fees. If they are to sit with the council, they will be paid by central government, and that is appropriate. This bill gives the council the ability to go back and consult on a new set of fees. They will start that process again. The teaching profession will, therefore, have the opportunity to have their say on what the appropriate level of fees is.
The Government’s also doing some further work, which will come through in subsequent bills, to look at the overall costs that the council faces. There’s no question that the changes made to the way the council undertakes its disciplinary functions—again, changes made in 2015—have increased the overall cost structures and cost pressures on the council. Some of those costs are justified; some of them are not, and so there will be further legislative change coming in that area to ensure that the teaching profession only pays the level of fees that are absolutely necessary to ensure that the council can perform its core statutory functions around registration, around discipline, and around those other specific processes that are so important to the self-regulating teaching profession that the Government is committed to and that I think the teaching profession itself also wants to see.
So this is a good bill. It is a necessary bill. It is a bill, of course, we would prefer not to have to pass through the House, but it does provide certainty to the council and to the profession about what can be charged for through fees. The fee-setting process can now start again. The profession can have their say on that, and if the National Party wants to put forward a bill to reverse the changes they made in 2015, of course I’ll look forward to seeing that.
NICOLA WILLIS (National): Well, the Minister of Education has spent time in the House giving us a history lesson, and I want to simply explain what he has said. What he has said is that after a decade of relatively stable fees charged to teachers by the Teaching Council, on a Labour Government’s watch, fees are going up, and that Minister of Education is perfectly happy about it. Well, we on this side of the House do not think that this bill is justified, and I’m going to tell this House why.
The first thing is that as a matter of principle, we do not think that it is appropriate to be letting the Teaching Council off the hook for acting unlawfully. I’m going to quote the court, who looked at the council’s decision to change fees from three-yearly increments to one-yearly increments, raising costs on teachers. What the court said about that was the Teaching Council’s decision to set “a fee for issuing a practising certificate amounted to an unlawful tax;”—an unlawful tax.
Now, this isn’t a conceptual thing or a notional thing; this actually happened. Everyday teachers, who, by the way, under this Government are facing a rising cost of living on every front, whether it’s at the pump, whether it’s at the supermarket, or whether it’s the house that they want to rent or buy, are also being slapped with an unlawful tax from their professional body, and instead of the Minister of Education deciding to stick up for teachers and take a role as their defender, in this instance, he has said, “Oh well, Teaching Council, I’m on your side on this. I’ll tidy up the law and get you off the hook.” That’s what he had decided to do.
But then he’s taken it a step further. He’s said, “Well, actually, we need to make sure, Teaching Council, that you can confidently increase fees well into the future.”, and that’s what this bill does. It allows the Teaching Council to charge fees and levies for a broad range of functions. This is why submitters to the select committee are concerned, because when they look at the role of the Teaching Council, they say, “Well, look, there are some things that, yes, we might be happy to pay for: registration and certification, setting standards for qualifications that lead of registration.”—those are narrow functions—“performing disciplinary function when misconduct occurs.”
But then we have this other function, and this is where we’ve got the empire creep happening. We’ve got the Teaching Council having big views about itself and what it’s there to do—that is, providing leadership to teachers and direction for the education profession. Well, how big a leadership function is that? That is actually the question, because that could be as long as a piece of string. That could go on and on, that leadership function, and what teachers expect the Minister of Education to do is to say, “Well, there are limits to that because someone else is paying for it.”
We shouldn’t be creating a situation where teachers are expected to pay ever-higher fees and registration costs because there’s a quango in Wellington that wants to expand its role, and there’s evidence of this. In 2016, the staff costs of the Teaching Council were $5.3 million. Fast-forward to 2020, those staff costs had leapt up to $8.2 million. This is an organisation that is very comfortable about spending other people’s money—about spending money that came from everyday teachers, that came from their wages, that came from their household budgets—and I note that, actually, this isn’t an entity that is well loved. There has been significant dissatisfaction with its performance—in particular, in relation to the way it ran roughshod over sector concerns and introduced huge and unprecedented increases in fees. They have been slapped on the hand for poor consultation. The Minister has acknowledged as much—that they should have consulted better; that they should have done a better job of that—and yet they will be allowed to continue. What that speaks to, I think, Minister, is arrogance that, actually, this is a body that thinks it can just increase fees for the people it serves and not face any consequences.
Now, a Minister of Education has a choice when an organisation does something like that. He can choose to confront it and say, “Well, actually, I want to see you performing much better in future. Here’s how I’m going to require that of you.” But, instead, what this bill is is the Minister of Education making a deliberate decision to look the other way, to leave the Teaching Council unfettered in its ability to keep riding roughshod over teachers, to keep increasing fees and levies, to continue to consult poorly, and to continue to grow its role, expand its functions, and expand the costs it imposes on others.
I want to turn to another issue, and that is the role of the Government in funding the leadership role of the teaching profession in New Zealand. Now, the simple reality is that for many years, the Government has played a significant role in partially funding the leadership function of the Teaching Council and that has meant that that has offset the costs that would otherwise be imposed on teachers, and this Government has decided to bring an end to that. It has decided that, actually, no, despite spending literally tens of millions of dollars more on staff at the Ministry of Education—despite finding the money to expand the functions of the Ministry of Education phenomenally to see it hire tens, hundreds of new officials—it’s not prepared to keep in any way funding the functions of the Teaching Council.
Now, that is a deliberate choice, and Minister Hipkins should not talk down to teachers such that he would expect that they’re not aware of that choice. He has made a choice not to continue partial funding, and the result is clear. The result is that everyday teachers struggling with the cost of living are going to be expected to pay ever-higher fees and costs, and what an extraordinary situation it is when it is the National Party that is standing alongside the Post Primary Teachers’ Association (PPTA) saying, “Well, actually, when the PPTA takes the Teaching Council to court and has a finding that it has imposed an unlawful tax, don’t rely on the Minister of Education”—the union-aligned Minister of Education from the Labour Party—“to stand with you, because he’s nowhere to be found. He’s got other things to worry about. But, actually, National will stand up, because at a principled level we believe that the Government should be as careful in the way it spends your money as you would be.”
We believe that before a Government takes a dollar from someone else, it should ensure it’s pulled its own belt in, and we don’t see evidence that the Teaching Council has had to do that. We see no evidence that the Minister of Education has stood up to the people spending teachers’ money and said, “I need you to do a better job. Treat teachers with more respect. Actually, they don’t have endlessly deep pockets. So, before you go off and expand your leadership function and hire more staff and do more things that give you great joy, please think about the people paying for that. Please think about the everyday teachers.”—who are really struggling, by the way, under this Government, because rents have gone up, on average, $100 week, the price of a house has gone up $200k in the past year—“It’s actually pretty tough out there, Teaching Council. So we would like you to be a bit more careful in future. And, by the way, don’t ever again put New Zealand teachers in a situation where your consultation over increasing fees is so bad that it ends up in court and the PPTA have to take you to court to fight you, to get a finding against you. Don’t put us in that situation.”
ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! I’m trying to remind the member not to bring the Speaker into the debate. Thank you.
NICOLA WILLIS: Madam Speaker, I apologise for bringing you into the debate.
There are two entities in this debate, and they are, on the one side, everyday teachers in New Zealand, who are facing rising costs and who, under this bill, can expect to be paying increased registration and certification fees in many years under a Labour Government, and on the other side is the Minister of Education and the Teaching Council, who have been given absolute freedom to increase fees. It is a Labour Government that is increasing fees for teachers. National stands on principle to say that we believe that the Teaching Council should face the same constraints as everyday New Zealanders. We oppose this bill.
ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.
Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Speaker. It’s a pleasure to stand on this bill.
That last speech from Nicola Willis was riddled with inaccuracies and misrepresentations. The first was some suggestion that the Minister, by this bill, is endorsing the unlawful behaviour of the Teaching Council. It’s simply false. We heard the Minister state quite clearly that the illegal fees are not being reinstated and that the teachers council has to go back and correct its error, and to suggest that this legislation in some ways gives carte blanche to the teachers council to impose what fees it wants flies in the face of the legislation and, indeed, the select committee report, which was at pains to make sure that there was clear guidance and constraint about what the teachers council could charge its teachers and to make it very clear that it could only charge for the costs of discharging its statutory functions.
Anyone who has sat on the Regulations Review Committee would know that it is often times a question for that committee as to what the fees, charges, and levies should be. There is a very robust framework for testing those, and the select committee should be commended for its work in addressing the question and making it very clear that this council—a teachers council which is majority run by teachers elected by teachers—can only impose fair and reasonable charges and levies to discharge its statutory functions.
This is an important piece of legislation to correct an error inherent in the National Party’s previous work. It’s unfortunate that it’s had to come to the House to tidy that up, but it’s entirely appropriate that any professional body should meet the costs of operating its professional organisation, and that is all that this bill does. I commend it to the House.
HARETE HIPANGO (National): This bill came before the Education and Workforce Committee. I wasn’t a member of that, and members who are speaking, addressing the House today, were. I note that there were 1,033 submissions from interested groups and individuals, and there was oral evidence heard from 112 submitters.
It’s well-known by our first speaker, Nicola Willis, that the National Party is opposing this bill for the grounds that have been outlaid. May I just for the benefit of the public traverse how this bill came to the House.
Essentially, it was because there had been an action brought by the Post Primary Teachers’ Association (PPTA) to the High Court against the Teaching Council for actions that they were seeking to impose, which was, effectively, that the Teaching Council sought to impose a fee, or was charging an annual fee, as opposed to what used to be a fee every three years. So it was noted that prior to the Education Act 1989, which is the relevant legislation for this case, the PPTA took proceedings to the High Court and they were successful on the grounds as follows: that the Teaching Council failed to consult before imposing annual certification, that the Teaching Council failed to properly consider the merits of annual certification, that the Teaching Council misconstrued and misapplied key elements of the statutory regime relating to payment by instalment in the default three-year certification period, and, furthermore, that the Teaching Council’s decision to set a fee for issuing a practising certificate amounted to an unlawful tax.
It’s inaccurate that members across the House say that that is incorrect. There is a High Court ruling and decision which clearly states that a fee that was set for issuing a practising certificate amounted to an unlawful tax.
So as a result, this bill, the Education and Training (Teaching Council Fees and Costs) Amendment Bill, is to reset the course of that High Court decision to reset and impose the fees. The National Party opposes this bill because it is inappropriate for that to be done so, and I pick up on my colleague Nicola Willis’ saying that it’s somewhat peculiar that here we are, as the National Party, standing in support of the PPTA when it’s well-known that the party for the unions is the Labour Party—the very Government that is seeking to impose what the High Court deemed to be an “unlawful tax”.
I think it’s important in standing and speaking and addressing the House today to acknowledge the teachers of Aotearoa New Zealand, their students, and also the families of teachers and students during this COVID-stricken period, and, particularly, thoughts turn to Auckland, where our children, our students, have been locked out of learning for the last nine weeks and still hold with bated breath the Government’s announcement today as to what plan, if any, there’s going to be to provide some measure of certainty. The certainty that this bill provides once it is passed into law is that it is highlighting, yet again, that we have a Government who will turn its mind to do what it sees fit, dispensing with and not listening to the very people—the teachers of Aotearoa New Zealand—to what their plea and their plight has been. It’s certainly important that when actions and proceedings are taken to the court to seek clarity around legislation, there are rulings that are favourable and, indeed, take heed of the plight of the applicants. In this instance, it was the teachers of New Zealand.
I will have colleagues from the National Party who sat on that committee, who will be able to speak to the detail of the bill, but a key message is that this has been an incredibly untidy process by this Government, which perhaps reinforces the action that has been taken by this Government in leading the way with a lack of clarity and a lack of certainty during this COVID time. But the untidy process from the Government in response to the High Court decision is to bring this bill with its amendments before the House.
The National Party acknowledges the important work that the Teaching Council does regulating the profession, and that the council requires revenue to, effectively, execute its role in doing so. However, it has not been the teachers’ fault that the Teaching Council did not consult—did not consult—adequately with the teachers, much in the same way that this Government chooses not to consult with the nation of Aotearoa in the legislation and the policy imposition that it imposes on us.
So the hard-working teachers of Aotearoa New Zealand—particularly during these COVID times of the last 18 months—have done the most remarkable job in helping students through this period of time. However, the uncertainty remains and we are told, as a nation, just to wait until the Government is ready and the Minister is ready to make announcements. So we await with bated breath what may come out from the Minister this afternoon as it impacts on our teachers of New Zealand, on our students of New Zealand, and on the families in support of them.
The National Party have a minority view, and that has been recorded in the Education and Workforce Committee’s report. The reality is that the National Party, and in Opposition, we do not have the numbers for this bill to be thwarted and halted. The reality is that the Government holds power, holds the numbers, and will put through whatever it deems fit, irrespective of the views of its people, of its entities, of its groupings of New Zealand, and, in this instance, of the teachers.
So, as is known, the Government is yet again amending another piece of legislation, a bit of a hatchet job patching and fixing things up along the way, when it should have been done when the Education and Training Act 2020 was before the House. So, again, we have evidence where things are untidily done by this Government, and it’s as an afterthought it comes to try and repair.
So the Teaching Council, as I said—in summary—is an independent body. They are responsible for registering and certifying our teachers of New Zealand, keeping a register of all teachers, protecting the reputation of the teaching profession, setting standards for teachers’ practice and behaviour, managing concerns about conduct or competence, and making sure teaching students and new teachers get the right training. It somewhat goes against the grain when we have, again, a bill coming before the House and the Government seeking to—as they think and as they see fit—amend something that goes against the grain for the teaching profession here, within Aotearoa New Zealand.
So, rather than addressing the fundamental failings in our education system, here we have a Government led by its Minister, for what seems like the umpteenth time, doing a one-off, fix-up hatchet job to the Education and Training Act 2020. The Government’s education priorities are wrong. They’ve lost sight of the basics in education. The Minister should be focused on getting our children back into school regularly, teaching them a world-class curriculum, and measuring performance—ensuring that they are making progress. During COVID times, our schoolchildren and our classes in Auckland for the last nine weeks have been thwarted and halted from having access to learning and education.
As I say, we wait with bated breath to see what announcement-pronouncement comes from the Government today. In the meantime, I stand as a member of the National Party in opposition to this bill, because what it does is it undermines our teachers of New Zealand by doing a hatchet, patch-it job on another piece of legislation. I do not commend this bill to the House.
ANGIE WARREN-CLARK (Labour): Thank you, Madam Speaker. I’m delighted to take a short call on this bill. I want to initially begin by acknowledging the very hard work that occurred during level 4 lockdown to get this bill to the state that it is in at the moment, and I acknowledge my friend and colleague Marja Lubeck, the chairperson of the Education and Workforce Committee, and the entire team, including officials, for doing such sound work in trying circumstances. It was a limited period of time that was select committee had, but they had over a thousand submissions and heard from over a hundred submitters during the select committee process.
The thing that I am really delighted about is the changes that the select committee have made to the legislation. One of the two things I’m particularly delighted about is ensuring that the council does not set unreasonable fees or levies. So this change, basically, says that the fees and levies need to be fixed to cover actual and reasonable costs. That seems to me to be a very sensible change.
The second thing that I think is particularly good about this bill is that the council must consult before fixing fees or imposing levies. So there is built into this legislation an obligation and process that means that they must listen to their membership and speak to their membership. This is not holus-bolus open slather on changing of fees at all; it is about a consultative and careful and respectful process.
I would also like to remind this House that we have done this legislation for one reason and one reason alone: this was set up wrong in 2015 by the previous Government, and we are fixing it. I commend this bill to the House.
TEANAU TUIONO (Green): Fakaalofa lahi atu, Madam Speaker. Fakaalofa lahi atu ki a mutolu oti. I’m just wanting to recognise that it’s Niuean Language Week, and the theme for Faahi tapu he vagahau Niue—Niuean Language Week—is “Kia tupuolaola e moui he Tagata Niue”, which means “May the Tagata Niue thrive”. Actually, I’m sure all of my Niueans would agree that they would hope that not only all Niueans thrive but, actually, all of our teachers thrive as well, and I would like to begin by acknowledging all of our teachers who are doing all the hard yards at the moment, teaching our kids, but particularly those in Auckland, who are doing their jobs but then also doing them from home as well. It’s a tough job, and I know that teachers don’t just do it for the money. They do it because they love our kids, and they love to make sure and to see our kids and our families and communities grow.
In particular, I’d like to acknowledge the Post Primary Teachers’ Association (PPTA), and as I listened to the submissions, I could hear the frustration coming through the Zoom call. They were so frustrated that they took this to the High Court. We’ve heard from other speakers the results of that, and we’re also appreciating that this piece of legislation is about trying to fix up some of the stuff that was set up in 2015.
The Greens believe that our education system should give everyone the best possible start on a lifelong journey that happens inside and outside the classroom, or even in the Zoom room. Every child is entitled to high-quality, free, accessible public education that gives them the best possible start in life. Education is a public good that should be publicly funded, and we should centrally fund teachers and their activities. We value the contribution they make to Aotearoa and the work to increase the number of skilled teachers.
There’s been a lot of work been put into this bill. The bill is the result of a Government decision in 2020 to reduce funding for the Teaching Council, which led to the council having to increase the fees that teachers pay in order to cover its costs. The Teaching Council is a statutory body set up for the Government to handle the registration and certification of teachers. They investigate teachers’ misconduct, handle professional complaints, and provide professional leadership for the workforce.
I’d like to thank the Education and Workforce Committee and the chairperson, Marja Lubeck, for pulling us all together. We were doing it under lockdown, and I know that each—well, I felt that each member of that committee was committed to getting the best possible outcome for teachers and for our schools and also, of course, for our communities as well.
I had heard that the teachers were frustrated, but I was surprised at the extent of the frustration. In all of the submissions that I heard, none of them were in support of the legislation—I heard there were a couple, but none of them showed up for me, as well—and I guess some of that is around information not landing properly, but then also a lack of clarity around some of the provisions of the legislation.
So we welcome the changes made to the education and training amendment bill in terms of some of the concerns that were raised in the submissions, and we also acknowledge that it is nudging in the right direction—in particular, the provisions which will ensure that the council consults with the teacher profession and turns its mind to the actual and reasonable costs in the carrying out of its functions when setting fees and levies—and, hopefully, this will provide reassuring checks on the powers of the council. However, despite these changes, we remain concerned that the council is now expected to fund core functions independently, having received partial funding from the Government for long periods of time.
I have heard that this has been signalled for quite some time to the profession, but the thing is that when we talk to the professionals, we’ve got to make sure that that stuff lands with the rank and file. I know right now that there are next to no teachers listening to these speeches—next to none. They’re all working, teaching our kids. So it’s all very well for us to have these monologues, but in order for a communication to land, we need to have dialogues, or multi-logues, to make sure that when we communicate things, they land appropriately in the way that we intend them to land.
Fee increases, even those that are reasonable and actual, will be necessary, and we are concerned about the subsequent financial burden that this will represent for Aotearoa’s teachers. At the heart of that, what I got after listening to all the submissions was that there was a direct mistrust and opposition to the council and the way that it operates.
I get that this legislation is about unlocking potential and trying to sort things out after the issues from the 2015 set-up of this legislation as well, but there are problems with the relationship between teachers—particularly those affiliated with the PPTA—and the Teaching Council. For me, I was thinking about relationships the other day, and I guess the way to describe it as a relationship—I was just thinking about food, actually. A good relationship is a boil-up—you know, you’ve got to give it a bit of time. You’ve got to put the ingredients in, you’ve got to let it simmer for a little bit, you’ve got to then kind of check in on it, and you’ve got to give it time to actually get the fine taste of the kai. It’s a boil-up; it’s not a fry-up. You don’t cook it up really, really quickly, and then sort of expect for it to taste well.
So my concern here is that we have boiled up this legislation and then turned off the stove, waited a little bit, turned it back on, and then, 10 minutes later, chucked in a bit of salt and then maybe turned it on a little bit later, and that is my concern about this, because this hasn’t landed well with a lot of teachers. So for me, I think, in terms of nudging our way towards an outcome—because I think we all want that, right? Well, I hope we all want that. We all want the teachers to have confidence in the Teaching Council, because when you have that and that relationship is solid, that is the best thing for schools, for teachers, and for communities.
I have some questions that, hopefully, we can get some clarity over, or even a response from that corner of the House, even in the committee stage. Given that the Teaching Council does not intend to possibly be able to fulfil its intended legislative functions without a substantial fee increase, how will the Government mitigate the financial burden for teachers, because we are talking about some new teachers that are just starting, early childhood education teachers, and then, of course, relief teachers as well. I remember one submission from a teacher, and she talked about how she had to budget right down to the next dollar. So, all of a sudden, you’re going to have 10 years’ worth of increases, potentially, showing up, and then what will that mean for that teacher?
Instead of amending the legislation to allow for levies to be charged as well as fees, why does the Government not just fund those aspects of the Teaching Council that are for the public good, such as the disciplinary functions themselves, instead of making all teachers pay for a process that the vast majority might not need? Why does this legislation seek to expand the Teaching Council’s fee-setting powers to cover all of those expanded functions when the submissions to the select committee were very clear that teachers want to remove those expanded functions and not pay for them?
I did want to acknowledge the comment from the Minister of Education around the leadership functions and how the Supplementary Order Paper (SOP) will take out those leadership provisions, and so thank you for that clarity. But I do have some questions about what leadership means when in reference to that SOP. There are three types of leadership elements that I think we need to address to get that clarity, to get the best ingredients possible in this boil-up that I was talking about.
So with leadership, is this about providing leadership to teachers and direction for the educational profession, or will that be covered by the SOP? Will it be to enhance the status of teachers and educational leaders? That’s the second element. Will it be able to identify and disseminate best practice in teaching or leadership and foster the educational profession’s continued development in light of research and evidence of changes in society and technology? So I would like to get more clarity around those three elements of leadership, or different types of leadership, to see if this SOP will actually cover that, to make sure that this is nudging in the right direction.
I think a longer period of consultation over the changes in this bill would be more constructive and better. We did work hard in the select committee process, and I know that the teachers themselves have been feeling frustration, but at the heart of that is this relationship. We need to be able to get that relationship well and to make sure that it is as solid as possible, and we did hear that they are actually running out of money, and so on and so forth. But, for me, that’s not the fault of teachers. Teachers did not do the 2015 legislation and they’re not responsible for this legislation, so why should they have to stump up extra money in a way that is not clear for them?
So what I would encourage this House and, of course, the Minister to do is to work with the teachers—particularly the PPTA, because the frustration is coming from that corner of our education ecosystem—and to walk with them to make sure that we do the best thing possible and get the best possible outcome for teachers, for students, and for our communities. Thank you, Madam Speaker.
CHRIS BAILLIE (ACT): Thank you, Madam Speaker. I rise on behalf of ACT to speak to the Education and Training (Teaching Council Fees and Costs) Amendment Bill. ACT opposes this bill for a number of reasons, but the main reason being that teachers have lost confidence—and rightly so—in the Teaching Council and, really, it doesn’t need tinkering; it needs a complete review.
Teachers do a great job in an increasingly stressful situation. More accountability and all sorts of pressures have gone on to teachers just recently. They need a teachers council that, actually, they trust and that they support, and that they know supports them.
I renewed my teachers’ registration last June. I was the envy of a lot of teachers because I got in just before the teachers council were going to change it to a one-year registration. We know the result of that: the teachers council made that change, despite all the negative feedback from teachers who didn’t want that. But they changed it, so their trust has gone.
I was on the Education and Workforce Committee and heard many submitters, and, like the previous speaker Teanau Tuiono, I never heard one submitter who was supportive of this bill. Many issues were raised and they all had pretty common themes. The extra powers that have developed over the years—no one actually knew what the teachers council did. The rushed process was questioned: lots of submissions, but they still felt that they didn’t have enough time to be heard. Concern that the teachers council weren’t the right people to deliver the professional development: science teachers know best what they need to know; every department is more OK with what they need to learn to teach the kids. There was a concern that the Teaching Council keeps changing requirements and then requiring teachers to do professional development so that they can meet those changes. Also, a concern whether the teachers council—the body that handles the discipline of teachers—is the appropriate body to provide the professional development and the leadership.
A number said that the vast majority of teachers pay for the teachers council for the discipline side of things, but it’s never actually used. Many mentioned that the key 13 staff in the teachers council averaged $187,000 while they were on a pay freeze. There was a certain amount of disdain that the teachers council had a budget, and so it should work within it like everyone else, and almost every submitter, like I said, was concerned at the lack of consultation.
The select committee report acknowledged that the profession doesn’t trust the teachers council, and a number of teachers have been asking whether the Minister will be calling for the resignation of the leadership. They made it clear that they wanted to remove the expanded functions of the teachers council and not add to them, or do whatever they decide. The Supplementary Order Paper offers no real comfort, and if it really does separate the council’s leadership functions from its other functions, we don’t need the bill—user-pays.
Teachers haven’t been fooled by semantics. Fees, levies, or whatever—they’re not silly. The teachers council should stick to its knitting: registration and discipline—although I’ve heard some pretty horrific stories about the latter over the last few months.
ACT opposes this bill, but I’m quite happy to see it pass as it shows the people of New Zealand the contempt this Government has for process and it highlights the self-interest and agendas that we’ve come to expect. We already know this Government doesn’t care about kids. The appalling treatment of charter schools—successful charter schools—shows this, but it also shows teachers, those hard-working and often loyal Labour supporters, that they really don’t care about them or their opinions, either. ACT does care about kids and we also care about teachers, and we oppose this bill. Thank you.
RACHEL BOYACK (Labour—Nelson): Thank you, Madam Speaker. It’s a pleasure to take a short call on the Education and Training (Teaching Council Fees and Costs) Amendment Bill. Just in response to the previous speaker Chris Baillie, I just want to make some comments, I guess, about the excellent work that the Education and Workforce Committee did do on this bill, which involved listening to teachers, specifically about some of the concerns that they raised.
I just want to draw attention to the House of two particular changes that were made to ensure that teachers’ concerns were addressed as part of this bill. The first was around ensuring that the fees used by the Teaching Council and collected from teachers are only used for the specific cost of performing their function. So one of the concerns that came through from teachers in the select committee hearings was how that money that is collected is used and the purposes of it. So the bill is going to be amended to ensure that it only focuses on those specific functions of the Teaching Council that relate back to the work of teachers.
The other which I think is really important is the importance of consultation. I note in the select committee report that the Teaching Council came to select committee and has assured members that they will be co-designing a consultation process alongside teachers and their representatives. Look, from my point of view, consultation that is genuine and fair—this is an important matter for the Teaching Council to be focused on. The select committee certainly agreed with the views of teachers on that and welcomed the position from the Teaching Council around having a proper focus on consultation around fees, because that is exactly how fee-setting in this type of context should occur.
So I think that the select committee has done an outstanding job here of listening to those concerns and amending the bill to ensure that they are addressed. On that note, I commend the bill to the House.
JOSEPH MOONEY (National—Southland): I rise as the member of Parliament for Southland, on behalf of the National Party, to speak on the Education and Training (Teaching Council Fees and Costs) Amendment Bill and to oppose it on behalf of the National Party. It is somewhat ironic that when we have just received news that we have got the biggest increase in the cost of living in a decade, inflation of 4.9 percent from this time last year, when the costs of living and the costs of buying essentials is going up for our hard-working teachers, among others, in our communities, this bill is going to retrospectively justify, effectively, doubling the cost of registration for teachers over a three-year time frame.
So just to be clear: the Labour Government, earlier this year, rewarded essential workers with what was a wage freeze, and now they are telling teachers, who are the unsung heroes of the pandemic and who are making sure that our children continue to be educated—something that is critical for the future of themselves, their families, and this country—that they are going to have to pay more to be a teacher; in fact, double over a three-year time frame. This is not good enough.
The Post Primary Teachers’ Association—the PPTA—took a case to the High Court earlier this year, and the High Court was quite compelling in what it said: firstly, that the Teaching Council had failed to engage teachers, and, in fact, teachers had no opportunity for meaningful or, indeed, any input into the decision to move to an annual certificate renewal. The court noted that the move to annual certificate renewal was likely to create more work for teachers than triannual certification, and the council had incorrectly said it could not legally accept instalment payments or fees for a triannual certificate. The court said, “I have reached the conclusion that the change to the period of certification was a significant one that produced detriment for a large number of teachers. The teachers had no opportunity for meaningful or indeed any input into the decision.” This just brings to mind, for me, a number of other things that this Government has done itself which are not engaging in meaningful discussions with people who its decisions affect, and, unfortunately, we are seeing this extended to this bill, which is retrospectively justifying a doubling of certification fees for teachers. It is, frankly, mind-boggling.
I note that this Government has found a significant amount of money—in fact, hundreds of millions of dollars—for the Ministry of Education restructure, yet it cannot find a few million dollars for teachers at the front line of our education system. What message does that send to our hard-working teachers, who are keeping the wheels of education moving during this pandemic? Why should hard-working teachers, who have done such an incredible job, literally have to pay more because this Government has not been on the ball?
It is not the teachers’ fault that the Teaching Council did not consult with teachers adequately, nor is it the teachers’ fault that the provisions of the Education and Training Act were inadequate to achieve Parliament’s objectives. While the Act is, admittedly, large and complex, Parliament should cop the High Court ruling on the chin and pay for its mistake. It sets a bad precedent for Parliament to rewrite an Act immediately and retrospectively in response to one court decision.
National does acknowledge the important work that the Teaching Council does in regulating the profession, and the council requires revenue to execute its role. But this is the wrong way of going about it.
New Zealand’s teachers have done an extraordinary job during these lockdowns, and are continuing to do so during the lockdown that we are experiencing in parts of our country. They have been spending a lot of time online, making sure their students continue to learn, and I want to especially extend my appreciation to them. New Zealand owes our teachers a debt of gratitude. The National Party very much values our teachers. With that, I would say the National Party does not commend this bill to the House.
RACHEL BROOKING (Labour): Thank you, Madam Speaker, for this opportunity to make a much more positive contribution, or a more positive speech at least, than the previous speaker Joseph Mooney. Thank you for this opportunity to speak on this bill, the Education and Training (Teaching Council Fees and Costs) Amendment Bill, and I say the title there because we’ve seen the Supplementary Order Paper—which will, of course, be discussed in the committee stage—that changes that title to the Education and Training (Teaching Council Fees, Levies, and Costs) Amendment Bill. So that is the part that I’d like to discuss. The parliamentary process, which I think, has been very good, is making some changes via the select committee process and then by the Supplementary Order Paper.
I say that because I’m delighted to be a member of the Regulations Review Committee—
Hon Chris Hipkins: A fabulous committee.
RACHEL BROOKING: —a great committee—and that committee has the joyous task of looking at all the bills that come before this House where there is a regulation-making power. So the Regulations Review Committee looked at this bill, and this bill, as I’ve just mentioned, referred to fees but not to levies, and the Regulations Review Committee wrote to the select committee looking at this bill and said, “We think you need to be clearer about when something is a fee and when something is a levy.” Fees are for a specific private benefit, whereas with levies there is more of a benefit to the part of the community that the regulation is relevant to.
The Regulations Review Committee wrote to the other select committee—the Education and Workforce Committee—and the select committee picked that up in their report and made the changes to the bill that we’ve heard the Minister speak about. Those are furthered in the Supplementary Order Paper, with that change to the title as well.
If this is something of interest to anyone, I can recommend the Auditor-General’s recent guidance: Setting and administering fees and levies for cost recovery: Good practice guide. That has just come out in the past couple of months—great reading, with a two-page summary, which is very handy.
I’d like to end just by agreeing with the previous speaker about the importance of teachers, particularly in these COVID times. As a mother of three, I certainly appreciate all the hard work that the teaching profession is doing. On that note, I’d like to commend this bill to the House.
PENNY SIMMONDS (National—Invercargill): Thank you, Mr Speaker. I rise on behalf of the National Party to speak in opposition to the Education and Training (Teaching Council Fees and Costs) Amendment Bill. There’s a number of ironies to this bill which people have already alluded to, but the irony for me is that this bill has come about because the Teaching Council didn’t consult sufficiently with teachers. So what was the Government’s response to that? Well, they rushed through, with only a handful of weeks for consultation for the poor teachers, this bill during term time while most teachers were teaching remotely in lockdown conditions. So they were adding insult to injury in terms of the amount of consultation with the teaching profession.
The Teaching Council is an important body, and we recognise that it has an important role in regulating the teaching profession and in the certification of the teaching profession. But when they moved outside the scope that the teachers had given them into professional development that the teachers had not asked for, and increased their fees because of that, and moved to annual registration, the Post Primary Teachers’ Association (PPTA) felt forced to take this case to the High Court. The teachers were, quite rightly, incensed by this. They would have been very pleased that the High Court found in their favour, and, on five counts, thought the Teaching Council had failed. They had failed, as I said, in their consultation with the teachers. They had failed to consider the merits of annual certification. They had misconstrued key elements of the statutory regime that they were operating under, and their fees, therefore, amounted to unlawful taxes on the teachers.
So the teachers could have, at that stage, expected: “Right, we’ve stood up, we’ve been counted, we’ve been heard, it’s going to be fixed.” The Government had two options at that stage: they could have taken it on the chin and they could have funded the shortfall, or they could have asked the council to do what most businesses have to do across this land, and that is to cut their cloth to the budget that they have. But, instead, the Government decided to rewrite an Act of Parliament to change this. Now, that’s an amazing signal that this Government is giving to the teachers.
There have been a number of people that have said there’s some irony in having the National Party stand alongside the PPTA; actually, I don’t find any irony in that at all. I’m very comfortable standing beside our teachers. I’ve spent the last two decades working productively with the Tertiary Education Union, and I know that when you walk alongside unions, you may have different points of view on a number of things, but, actually, you have a lot of similar aims and objectives. So this signal that this Government—this Labour Government—have given to their teachers is absolutely astonishing.
I’d like to go back to what the teachers said. As my colleagues have noted, there were 1,033 submissions and 112 of those submitters asked to be heard, and, like my Green Party and ACT Party colleagues, I didn’t hear one teacher in support of this bill. So every MP on the Government side who has stood up and said how this is a wonderful, positive bill and such a good thing for teachers must have been listening to different submissions than I heard, because not one teacher agreed with this. They were incensed, they were furious, and they were angry, and I think my Green Party colleague noted that he was surprised at the level of anger from the teachers.
But they noted quite sensible things, like they never asked the Teaching Council to expand into professional development. They want to do the professional development with their colleagues in the same discipline, so the music teacher explained in her submission that her professional development is with the music teachers of New Zealand and the science teacher talked about how their professional development needs to be in the science field with their science colleagues. But we saw within the Teaching Council that, actually, what they were doing with an amount of their professional development was actually following indications from Government about some ideological changes that they wanted to see in the teaching profession. Now, this is astonishing that then the Government has refused to pay for that, given they were expanding the scope of what the Teaching Council was doing to cover their ideology—but they wouldn’t pay for it.
I think the teachers of New Zealand should be able to expect from their Minister that he would be interested in the big issues for their sector. A teacher could expect that their Minister would be worried about truancy levels, which were horrendous even before COVID and are going to be a nightmare for schools and teachers, and they will need support and resources to bring those truancy levels down. Teachers should be able to expect that the Minister would be absolutely focused on what is happening with our maths and our science in schools, and how our levels are dropping against peer jurisdictions across the world. They should be able to expect that that’s exactly what the Minister is focused on. They should be able to expect that this Minister is concerned about the resources and the equipment and the facilities that they have to teach our young people. But, instead of these very big important issues for our education sector, the Minister is fiddling while Rome burns by putting through bills like this to impose more costs on teachers.
Now, we shouldn’t have been surprised when we saw the anger and the frustration from these teachers. No wonder they are angry when this is what their Minister is worried about: getting more costs on to our teachers, taking away their ability to meaningfully be in consultation with the Teaching Council and with this Government. It is an insult to those teachers that the Government rushed this through at a time when teachers were absolutely pushing to the limit to look after young people remotely in lockdown, and all the issues that they have to deal with with those young people—to push this through and expect them to make submissions at that time. Many of the submissions spoke to that, and spoke to how angry they were about how the Government had treated them so arrogantly.
So I can absolutely sympathise and understand, and I’m happy to walk alongside the PPTA and other teaching unions because they are seeing—exactly as our ACT colleague has pointed out—that this Government does not support our teachers, our teachers that have done amazing work over these last two years, when students have been in lockdown. They have done amazing work trying to keep their home lives going while they are teaching, and then they are being asked to put submissions in and go in front of select committees remotely to try and get heard by this Government that has purported to be the Government of the teachers. Well, I think that façade is slipping very fast, and teachers will understand that there is very little empathy and very little support coming from this Government for our teachers.
So the National Party is standing in opposition to this education and training amendment bill. Thank you.
GREG O’CONNOR (Labour—Ōhāriu): That previous speaker, Penny Simmonds, is living proof of the axiom that politics makes for strange bedfellows.
Every speaker here today has mentioned professionalism, so let’s understand what we’re talking about. A profession is defined as a unique body of knowledge and skills—something that our very professional teaching organisation has. It has an institutionalised learning and standards of qualified entry—again, describing our teachers. It has a code of ethics, it has a service orientation, and it has—important in light of this legislation—a self-governing professional association or sanctioning body, and that’s what we’re talking about here. To be able to call yourself a member of a professional body, you simply have to have those five attributes, and our teachers, fortunately, do. However, without a self-governing professional association funded sufficiently to be able to do the job it is required to do, then one cannot regard oneself as a member of a profession.
What does that professionalism allow? The first thing it allows is it allows mobility. It allows New Zealand teachers to be able to go and work in Australia, in the UK, and in Canada because they have a recognised profession. So the price to pay for being part of a profession is to be part of a self-governing body, and it means somebody’s got to pay that bill.
This legislation is about ensuring that that bill is paid and that teachers can justifiably stand and call themselves professionals. They are professional. We are well served by our teachers, but it is important that there is a self-governing body around that to ensure that those standards are enforced. That’s what this bill is about. For that reason, I have absolutely no hesitation in commending it to the House. Thank you, Mr Speaker.
That the amendments recommended by the Education and Workforce Committee by majority be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 65
New Zealand Labour 65.
Noes 55
New Zealand National 33; Green Party of Aotearoa New Zealand 10; ACT New Zealand 10; Te Paati Māori 2.
A party vote was called for on the question, That the Education and Training (Teaching Council Fees, Levies, and Costs) Amendment Bill be now read a second time.
Ayes 65
New Zealand Labour 65.
Noes 55
New Zealand National 33; Green Party of Aotearoa New Zealand 10; ACT New Zealand 10; Te Paati Māori 2.
Motion agreed to.
DEPUTY SPEAKER: The question is,
Amendments agreed to.
Bill read a second time.
Name changed to Education and Training (Teaching Council Fees, Levies, and Costs) Amendment Bill.
Bills
Education and Training Amendment Bill
Second Reading
Hon JAN TINETTI (Associate Minister of Education (School Operations)) on behalf of the Minister of Education: I present a legislative statement on the Education and Training Amendment Bill.
DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon JAN TINETTI: I move, That the Education and Training Amendment Bill be now read a second time.
On behalf of the Minister of Education, I wish to take this opportunity to thank the members of the Education and Workforce Committee for their careful and cooperative consideration of this bill. I also wish to thank those who made submissions on the bill, as well as the Office of the Clerk of the House of Representatives for their report relating to this bill. And, as the Minister mentioned in his first reading speech, this bill primarily deals with issues that aren’t policy changes but are the inevitable necessary tweaks following the drafting of the Education and Training Act 2020, which was a significant drafting exercise.
While the amendments to the Act are small, they are relatively urgent. As part of the process of converting all education legislation into a single statute, Schedules 20, 23, and 24, relating to the enrolment schemes, electing and co-opting board members, and national student numbers, were to be automatically repealed on specified dates and converted into regulations. Upon further reflection, these three schedules all contain provisions that should remain in primary legislation rather than being converted into regulations. As such, the bill amends the Act’s sunset provision so the schedules are not automatically repealed on specified dates. The schedule relating to national student numbers is due to be repealed on 1 January 2022, making it necessary for the bill to be passed this year. I thank the select committee for their timely examination of the bill, which avoids a vacuum.
The Education and Training Act and the Children’s Act both contain provisions aimed at keeping children safe when engaging in education. It has become clear that there is some confusion about how the two Acts work together. The bill inserts a provision to make it clear that the first question employers must ask themselves is whether their new employee is a children’s worker. Only if the answer is “no” do the provisions of the Education and Training Act become relevant. There are a few other minor and technical changes in the bill, including amending the thresholds for interventions in State schools so that they replicate the provisions of the previous Education Act 1989. These thresholds were intentionally changed in the drafting of the Education and Training Act.
The bill also amends the physical restraint provisions to be consistent with the position under the now repealed Education Act 1989. This position was not intended to be changed. The bill amends section 6 of the Act to specify five education agencies that must give effect to the statements of expectations relating to Te Tiriti o Waitangi, issued jointly by the Ministers of Education and Māori Crown Relations: Te Arawhiti. These agencies are the Ministry of Education, the Education Review Office, the New Zealand Qualifications Authority, the Tertiary Education Commission, and Education New Zealand.
I wish to thank the Office of the Clerk, who drew the committee’s attention to two design issues relating to the bill. While the report from the Office of the Clerk did not lead to any amendments to the bill, these kinds of checks and balances are an important part of how our Parliament operates.
So, as the Minister predicted in his first reading speech, the bill did not set the world on fire. The bill has been reported back with no recommended amendments, and, as he hoped, with the bill being relatively technical, it has been non-controversial so far. I commend the Education and Training Amendment Bill to the House.
DEPUTY SPEAKER: The question is that the motion be agreed to.
PENNY SIMMONDS (National—Invercargill): Thank you. Thank you very much, Mr Speaker. Well, an education and training amendment bill again. I really wish the Minister would watch the home handyman on TV that says, “Do it once; do it right.”, because with these education and training amendment bills, it seems to be in one door, out another, back in the door.
So the purpose of this bill is to clarify safety checking processes for children’s workers and school employees. Of course National supports that; it’s tidying it up, of course we would. It would be nice if you could get it right the first time. It extends the ban on charging trainees a compulsory student services fee for year 1. Now, this is tied up with the review of vocational education; the merging of the ITP sector and the ITO—institutes of technology and polytechnics and industry training organisations sector. So it’s extending that out to a period closing 31 December 2022.
Now, how did that not get done right in the first place? The Minister knew when he was putting this merged Te Pūkenga in place that it was going to not happen until 2022—the implementation of it. But I’d have to say, having just come from the Education and Workforce Committee, where we saw what a shambles that amendment has created with Te Pūkenga, I’m not surprised that this has to be amended. Just on that amendment of the reform of vocational education and the setting up of Te Pūkenga, if people are wanting to just keep an eye on what the Minister promises: the Minister promised a modest headcount of a head office for Te Pūkenga—139 people at a cost of $11 million. That’s probably modest in this Government’s view, when they can throw millions and billions, but I can understand now, perhaps better, how they got the date wrong in charging the trainee compulsory student fees.
The other bit in it is about ensuring that only persons holding a teaching position are able to use physical restraint, and certain other provisions around rules of intervention. So, look, it’s a tidy-up bill, and National is going to support it. And, of course, we want to support when there are technical amendments, but it also shows the dangers of trying to do too much in too short a time—rushing things through without consultation, rushing things through under urgency, and then having to come and mop up later when it takes time in this House to do it. Quite frankly, I would hate to think how many times this Education and Training Act has been to the House in the short time that I’ve been here, in a year, but it’s certainly been frequently.
So National has concerns in a number of areas of what’s happening in the education sector, and we would rather that we were getting amendments coming to the House for this piece of legislation that were addressing some of the key issues that we’ve already talked about today in the House in the education sector. We would love to see some amendments on changes that can help improve the absolutely appalling truancy rate that is in this country. And before anyone leaps up and says that’s COVID, it isn’t COVID. Those truancy rates were there pre-COVID, and they are only getting worse. We would love to see an amendment to this Act come into the House that shows something being done to improve our maths and our science results in our schools. That would be worth standing here and debating in the House. We’d even like to see something come in that shows that immigration is going to open up and allow some more maths and science teachers in to help all those schools that are franticly trying to find maths and science teachers to staff their classrooms.
So, look, there are big issues in education happening at this very time. When we have a significant number of our young people in schools who have not been able to physically get to schools for the equivalent of over a whole term, and the impact that that is likely to have on their whole learning journey, we would like to see some things coming to this House that are going to address that, but instead—and I said it in my last speech—we are seeing a Minister who is fiddling while Rome is burning. There is nothing substantial coming in that is showing we are supporting the teachers, we are supporting the schools, and the schools are going to have to deal with these young people because there has been such variation in the amount of schooling that these young people have received over lockdown time. The schools must receive some sort of support to catch up that learning for those young people or they are going to be behind their whole lives. So those are the kinds of things that we would have hoped to see coming into here. I would just be very, very hesitant about seeing minor amendments like this and having to support them, but seeing nothing of substance and not seeing sufficient consultation so that legislation is done right and done once in the first place. My goodness, we are going to have to see some amendments come in with that shambles that is unravelling in Te Pūkenga as a result of the review of vocational education, which, again, had that theme of consultation that wasn’t done right, of a Minister claiming that there was an overwhelming majority of submissions supporting it, except there were 29 percent of them.
So we’ve got some remedial work that I’m sure is going to be in front of us again with the Education and Training Act. We will support the Government because these things need to be fixed up, not because we want to support you continuing to make messes. But it is taking our time, it is taking the House’s time, it is taking select committee time, and not one scrap of time has been given to these big issues in the education sector of truancy, of hard-to-staff discipline areas, of failing maths and science grades, and of schools that are crying out for support. So we will rise and support the Education and Training Amendment Bill second reading. We hope it doesn’t go out the door and come back in again with some other changes because the Minister forgot to find out about something or forgot to consult sufficiently. I understand it is likely, but could the Minister please start paying some attention to detail so we don’t constantly spend our time on cleaning up these shambles. Thank you, Mr Speaker.
ANNA LORCK (Labour—Tukituki): It’s a bit rich for that side of the House to go on about what they know in education when you think about the abomination of national standards and what that did to our education system. We on this side of the House have an absolute desire and passion to ensure that education feeds the growing minds of this nation so that our young people learn and discover and thrive in a lifetime pathway of success. This bill has a few very short, important issues that need to be addressed. This is why I support this with urgency, and I commend this bill, the second reading of the Education and Training Amendment Bill, to the House, because Labour supports and thrives in an education journey with teachers, students, and parents for a better, brighter future for this country. I commend this bill to the House.
NICOLA WILLIS (National): National supports this bill, the Education and Training Amendment Bill, which largely proposes technical amendments that fix up the principal Act. But let me say, here we are again. This House has spent inordinate time during this term of Parliament fixing up legislative errors in legislation brought forward by this Government. Members opposite may think that that’s no big thing—who cares; it’s just Parliament’s time.
Hon Dr David Clark: Opposition didn’t do its job last time.
NICOLA WILLIS: I would remind members opposite, including Minister David Clark, who’s currently barracking at me, that he is here, funded by taxpayers, and that the time of this House, the support for this House, is time that could otherwise be spent on issues that are far more important to everyday New Zealanders. Let’s remember the context.
Anna Lorck: What’s more important than education?
NICOLA WILLIS: Anna Lorck asks me “What’s more important?” Thank you for that wonderful question. I will tell you, Anna Lorck, what is more important. What is more important than spending the House’s time on technical amendments to a piece of legislation is the fact that two out of five children in this country do not regularly attend school. What future do those children have? What hope do they have, Anna Lorck? What hope do they have, Minister Jan Tinetti? Actually, we have major issues in our education system, and this bill does absolutely nothing to progress solutions to them.
Every hour we spend in this House has an opportunity cost. Every hour officials spend doing technical amendments to bills, every moment that the Minister spends having to fix up sloppy mistakes he’s made in the past is a minute not spent confronting the genuine challenges of our time, which in the education system are real. They are palpable. We have kids not going to school. We have kids failing to learn to read and write. We have kids who can’t do maths, and what’s the Minister of Education doing? He’s doing technical amendments to the Education and Training Act.
I notice that the members opposite have suddenly got a lot louder, haven’t they, colleagues? They’ve suddenly got a little bit louder, and I think that’s because it’s actually a bit embarrassing for them. I think it’s because they know that their constituents, who gave them their support and their votes at the last election, didn’t do that with the understanding that they would come to Parliament and spend their time representing them by pushing through technical amendments following sloppy mistakes. They know that, actually, New Zealanders expect pretty simple things. They expect that our schools will have children who attend them, and that where children aren’t attending school, where two out of five children aren’t regularly attending school, that the Minister of Education will see that for the crisis that it is, and that he will prioritise the time and resources of his ministry, of his officials, and of his own time, towards addressing that problem.
The members opposite know that every minute we are spending on technical amendments to change Schedule 20 relating to enrolment schemes, and Schedule 23 relating to electing and co-opting board members, and Schedule 24, which relates to national student numbers, is a minute not spent on the more real issues confronting our education system.
Hon Member: Stop filibustering.
NICOLA WILLIS: Was it Minister David Clark who made that contribution? He said to me that I was filibustering. Well, I’d offer this to you, Mr Speaker. Members on the Education and Workforce Committee spent some time considering this bill. This bill has multiple provisions, and it’s actually not the first time that a bill has been brought forward to fix up the Education and Training Act. I think it is absolutely appropriate that at the second reading of a bill, which is, fundamentally, about the way the education system in New Zealand works, that we do say, “What is the opportunity cost of this legislation?” Members opposite may think that there is a big money tree at the end of the garden and that there is room to do love and sunshine for all, but I tell you what, actually, members opposite would do well to learn that Government is about priorities. Government should be about where you spend your time, resources, and energy and what problems you focus on fixing. So it is absolutely relevant to this debate that we have an education and training amendment bill before us that does nothing, not a thing, to address attendance, to address falling literacy levels, to address declining numeracy levels, and that does not a thing to lift student achievement.
DEPUTY SPEAKER: I’m going to give the member a little bit of encouragement to talk not about what’s not in the bill, but what is in the bill. I ask her to do that now, please.
NICOLA WILLIS: I’m going to do that, and I really hope that New Zealanders are listening. I hope that while they listen to me doing that, while I tell them about what’s in this bill, they have in the back of their mind, “This is what I sent Greg O’Connor to Parliament to do.” What they sent Greg O’Connor to Parliament to do was, as the explanatory note of the bill states, “Clauses 5 to 7 amend sections 99(1) and (2)(b), 100(1), and 101(4), which relate to the use of physical restraint at registered schools, including by teachers. The amendments clarify that only persons holding a [current] teaching position can use physical restraint in accordance with the provisions.” And the reason we’re doing that here is because there were drafting errors in the original Act that members opposite failed to pick up at select committee, that the Minister failed to pick up, and that his hundreds of officials at the Ministry of Education failed to pick up. So here we are doing those clauses.
What Greg O’Connor, the member for Ōhāriu, came to Parliament to do was ensure that the House could spend its time on clause 8, which “amends section 171(2), which authorises interventions in State schools by the Secretary for Education (the Secretary) or the Minister. The amendment ensures that the provision directly corresponds with section 78I(1A) of the repealed Education Act 1989, which relates to interventions that may be used by the Secretary.” Is anyone following this? My sense is that these sorts of technical amendments are not what anyone sitting in this Chamber today thought they came to Parliament to do. My sense is that when I talk to voters about the great education challenges facing our country, what they want for their kids, and what they expect legislators to be focused on, it’s not actually about fixing up technical amendments and schedules in the new Education and Training Act.
Actually, what we do, I think, have a right to expect is that when we’re continually having to do these fix-up bills that someone, somewhere, maybe the Minister or maybe one of the good members opposite, sits down and says, “I think the officials at the Ministry of Education have got a bit sloppy. I think we need to demand better from them.” Actually, it’s not appropriate that the Minister is having to waste time on this, that members in the House are having to waste time on it, and that officials are having to waste time on it. I think it is absolutely appropriate in a second reading speech that we ask those questions, and I wonder whether the Minister of Education is happy that this sort of fix-up is continuing to have to happen.
I want to be realistic. A bill like this is necessary. We can’t, as legislators, let mistakes in the law continue and perpetuate when we are aware of them and when we know they could cause technical and legal difficulty in the future. It is appropriate to support amendments that make a piece of legislation function effectively in the way that it should. And, yes, it is also true that from time to time mistakes will be made in the parliamentary process. I fully acknowledge that. Those mistakes have been made on both sides of the House, with National-led Governments and with Labour-led Governments. But the point I’m simply making today in this contribution is that we have had to have fix-up after fix-up after fix-up to the Education and Training Act, and that is in the absence of any meaningful reforms and changes to genuinely address the very real problems in our education system. I could keep talking to you about the clauses in this bill, but I don’t think it’s the best use of the House’s time, and I would ask members opposite to consider that next time they bring an education and training amendment bill to the House, it actually does something to get kids better educated in this country. Thank you, Mr Speaker.
PAUL EAGLE (Labour—Rongotai): Well, thank you, Mr Speaker. What a pleasure it is to be back in the House and to speak after the list member for Wellington Central Nicola Willis, because I hosted her in the mighty Rongotai electorate recently at Newtown School. She was a lot warmer then. She was a lot cuddlier. She was holding hands, well trying to, but I said, “Two metres, remember?”! She was a whole lot different. But, I guess, she was in a school, and that’s a good thing for any one of us, in this House, to be on the ground with the people, with the children, and doing good things, like getting people vaccinated, but I digress. Today, however, she’s obviously not in the same mood.
But I’m going to refocus and just talk about this very important amendment bill, because, as the Associate Minister said in introducing it, it is small, it is urgent, but it’s important. Those three words I hold dear because we do need to get this through. There are seven things on the list here that range from clarifying Police vetting provisions, through to those in early childhood education around regulation-making power, through to the statement of expectations relating to Te Tiriti o Waitangi, and lots of other minor and technical changes. We could pull apart why, how, and spend months and years, but that’s not what the people of Aotearoa New Zealand want us to do. They want us to get on with it, make these changes, make anything possible to give—as the previous speaker said—our children all the education that they can possibly get. That’s why I’m commending this bill to the House.
TEANAU TUIONO (Green): Fakaalofa lahi atu, Mr Speaker. Fakaalofa lahi atu ki a mutolu oti. It’s Niuean Language Week—so big greetings to all our Niuean teachers out there and, of course, to all of our teachers across the great nation of Aotearoa, who are doing it tough for all of our whānau, particularly our teachers up in Auckland, who are doing their jobs in lockdown.
It’s Groundhog Day: we’re back here to list this amendment, this bill, and when I remember the first version of this bill, that Groundhog Day was actually a lot quicker, because we know that this is just dealing with a few technical changes that need to be done. And it reminds me of that whakataukī, “Ko te manu e kai ana i te miro nōna te ngahere, ko te manu e kai ana i te mātauranga nōna te ao.”—the bird that partakes in the berries, their domain is only the forest; but the bird that partakes of knowledge, their domain is the world. But sometimes birds drop a few berries here and there in the forest and they’ve got to go back and pick them up.
So this bill is a quick tidy-up bill; it’s not controversial. People have gone through the list of the different amendments that need to be done, and I fully appreciate that as well—things like amending the sunset provisions, clarifying the relationship between the Police vetting provisions, ensuring regulations can be made to reflect a new requirement for proposed early learning services, specifying the agencies that the Minister of Education and the Minister for Māori Crown Relations relate to as well, and all of those types of things.
There are a lot of issues at play in education, and the Minister was right that this bill would not set this House on fire, but I am mindful that there are places around the world that are actually on fire. And so, by spending less time and less speech time on this reading, we’ll be able to focus on those bigger issues, like where those fires are happening. So things around climate change education are really important, making sure that we embed that within the Curriculum, making sure that that learning follows through the Curriculum review, making sure that that is part of the learning, because it is actually part of the reality that our children are inheriting and are in today. I won’t drag this out, but I will say that the Greens do support this bill. Ngā mihi.
CHRIS BAILLIE (ACT): I rise on behalf of ACT to take a short call on the Education and Training Amendment Bill. This is a bill which ACT supports. It is a technical bill that amends the Education and Training Act 2020 so that a number of provisions that are best suited for parliamentary enactment remain in the principal Act.
Obviously, that needed sorting, but it is debatable whether it’s the most important issue in education today. The bill won’t help things such as falling literacy and numeracy rates, terrible truancy rates, increasing students with learning needs, and increasing behavioural issues. New Zealand must start addressing these, and I think they’ve been well highlighted by previous National speakers.
As a former policeman, I am particularly interested in the amendment that limits the use of physical restraint, which will change the wording of several sections to clarify who can use restraint on a student. They would make it clear only a person holding a teaching position can use physical restraint, or someone who is specifically authorised by their employer. On the face of it, this makes sense, but I think it really is a little bit naive, and it needs pointing out that we must always remember the two sections in the Crimes Act 1961, which override rules and regulations.
The first one is section 41, which is prevention of suicide or certain offences, and it reads: “Every one is justified in using such force as may be reasonably necessary in order to prevent the commission of suicide, or the commission of an offence which would be likely to cause immediate and serious injury to the person or property of any one”. This would include an out-of-control student smashing up a classroom.
And section 48, which is self-defence and defence of another, which reads: “Every one is justified in using, in the defence of himself or herself or another, such force as, in the circumstances as he or she believes them to be, it is reasonable to use.”, such as students fighting. I would like to think if a teacher—or anyone else, for that matter—is put in the unenviable situation that requires physical restraint they are supported by their senior management, the Ministry of Education, and the law, whether they have permission or not. ACT supports this bill.
TĀMATI COFFEY (Labour): Thank you, Mr Speaker. I stand in support of this, the Education and Training Amendment Bill, which is being read for a second time and being debated around the House. While these amendments to the Act are incredibly small, they absolutely come with a time sensitivity which makes them relatively urgent.
There is one that I will point out as we talk about this today. The bill amends section 6 of the Act to specify five education agencies that must give effect to statements of expectations relating to Te Tiriti o Waitangi, issued jointly by the Ministers of Education and for Māori Crown Relations: Te Arawhiti. Now, there was the need to actually flesh this out, and when I talk about minor changes that this bill is fixing, this is one of those minor changes. It was simply to name those agencies.
So those agencies—for the benefit of clarity, and for those submitters that came forward wanting to put some names on them—are: the Ministry of Education, the Education Review Office, the New Zealand Qualifications Authority, the Tertiary Education Commission, and Education New Zealand.
These are small but significant changes that we need to pass as a Parliament to be able to make sure that our education system and our training system is the best it can possibly be for New Zealanders. So I support it to the House.
DEPUTY SPEAKER: This is a split call. I call Joseph Mooney—five minutes.
JOSEPH MOONEY (National—Southland): Thank you, Mr Speaker. The National Party supports this bill, which largely proposes technical amendments that tidy up the principal Act. It is, however, another fix-up of this large Act that the Government pushed through in 2020, last year. We acknowledge fix-ups are needed from time to time and that they should be amended as soon as possible, which is why National supports this reading. However, these continual fix-ups do take up the time of the House, do take up the time of officials, and do take up the time of the Minister of Education, that could be better spent dealing with big challenges in the education sector.
I note, for example, that 60 percent of students are not attending school regularly, and it would be nice to see attention in this House on how to address that issue. I note, also, that New Zealand’s primary school competence in reading, mathematics, and science has plummeted to their worst recorded level ever. Just over four in 10 students are meeting minimum levels in maths. Just over two in 10 are meeting minimum levels or expectations when it comes to science. And at least a third of maths teachers in New Zealand, not just in primary schools but also in secondary, are not trained in mathematics. I would hope that we will see some action from the Minister on these key things to address, as one of the biggest ways to ensure that our young people will have a good opportunity, because we all know that with a good education comes good opportunities for employment and good opportunity to advance for people’s future. So that is a key thing that we want to see from the Minister.
I’d note, with the students not attending school regularly, just going around schools in my electorate, that there is limited support, extra learning support, for children who have neuro-diversities, both in assessing students who have and also providing support to them. Neurodiversity is acknowledging that everyone’s brain works differently, and views learning through a strengths-based lens. Ten percent of the population globally has dyslexia, which is irrespective of language, culture, and ethnicity. I note that dyslexia is not an indication of intellectual disability. Individuals with dyslexia have brains which process auditory and/or visual information in a way that’s different from those with what we call neuro-typical brains. I’d like to see the Minister providing extra learning support for those students.
Fortunately, folks with dyslexia have the ability to learn in a different way. It’s still a very effective way, but they need the right support to do so. And if they don’t do so, that dyslexia is, unfortunately, linked to poor educational achievement, low self-esteem, poor behaviour, and feelings of frustration. You know, I just link that, potentially, I’d like to see some action from the Minister in seeing whether there’s a link between that type of neurodiversity, as well as others like dyspraxia, dyscalculia, dysgraphia, that is seeing our students not engaging in their school learning and not attending school regularly.
I just note that a study was done on 120 learners in prison and nearly half—49 percent—showed evidence of significant dyslexia, and 82 percent had only had two years or less of secondary school education. So if we really want to ensure that we look after our learners, and make sure that they deliver at the schools to have good opportunities for them, we need to provide the right tools to ensure that the teachers can teach them in a way that works for the way their brain works. So I do support this bill. However, I do hope to see some more substantive action from the Minister.
TANGI UTIKERE (Labour—Palmerston North): Tēnā koe, Mr Speaker, thank you. Happy to rise in support of this bill this morning. It’s been mentioned that these are some minor tweaks to, essentially, what is the most significant reform to education legislation in quite some time. I want to reflect on some of the comments that have been made by members opposite, in that this is, perhaps, not a good use of the House’s time. I would disagree with that position because when we just look at some of the changes that this bill will provide for, hopefully that will paint a different picture.
For example, the use of the NSN—or the national student number—and ensuring that that won’t automatically be repealed, will ensure that schools up and down the country don’t have an additional administrative burden placed on their time. When we look at the ability for boards of trustees in our school communities to continue to elect and co-opt and fill those positions, if we didn’t do that, with some sense of haste, then it would mean that there was no value in communities being involved in the decision making and governance arrangements for schools. If we look at the physical restraint, capacity and opportunity: if we didn’t do that, then there would be limited clarity around who could actually engage methods in a classroom on school grounds. And, as a former teacher, I know the importance of knowing what one can do and what one can’t do, so providing certainty is important. When we look at what this bill provides in terms of clarity for Police vetting opportunities extending through to early childhood education systems, if we weren’t able to do that under urgency, then it would mean that there would, again, not be clarity in that sector.
So I disagree that this proposed bill is not a good use of the Parliament’s time, because while they are tweaks, they are important to ensure that our tamariki, our ākonga, and other members of our school community—including our staff—are safe and that there is clarity. On that basis, I’m obviously in support of it.
STEPH LEWIS (Labour—Whanganui): Tēnā koe, Mr Speaker. It’s my pleasure to rise and take a short call in support of the Education and Training Amendment Bill. While I’m not a member of the Education and Workforce Committee and wasn’t privy to the submissions, I do want to begin by acknowledging the work of that select committee, especially as they have reported the bill back to the House without recommending any amendments.
This, as has been discussed this morning, has been a bill which isn’t going to set the House on fire, but is a bill which makes, as my colleague Tangi mentioned, some really important tweaks to help keep our tamariki and our teachers and staff in schools safe. I particularly want to draw the House’s attention to the clarification of the relationship between Police vetting provisions in the Act and the children’s worker safety checking provisions in the Children’s Act. Both Acts set out a framework to keep children safe while engaging in education. But, up until now, there has been some confusion about which framework to apply when checking the level that applies to some employees. This bill will clarify that, to remove that confusion, so as those vetting new staff know which provisions to apply.
I also want to note that it extends the current provision on tertiary education providers from charging compulsory student fees by another year to allow the permanent arrangements to be finalised. So that is why I am commending this bill to the House.
HARETE HIPANGO (National): Kia ora. As we’ve heard in the House, this is a bill, the Education and Training Amendment Bill, that is to fix the mistakes in the drafting of the main Act. Fixing mistakes seems to be a signature brand of this Government. So here we are again. This is the second amendment bill before the House on the Education and Training Act—to fix mistakes.
My colleague Penny Simmonds, who is the member of Parliament for Invercargill, talked about these two decades that she’s had in the tertiary education sector and the engagement that she’s had in leading the Southern Institute of Technology. The importance of getting things right—she said, “Do it once; do it right.”
This is a bit like the Bob the Builder advert, where, again, we have a bill before the House where it’s fixing up oversights, errors, and mistakes when the Government rushed through this main Act in 2020. So Bob the Builder, we have a Minister who is “Chris the Constructor”. In doing that, it takes me—because this is a reconstruction, this is a fix-it-up, and I talked earlier in the bill that I spoke to before, the Education and Training (Teaching Council Fees and Costs) Amendment Bill, about a hatchet, patch-it, fix-it-up job. It turns me to thoughts about the Mitre 10 ad of the two little boys playing in the sandpit—one New Zealander, one Australian—and the comment is “Mate, you’re dreaming”. I reflect, because I do recall when the Education and Training Bill was first before the House in 2020 and how it was being rushed through. This is what happens, those members in Government, when you rush things through, you don’t do it properly, you’ve got to turn around, declare your mistake, and fix it up.
Now, I’ll turn to the bill, because this is about fixing it up. National supports it, largely because they’re technical problems which we did address in the House in opposition to this being rushed through, identifying what the errors, the flaws, and the failings of this were likely to be—and, hello, here we are today in the House, fixing this up.
So in saying that, the fix-ups—turning to the Education and Workforce Committee’s report, they recommend the bill without amendment. The bill proposes, in the main, statements of expectations. It’s been identified to specify which agencies the Minister of Education and the Minister for Māori Crown Relations: Te Arawhiti, for some reason, may issue statements of expectations, when this is an Education and Training Amendment Bill.
The other aspect that it proposes for a fix-it-up are limits on the use of physical restraint. That’s most appropriate, and it’s interesting standing and listening to other speakers in the House to learn of the life experience that they come from. I turn to my colleague in the ACT Party Chris Baillie, speaking about your former life as a police officer, serving there. My former life as a lawyer was working in youth justice facilities with children, and in my role as spokesperson for children, Oranga Tamariki, there are times when the use of physical restraint is required. In this setting, we’re talking about in the classroom. So one of the fix-it-up jobs that the Government didn’t get right the first time this was before the House is to clarify who can use physical restraint on a student, making it clear that only a person holding a teaching position can or may use physical restraint, or someone who’s specifically authorised by their employer to do so.
Another fix-it-up is where it clarifies interventions in State schools by the Secretary for Education—when and how the Minister or the secretary may intervene in a school.
Then, again, we turn to another fix-it-up: regulations relating to licences for early childhood services—amending the regulation-making power within the Act to allow regulations to be made that reflect the new process for early childhood education services to gain approval to apply for a licence.
Another provision for fixing up that initial oversight, when the legislation was initially rushed through the House under urgency, and here we are again today: retaining provisions in primary legislation, amending the sunset provision, so that specific schedules are not automatically repealed. These schedules are about school enrolment schemes, electing and co-opting board members to boards of State schools, and national student numbers. So, here in Opposition, we agree that it’s appropriate—should have been done properly the first time around—for these provisions to remain in primary legislation.
Then, finally, continuing with no student service fees until 2022. My colleague Penny Simmonds, who led the Southern Institute of Technology for a number of decades as the chief executive—this is applicable in her knowledge. The provisions that we’re fixing up today would extend by another year the current prohibition on tertiary education providers charging a compulsory student services fee.
My colleagues in Opposition have appropriately identified in the House today, to members in the Government, to the Minister of Education, that these continual fix-ups, these mishaps, these mistakes, these failings—which, as I said earlier, seem to be a signature branding of this Government. We do the job the first time round, do it right, do it once. Here we are wasting time. More appropriately, priorities should and must be given to those very issues impacting our children, our tamariki, our tauira, the students, around the lack of quality education. How we’ve seen the standards drop, how we’ve seen the failings, how we’ve seen the non-attendances, the truancy—which, for some reason, turn a blind eye, out of sight—
SPEAKER: Order! The member will now refer to the bill and only the bill.
HARETE HIPANGO: I’m referring to the bill, Mr Speaker—
SPEAKER: Order! The member does not argue with my ruling. She sits down while I’m making it, she does not read her speech, and she refers to the content of the bill. The word “education” is not broad enough to talk about the entire education system.
HARETE HIPANGO: So the changes that are being addressed in this amendment bill are acceptable. However, the focus—and, Mr Speaker, addressing the House, there was no argument with the ruling from the Chair. In addressing the House on this Education and Training Amendment Bill, it is appropriate that the bigger issues in education that I had appropriately pointed out—
SPEAKER: Order! I’m just going to take my mask off. The member has now twice referred to a ruling that I made, and she’s just not allowed to. I’m terminating the member’s speech.
BARBARA EDMONDS (Labour—Mana): Fakaalofa lahi atu, Mr Speaker. I’m happy to rise in support of the Education and Training Amendment Bill. As members have canvased today in the speeches for the second reading, the genesis of this bill is the Education and Training Act that was brought into the House last year in 2020. That was a significant Act that brought together, from 1989, decades of changes and brought together and simplified the Education Act so that those that are working in the education system are able to apply it easily, efficiently, and effectively. Clearly, this amendment bill has got a number of provisions in here which could have been picked up earlier in that bill, but because it was such a significant change, it was clear that small changes needed to be made. Amendment bills are not unusual.
The previous member for Palmerston North, Tangi Utikere, who was a teacher, succinctly summarised why we need the changes in this bill. I just want to add one more aspect to it. For my sins, my self-inflicted sins, I was a member of a number of school boards, and because of that, when you are a member of a school board, certainty is really, really important to be able to have clarity around how the Education Act interacts with the Children’s Act, how that interacts around physical restraint—those particular rules are so important to make clear and certain when you apply them as a board member, when you apply them as a school, so that you always have the safety of the children in mind when applying those rules. So for those reasons, I too, like the members on this side of the House, commend this bill to the House.
Motion agreed to.
Bill read a second time.
Bills
Commerce Amendment Bill
Second Reading
Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Mr Speaker, I present a legislative statement on the Commerce Amendment Bill.
SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon Dr DAVID CLARK: I move, That the Commerce Amendment Bill be now read a second time.
The Commerce Act is to promote competition in the market for the long-term benefit of New Zealand consumers. Ultimately, competition generates price benefits. It generates quality benefits. It generates opportunities for new innovation in the market, and consumers see a wider range of products available in the market when there is healthy competition. I’ve spoken previously about the benefits of competition as they apply to performance, productivity, innovation, and the like, but healthy competition in the market demands carefully thought-through competition law. And that is what we are seeking to accomplish with this bill.
The most notable change in this bill is the change to section 36 of the Commerce Act, and, up until this point in time, section 36 has used a hypothetical test for assessing whether dominant firms in the market were abusing market power to retain or strengthen their position in the market. What we are proposing here in this bill—what this bill will do—is set a different test to ensure that different rivals in the market, including new players who might arrive in any given market, can compete on their merits. And that new test would prohibit any unilateral conduct by a firm with substantial market power that has the purpose, effect, or likely effect of substantially lessening competition in a relevant market. So what we will see, hopefully, as a result of this change that we’re making to section 36 is a more competitive market, and with that will accrue benefits to consumers and benefits to other smaller businesses.
Now, I understand that the select committee heard two concerns with respect to this change and considered two concerns. The first was really a range of scenarios where submitters argued that the new prohibition would be overly inclusive. And the second range of concerns that the select committee considered was a risk around overly conservative decision-making by dominant firms because they would find it too difficult to know when the test was likely to apply to them, and that they thought that that would modify the way that they acted in the market. Well, what I note from the select committee’s report is that, ultimately, the majority of members on that committee were satisfied, once those scenarios were worked through, once they received the advice, that those criticisms or concerns did not justify a change in approach to what was being suggested here, in terms of section 36.
Those concerns didn’t suggest that we should retain the status quo, which, effectively, is a situation where nobody has been able to be successfully challenged on behaviours as a dominant player in the market. And I think members opposite who raised some of those concerns ongoing know very well that the current dominant status of some really big players in the market has not been able to be challenged under the current provisions of the Act. So I’d be very interested to hear what they might have to say about what alternative provisions they would put forward and own—or put forward should they even get to be in Government in the future—because I think they just really want the status quo, where those big firms with market power can indiscriminately apply that in the market to the detriment of small and innovative new businesses coming into market places. So we’ve got this new provision, we’ve got the new scenarios that have been looked at, and officials have also worked through and convinced themselves, as they’ve worked through the detail, that the reformed prohibition won’t penalise unnecessarily dominant firms unless they are causing substantial harm in the market and that competitive process that we all, I think, in this House would want to see.
There are, of course, then, some complexities as those dominant firms have to work through what the new changes might mean for them, and there has been attention given to how section 36 would apply in particular situations. So the bill alleviates some of the concerns that might be raised in a couple of ways. Firstly, it adopts a test that already operates elsewhere in the Commerce Act. So it is a familiar test. And I’d also note that the test is what is used in Australian law. So we have law there, we have records of proceedings, we have some case law to assist in the interpretation of the prohibition already. The second thing that will alleviate some of those concerns is the delaying of the commencement of the new section 36 by 12 months, which will allow time for the Commerce Commission to develop guidelines and for those firms which feel they may be affected by the change in the law to be able to assess whether and how they will meet the new guidelines that the Commerce Commission will propagate. And I believe that those changes are important, and the select committee is right to emphasise the importance of that Commerce Commission guidance as to how section 36 will apply for those dominant firms.
Now, the second main policy area covered in this bill involves practices around intellectual property (IP). The current Act contains three provisions that require us to assume certain practices are never anti-competitive, just because they involve intellectual property. That is outdated thinking. That is in the Act because that was the dominant thinking of the day when the Act was put together, but, in fact, now that thinking has been discredited. And we should have in the law, in my view, provisions that ensure that we can have scrutiny as to whether IP practices are coming in to challenge the way competition law should rightly function. I understand that most submitters supported the repeal of these provisions. Others argued the provisions are necessary to prevent beneficial uses of IP innovation from being unlawful, but, again, these submissions were carefully analysed, worked through. The challenges that might sit in there were outweighed by the benefits of making the change. So, ultimately, the Government’s view remains that intellectual property rights should be treated no differently under competition law to any other form of property right that might exist. And, as I explained when I appeared before the Economic Development, Science and Innovation Committee, ultimately, we want the benefits to accrue to consumers and to other small businesses that we see will accrue with this change. So, again, the Commerce Commission guidelines will be instrumental in enabling affected IP owners to realistically assess their obligations.
There are a range of other suggestions that the committee itself has made, which I think will improve the functioning of the bill overall, and I do want to thank the committee for its work on this particularly important piece of law. Some of the changes it will create: I’d like to briefly mention three. It will create equivalent reforms as those we are proposing to section 36 but in trans-Tasman markets. The Australian Treasurer has given an undertaking that they—or agreed to the prohibition of the misuse of market power in those markets. I think that’s a very good thing for trans-Tasman trade, and dominant firms, no matter which side of the Tasman they’re on, should have a clear understanding of how they are to behave. The committee has also recommended a range of reforms to the authorisation scheme, and that, again, gives the Commerce Commission greater scope in terms of how it applies authorisations in the public interest. And I think that’s appropriate and should, again, allay some of the fears that have been raised by some submitters with genuine concerns.
And, lastly, the committee has recommended a short transition period for intellectual property arrangements affected by the repeal of section 45 and covenants brought within the Act’s cartel regime. So the provisions as they were originally proposed, at three years, I think were too long. I agree with the committee that three years is unhelpfully long, and so the 12-month period suggested on top of the 12-month delayed commencement period, I think, strikes the right balance. So I think those things are excellent. We have a number of other small tidy-ups that are going to be put through to make sure that we have strong competition law in this country, because, ultimately, we want the consumer surplus that strong competition law generates. I would welcome support around the House for stronger competition in the markets, but I fear we may hear from some members that they would rather protect the interests of large, dominant firms in the market, perhaps with whom they are close, at the expense of new and innovative firms that come into challenge the status quo, that come in to generate new products and better prices for consumers. Let’s see who supports the status quo and who, indeed, wants to see consumers better off and see innovation in our markets. I commend—
SPEAKER: Order! The member’s time has expired.
Hon TODD McCLAY (National—Rotorua): Mr Speaker, thank you. The Minister’s not taking his job seriously with his comments at the end here, because competition law is important. There’s not a single party in this Parliament when in Government that hasn’t looked to have good competition law. And for him simply to say let’s see whether everyone agrees with him suggests that either he thinks that he’s the only one that knows best when it comes to competition law—and if that is the case he needs to talk to competition lawyers who have a range of views on this issue about how to get it right, not just what the Government’s doing—or actually he just wants to bring a simplistic political argument to what is an important debate.
The reason this is important is if the Government gets it wrong, ultimately businesses and consumers will be harmed. Competition doesn’t just go one way, and if the Minister thinks that, actually, without these changes large companies are going to be bad in New Zealand, he should get out and have a closer look at the way that our economy operates. It’s not just good enough to say Australia’s doing it so we should do it here, because the Australian market is very different than New Zealand, both for consumers and for businesses. They have many much larger businesses than we do in New Zealand, and, when it comes to intellectual property, particularly rights holders who want to bring things in from overseas, it is a more attractive market than New Zealand is. So when we look at this law, we need to balance out what’s best for consumers, so there is competition which is lower, fairer prices, but at the same time not just assume, as the Minister has suggested with some of his comments, that actually making businesses not undertake normal business practice will achieve that. And so we are supporting this, but we’ll be bringing forward Supplementary Order Papers (SOPs) in the committee stage to make what we think are small changes but practical ones that will achieve what he wants to with the legislation, but actually not create uncertainty and in many cases not alter behaviour so that consumers will be worse off.
The three areas particularly we will focus on are the areas that the Minister has mentioned in his intervention, and it comes to effect or foreseeable consequence for a dominant player in a market and their activities. Currently, the Commerce Commission says it’s too hard for them to get prosecutions when they believe somebody has wilfully or purposefully been anti-competitive with their practices, and they’ve said that’s a result of the interpretation of the courts. Now, there are two ways to look at this. The Commerce Commission is saying, “It’s a bit hard for us to do our job”, so they’ve asked the Minister to make it easier so they can get prosecutions, or the court has interpreted differently than Parliament intended when it passed this law a long time ago. The Minister hasn’t said which of these two he thinks is the issue, he’s just come forward with what I believe is a sledgehammer that actually will tilt the scales too far in the other direction. And if I accept for a moment the Commerce Commission’s view that it is too difficult for them with existing legislation to seek prosecutions and therefore they’re not taking the cases that they would otherwise, there is an imbalance against them towards large business practices, what the Minister is doing is creating an equal imbalance in the other direction against businesses.
So currently for the Commerce Commission to seek and gain prosecution, they need to demonstrate that a business with a dominant market power had the intention of acting anti-competitively and to harm others. I remember asking the Minister, when he came to select committee around this legislation, his views of Air New Zealand as a dominant player and what that meant in as far as their activity and pricing and so on is concerned, and he wouldn’t offer an opinion at that time over Air New Zealand. But, ultimately Air New Zealand would be captured by this legislation if the effect of them offering cheaper prices to consumers as a result of trying to stimulate travel post-COVID had the effect of harming other companies. Now, it wouldn’t be their intention to do that, but it could be the effect of doing that, in which case Air New Zealand would say, “Well, under the Commerce Act, we take our responsibility seriously. The Government must be sending us a signal that they don’t want cheaper rates for people to fly at different times of the year so we won’t do that.”, which means that New Zealanders would pay more when they travel. The SOP that we’ll bring forward will, actually, not alter the intention of the Act but it will also mean that if there is an intention or foreseeable outcome of anti-competitive behaviour, then they can’t do it, it is against the law, but if the effect is that it has harmed somebody else but it wasn’t foreseeable or it wasn’t their intention, then prosecution shouldn’t be able to be brought against them.
I take the case that, actually, this certainty will be good for consumers. If you take a truck manufacturer or trailer manufacturer that has a reward scheme for businesses that have given them a lot of business—a loyalty scheme over an extended period of time—it is not their intention to alter the market, it’s to reward good customers because of a good practice that they have with them, a good relationship, and if that is in as far as incentives and pricing and so on, then actually that could distort the market or there could be someone else locally that’s not able to offer the same conditions who would be harmed, and that would mean under the legislation the Minister’s brought forward that company couldn’t do that, and therefore the price would be higher for a longstanding client. That can’t be the intention of this, to alter normal business practice. It should be where someone has the intention to distort a market to harm others, or it’s foreseeable that their actions would, that should be against the law, not the effect of them doing something that a normal business practice is. And so we will seek to bring forward an SOP, not to alter the intent, to make sure we have good, fair competition here, but also to protect normal business practice and at the same time consumers, because where businesses have to become more cautious than we would want them to be otherwise or make different decisions because of uncertainty created by the law, it is the consumer that will be worse off—it is the consumer that will be worse off. Certainly that’s the case with airlines. It’ll be the case with many things.
The second area here is around normal business practice. There will be normal business practices that, actually, won’t be possible any more under this law, and that shouldn’t be the case, because they are normal business practices. A large firm does it, it’s not OK; a small firm does it, it is OK? That doesn’t make sense. There’ll be a number of normal business practices actually that should be exempt from this and it’s a very small change that would allow that to give certainty. The reason for that is not to protect large businesses or large enterprises as the Minister fancifully is trying to suggest those who have a different view than him are trying to do, it’s not about protecting any businesses. It’s about a fair, level playing field when it comes to competition law and, actually, people having certainty, both in business and better results for consumers. So we’ll be seeking changes there.
The third area where we’ll be seeking changes will be around the IP protections. Minister, I think that officials have made the case, but I think they have got it wrong here. There are reasons in a small economy that we would want to keep the existing protections that are there. They should be safeguarded because they were put in place to help a small industry to get on its feet in New Zealand, and it is still a small industry, and they need that protection. I do note in the US and the EU, they provide IP protection already. They haven’t taken it away, it is there, and New Zealand, therefore, would be an outlier. We would make a decision that is different than many other larger economies of the world, and we could well suffer in that. If we were as large as them, it would be different, but those who have rights over intellectual property when it comes to software, as an example, don’t have to come to New Zealand. We are not larger enough that they will care enough about us. There must be a middle ground here that provides a protection but also allows competition or fairness in a market place, and merely taking these away won’t achieve that. In effect, I think those that came before the committee and spoke of their concerns were not doing so to protect their own positions. They were experts in the field and said this will be the consequence of this change. And so I do think, Minister, I’d ask you to go and have a look at this, not from a political point of view, not for a fight, but to get it right, because, actually, if harm is done through this legislation, if a future Government was to reverse it and change it, in the intervening period of time that harm cannot be fixed.
National proudly supports good, positive, strong competition law. In fact, much of these processes were started under us and have come forward under this Minister. But, actually, competition law is complex. Many countries of the world have got it wrong. New Zealand, actually, should not be an outlier. We should not be at the front of the queue. We shouldn’t just be doing things because Australia has. We should be doing things that actually are right and fair for New Zealand, which includes very strong rules on large companies with a dominant market position who do not act appropriately, who have the intention to use their large position to better themselves, but when it comes to normal practice and certainty, we shouldn’t be penalising them, because if you penalise them and make it too difficult, Minister, ultimately it is the consumer that will pay through less choice or through higher prices.
GLEN BENNETT (Labour—New Plymouth): Kia ora, Mr Speaker, thank you very much. Thank you to our previous speaker the Hon Todd McClay for your contribution, for contributing both at the select committee and, obviously, here in the second reading. I’m glad to hear that you support good, positive, strong competition laws. I feel that this is a piece of legislation that will do that.
I’m grateful to the Hon Dr David Clark and his comments earlier around how this benefits consumers, benefits other small businesses, and also benefits and encourages new and innovative firms who challenge the status quo.
Now, this piece of legislation is around the sharpening up of our Commerce Act. When we finished with our select committee process, I was reading the New Zealand Herald and the headline around this piece of legislation read like this: “Law tweak … to make sure giants play fair”. I think that’s pretty clear around what this bill is about and what it will do, and how it amends section 36 of the Commerce Act around the misuse of market powers, around the one sided anti-competitive behaviours for firms with a substantial market power.
I’m really grateful for the submissions we heard in our select committee. Thirty submissions were written, 11 submitters appeared in person. This, very much, is around promoting competition, protecting New Zealand. We’re a small nation, and we need to ensure that we have good, robust law, and we have good, positive, strong competition law, and that’s why I support this bill.
STUART SMITH (National—Kaikōura): Thank you, Mr Speaker. It is a pleasure to speak on this Commerce Amendment Bill. I didn’t have the pleasure of sitting on the Economic Development, Science and Innovation Committee, which heard the evidence on this particular bill, but I am delighted to have the opportunity to speak on it because I certainly have had some dealings with the Commerce Commission in terms of that—
Hon Member: Oh.
STUART SMITH: Yes, which is quite a long story, which I won’t go into, but—
Hon Members: Aw, go on.
STUART SMITH: Oh, OK. If you want to know, I was—
SPEAKER: No, let’s stay with the second reading of the bill.
STUART SMITH: I’m coming to that and I’m giving some—I was going to give you a bit of detail and that was in regard to an allegation of fixing the market. And I was alleged to have fixed the market because I had advised grape growers that if they grew too many grapes, they would suffer some market consequences. I, perhaps foolishly but wisely, put in an estimated number that would be quite acceptable that the market could accept. And lo and behold, they actually produced that amount of grapes. Therefore, the allegation. Fortunately, it was so spurious and, actually, the people investigating it had no idea about what they were talking about. And I thought that’s what really worries me about the Commerce Commission, when they get to the point of investigating it. I advised them to charge me, I said, “Charge me” because, actually, it would be so much fun tearing them to bits because they had no evidence to back up what they were talking about. And so I thought if that happened to me, what’s happening in the real market out there? And I think that is what we’ve got to be concerned about.
So I’m absolutely against, as I think my colleague has just mentioned and gone into great lengths about, that there should be an imbalance of power here. There is always an imbalance of power in the market. I think we have to accept that. Anyone who’s been in business will know that—you’re either on the right side of it or you’re on the wrong side of it. It depends on whether you’re a desperate seller or one who’s not that keen to sell. Either way, you have more power or less power than the other party—by definition. That’s how it works. But we have to ensure we do as much as we possibly can to ensure that the market is as fair as possible, whatever your definition of fair happens to be.
I think it ironic that this has come forward at this time, in some respects, given that we’ve just gone through a period of lockdowns where very large market players, that is, supermarkets, were being criticised by the Government—they had a short inquiry into whether they had too much market power or not—while at the same time the Government drove the market to them by shutting all of the butcher shops and all of the greengrocers. So that had a completely opposite effect to what this bill is supposed to do. And I think the Government members might want to reflect on that. I think it’s a point that is not lost on the public.
But to this bill, my colleague mentioned the Supplementary Order Papers (SOPs) that we want to bring forward, and I think that that is absolutely needed, to do that. I think there are different things; the effects test is a valid test, but I think we have to be careful—well, that’s been struck out. We have to be careful that we don’t end up with the rule of opacity, where you get a disconnect between the conduct rules—and I’m sure Dr Webb would have a lot more to add on this than I have—which is relatively obscure, whereas the decision rules are quite not knowable to the general public. We have to ensure that the way this is interpreted by the powers that be is something that can be understood by those in the market every day—those businesses that will rub up against this one way or another, either as someone who is a complainant or those that are being complained against, in terms of their market power.
I think one of the SOPs we’ll do is on that effects test, and we use an example here of the market power of a large truck manufacturer that gives discounts to the big companies that—obviously the largest companies, but the effect of that is that a small company goes out of business. And, of course, the truck manufacturer didn’t set out to put the small operators out of business, but the effect actually was just that. So we feel that needs to be taken in account of, and so we’ll be putting an SOP up on that one.
The other one is a legitimate business justification defence should be included. I think that that’s also a very good one that we should be looking at. So, for example, refusing to supply a downstream customer for reasons perhaps of their credit record or outstanding debt or otherwise, that may well put them out of business: how is that affected by this particular bill. And I see Duncan Webb taking some notes now, and he’s getting really fired up, ready to go, and I’m pleased to see that because we need these sorts of things to be explored. And when we get to the committee of the whole House and we table our SOPs, I’m really looking forward to having that debate. I wasn’t on the select committee, I don’t know whether these things were covered or not in the detail that I think they need to be, but it appears, to a certain extent, that they weren’t.
The reinstating of intellectual property safe harbours—I think that is something that has to be looked at and that’s what we’re going to be putting an SOP in on. We’ve got to be careful that we don’t discourage the innovation that goes along with intellectual property. If you can’t protect that intellectual property why would you do it in the first place? Intellectual property is a difficult thing for many people to get their heads around. It can be as simple as an idea, effectively, that you are trying to protect, and I think that we need to ensure that that is taken care of. We could be making New Zealand an outlier, an international outlier, as the United States and the European Union allow the enforcement of intellectual property rights. So we can’t be out of step with our international trading partners, because this is such a mobile world nowadays, particularly with these low-weight products such as digital products. All the laws that we have today really were set up to deal with manufacturing businesses of heavy goods such as vehicles, all sorts of things like that.
Nowadays, we’re moving more and more to that digital-type economy, albeit that New Zealand is almost being propped up at the moment by the agricultural sector in terms of our exports. But it just shows how we need to protect all of those other assets because a lot of our technological assets now are coming out of that agricultural sector, where the research is going in to innovate, to make agriculture a more efficient and world leading—although it already is a world leading—sector. So a lot of those innovations are around things like climate change and reporting and verifying the practices that primary producers claim to make, and also—
Hon Member: What about Australia?
STUART SMITH: Well, what about Australia? Yeah. I think that the Minister alluded to working across the Tasman with the Australians and having some parallel and accepted standards between both countries. That’s a very good and laudable goal to have, and we do support this bill. But we see three areas that need SOPs to bring it up to scratch, and we will be arguing very forthrightly for those in the committee of the whole House. So with that, I commend the bill to the House.
Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora, Mr Speaker. Thank you. Look, this is a small but important change and it’s been recognised for a long, long time that the purpose test hasn’t worked because when dominant players in the market were using their market power, they could easily point to any number of purposes other than reducing or eliminating competition or destroying emerging players. It’s well documented that they would point to things like “We were simply seeking to protect market share. We were simply seeking to ensure our long-term profits were adequate.” And in a sense those things were true and the fact that they destroyed small, emerging, and innovative players along the way was simply a by-product of that. But the fact was that it was always going to be the case that if a dominant player makes a short-term loss to eliminate an emerging player, that was going to be anti-competitive in the long run.
So the purpose test—the test which says “What is the corporate intent in this conduct?” was never going to work. Now, two of these things are really important to go together because the one is the changing of the test to say that if the effect of that conduct is to reduce or eliminate competition then it’s a breach of section 36; that’s really important. But the Opposition has raised a number of situations which in their mind may be predatory conduct under the test but are excusable and they use an example of the trucking firm having some kind of rebate scheme. I struggle to see how that meets the test but even if it did there’s an authorisation process under the Act. The problem with the authorisation process historically has been it’s been time-consuming and expensive, but this bill introduces a provisional authorisation power, and I understand the Commerce Commission also has a particular process that’s a lot easier and cheaper for smaller businesses. So those two things in tandem absolutely make it workable. Competition and innovation are at the heart of a thriving economy. That’s what this bill upholds, so I’m a little surprised to hear some of the comments from the Opposition. I absolutely support this bill.
Dr ELIZABETH KEREKERE (Green): E te Māngai, thank you for this opportunity to speak on behalf of my colleague Ricardo Menéndez March, who is helping hold it down in Tāmaki-makau-rau, on behalf of all of us. We thank the Economic Development, Science and Innovation Committee for the work that they’ve done; hearing submitters; and listening to the concerns, especially for us, around privacy safeguards.
The bill seeks to amend the Commerce Act so it can better fulfil its purpose of promoting competition. In particular it would strengthen the prohibition against misuse of market power in section 36 of the Act. It also seeks to address problems with how those provisions are interpreted and applied. The bill would replace the current test in section 36 that focuses on whether a company’s conduct takes advantage of its substantial power and instead would prohibit people—
SPEAKER: Order! Order! I apologise for interrupting the member, but, frankly, reading the explanatory note of the bill is not debating a bill. If the member has matters to discuss about the bill, she may. But to date, all she has done—and it might have been something that’s made its way into a research unit note—is read the front page of the bill, and that is not satisfactory.
Dr ELIZABETH KEREKERE: Kia ora. Thank you for that. The key thing we wanted to note was supporting the select committee in some of its recommendations, particularly about reducing the transitional period from three years to one year, as it brings it into line with the agreements affected by the repeal of section 45.
We wanted to acknowledge concerns from some submitters with the scope of personal information-sharing powers between Government agencies that the bill will authorise. We note that the Ministry of Business, Innovation and Employment has disputed those concerns, suggesting that all information will be subject to the Privacy Act. Because of that, we are concerned that each agency will be required to design its own privacy and internal processes for that. We’ve seen different privacy breaches in Government departments, so we want to make sure that the Privacy Act cannot be seen as the be all and end all for protecting the personal and business information of New Zealanders. So no reira. We commend this bill to the House. Kia ora.
DAVID SEYMOUR (Leader—ACT): Well, thank you, Mr Speaker. I rise on behalf of ACT in support of this Commerce Amendment Bill but, as at my first reading speech, with some considerable reservations. We feel that if competition law is worth doing, then it’s worth doing right and that’s why we’d like to give the Government another chance in the committee of the whole House stage to fix up what are some real difficulties in our view with this Commerce Amendment Bill. Central to the bill is the change to shift the onus on to a business to show that whatever it’s doing doesn’t have the—quote—“likely effect” of lessening competition.
Now, if I was to point to two themes in the New Zealand economy that are holding us back one is the enormous amount of bureaucratic activity where instead of actually doing work and producing goods and services to provide for New Zealanders’ needs, we find time and again that we are spending more of our time either getting permission to do work under some regulation, demonstrating that work’s done, showing that we’re people that are allowed to do work—we spend a huge amount of time doing just about anything but actually doing work. I would argue that this change in interpretation where the law says you can’t do anything that has the likely effect of reducing competition means that there’s going to be a whole lot more time spent by businesses on the compliance side and Government on the administration side working out exactly whether or not competition is likely to be reduced by somebody doing something or making a business decision.
The second big trend that I think is a real problem for commerce in this country is the creeping empire building of the Commerce Commission and this legislation—no doubt drafted if not by them then very closely monitored by them—will again increase the amount of work for the Commerce Commission. The repeal of safe harbours for intellectual property means there’s a whole new cottage industry for the Commerce Commission, trying to work out whether or not a particular business has too much market power because of the intellectual property they hold, and that links back to our first big problem that more of New Zealand’s activity ends up on rule-making, administration, and compliance of rules made, and not enough on actually making New Zealand wealthier. So those are some serious problems with the bill that I would say need to be addressed and perhaps may be addressed by the Government in the committee of a whole House stage and that is why we support it only so far.
To address those two themes, first of all, we have got—well, actually, let’s start with the second one. We’ve got this trend of the Commerce Commission empire building and increasing the power that it has in the New Zealand economy. And let me give you an example. Not so long ago, my good neighbour Paul Goldsmith was the commerce Minister, and the Commerce Commission repeatedly—repeatedly—went to him and said, “Minister, we would like to be able to do what’s called market studies.” And Minister Goldsmith said, “Well, would you be responding to a complaint? Who would initiate it?” They said, “Oh, we’d would like to initiate these market studies ourselves.” How would that work? “Well, we would just go out to business or a sector and we’d start working out: well, do we need more competition? Is there enough competition? How much competition should there be? And we’ll probably produce a big, thick report and then we’ll tell people if the market structure is right and if there should be more competition and so on.” Minister Goldsmith asked some very good questions—“How would you know?”—being one of them and they got knocked back. They got knocked back by Minister after Minister, particularly Ministers like Minister Goldsmith—very well educated, very sharp-witted, and very thoughtful—and he said no. But then along came another Minister named Faafoi. Minister Faafoi came along and Minister Faafoi said, “No problem. You can have your market studies.” And so the Commerce Commission went off and did this market study, the first one into the petrol prices. You see, petrol prices were very high.
Mr Speaker is holding up the bill saying, “Can you talk about this?” I just want to be clear that this bill can’t be understood without the context of a Commerce Commission that is behind it, lobbying the Government to grow its power. And that’s why some of the powers given to the Commerce Commission under this bill should be opposed. That’s right, Mr Speaker. And in any case, the reason the petrol prices were high was because of the US dollar and the price of oil, basically. They did the market study. Nothing happened. The oil price went down. The New Zealand dollar went up. No one was worried. Now the dollar and the oil price are appreciating for a variety of reasons, and we’re back to the same position. The problem hasn’t been solved.
So I make the point that this empire building by the Commerce Commission has a track record of failing to serve the interests of New Zealanders. And when the intellectual property rights safe harbour is taken out and when the Commerce Commission has the right, as it does with the market studies—the last trophy they got—to go around saying, “Oh, I think this company has too much intellectual property and it’s excluding other people from entering the market”, even though overwhelmingly the markets move far faster than the Commerce Commission can ever keep up with, and are far more global than the Commerce Commission’s jurisdiction affects, nevertheless, people running businesses will have to think, “How do we protect ourselves against the regulatory risk of being investigated or face a complaint in front of the Commerce Commission for our intellectual property?”
And that goes back to the first theme: far too much time in New Zealand spent complying with rules, making sure that you’re covered against liabilities for regulatory risk, not enough time actually generating wealth, providing better goods and services so that New Zealanders can provide for themselves and their families, and pay an enormous amount of tax that is necessary when a Government borrows 100 billion bucks to get through a very prolonged mismanagement of a global pandemic.
SPEAKER: Order!
DAVID SEYMOUR: Mr Speaker, productivity and paying taxes will be impinged by this legislation. I think the connections—I think people have a right to hear what some of the ramifications of this legislation are.
Then you come back to the question of what happens when people have to decide whether or not it is a likely effect of a particular business decision to reduce competition. Now we’ve heard from the Labour members that at the moment it’s too easy to justify a purpose as being to do something other than reduce competition. So instead of just the purpose, actually you have to prove that not only you had a purpose but you have to prove that you weren’t likely to have the effect of reducing competition by making your business decision. Now, if the Labour members think that it was too difficult to decide whether or not a purpose was resulting in a reduction of competition, wait until the massive new array of jurisprudence we’re going to face when people try to work out what are the likely effects of a business decision are. So, again, we’re back to this problem that if this bill goes through we are going to find that there’s going to be more time spent working out what the rules are, arguing with officials, getting permission from officials, going to court, producing internal documents in companies to protect from regulatory risk—all of that is going to be increased and yet actual productivity, actual productive behaviour, will reduce.
Now that might not be a bad thing if the Commerce Commission had knowledge that was adding value to those decisions. If the Commerce Commission knew what the correct market structure was for a specific industry on a country that’s about 1,500 kilometres long in the South Pacific far from any other country, quite mountainous with most of the population living in the top 400 or 500 kilometres of the island chain, if they knew what the correct market structure in different sectors was, then they could probably provide some helpful advice and information. The only problem is that they didn’t and that is why we support this bill with great reluctance.
Now, Mr Speaker, I noted on the weekend you said you didn’t like members that just read out bill notes. You wanted people to make a wide-ranging contribution and I hope that I’ve done that for you and you’ve appreciated this Cook’s tour of competition law in New Zealand. I commend this bill to the House for the second reading but if it’s not fixed at the committee stage then wait and see. Thank you, Mr Speaker.
SPEAKER: I want to thank the member for his comments. He waved in the direction of speaking about the bill but a little bit of focus in reading it would have helped.
INGRID LEARY (Labour—Taieri): I just rise to take a short call on this bill, which really is, if one looks at it, actually about reducing Machiavellian behaviour—so the types of behaviour that are designed to be anti-competitive, that have anti-competitive intentions. So this bill does go towards supporting increasing competition in New Zealand. It is very timely. We need to have this in order to make sure that we continue to have a thriving economy. I commend this bill to the House.
Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Speaker—is this a split call?
SPEAKER: Yeah—five-minute call.
Hon SCOTT SIMPSON: Thank you, Mr Speaker. Look, competition, enterprise, free trade, and commerce are the very foundation stones of our economic wealth in this country and are to be lauded and commended.
I didn’t have an opportunity to sit on the select committee that heard submissions from, I think, not very many submitters, actually, at all—30 submissions in total, and oral evidence heard from just 11. But, actually, this piece of legislation, as speakers on this side of the House have already indicated, is quite important because it seeks to change some pretty fundamental things about competition law in New Zealand.
Now, I listened carefully to the contributions of my colleagues the Hon Todd McClay and Stuart Smith, and then more recently the member for Epsom on this side of the House about the impacts of the change in this legislation, in this bill, of “likely effect” in section 36 of the principal Act, the Commerce Act. Why is this a problem? Well, it is a particular problem because it goes to the very meaning of business and commerce and the ability for enterprises and businesses to do business in a way that allows them to be creative, to be imaginative, and to be energetic in a small market place like New Zealand.
Now, one of the challenges that we have in our small market place is that it is, by world standards, international standards, a very, very small, intimate little market place. For goodness’ sake, we are a market that is, in fact, smaller than metropolitan Sydney. So what that means is that, by definition, businesses that command a significant percentage of market share in a particular sector are going to be very careful—and if not careful, they are going to come across the impacts of the creeping growth of the Commerce Commission that the member for Epsom raised in his contribution, because they will be chilled by the effect of this legislation. The trick that needs to be adopted here by the Government is that the balance needs to be right. The balance needs to be about not stifling enterprise and entrepreneurism and the growth of businesses, whilst, at the same time, not allowing for anti-competitive behaviour.
Most of my working life before coming into this place was running New Zealand divisions of Australian-owned businesses. It became very clear to me over a long number of years that much of what happens in New Zealand enterprise is actually dominated and decided not by businesses and business decision-makers here in New Zealand; much of it actually occurs in Australia. That’s just the nature of the geography and our closeness as nations together, but also of our economic and commercial environments on both sides of the Tasman. So what occurs in Australia does have an impact here. The impact of the “likely effect” definition in this legislation means that those decisions will be made with a lens that is a trans-Tasman lens, and that is always going to be something that is a reality of our small market place.
To think that we stand alone, isolated, glorious, and immune from the currents of international markets and trans-Tasman markets is to just, really, deceive ourselves. What we want to be doing, as a small, eager, keen, and enthusiastic economy, is to encourage enterprise and competition. But we want to do it on the basis of a level playing field.
Now, the thing that concerns me most about this legislation—and we will also be moving Supplementary Order Papers at the committee of the whole House stage—is the likely potential for judicial activism on interpretation of what the term “likely effect” will mean. I would much prefer, as a member of this Parliament, that it was us as legislators that made definitions about what was going to be good competition law and what was going to be bad competition law than leaving it to an activist judiciary. My fear and concern is that in terms of the definition that has come from the select committee, reported back by the majority—which was the Labour Government’s majority on that select committee—they don’t quite understand the potential impacts or the potential for judicial activism that will cause perverse outcomes.
We support this bill but with reservation.
SPEAKER: This debate is interrupted and set down for resumption next sitting day. The House stands adjourned until 2 p.m. today.
Debate interrupted.
The House adjourned at 12.59 p.m. (Wednesday)