Tuesday, 5 April 2022

TUESDAY, 5 APRIL 2022

TUESDAY, 5 APRIL 2022

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Hon JENNY SALESA (Assistant Speaker): Ke tau lotu. ‘E ‘Otua Māfimafi, kuo mau taa’i mālie ‘i ho’o ‘ofá mo e ngaahi tāpuaki hono kotoa. ‘Oku tuku homau lotó ka mau hū atu ke malu‘i ange mu‘a ‘a e Kuiní, mo tataki ange ‘emau fua fatongia ‘i he Fale Aleá ‘aki ‘a e poto Faka-e-’Otua, ‘ofa pea mo e ‘ulungaanga malū, ko e ‘uhí ko e mo’ui mo e melino ‘a e fonuá. ‘Oku mau kole atu ‘a e ngaahi me’á ni hono kotoa ‘i he huafa ho ‘aló pē ‘e taha ko Sīsū Kalaisi ka ko homau fakamo’uí, ‘Emeni.

Obituaries

Sir Robert McDowall (Robin) Gray

SPEAKER: Members, I regret to inform the House of the death on 2 April 2022 of the Hon Sir Robert McDowall (Robin) Gray, who represented the electorate of Clutha from 1978 to 1996. Sir Robin was the Speaker of the House of Representatives from 1990 to 1993. He was also a Minister of State and Associate Minister of Foreign Affairs. 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.

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

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

SPEAKER: A petition has been delivered to the Clerk for presentation.

CLERK: Petition of Kathryn McGarvey requesting that the House urge the Government to grant an Entrepreneur Residence Visa.

SPEAKER: That petition stands referred to the Petitions Committee. Ministers have delivered papers.

CLERK:

Parliamentary paper on a proposed policy change to the Fair Pay Agreements Bill

Direction to support a whole-of-Government approach given by the Minister for the Public Service and the Minister of Finance, under section 107 of the Crown Entities Act 2004.

SPEAKER: Those papers are published under the authority of the House. Select committee reports have been delivered for presentation.

CLERK:

Report of the Officers of Parliament Committee on the alterations to the 2021-22 appropriations for Vote Audit, Vote Ombudsmen, and Vote Parliamentary Commissioner for the Environment, and the 2022-23 draft budgets for the Office of the Controller and Auditor-General, the Office of the Ombudsman, and the Office of the Parliamentary Commissioner for the Environment

reports of the Petitions Committee on the petitions of James Meharg, Jay Shack, and Piolito Ari

report of the Regulations Review Committee on the Examination of COVID-19 Orders presented between 8 March and 15 March 2022.

SPEAKER: The reports of the Officers of Parliament and the Regulations Review Committee are set down for consideration. The Clerk has been informed of the introduction of a bill.

CLERK: Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill, introduction.

SPEAKER: That bill is 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 recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): The Crown Accounts, released this morning, continue to reflect the strong position New Zealand finds itself in as we meet the current global economic challenges. For the eight months to the end of February, the Operating Balance before Gains and Losses—the OBEGAL deficit—was $8.3 billion, $4.4 billion below that forecast in December’s Half-year Economic and Fiscal Update. Net core Crown debts stood at 35.2 percent of GDP, $1.9 billion less than had been expected and significantly below the countries with which we compare ourselves. Our strong position gives us the ability to provide meaningful support to low and middle income earners at this time, invest in meeting the long-term opportunities and challenges facing the New Zealand economy, while keeping a careful eye on our overall long-term fiscal position.

Dr Duncan Webb: What do the Crown Accounts indicate about the economic prospects for 2022?

Hon GRANT ROBERTSON: The Crown Accounts results reflect the strength of the economy and that we have come through COVID not only with one of the best health responses in the world, but one of the strongest economic outcomes globally. We do need to acknowledge, however, that 2022 will be a challenging year for many households and businesses, and we will need to take a cautious approach to support them through this. We are in a strong position to do this. But, as the International Monetary Fund said last week when they congratulated New Zealand for our strong fiscal and economic position, they also warned against tax cuts at this time while the economy is rebuilding.

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

Hon GRANT ROBERTSON: The resilience of the jobs market is continuing to support the economy. Last week, Stats New Zealand did report that filled jobs in February had edged down by 0.3 percent, compared with January, but still remaining at record highs of 2.29 million people in work. The SEEK New Zealand Employment Report released today shows a number of job advertisements in March rose 2 percent compared with February, to a record high. On an annual basis, growth was 27 percent. And TradeMe reported today that there was a record 81,984 vacancies listed on its site in the March quarter. They also indicated that wages were rising with the average salary for advertised roles—up 4 percent to $65,799. The strong jobs market shows that the Government’s actions in response to COVID-19 since the start of the pandemic have proven to be the best economic approach. The opening of borders to foreign workers and tourists will also accelerate this recovery.

Question No. 2—Prime Minister

2. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does she stand by all of her Government’s statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Yes, including the package that came in on 1 April and will see 1.4 million New Zealanders’ incomes boosted as we confront cost of living challenges. This is in addition to the moves we made last month to reduce fuel excise by 25c a litre for three months, with road-user charge changes coming before the House this week also. We know there is no easy fix to the challenges presented by the COVID recovery supply constraints and the war in Ukraine, but the Government is doing what we can to support Kiwis through.

Christopher Luxon: Does she agree that whenever her Government decides to spend more of taxpayers’ hard-earned money, they have a responsibility to actually deliver better outcomes?

Rt Hon JACINDA ARDERN: Of course we have a responsibility to do our very best as a Government through trying times to ensure that we are lifting the outcomes, be it across wellbeing outcomes, be it across economic outcomes. This has been our focus the entire time we’ve been in office.

Christopher Luxon: How has the Government managed to spend $1.9 billion more on mental health but after three years has delivered “no change in access to acute and specialist mental health services”, and is this an acceptable outcome for spending that much taxpayer money?

Rt Hon JACINDA ARDERN: If I track back to the direct ask that was made of Government when we came into office, where there was a crisis across the board on mental health, the very specific focus that came from those who had experience of the system and those who worked in the system was the complete absence of primary mental health care. That was adding to extra pressure on acute needs. That is why we have built a primary mental health system for the first time in New Zealand’s history. It is providing tens of thousands of appointments for New Zealanders who previously had no access to early mental health support. At the same time, we know we need to continue to build the tertiary and acute care. It’s a particular focus of ours on building the workforce, which in some cases takes up to five years to create.

Christopher Luxon: Can she explain how the funds she announced for mental health services for tertiary students have spent $4 million but only delivered 304 counselling sessions, and is $13,000 per session an acceptable outcome for spending taxpayers’ money?

Rt Hon JACINDA ARDERN: Calculating based on the entirety of a programme of care across providers by those early counselling sessions that have been provided is exactly the reason that that member’s party in office did nothing to support tertiary students, to support young people, to create primary mental health care. If that is the way we calculate care in this community for mental health needs, that explains why there was no investment before us. We have provided Piki Ora in conjunction with the Green Party and Mana Ake across primary and intermediate schools across Christchurch, across Kaikōura, and now into the West Coast, Counties Manukau, and Northland. We’ve provided primary mental health care for New Zealanders across the country. We are now providing rainbow communities with the mental health care that they need through specialist providers, and now we are also providing youth care through increased support through youth helplines and through tertiary education. These services didn’t exist before.

Christopher Luxon: Why, despite spending an extra $30,000 per prisoner compared to 2018, has there been a steep reduction in the number of prisoners accessing rehabilitation services, and is this an acceptable outcome for spending more taxpayer money?

Rt Hon JACINDA ARDERN: Again, very crude analysis here. If you divide the cost of spending and there are fewer prisoners, then the cost per prisoner goes up. If the member wants to achieve economies of scale in corrections by having more people in prison, that explains why that Government when they were in office started building a mega prison. When we came into office we said that is not the kind of style of corrections service New Zealanders want. There will not be American-style mega prisons on our watch. We will also not invest in rehabilitation programmes that are sometimes eight hours long and call it a success. We’ve invested in programmes that work and that reduce reoffending and—proof is in the pudding—reduce the number of people in prison.

Christopher Luxon: Does she agree that a 40 percent increase in spending on police that has failed to prevent a more than 40 percent increase in gang membership, or a 21 percent increase in violent crime, is not an acceptable outcome for spending that much more taxpayer money?

Rt Hon JACINDA ARDERN: The member now seems to be telling his own party that he doesn’t support an increase in police, because that is what we’ve done. We have increased the number of front-line officers, and that means we now have more police officers on the beat than we’ve ever had before. We now have 700 police officers working solely in the organised crime unit—more than we have ever had before. And if the member on that side doesn’t support that growth in police numbers, that’s for him to answer for.

Christopher Luxon: How can taxpayers have any confidence that the record $6 billion of their money she is planning to announce in new spending at the Budget will return any sort of value, given her Government’s 4.5-year record of spending more but delivering worse outcomes?

Rt Hon JACINDA ARDERN: A 3.2 percent unemployment rate in the middle of a one-in-100-year economic crisis; some of the lowest debt relative to other countries in the OECD that you will have seen—we have supported New Zealanders through a health and economic crisis that, yes, meant we had to invest, but kept people in work. At the same time, we have overseen a lift in incomes for our lowest-income New Zealanders and a once-in-a-generation increase in welfare. We have nine of the child poverty indicators tracking down—60,000 fewer children in poverty than when that member had his party in Government. I could speak at great length about what we have done in office to repair the damage of that time in office by the National Party, so if the member wants to ask more patsies, I would welcome it.

Christopher Luxon: Ha, ha—classic! Why, at a time where the cost of living is soaring, and Kiwi households are making tough decisions about their own spending priorities, does her Government refuse to do the same thing when it comes to spending taxpayers’ hard-earned money?

Rt Hon JACINDA ARDERN: We do that every single day. The member’s proposal, for instance, is demonstrating where his priorities are; that when it comes to taxpayer’s money he would rather, for instance, spend a billion dollars giving those on $180,000 or more—and those who own investment properties—a tax break, than put it in health or education. That’s his priority.

Question No. 3—Health

3. Dr TRACEY McLELLAN (Labour—Banks Peninsula) to the Minister of Health: How is the Government preparing for the forthcoming flu season?

Hon ANDREW LITTLE (Minister of Health): On 1 April, we began our annual influenza vaccination season, and I’m pleased to report to the House that, on that day alone, 24,729 people got their flu jab. This year, the Government is ramping up the flu vaccination campaign, with 40 percent more free flu shots available this year as part of the COVID-19 winter plan. This means that, while New Zealand usually uses about 1.4 million flu doses a year, this year the Government is making 2 million doses available while widening eligibility for people to get vaccinated for free. In an ordinary year, flu kills more than 500 New Zealanders, but this is no ordinary year because, for the past two years with the country closed to the rest of the world because of the pandemic, we’ve been largely free of colds and flu, and so this year we must be prepared for a much higher incidence of them.

Dr Tracey McLellan: Who will be included in the expanded eligibility for flu vaccines?

Hon ANDREW LITTLE: We routinely make the flu shot available for free for everyone over the age of 65 and for those who are pregnant or at risk of becoming seriously ill because of other underlying conditions. This winter, on clinical advice, we’ve widened eligibility to include Māori and Pacific people aged 55 and over, because of the high epidemiological risk they face, and this means an extra 39,000 people can have the vaccine for free. It’s also important to remember that, like the COVID-19 vaccine, vaccination against the flu provides indirect protection to those around us as a result of the increase in community immunity. This enables our whānau, our workplaces, and our health system all to gain benefits from a wider net of protection.

Dr Tracey McLellan: How is the Government encouraging uptake this year?

Hon ANDREW LITTLE: Every year, about half the people eligible for free vaccination take it up. But, because of the heightened risk this year, we will be running a public health campaign to remind people to boost their immunity by getting the vaccination. We’re also looking at ways to increase the vaccination workforce to get flu shots to those who need them. Ordinarily, GPs, pharmacists, and community health providers administer the vaccination. However, for COVID, we substantially expanded our vaccinator workforce, and we are now working to introduce a new vaccinating health-worker role to be able to deliver flu vaccines as well. This fits with our Government’s approach of building back better when it comes to our health system.

Dr Shane Reti: Why did he let $3.8 million of flu vaccines expire last year, and will this year’s flu vaccine programme add more millions to his botched management of the immunisation schedule?

Hon ANDREW LITTLE: That member’s reliability with figures, as we know, is not good, so I’m not going to comment on the figures that he uses except to say that this Government’s track record in protecting New Zealanders against known health risks is actually a darned good one. That’s why we had the COVID vaccination campaign. That’s why we’ve been preparing for some months for this flu season, and we are well prepared for it.

Question No. 4—Prime Minister

DAVID SEYMOUR (Leader—ACT): My question is to the Prime Minister and reads as follows: does she stand by all of her Government’s statements and actions?

SPEAKER: Order! I think the member might want to try reading it again.

4. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Apologies, Mr Speaker. My question actually reads: does she stand by all of her Government’s statements and policies?

Rt Hon JACINDA ARDERN (Prime Minister): Still yes, in particular our ongoing response to the Russian invasion of Ukraine. As I said yesterday, the reports of war crimes and crimes against humanity committed by Russia are beyond reprehensible. Russia must answer to the world for what they’ve done. New Zealand, alongside other Rome Statute States Parties, has already referred the situation to the International Criminal Court, and we continue to support prosecutors in their investigations into all international crimes committed in Ukraine. As a Government, we’re continuing our response against Russia and, last night, issued further sanctions. This was the second run of sanctions since the passing of the Russia Sanctions Act just three weeks ago, and builds on the sense of sanctions we’ve implemented to date, our visa supports, and the humanitarian aid we have provided Ukraine. All New Zealanders have been shaken by what we’ve seen in Ukraine, and as a Government we’re continuing to condemn the actions of Russia and support Ukraine.

David Seymour: Does she accept that the global security situation is changing rapidly and, if so, will she commit to a pathway where New Zealand spends 2 percent of GDP on defence, as Australia has?

Rt Hon JACINDA ARDERN: Yes, in answer to the first question, I do absolutely accept that the dynamic has changed considerably. These events only demonstrate the changing strategic environment that New Zealand is operating in. I would say that our response, both at a bilateral level to this conflict, but also the spending decisions that we’ve made on our defence estate—including, for instance, the purchase of P-8s, additional assets for the navy, and so on—demonstrates our ongoing focus on ensuring that we have the capability and the kit that’s required to respond within the Pacific to the changing threats that we face.

David Seymour: So will her Government commit to a pathway towards spending 2 percent of GDP on defence or not?

Rt Hon JACINDA ARDERN: As I’ve said, we’ve committed to ensuring that our Defence Force have the capability that they need to ensure that we are a responsible and responsive player within our region, and we demonstrate that time and time again—whether it’s a response in the Middle East, the fact that we even have people on the ground supporting the response in Europe to what’s occurring now, or our purchases that we’ve made. I’m not going to pre-commit to spending decisions for the Budget at this point in time, but I would ask the Minister to demonstrate where we have not pulled our weight in this international environment.

Hon Chris Hipkins: Would it be possible to increase defence spending, cut taxes, and not cut public services, all at the same time?

Rt Hon JACINDA ARDERN: This does appear to be the proposal from some members in this House, and I think it would be an interesting environment to see, for instance, the member opposite propose that we cut some of the very most basic safety net that we have in the country, while dramatically increasing defence spending. But that is the member’s prerogative.

David Seymour: Does she accept that tax revenue is up $17 billion per annum in the last two years alone and, if so, does she stand by her statement that this is not the time to cut taxes?

Rt Hon JACINDA ARDERN: I stand by this Government’s response, which is to put additional support in to make sure that those who are feeling the effects of the cost of living are well supported, as much as we can. So, the changes to, for instance, fuel excise comes at the cost of $350 million; the $270 million that we put into making sure that the family tax credit is increased; and, of course, the additional spending going into lifting superannuitants’ incomes, and acknowledging that our students and others on low incomes are doing it tough—1.4 million New Zealanders have benefited from those boosts. We know it doesn’t solve everything, but that’s what we are able to do at this point in time. I would also acknowledge, though, what we’re seeing in the Crown accounts is, yes, that we still are facing deficits, but we have also seen, of course, a change in what we’ve previously forecasted, as a result of more people being in employment.

David Seymour: What does the Prime Minister say to the dozens of people who have commented on her Facebook page on Friday to say there was nothing in those 1 April changes for middle-class working New Zealanders who aren’t receiving benefits, such as Amy McKenzie, who said “What about all the Kiwis paying taxes for this ‘extra support’? How does this help us help our own families while we’re working hard to try and keep up with the rising costs of living also?”

Rt Hon JACINDA ARDERN: Well, the first thing I’d say is that 60 percent of families actually are impacted by the changes that are made to the family tax credit. So that is a large number of New Zealanders as a result of the changes made through Working for Families, which, of course, does go to working families. The second point I’d make is that the response to fuel excise was one way that we can very quickly see a change that, depending on fuel costs—anything from $11 to $17 a week, potentially, for everyone. That was a way that we could quickly respond also. But what I would also say is one of the most important things we can do is make sure incomes—not just, of course, what can be done through tax bracket changes, which often deliver the least to those who need it the most. Rising incomes is what makes a significant difference, and up until now we have seen under this Government incomes outstrip the cost of living, and it is projected to be the case again soon.

David Seymour: Does the Prime Minister accept that with tax revenue having risen $17 billion per annum in just two years, one of the easiest things she could do to help New Zealanders with their after-tax income is let them keep more of their own money by cutting income taxes?

Rt Hon JACINDA ARDERN: The member speaks as if we have done nothing, of course, to change, for instance, tax credit regimes that make a significant difference to those on low and middle income families. The member well knows that tax bracket changes—for instance, such as those proposed by the Leader of the Opposition—for those on the lowest incomes delivers something like $2 a week. If you use the more sophisticated system that we’re able to operate in New Zealand on account of our size—use the family tax credit system, for instance—you can deliver a much greater benefit to those family members than just changing tax brackets. That is what we did from the moment we came in, in addition to things like the winter energy payment.

David Seymour: Can the Prime Minister explain to the New Zealand public how the Government’s policy of fair pay agreements (FPAs) will increase worker productivity, and, if so, why does she think the OECD says the policy would “cut both labour and multi-factor productivity growth in the covered sectors.”?

Rt Hon JACINDA ARDERN: Of course, those countries that are often held up as examples of demonstrating better rates of productivity than New Zealand include the likes of Germany and Australia, who operate fair pay agreements. Look, there are often, from time to time, policies where the member and I are just going to fundamentally disagree. On this side of the House, our view is that if we want New Zealanders to be better off, we do that by ensuring, for instance, that they have decent wages and decent conditions, and that is exactly what fair pay agreements are all about now. Now, not every, for instance, employer and every workforce will necessarily see an increase in their wage bills as a result of an FPA. What it’s designed to do is lift those who are operating at the very bottom and who are sometimes driving the sector down to come up to an agreed standard, and some employers support the role that FPAs can provide in that regard.

David Seymour: Can she tell New Zealanders how many fewer COVID cases we will have due to her decision to keep the country at red yesterday, and, if so, how does she justify the acute costs of that decision to hospitality operators?

Rt Hon JACINDA ARDERN: The changes that we made yesterday were all about ensuring that our hospital system and our healthcare system are able to cope with the number of people that are currently in there as a result of COVID. So that’s not directly aligned to cases, but it can be. Roughly half of our hospitalisations at the moment are in the Auckland region. So whilst cases are coming down, even based on the modelling that we have, we’re still tracking above the peak of what would have been a medium transmission scenario for hospitalisations. We don’t take those decisions lightly. We know they have an impact. But, on the flip side, hospitality will equally be hit if people don’t come out because they don’t have the confidence to be out because case rates are too high and the health system isn’t working. That is the balance that we have to strike.

Question No. 5—Transport

5. TĀMATI COFFEY (Labour) to the Minister of Transport: What recent updates has he received on the repair work to the Tairāwhiti State highway network following recent weather events in the region?

Hon MICHAEL WOOD (Minister of Transport): On Saturday, I visited Tai Rāwhiti with my colleague the Hon Meka Whaitiri to see firsthand the progress made in cleaning up after devastating flooding last week in the region. We recognise how much the people who live in our regional and remote Tai Rāwhiti communities rely on the access that State Highway 35 provides for essential supplies and services. It was, therefore, a real privilege to be able to attend the blessing for the Mangahauini Bridge at Tokomaru Bay as it opened for traffic days ahead of schedule. I’d like to say a special thanks to the main contractor, Downer’s, and the amazing local contractors, Blackbee Contractors, who have been working day and night in trying conditions to help get these communities moving again.

Tāmati Coffey: How have the community chipped in to assist the clean-up efforts?

Hon MICHAEL WOOD: There were nearly 120 people involved in the repair and clean-up work on Tai Rāwhiti’s State highways, ranging from traffic management and arborists to those operating excavators, graders, and diggers, from inside and outside the Tai Rāwhiti region, and much of that work goes on. In particular, crews have worked tirelessly to install well in excess of 4,000 tonnes of rock to form the base for the new Mangahauini Bridge support and allow for the bridge approach to be reinstated. This is a real testament to the value of local procurement and the importance of the community places on essential transport links. I can also shout out to the aunties who put on an awesome feed at the Tokomaru Bay hall and the excellent pāua pies that were provided to everyone.

Tāmati Coffey: What are the next steps for Tai Rāwhiti’s response to the storm?

Hon MICHAEL WOOD: Contractors will continue work to futureproof the bridge, which will be sealed this Thursday. Works will continue around the edges of the bridge and in the river to futureproof it. State Highway 35 does for the time being remain closed north of Tokomaru Bay through to Te Puia Springs. This section has seen significant damage to the road, which I reviewed, including major cracks and uneven surfaces, slumping, and two major drop-outs. Access is expected to be restored later this week, with restrictions such as daytime opening only and a number of traffic management controls along the route. Once remedial works are done and the winter season has completed, we’ll also be proceeding with long-awaited Provincial Growth Fund - funded works to improve the resilience and safety of State Highway 35.

Question No. 6—Finance

6. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Is he concerned by the findings of the latest ANZ consumer confidence survey, which shows consumers are significantly less confident than in Australia and a record number of people are expecting to be worse off this time next year?

Hon GRANT ROBERTSON (Minister of Finance): The findings of the latest ANZ consumer confidence survey reflect the uncertain and challenging environment that New Zealanders are facing in 2022. Like all New Zealanders, I am concerned about the impact of nearly 2½ years of the global COVID-19 pandemic, resulting supply chain blockages, and Russia’s illegal invasion of Ukraine. We are, however, in a strong position to be able to support New Zealand businesses and households through this time, just as we protected them through COVID-19. It’s why we boosted the incomes of low and middle income families from 1 April instead of giving thousands of dollars to the wealthiest New Zealanders. It’s why we cut the fuel excise by 25c to help New Zealanders facing pain at the petrol pump. When we see strong Crown accounts and small to medium sized enterprise (SME) surveys like the Xero Small Business Index, which today showed small business growth over the start of the year, with wage growth and job growth, and stronger SME activity than in Australia or the UK, it indicates that as a country we can deal with the uncertainty and support New Zealanders to get through the Omicron peak and this global inflation spike.

Nicola Willis: Why does he keep blaming international events for New Zealand’s economic situation when Australia, affected by the very same events, is experiencing lower inflation than New Zealand, higher consumer confidence, and higher growth forecasts?

Hon GRANT ROBERTSON: Right around the world, countries are experiencing the impact of the global COVID-19 pandemic. We are at different stages of that pandemic. The survey the member refers to in her primary question comes at a time when New Zealanders are experiencing the worst of COVID-19. Through the actions of the Government and the hard work of New Zealanders, up to this point we have been able to withstand that and we will continue to do so. I would bear in mind that organisations such as the IMF have as recently as last week congratulated New Zealand not just on our health response but also our economic response as well.

Nicola Willis: Is he concerned that New Zealanders’ consumer confidence is now lower than even during the depths of the global financial crisis, and will he acknowledge that a growing number of households feel they are going backwards on his Government’s watch?

Hon GRANT ROBERTSON: As I said in my answer to the primary question, this is an extremely challenging time for many New Zealand businesses and households. We supported those businesses and households to get through COVID-19, and we are continuing to do so. On this side of the House, we know the importance of investing long term in things like transport and in housing, and making sure we have a good health and education system is required alongside making sure we provide those individual supports.

Nicola Willis: What does he say to Katie, who responded to the Prime Minister’s Facebook post about the Government’s 1 April changes to benefits and entitlements, saying, “What about the middle income earners. We both have full-time jobs. There is no relief because we aren’t on benefits, but still get stung by the increases everywhere.”?

Hon GRANT ROBERTSON: I express sympathy for that person, but, then, I would refer that person to meet up with Becks, who wrote to the Prime Minister to say, “Thanks so much for all you and your Government has done. The COVID assistance has kept me in business without a doubt, and I’ve been around long enough to appreciate that National would’ve turned a blind eye to the likes of my little business.”

Nicola Willis: Is he concerned about the economic situation confronting Sarah, who also responded—[Interruption]

SPEAKER: Order! The member can have two extra supplementaries for that outburst.

Nicola Willis: Thank you. Is he concerned about the economic situation confronting Sarah, who also responded to the Prime Minister’s Facebook post, saying, “What about the middle classes who earn slightly too much to get in-work tax credits yet not enough to keep up with the ever increasing cost of living.”?

Hon GRANT ROBERTSON: What I would say to that person and to all New Zealanders is that we appreciate the challenges that are in front of them, and that’s the reason why packages like the 1 April package came through. It’s the reason why we supported New Zealanders with $23 billion worth of financial support through the COVID-19 pandemic. But I would also invite that person to perhaps be able to talk to Martina, who wrote to the Prime Minister to say, “I personally wanted to say thank you for always having the heart of New Zealand in the support you and your Government give us. Watching you and the team yesterday”—this is last week—“as you gave details of the petrol reductions was uplifting. This is a Government that has tried to act quickly and alleviate the pressure and stresses for families and businesses across the country. Your heart shines through the key messages you give. I’m not simply saying thank you for yesterday but—”

SPEAKER: Order!

Nicola Willis: Why won’t he improve New Zealanders’ financial prospects by delivering them income tax relief when the Crown accounts today show that thanks in part to inflation, the Government is raking in more income tax than forecast, up $12.5 billion since Labour came to office?

Hon GRANT ROBERTSON: What I would note that those accounts show is that revenue is coming in to the Government as a result of the fact that companies are making bigger profits, and more people are in work and they’re earning more. On this side of the House, we don’t think giving tax cuts to people who earn more than $180,000 is the right response in the environment we have, and neither does the IMF, so I think, for that member’s benefit, on this side of the House we will continue to support New Zealanders, we will continue to target where we put it, and we will be careful with the Government’s books.

Nicola Willis: Does he consider that record low consumer confidence indicates, as ANZ states, “a broad consensus that it’s time to close the wallet”, and why is it that the Minister is planning a record $6 billion operating allowance in the upcoming Budget but will not prioritise tax relief for struggling New Zealanders?

Hon GRANT ROBERTSON: It’s a surprising question from the member given that she appears to be joining me in the view that we need a $6 billion operating allowance, because she actually told the New Zealand Herald today that she’s going to spend the same amount of money as this Government is, except that she’s going to prioritise untargeted tax cuts for the most wealthy New Zealanders.

Nicola Willis: Is he concerned that the vast majority of New Zealanders think that right now is a “terrible time” to buy a major household item, and does he not accept that this is an ominous sign for the future?

Hon GRANT ROBERTSON: I think many New Zealanders will be experiencing the impacts of global supply chain disruption, which would particularly affect the purchase of those sorts of items. What I think New Zealanders also understand is the importance of taking a long-term view where we do invest in health, we do invest in education, we do invest in housing, we do invest in transport and balance that with keeping an eye on the books and looking after the people who need it the most, not giving tax cuts to people who earn more than $180,000 a year.

Question No. 7—Conservation

7. CHLÖE SWARBRICK (Green—Auckland Central) to the Minister of Conservation: Has the Department of Conservation identified how many kororā/little blue penguin live in the rock wall at Pūtiki Bay; if so, how many?

Hon KIRITAPU ALLAN (Minister of Conservation): The Department of Conservation (DOC) has advised me that there are currently no burrows with any sign of kororā in the rock wall at Pūtiki Bay. I’m advised by the department that surveys undertaken in 2021 identified four burrows along the rock wall that did have signs of kororā, but that none of these are being actively used by kororā at present. However, I do want to thank the member for raising this issue, as the situation at Pūtiki Bay has highlighted some of the issues that are very live and playing out, that occur when decisions are made under the Wildlife Act 1953, which is why I’ve decided to announce a first principles review of the Act back in December.

Chlöe Swarbrick: Is the Minister confident that no kororā will come to harm as a result of the permit DOC has granted developers to move kororā while removing the rock wall; if so, why?

Hon KIRITAPU ALLAN: Yeah, thank you to that member. These questions, of course, are really relevant because I know that many people have been very concerned about the wellbeing and welfare of the kororā. As the member will be aware, the decision to grant the permit was that of the Auckland Council, which has been granted to the development agency. The decision to grant the permit under the Wildlife Act, though, provided the authority to capture, handle, and relocate kororā as a consequence of the position that they found themselves—the options that were put to them under the Wildlife Act: either (a) decline the consent, and, therefore, you are at the behest of those works going ahead, and you can’t really do anything other than let the works go ahead and they can’t ensure the protection of the kororā; or grant the consent. By granting the consent and enabling those kororā to be moved, the Department of Conservation made the determination based on the advice provided to them that this would be the way to ensure the safety of those kororā. But the question remains that we are still at this really—it’s an unsatisfactory decision-making process that the Wildlife Act confers upon decision makers.

Chlöe Swarbrick: Does the Minister agree with Karen Saunders of Waiheke’s Native Bird Rescue that it is “beyond horrific in this day and age to be destroying habitat for the sake of pleasure boats that are contributing to the climate emergency.”; if she does, why did the department grant the permit?

Hon KIRITAPU ALLAN: As the member will be aware, the consents for the overarching marina development, those are granted by the Auckland Council, and I, as the Minister of Conservation, don’t have any discretion with that respect. So the issue that was before me as a decision maker is very, very narrow around what we can do in terms of moving and relocating the kororā now that the permit for the development has been agreed to. So with respect to the broader comments of the member, look, I understand that there are many views about the impacts of the marina development but I don’t have any ministerial responsibility for the broader implications.

Chlöe Swarbrick: Did the decision under the Wildlife Act to grant the permit take into account—quoting penguin expert Dr John Cockrem of Massey University—that “The expectation is that the birds will come back to their home and if their home is gone, they will go into the rocks closest to where they have been, but their home will be destroyed.”; if not, why not?

Hon KIRITAPU ALLAN: The Department of Conversation, I’m advised, engaged with Dr Cockrem, as well as a number of other ecologists who presented different views. My understanding is that the advice was that the safest option was to grant the consent to enable the relocation. Further, the ecologists that they turned to said that the penguins, or the kororā, would most likely return back to the environment, albeit in its altered state. So that was the information that they have relied on to grant the consent.

Chlöe Swarbrick: Does the Minister think that it is acceptable that commercial developments are prioritised ahead of the protection of threatened species such as kororā; if so, will her reform of the Wildlife Act rectify this issue and put native species first?

Hon KIRITAPU ALLAN: As I think I’ve addressed, I think that there are multiple issues here at play. I think some of these issues will be for consideration under the broader Resource Management Act reforms. I think some of them fall within the very narrow scope of what can be done to protect wildlife under the Wildlife Act, which, as the Waitangi Tribunal found, is completely out of date, which, as many conservationists have found, is completely out of date, which, as we understand, just is not appropriate and fit for purpose in our current day and age. I expect that we will hear many submissions around the way that we can best ensure that the Wildlife Act is fit for purpose. Moving forward, that takes into consideration all of the impacts of development, which are currently creating adverse outcomes as a consequence of a lack of discretion for decision makers to be able to make.

Question No. 8—Conservation

8. ANGELA ROBERTS (Labour) to the Minister of Conservation: What recent announcements has she made regarding Jobs for Nature funding for the restoration of the Whanganui River?

Hon KIRITAPU ALLAN (Minister of Conservation): Last month, I announced that $7.8 million in Jobs for Nature funding would be provided to Te Awa Tupua o Whanganui, a project led by Ngā Tāngata Tiaki. The project will employ at least 66 people over four years, and work will focus on mitigating soil erosion, improving freshwater quality, and enhancing the biodiversity values of the river. It is incredibly valuable work not only for the impact it will have on the everyday lives of the people that are undertaking that work, but for the enduring impact it will have on the river and its communities.

Angela Roberts: What will this investment mean for the health of the river?

Hon KIRITAPU ALLAN: The project will deliver a range of conservation outcomes, including 290 kilometres of riparian fencing, the planting of more than 600,000 native trees to protect the health of the river, and possible development of wetlands. There will also be freshwater fish habitat restoration, pest and weed control, as well as the establishment of multiple native nurseries to develop the plants and seedlings for the ongoing project.

Angela Roberts: What co-governance arrangements have been put in place for the river, and how does this project interact with them?

Hon KIRITAPU ALLAN: Well, it’s a good question. In 2017, the National Government recognised the Whanganui River, in law, as a “living and indivisible whole” Te Awa Tupua through the Te Awa Tupua (Whanganui River Claims Settlement) Act. The Act established co-governance arrangements including Te Pou Tupua, the human face that represents the river comprising Crown and iwi nominees; and Te Kōpuka, a permanent joint committee under the Local Government Act acting as a strategy group for the river, with delegated planning powers comprised of members including iwi appointees. The Department of Conservation is supporting Te Kōpuka to develop Te Heke Ngahuru, the strategy for Te Awa Tupua, and the Mouri Tūroa project, which will support this kaupapa through the focus of the restoration of the awa and the reclamation of tikanga.

Question No. 9—Workplace Relations and Safety

9. Hon PAUL GOLDSMITH (National) to the Minister for Workplace Relations and Safety: Does he agree that flexible labour markets are one of the foundations of New Zealand’s economic progress in the past three decades?

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): Well-balanced flexibility in the labour market can support economic and social progress. For example, the flexibility provided to employees to manage their health through 10 days of sick leave has provided many benefits. I note that the member and his party voted against that. While New Zealand’s economy has made good progress in a number of respects, including 3.2 percent unemployment under this Government, there are also real weaknesses in our labour market that hold us back. A longstanding mismatch between wage growth and productivity is not economic progress. Suppressed wages and inflexible working conditions is not economic progress. Working two or three jobs just to put food on the table at night is not economic progress. On this side of the House, economic progress is a high wage, high productivity economy that delivers for workers and businesses alike. That’s what we’re committed to delivering, and on that note we very much look forward to the first reading of the Fair Pay Agreements Bill very shortly.

Hon Paul Goldsmith: Sorry, does he believe in flexible labour markets or not?

Hon MICHAEL WOOD: As I just described, we do believe that well-balanced labour markets that have appropriate flexibility for employers and employees are important. What I do note is the very strong international evidence that labour markets that have a mix of individual bargaining, collective bargaining, and sector-based bargaining are the labour markets that function the most effectively, the most equitably, and which have the highest rates of labour productivity.

Hon Paul Goldsmith: Does he agree with the proposition that the fair pay agreements regime he is introducing today is less about fair pay and more about imposing mandatory union deals on Kiwi workplaces?

Hon MICHAEL WOOD: No, I don’t accept that characterisation at all. I do accept the characterisation that I’ve heard from some major employers who point out to me that at the moment, they are held back from offering better terms and conditions for their workers that they would wish to because of the race to the bottom nature of our existing labour market.

Hon Paul Goldsmith: Does he care about BusinessNZ’s view that “Fair pay agreements couldn’t come at a worse time than now as businesses face mounting pressure from runaway inflation, labour shortages, fast rising costs, supply chain issues and the Omicron response”?

Hon MICHAEL WOOD: In response to those comments, I would note two things. The first is that the passage of fair pay agreements will see fair pay agreements not coming into effect until next year at the earliest. The second point that I would note is that there is, in fact, a no more apposite time for us to be considering this issue, given that some of the very people who have helped our country through the global pandemic—the likes of cleaners, who have kept our workplaces, our schools, and our hospitals safe and hygienic; our retail workers, who have kept us stocked with food and other goods—have been the people that have helped us to get through but are very often the people who have been left out in the cold of the labour market conditions that we currently have.

Hon Paul Goldsmith: Does he still think that the Government can add to the cost structure for small and large businesses with no consequences either for their international competitiveness or the cost of living, and if so, can he please explain how this works?

Hon MICHAEL WOOD: As we have canvassed in this House previously on this topic, the member and I have a very different view about these matters. The member seems to think that there is a straight out trade-off between fair and decent pay and conditions for workers on one hand and good economic outcomes on the other hand. On this side of the House, we actually believe in a better and more progressive vision of labour relations, one in which investment in workers, investment in skills and training, and valuing people can actually build value and productivity in the long run. That is why, for example, Australia, which has had a form of sector-based bargaining in place for most of the past 40 years, has a higher rate of labour productivity than New Zealand, with its largely individualised-based bargaining system.

Question No. 10—Diversity, Inclusion and Ethnic Communities

10. IBRAHIM OMER (Labour) to the Minister for Diversity, Inclusion and Ethnic Communities: What recent announcement has she made about supporting former refugees, recent migrants, and ethnic communities into employment?

Hon PRIYANCA RADHAKRISHNAN (Minister for Diversity, Inclusion and Ethnic Communities): Along with Minister Sepuloni, we launched the Government’s Employment Action Plan for former refugees, recent migrants, and ethnic communities. Across Government, we’re committing to 22 actions to improve employment outcomes for these groups. The action plan was informed by extensive consultation with these communities, and brings together current and planned programmes of work across Government to provide better support for these groups to develop skills, gain work experience, and move into more sustainable and rewarding work, while also supporting employers to create more inclusive workplaces. It also builds on the ongoing work of the Minister for Workplace Relations and Safety, Michael Wood, to end migrant worker exploitation, forced labour, and human trafficking.

Ibrahim Omer: Why is this announcement important?

Hon PRIYANCA RADHAKRISHNAN: Our ethnic communities are a vital part of Aotearoa New Zealand’s social fabric and economy, and make up nearly 20 percent of New Zealand’s total population. But despite record-low unemployment, and although there are of course many who make a significant contribution to New Zealand’s economy, there are still too many people from our ethnic communities who continue to face systemic barriers that prevent them from accessing and progressing in the labour market. Many have spoken to me about being highly qualified for the jobs that they’re applying for, but not being hired. Many people report discrimination in both internal and external recruitment processes that also impact career progression, and others face pay disparities. This action plan will help us tackle one of the biggest issues for our ethnic communities, and takes significant steps towards ensuring the skills and experiences of these communities are recognised, respected, and valued.

Ibrahim Omer: How will the plan improve outcomes for these communities?

Hon PRIYANCA RADHAKRISHNAN: The action plan is one of seven population-specific Employment Action Plans that support this Government’s wider employment strategy. Not only does it support these communities in preparing them for and connecting them with work, we’re working with employers in industry to increase employment opportunities for people from ethnic communities, and to promote diverse and more inclusive workplaces. I want to acknowledge the fact that there have been various community groups and entities, like Diversity Works and the Auckland Business Chamber, who’ve been working towards better employment outcomes for ethnic communities, and also themselves supporting more inclusive workspaces. I look forward to working alongside them. It is critical that we unlock—

SPEAKER: Order! Order! The member’s answer is now too long.

Question No. 11—Police

11. GOLRIZ GHAHRAMAN (Green) (remote): to the Minister of Police: Is she concerned by a recent report that shows New Zealand Police kill people at 11 times the rate of police in England and Wales, with the Police’s use of force disproportionately directed at Māori?

Hon POTO WILLIAMS (Minister of Police): I am concerned about the use of firearms in our communities and that is why we are reforming our firearms law. Policing is an inherently dangerous job and front-line staff put themselves in harm’s way every day to protect the public. The use of lethal force by our police is an absolute last resort, and no police officer ever wants to pull the trigger. I am committed to ensuring Police has the tools available to safely defuse situations without the use of lethal force. It’s worth noting that New Zealand has a much higher rate of gun ownership than the UK, and that the UK has already undertaken comprehensive firearms reforms to make their community safer, which we are currently in the process of doing. The statistics are really clear that our Māori and Pacific communities are disproportionately represented, and that is why police are working with Kim Workman on addressing the bias that exists in the police operating environment.

Golriz Ghahraman: Is she concerned by the fact that many of the people killed by police were not in possession of a firearm and had mental health issues which were likely known to police?

Hon POTO WILLIAMS: That is not my understanding; it’s my understanding that the vast majority of those who are shot by police are armed.

Golriz Ghahraman: What action, if any, has the Police taken to establish a national programme for monitoring and mentoring of the armed offenders squad (AOS), which was recommended by the Independent Police Conduct Authority (IPCA) seven years ago after junior squad officers were deployed without the full qualifications and training required for the AOS?

Hon POTO WILLIAMS: I can confirm that the national training programme for the AOS is already in place.

Golriz Ghahraman: Does the Minister think it’s acceptable that Māori are seven times more likely than Pākehā to be on the receiving end of police use of force, including pepper spray, taser, and firearms, and does she think this is reflective of the low training requirements of New Zealand Police, which are behind Germany, Australia, and even the US?

Hon POTO WILLIAMS: It is not acceptable. That is why the Police have developed Te Huringa o Te Tai strategy, which has been developed in partnership with iwi Māori to address concerns and to reduce victimisation, offending, and injuries among police. It’s also why it’s important that our police represent the communities that they serve. It’s something that I’m committed to as Minister of Police, and that’s why it’s been the focus of our 1,800 growth initiative with Māori, Pasifika, and Asian recruits making up 37 percent of all new recruits.

Golriz Ghahraman: Is she concerned that the IPCA reports into police shootings indicate a pattern of escalation by the armed offenders squad and that the head of the IPCA said, of the shootings, that police continue to “put themselves in a position where firearms use is the only option”?

Hon POTO WILLIAMS: Yes, I am concerned, and that is why I support the police in their efforts to ensure that they review their training and that they put in place the measures that they need to, to make sure that the AOS are sufficiently trained—and just for that member’s information, they do receive a minimum of 20 days’ training each year.

Question No. 12—Police

12. Hon MARK MITCHELL (National—Whangaparāoa) to the Minister of Police: Does she stand by her statement, “I reject the premise that gang tensions have increased under this Government’s watch”; if so, how does she reconcile that statement with the over 40 percent increase in gang membership since 2017?

Hon POTO WILLIAMS (Minister of Police): I stand by the full context of all my answers at question time last Wednesday, including my statement that there is no doubt that violence and gang tensions are a feature of our community and we have to do everything we can to ensure that we deal with that. That’s why we are deploying the largest ever number of organised crime staff by funding 700 additional specialist staff, introducing firearms prohibition orders legislation, and why we’ve rolled out tactical response teams across the country. In answer to the second part of the question, the National Gang List is an intelligence tool used by police, and while the number of gang members on the list has dropped by around 500 since August last year, it remains an unreliable tool for measuring gang membership. As such, we will continue our work to target gangs. We know there is always more to do, and we are working hard to address the issue.

Hon Mark Mitchell: What is her response to Auckland resident Helen White commenting in the New Zealand Herald on Friday, that—

SPEAKER: Order! Now, members got extra questions as a result of similar laughter. Do we want the reverse to be applied here?

Hon Member: No.

SPEAKER: No? Well, just be quiet then. Mark Mitchell, start again.

Hon Mark Mitchell: Thank you, Mr Speaker. What is her response to Auckland resident Helen White, commenting in the New Zealand Herald on Friday, that “Once we had a city full of international students and tourists. Now we are faced with an increase in gang activity in the city”?

Hon POTO WILLIAMS: My response to that is that, as a Government, we have to ensure that we have adequate police and that they are resourced well. Can I just confirm for that member that in Auckland alone, due to the fact that we are building a police force up by 1,800, we have increased the number by 360.

Hon Mark Mitchell: Was Helen White wrong to claim gang activity and crime has increased in Auckland?

Hon POTO WILLIAMS: What I can confirm, and what Ms White and I both agree on, is the support that this Government has given to police to ensure that we deal with gang activity appropriately by ensuring there are 700 police focused on organised crime.

Hon Mark Mitchell: Point of order, Mr Speaker. The Minister didn’t come anywhere close to actually addressing the question.

SPEAKER: I think she came close enough.

Hon Mark Mitchell: Can the Minister provide her definition of gang tensions?

Hon POTO WILLIAMS: What I can confirm is that this Government has supported the police by lifting the numbers by 1,200 so far; we’re well on our way to the 1,800 target. We’ve increased the budget by $450 million, we are ensuring that 700 police are dedicated to organised crime activity, and in Auckland alone—due to the increased numbers—they have 360 more cops on the beat.

Hon Mark Mitchell: Point of order. Mr Speaker, the Minister has stood in this House and told this House that there has not been an increase in gang tensions—

SPEAKER: A point of order?

Hon Mark Mitchell: And my point of order is that she has come nowhere close, again, to addressing the question.

SPEAKER: Well, I might have had some sympathy for the member if the answer wasn’t being shouted down by Mr Doocey and others. If I could hear all of the answer, I might have ruled in the member’s favour, but I couldn’t. It might have been in there somewhere—I don’t know—and you can talk to Mr Doocey about his noise.

Hon Mark Mitchell: Thank you, Mr Speaker. Could the Minister please provide her definition of gang tensions?

Hon POTO WILLIAMS: It’s a tension between gangs.

Hon Mark Mitchell: Has gang violence increased or decreased under her watch?

Hon POTO WILLIAMS: If I can point to the National Gang List that the National Party seems to rely on, which has had a drop of 500 since August last year, and if I can also point to the fact that we are now charging gang activity at 92 percent, a much higher rate than has ever been before.

Hon Chris Hipkins: Does she agree with the claim made last week that increased gang activity, or increased gang tension, is a result of the deportation of 501s from Australia, as claimed on breakfast television last week by the Leader of the Opposition?

Hon POTO WILLIAMS: What I can agree with is that the 501s have added an element which is very troubling into our gang environment, and it did start under the National Government. Their response was to write a gang action plan in 2016 which they did not implement. In fact, the gang action plan was implemented by our Government.

Bills

Fair Pay Agreements Bill

First Reading

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): I present a legislative statement on the Fair Pay Agreements Bill.

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

Hon MICHAEL WOOD: I move, That the Fair Pay Agreements Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill.

This one’s for Mele and Malia and all the other cleaners who keep our offices, our schools, and our hospitals clean and hygienic. It’s for Jason and Wa’el and the security guards across New Zealand who work day and night to keep people and property safe. It’s for Connor and Muwela, and all of their colleagues across retail who have kept us all supplied with food and goods during the COVID-19 pandemic. It’s for Morris and the thousands of bus drivers who keep our cities and our towns moving. It’s also for the major employer who told me last week how proud he is of his cleaning workforce, and how much he wants to end the race to the bottom so that his team can have fair pay and conditions and his sector can have a sustainable future.

The global pandemic has reminded us of the value of much of the work done in our communities that has been undervalued for too long. We’ve gotten through COVID together, and as we build back better, it is time to deal with some of the longstanding inequalities that have been exposed.

For 30 years, the critical work and contribution of Kiwis performing some of the most essential work in our country has been systematically undervalued. I ask this House why the cleaners who keep us in this Chamber healthy and safe should not have wages that allow them to live in dignity and their whānau to have security. I ask this House why the bus drivers who serve our communities up and down New Zealand should not have hours of work that enable them to participate fully in family and community life. I ask this House why aged care should not be a sector that attracts skilled and caring Kiwis through decent, sustainable pay and conditions. The answer is that for 30 years, our employment relations system has embedded low pay and conditions in a race to the bottom in many of these sectors. This isn’t necessarily about employers deliberately doing the wrong thing; it’s the inevitable consequence of a system that has incentivised competition based on low labour costs.

Almost exactly 31 years ago in this Chamber—and it’s here in the Hansard from 1991—we were told in the debate on the Employment Contracts Act that a highly deregulated market and the end of sector-based bargaining would improve New Zealand’s labour productivity. It did not. We were told that the wealth would trickle down. It did not. We were told that workers would not see their living standards reduced, but for many of them, they did.

Fair pay agreements (FPAs) are about creating a new, modern, sector-based bargaining system that supports fair, safe, and productive workplaces. The model is built on international evidence described by the OECD Directorate for Employment, Labour and Social Affairs as the positive benefits that a level of sector-based bargaining can have in labour markets, but, most importantly, the FPA Bill is a uniquely New Zealand solution to the race to the bottom problems that I have described. The model was initially developed by a tripartite working group chaired by the Rt Hon Jim Bolger, whose careful and balanced work on this issue I acknowledge today.

FPAs will enable good-faith bargaining to occur at the sector or occupational level, and will establish a minimum floor for conditions in that area. In the same way that the Government establishes a minimum floor like the minimum wage or statutory sick leave, employers and unions will be able to negotiate and agree a bespoke minimum floor relevant to the issues in their sector. By establishing a floor underneath pay and conditions, competition based on low labour costs will be disincentivised.

Our 30-year experiment with a low - labour-cost model has not worked. Many workers have suffered, but, equally, our rates of labour productivity have been amongst the worst in the world under that regime: lower than the OECD average, and lower than many countries that have a level of sector-based coordination for worker terms and conditions. A model based on wage-based competition is focused on the wrong things. FPAs will incentivise competition based on the right things. The quality of goods and services offered, investment in skills and training, R & D innovation—these are the things that will drive productivity and prosperity for our country.

Inherent in this bill, we recognise that wealth creation is a shared endeavour. It takes the contribution of both those who provide capital and those who provide labour. Why shouldn’t there be negotiation, compromise, and shared vision for how a sector progresses and how the fruits of growth are shared, given that both parties have that stake?

The bill before the House provides a carefully worked through framework for how the FPA system will function. Some of the key design details include provisions for the initiation and bargaining of fair pay agreements. There will be two pathways for a union to initiate bargaining for an FPA: a representation test based on employee numbers, or a public interest test. Employees will be represented by unions and employers will largely be represented by employer associations. The process will be guided by the good-faith obligations that are well-known and established in the existing Employment Relations Act (ERA).

Once an FPA has been negotiated, it will need to be ratified by both employees and employers. This ensures that there will be support from both the industry or occupation for the new minimum terms of the FPA, and there will be a particular weighting for small businesses in that ratification process.

There will be certain topics which have to be negotiated as mandatory terms in FPAs, including base wage rates, ordinary hours, and penalty rates. Other topics such as flexible working conditions, redundancy, and health and safety will need to be discussed, but will not necessarily have to be agreed as part of a final FPA. FPAs will be longer-term agreements of between three and five years that provide parties with a platform for dealing with the long-term issues in their sector. The bill also provides for a dispute resolution system built off ERA provisions with access to mediation and, where necessary, determination so that fair pay agreement negotiations do come to a conclusion and provide certainty for all parties.

I acknowledge that this is a significant reform of our workplace relations system. Some will have questions and concerns, and I will continue to engage on reasonable issues that are raised. I know that the select committee will also work hard to hear submissions, and I have every expectation that they will recommend improvements to the bill at the next stage. Vigorous debate is good, and different views are to be expected on an issue like this, but I strongly urge debate based on the substance of the bill and debate focused on the labour market failures that we are trying to fix.

Sector-based bargaining is not an extreme approach to these issues. It is common around the world, including in our nearest neighbour. Australia has had a sector-based bargaining system in place for over 40 years, contributing to higher wages and an economy where average annual labour productivity growth has been 46 percent higher than New Zealand’s since 1991, when we abolished sector-based bargaining.

The arguments that FPAs and sector-based bargaining stand contrary to good productivity growth are false. Debate based on misinformation and scaremongering will take us nowhere, and it will be seen by New Zealanders as a desperate smokescreen to block progress.

So I want to be very clear about some of the disinformation that has already been raised by members opposite. Firstly, there is no compulsory union membership under FPAs. Existing voluntary unionism rights are affirmed in Part 2 of the bill. Secondly, there is no recourse to industrial action by employees or employers during FPA negotiations. Any claim to the contrary is factually false and is designed to scare rather than inform.

If the parliamentary Opposition want to create memes of me in an awesome 1970s shirt and bloviate about Soviet Russia, then so be it, but I think that New Zealanders deserve and expect better, given the issues at hand. I say further to members opposite that there is an honourable, conservative tradition in this country of supporting security and stability for people and communities. Much of that was ripped away by the tidal wave of reform 30 or 40 years ago. Both this Government and the previous one have had to try and deal with some of the social damage that resulted. FPAs, at their core, are about rebuilding the social contract, valuing work, and creating the stability and security that allows our communities to thrive.

This bill fulfils a Labour manifesto commitment that was democratically campaigned on at the 2020 election. It’s a piece of legislation that is in the best traditions of reforming Labour Governments that improve life for working New Zealanders and move our country forward, and it is in the best traditions of the Kiwi values of a fair go for all and working together. This bill will help stop the race to the bottom. It will enable good-faith bargaining at the sector level to overcome inequalities that have developed over the past 30 years. Through FPAs, we will build a more inclusive economy in which employees and employers can table their aspirations and negotiate as equals in good faith to solve problems and chart a fairer, safer, and more productive future ahead.

As I said before, this bill is for Mele, Malia, Jason, Wa’el, Connor, Muwela, and Morris. It is for those workers who help make our country, but who have been left out in the cold. It is about the dignity and the value of their work in our society. It is about fairness. I commend this bill to the House.

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

Hon PAUL GOLDSMITH (National): Thank you, Madam Speaker, and it’s my pleasure to speak on this bill. This legislation, introduced today, is not about fair pay; it is about the Government imposing mandatory union deals on Kiwi workplaces. Well, let’s not make any bones about this: there’s no choice involved, either for workers or for business operators. The misnamed fair pay agreements will be imposed on our workplaces.

And we have this Minister opposite who has this dark view of the world—in the past 30 years, since 1991, what we have seen in this country is a consistent reduction in unemployment from the high levels of the 1970s and 1980s, when we had huge parts of the workforce unemployed in a rigid labour market situation, and, since that time, New Zealanders have enjoyed a jobs boom and the opportunity to have employment, to look after themselves and their families. And labour market flexibility has been one of the key elements of that success. So the key question for us is whether these mandatory union deals will make our economy stronger, and our clear answer is no: it will make our workplaces less agile, less flexible—at the very time when they need to be. More than ever. That’s why National opposes this legislation, why the overwhelming majority of business owners oppose this legislation, and why, I believe, New Zealanders will be concerned when they learn about how this proposed so-called fair pay agreement works.

Now, this bill arrives at a time when New Zealand is facing very significant economic challenges—perhaps the biggest for a generation. I mean, if we step back, globalisation is in retreat, if we look around the world, with a rise of protectionism over the past few years amongst big trading powers, those restrictions accelerated by the COVID restrictions over the past couple of years, and turbocharged by the Russian invasion of Ukraine. Globalisation and, sadly, democracy, is in retreat. And what that means for a small trading nation, like New Zealand, remains unclear, but our prosperity has been underpinned by relatively free trade. And so the risks to our prosperity, right here, right now, are very significant. And that prosperity that we, as a country, have built over the past few decades is at risk. So now is not the time for economic complacency; it is the time when we should be focusing on building our economic strength so that New Zealanders have the opportunity to thrive and succeed.

And we’re also facing the highest inflation in 30 years, where the price of goods are increasing at twice the rate of wages, so New Zealanders are battling to stay still. We also see a net outflow of migrants to Australia already happening, and that flow will increase significantly. So these are real, substantial economic challenges. And what is the Government’s response? Nothing but adding costs to New Zealand businesses, with no concept of the implications for our competitiveness. And there’s nothing major to say about impediments holding New Zealand back. We see a Government focused entirely on redistribution of our wealth through higher benefits, through higher minimum wage, through strengthening the unions, through the mandatory union deals—all of which may have their place at times, but they have nothing to say about how we grow the economy so that we can pay for it. And that is why middle New Zealand is worried and have very good reason to be.

This bill is indulging an ideological wish list that this Government came into government with. The return to national awards and the move to strengthen unions—despite no empirical evidence whatsoever as to either the problem or the policy response. Let me quote directly from Treasury and what they had to say about these fair pay agreements, so-called: “There’s been minimal identification of empirical evidence for the problem or the policy response.” But they did note that the proposed system could make structural changes to the labour market and have negative effects on worker conditions, employment, and productivity. So the rationale for the mandatory union deals is as clear as mud. And that is what we’re seeing from this Government. It’s consistent with Labour’s desire to centralise control and not trust New Zealanders to make decisions about themselves and what’s in their own interests. It’s certainly not based on evidence, and certainly no evidence that it will increase New Zealanders’ wealth, living standards, and prosperity.

So a question I have for the Minister is how does a return to national awards across industries and occupations help New Zealand businesses become more agile, more flexible, and competitive in a rapidly changing workplace environment, and, in a rapidly changing global environment? How will it lift our national income? And we will never get very clear answers on that.

So let’s just go through the bill and what it does. Are you sure it brings in this framework for industry-wide or occupational-wide minimal-employment terms? So any eligible union can initiate the bargaining process if it meets a test of only 10 percent of employees in the proposed coverage, or 1,000 employees—but 10 percent, yeah—or a public interest test based on low pay or bargaining power; so that, basically, could be it. So maybe you don’t even have to make it to 10 percent, I don’t know.

Then the chief executive of the Ministry of Business, Innovation and Employment decides whether the process goes forward—so it can be either industry, so it could be all, I don’t know, transport workers, perhaps, or it could be all aged-care workers, or an occupation—it could be all sales workers, I don’t know. So that’s what we’re going to find in the next little while. And if you happen to be minding your own business operating a cleaning business up in Hokianga with five employees, you might not know anything about the process, you might not know if it even exists—you’re doing your own business, trying to make a living, and then, suddenly, whoomph, you’re part of a process and you just have to accept whatever comes out of the other side.

Now, if sides aren’t represented by an eligible union, or the two sides that are supposed to get down and do all this bargaining on a national level—there’s supposed to be a union side and a business side, or employer association. Now, Business New Zealand told the Government to clear off—“We don’t want to be involved in this and we don’t want to be part of a thing that we don’t agree with.” And so two days after the Minister introduced this legislation, that he’s been working on for four years and has been something that he’s dreamt about every night for a long time—two days after he introduced that, he brings in a change saying, “Oh well, actually, the bill that I just introduced didn’t do the job and so here’s a proposed change which is to bring in a backstop so if Business New Zealand or nobody else turns up on the employer side, well, we’ll just go straight to the Employment Relations Authority and they’ll make a determination.”

And so, basically what happens, if you do manage to find two debating sides, they get together, they argue, they negotiate, then it’s put to a vote on both sides, and if it loses that vote twice it ends up before the Employment Relations Authority. This, by the way, being an institution that takes about 300 days, on average, to come to a conclusion on any of its particular topics at the moment, so it is hardly the most efficient organisation in the world. And so that’s going to be interesting to see how they cope with this. They have enough trouble with personal grievances; just imagine how they’re going to deal with the imposition of fair pay agreements.

But, anyway, this organisation comes along, makes a determination, and that determination is binding on all businesses and employees who happen to be caught within it, even though, like I say, the cleaning business up in Hokianga might know nothing about it, have had no engagement with the process, who had never heard of it, doesn’t even know what a fair pay agreement is, and, all of a sudden, they have to have the same terms and conditions as everyone, or else. Now, there’s some talk of regional variation, but who knows what that means?

And so we’re left with this imposed fair pay agreement, so-called, what we would call a mandatory union deal, imposed on the business and the workers, on the workplace, and there we go. And so the conclusion is, well, how’s that actually going to help? How’s it going to make people’s lives better? Well, we, on this side of the House, believe that it’s best for people who are actually in the workplace, who go to the job, go to the business, know what’s going on in their community, to make arrangements that suit them, within the broad context of what we have, which is, already, one of the highest minimum wages in the world, lots of terms and conditions that have been set in order to protect the vulnerable. And New Zealanders, as a long tradition, have been concerned to do that. But this bill just adds another layer of mandatory control and rigidity, which is the last thing we need as a country.

So my final point is this is a time when New Zealanders need to be focusing on building our strength and, instead, what we’re doing is adding costs, and complication, and rigidity to our system.

Hon STUART NASH (Minister for Economic and Regional Development): Thank you very much, Madam Speaker. I stand in support of this Fair Pay Agreements Bill and I think the former Minister Goldsmith and I have one thing in common: we should be using this point in time on building on our strengths and our competitive advantages in creating the sort of economy that is going to last us into the short, medium, and long term.

Before I came into Parliament, I was involved in business: large New Zealand corporates—Fletcher Challenge and Carter Holt Harvey—a small private but highly successful company involved in international trade, and the director of strategic developments in a large State sector organisation. I have Master’s degrees in law and management and forestry science. In fact, my forestry science thesis was in commerce and, as Minister for Small Business and Minister for Economic and Regional Development, it is my clear focus and driving challenge to lift productivity in this wonderful country, because we have so much to offer in this beautiful country that we go to the world both for those who live here, and those who seek to visit.

But there is one thing we don’t have, one thing that we have not managed to crack over the years, and that is a high level of both labour and capital productivity or multi-factor productivity that other small advanced economies have. We have, over the years, overvalued capital and undervalued labour. Instead of investing in plant and machinery to drive productivity, to proactively increase investment in innovation, that will drive and create world-leading companies, we have based our growth on labour. In fact former finance Minister Bill English stated that our global competitive advantage was our cheap labour. No more. Our global competitive advantage will not and cannot be built on the back of working New Zealanders earning low wages under poor conditions. Bill English’s vision was almost 19th century in its ambition and is the reason why economic growth under the previous Government was based on immigration, not innovation.

Every single management case study of innovative successful companies from around the world, let alone this country, highlights the culture created by owners/employers. It highlights that success isn’t built on the back of workers but achieved by management and employees standing side by side, working together to drive the type of growth, innovation, and productivity required to help deliver a strong, sustainable economy that will help deliver success in the short and medium and long term.

Good employers—and I freely acknowledge that the majority of New Zealand employers are good bosses—have nothing to fear from fair pay agreements. Most, I think we will find, will be able to use the provisions to benchmark what they are doing and how they are treating their staff, and implement in a way that actually adds value both as an employer and as a company. The former speaker, Minister Michael Wood, highlighted some case studies themselves of people who come into the place that we call almost home, that we call “our house”, and work incredibly hard and yet do not earn enough to be able to live with dignity. That is not fair.

As a businessman, I completely understand and absolutely buy into the value created by fair pay agreements and cannot understand why the National Party would be so against, would be so opposed, certainly at this point in our economic history. But then again, I was actually on duty in this House when the Hon Paul Goldsmith, National’s workplace relations spokesman, spoke on the Matariki bill. During his contributions, he spoke against increases in sick leave for workers—in the middle of a pandemic! He spoke against increases in the minimum wage. He wanted to get rid of the labour weekend holiday, and he spoke in favour of tax cuts that would give someone on the median wage $2, however someone on over $180,000 a significant windfall.

I genuinely believe that Chris Luxon, the Leader of the Opposition, misspoke when he called people “bottom feeders”. I genuinely believe that he is a better person than that, and he misspoke and he probably regrets that. But this is not the way, nor is it the rhetoric, to increase productivity or profitability. It is the tired words and out-of-date ideas from a previous time, and we need to do better. I refuse to buy into the National philosophy that workers are just numbers on a spreadsheet to be manipulated and characterised as mere factors in production to be minimised and traded in a way that is unacceptable to most. Former Prime Minister the Rt Hon Jim Bolger actually bought into the need for us to make change. And when I hear Paul Goldsmith talk about unions in the way he does, it makes me wonder what he actually truly believes about workers and their rights.

The thing I love about unions is that they are the voice for those who have not got a voice. We all know, in the vast majority of companies, whether they be large corporates or small businesses, that there is an imbalance in power between those who own or run the company and those who work in the company. And the thing that unions do is they represent workers in a way that addresses that imbalance of power. They provide a level of fairness which is crucial to a highly functioning workforce and a highly productive economy.

As mentioned, good employers have nothing to fear from fair pay agreements; in fact, quite the opposite. Great employers should welcome the ability to benchmark their practices against industry best practice. In fact, what the good and the great employers will do and, as mentioned, I acknowledge the vast majority of New Zealand employers—certainly every single employer that I have met—is a good employer who wants what is right for his or her workers and his or her company, and, in fact, the country. But what it will stop is, in fact, that race to the bottom that Minister Wood spoke about. It will stop the cowboys coming in and creating an environment which is uncompetitive and untenable to the vast majority who live in our communities.

Most of us are here are mothers or fathers, and the thought of our children working in companies in a way that they were exploited is just not tenable, let alone our friends, our family, our colleagues, and those who live in our communities. Those who exploit their workers are on notice that their practices will not be tolerated, nor are they acceptable to the vast majority who live in our communities. The norms and practices reinforced by fair pay agreements are those reflected by our diverse communities. No longer should people have to work in a way that is unacceptable to the majority of New Zealanders and, to be honest, no longer acceptable to the vast majority of our trading partners either. As global consumers become more engaged, more educated and more enabled, they will want to know that they are buying products from companies that employ their workers, that treat their workers, in a way that is reinforced by these fair pay agreements.

We have a brand that is “100% Pure”. It is a brand enhanced by our Prime Minister, who asked us all to be kind, and we bought into this. In fact, those words resonated around the world to the point that we were acknowledged in 2020 and 2021 by a number of world-leading and reputable organisations as the country that dealt with COVID better than anyone else.

Dr Shane Reti: How’s that going now?

Hon STUART NASH: It is now time that we also live this brand, and I think it’s going incredibly well, Dr Reti, because we have one of the lowest death rates in the OECD and, as a medical practitioner, I am astounded you are asking that question. But that aside, it is time that we lived this brand, we heeded the call in all our workplaces, across every industry, across our country. Our competitive advantage will not and cannot be built on low wages. Low wages is not a plan for the future, nor a strategy for prosperity. And disrespecting workers is not a way to treat other human beings. Fair pay agreements will ensure that workers are treated well and are treated fairly, that employers understand their obligations and, once again, we can take our place in the world as a wonderful place in the world to do work and to work. That is only fair and right. Thank you.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Speaker. If ever there was a piece of legislation that clearly and decisively separated the differences in terms of philosophy and ideology between the socialist left and those of us on the centre-right of this Parliament, it’s this piece of legislation. This is nothing more than an ideologically driven piece of payback for the trade union movement. When my colleague Paul Goldsmith says that—

Hon Michael Wood: Point of order, Madam Speaker. The Standing Orders are very clear that it is out of order for a member to suggest that other members might be behaving in a way as reflected by the member’s comments about payback just now.

Chris Bishop: Speaking to the point of order, Madam Speaker. The member is correct, except for the fact that in the previous two parliaments his former ministerial colleague the Hon Phil Twyford made repeated references to the National Party doing particular things because of kickbacks, and paybacks, and other unsavoury allegations, all of which were allowed to stand and none of which were ruled out of order.

ASSISTANT SPEAKER (Hon Jenny Salesa): I will allow the member to continue his speech.

Hon SCOTT SIMPSON: Thank you, Madam Speaker. So the fundamental philosophical and ideological difference is one that sees—on this side of the House—people as individuals, as intelligent, smart people who can, and should, negotiate deals with their employer on terms and conditions that they negotiate directly with their employer. And over the last 30 years or so, that’s exactly what we’ve had. But on the other side of the House, on the socialist side of the House, people are considered to be little more than units of productivity to be herded, cajoled, and coerced into group actions that they may not want to participate in.

So for those of us who are of an age where we remember the bad old days before the Employment Contracts Act of 1991, we recall how bad what used to be called “national awards” were. And this mandatory union deals piece of legislation does exactly that. It takes us back 30 years, to a time when most New Zealanders thought we had well passed and would not be ever returning to. Because for the last 30 years or so, New Zealanders had a nimble, easy, flexible employment relations framework that has enabled employers and employees to come to terms with each other in a way that encouraged businesses to succeed and to thrive.

This piece of legislation is a road block to that continued nimbleness, that continued entrepreneurialism, and the handbrake will be well and truly put on—mostly small—businesses around New Zealand. Because this is a piece of legislation that seeks to pigeon-hole everybody, every business, every employee, into a pre-set, determined view of what their role in our economy should be.

I’m wanting to focus a little bit on some of the historical detail that has caused us to be debating this piece of legislation today. It goes back to the very formation of the parliamentary Labour Party. And those people who have studied their history will understand and remember that, actually, the trade union movement was formed towards the end of the 1800s, at a time when workplace reform was desperately needed. And the trade union movement around the word—not just in New Zealand, but in Australia, in the UK, in North America, and other parts of the world—developed to achieve those outcomes. But very quickly, just as in other parts of the world, they found that if they were to have true influence on decision making, they needed a role in a place like this—in a parliament. And so, out of the trade union movement was birthed the parliamentary Labour Party. Those connections are deep, they are historical, they are political, and they are of course financial as well.

So since the Employment Contracts Act 1991 and the abolition of compulsory trade-unionism, a couple of interesting things have happened. And one of the most interesting things is that New Zealanders have realised that, for most of them, trade unions are simply irrelevant—for most New Zealand workers, trade unions are simply irrelevant. Very few New Zealanders these days are members of a trade union, and so over that 30 years, of course, union membership and union financial strength has diminished considerably. And then join the dots as to why it should be that a parliamentary Labour Party in 2022 would want to wind back the clock to be putting through legislation, using it’s absolute majority in this Parliament, to ensure, actually, that unions have a continued future. Well, if unions were so important, New Zealanders would have joined them; they would have done that voluntarily. Actually, it’s something about like 14 percent of New Zealand employees are members of trade unions, and the vast majority of those are in the public sector. In the private sector, the percentage is very low indeed.

So for those who are younger than I am in this Parliament, and there are a few, but out there in the workplace, there are a whole lot of people who are, say, under the age of 40 who simply don’t remember the bad old days of demarcation disputes—which were not disputes between employer and employee, but actually demarcations between unions scrapping over which unions should have the right to represent a particular employee at award negotiations. Now, there’s nothing in this piece of legislation that prevents demarcation disputes occurring again. Yes, there will be, in this legislation, a provision that prevents employees and employers going to an industrial action dispute, but nothing about unions fighting over—in a demarcation way—who is going to represent a particular group of employees. And so we’ll be back to that. So there’s a whole group of younger people who don’t remember any of that bad old days stuff, but are soon going to be back in it.

And what happens for those younger people? Well they’ve grown up and are now used to a level of workplace democracy that is good, that is proper, and that is working very well for New Zealanders, and they don’t want to be cajoled and coerced into a template pigeonhole model that is of the sort that this legislation seeks to provide. And so, for most younger New Zealanders, they’ll be scratching their heads and saying, “Why am I being forced to negotiate—well, in fact, to lose my right to negotiate with my employer? Why is it going to be that decisions about my terms of employment, my hours of work, my rate of pay, and the conditions upon which I’m employed—why will it be that I no longer have a say in those matters and that those matters will be decided by big unions and big business, probably in a closed room in Wellington somewhere?” The only difference between that kind of scenario and what used to happen 30 years or more ago is that the smoke-filled rooms will no longer be there. But in secret meeting rooms behind closed doors, pay and conditions and terms, under this piece of legislation, will be negotiated by faceless people who don’t represent the interests and the best prospects for those people who they are purportedly negotiating for. They will be representing the interests of either business or unions, and there’ll be very little concern for individual employees.

And so the whole term “fair pay agreement” is just so wrong, on every level. The really proper term should be “mandatory union deals”. But there’s going to be fightback, because this Parliament will pass this legislation and it will do so on the back of the current Government’s absolute majority. But I want to give fair notice to the current Government, most of whom won’t be coming back in the next Parliament—fair notice to those few that will return, but a re-elected National Government will repeal this legislation. A re-elected National-led Government will repeal this legislation. So that’s fair notice to the employers, to the businesses, and to the employees around New Zealand who are fearful and worried about a trip back in time, a time that was less enlightened, a time that was less flexible, a time that was less nimble, and a time that—in workplace relations—was less democratic, less fair, and was dominated by big unions and big business. That simply doesn’t reflect a modern, future-focused employment framework, and it’s not going to be suitable for New Zealanders as we strive to make our way in a competitive world.

So mandatory union deals are going to be a feature of the New Zealand framework for a very short period of time. It’s my absolute hope, and I know that my colleagues on this side of the House will be working even harder with legislation of this sort to ensure that there is a change of Government at the next election so that this sort of old-fashioned, tired, draconian legislation—and, to use the words of the Hon Stuart Nash, “tired words and out-of-date” thinking which represents this legislation—will be repealed absolutely as soon as possible. And New Zealand employers, New Zealand employees, can take heart that that help and assistance will be forthcoming to them just absolutely as soon as possible, and that the use of a blunt instrument like an absolute majority based on nothing more than ideological principle and a relationship with—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! The member’s time is up.

Hon MEKA WHAITIRI (Minister of Customs): E Te Māngai o te Whare, tēnā koe, otirā ki ngā mema katoa o te Whare, tēnā tātou.

[Greetings, Madam Speaker, and greetings to all the members of the House.]

Wow—it’s a great day. It’s an absolutely great day. Pleased to take a call on the Fair Pay Agreements Bill on behalf of my constituents of Ikaroa-Rāwhiti, of which my auntie—and I come from a long line of freezing workers, who always told me that the freezing workers were the backbone of Aotearoa New Zealand. I’m proud to take a call on a bill that continues the modernisation of our industrial relations employment standards in Aotearoa New Zealand. We are 2022, not 1991. So I am pleased. Can I acknowledge the work of the Minister Michael Wood and his advisory group in getting this bill before us.

It’s unfortunate that we’ve had two very senior members on that side roll out the same old argument—“anti-union”. They didn’t address the issue around productivity and lifting wages and valuing staff and workers in the employment space—none of that. I listened intently to two very senior members—nothing. It’s a travesty that they actually haven’t understood the bill or come to this House and put up ideas around how they would lift productivity, how they would lift wages, and how they would respect workers in the workplace, because this is exactly what this bill intends to do.

Look, another story I want to talk about in my acknowledgment of my freezing works whakapapa was pre-1991, where there were national awards. Everybody in my household, from my father to my mother to my siblings to my first cousins to my auntie, all worked in the freezing works and were part of the national awards. What happened in those times was productivity was very, very high. Wages were very, very high. In fact, people bought their homes by merely working in the freezing works, because that enabled them to look after their families. Communities were born out of national awards. The participation of employees on behalf of their unions derived benefit in the homes of the people that this bill is acknowledging. For too long, that side have ignored the contribution of our workers across the nation in the fabric of this country.

That’s why I’m standing in support of something that gives hope to many of our workers, be they freezing workers, be they shearing gangs, our cleaners, or our front-line workers, who have done it extremely tough in the last two and a half years. This bill is sending a signal to them that they matter, that we on this side care for them. But also the involvement of those progressive employers who continue to do the right thing by their employees—and I’m talking about the living wage, and the fact that they are acknowledging the contribution. Has the sky fallen in for those employers—has the sky fallen in? No, the sky does not fall in when you are doing a fundamental piece of legislation that looks after a key component of businesses and workplaces up and down this country, and it is in this Fair Pay Agreements Bill.

Of course, it’s the first reading, but it’s interesting to hear that side—and I’m hoping that the following speakers on the Opposition side will actually come to the party, will come to the debate, on how their side will address productivity and wage lift and how they will protect the roles of their workers. In fact, the former speaker talked about “It’s already happening”—it’s already happening. Mr Goldsmith talked about voluntary unionism. These are slogans. They’re not ideas of how you are going to lift productivity and wages and look after and treat workers fairly in this country. They haven’t offered that. Their two key speakers have not done that.

So my message to the ones that are following: get up and say what you would do so that when we take this bill out for full consultation, people will actually see what this side, what the Government, is putting up, and by comparison what that side is putting up. Rubbishing unions and rubbishing that “It’s already happening” and keeping flexible labour market practice—and we know for many employees, they do not have a voice. They do not have the ability to sit across from their employer and bargain a deal that’s in their best interests.

What’s happened to the collective responsibility? We’ve seen this during COVID, where the nation has come together as one to look after each other. But what we hear on that side: no, it’s up to the individual. If you’ve got a stronger, bigger voice than anyone else, you’re likely to get a better deal. But what about the many who do not have that ability? What happens to their rights and their ability to advocate—“Well, if you give that deal for that person, why can’t I get that deal?” What is wrong with sharing a collective agreement that all workers in the workplace benefit from? So this bill is attempting to do that by putting minimum provisions during the negotiation—[Interruption] There you go. We’ve got an ACT member yapping over there. I’m looking forward to ACT’s contribution to this debate. I want to particularly hear what they are going to do around lifting productivity and wages. I bet you it’ll be some empty slogans that are, in my view, lazy around the lack of research into what this bill is actually doing.

So I’m proud to be on this side of the House, who put our workers at the forefront of a modern industrial employment system here in Aotearoa New Zealand. It is well overdue. It is to return the ability to acknowledge that national awards pre-1991—and I’ve got to say, for my sins, I was actually working in the Department of Labour as a very young—yes, I might have been 10; OK, I was a bit older. In the Department of Labour, we actually had to do the policy work on the Employment Contracts Act. I can tell you that many, many of my colleagues were very upset that we were changing and decentralising the system out, and the flexibility. To my analysis, for the time I remained at that department, it did not lift productivity. In fact, it spiralled many, many workers up and down this country with the introduction of the Employment Contracts Act.

But here we are. It’s a better day. It’s a new day. We’re now in 2022, and we are acknowledging the Fair Pay Agreements Bill in this first reading. I too look forward to it going to select committee. I too want to give the message to all those employers and employees: please take the time to read the bill. Don’t listen to the easy slogans that the Oppositions are throwing at it. Have a look at the bill. See yourself in it. See the benefits it will derive your business as well as your staff and workers that work in the workplace, because this is what this bill does.

I’m really pleased, like I said, to belong to a party that does put the people at the forefront, but I too want to add my support in the economic development space that we need to have a modern workforce that acknowledges not only the cost of the labour to do the job but also the value around discretionary effort. When you go into a workplace where you are valued, not just in terms of what you get in your weekly pay packet, but when the practice and the values of that employment and that employer values you as a person, you will always go the extra mile—you will always go that extra mile. We have not valued discretionary effort and the contribution it makes in the economic sense of that business. It’s now time that for some of us, on this side, we talk about and acknowledge the discretionary effort and the value it returns to the business, to the employer, at the end of the day.

It’s a great day. I’m proud to stand in support, and I commend the Fair Pay Agreements Bill to the House.

JAN LOGIE (Green): Thank you, Madam Speaker. I’m pretty stoked to get to stand up and take a call on this piece of legislation, finally. Sitting in this part of the bench, we’re not always in agreement with the Government, but I can tell the House this evening that tonight we are 100 percent celebrating this piece of legislation.

The Green Party believe that at the heart of a fair society, one of the key cornerstones are decent wages, stable jobs, and safe working conditions. All of those things have been significantly under threat in this country for the last three decades. We’ve seen international evidence—and I’ve heard from the National Party members this evening about how great and how much better things are now than they were before the economic reforms of the 1980s and 1990s. Things are so much better! We are so prosperous now—so prosperous—that the incomes of the top 1 percent have doubled in that time period—prosperous! But the disposable incomes of the poorest 10 percent have flat-lined, basically, since the 1980s. The money, rather than trickling down, has funnelled and been pulled up to the wealthiest, to the point when 50 percent of the collective wealth in this country is less than 1 percent of the wealth held by the top 1 percent. Like, I can’t even get my head around those numbers. It has been an absolute transfer of wealth from the majority of us to the minority of us, and that is the prosperity that the National Party has been talking about and they are fighting to protect this evening. That is not something the Green Party wants to support.

We believe that our collective effort, the benefits of it, should be shared across those who are doing the work. And the international evidence is really clear: strong unions and collective bargaining frameworks are the best tools for delivering decent pay, stable jobs, and safe workplaces. And they are our best tool for reducing inequality as well as, not at all magically, improving performance and productivity. We’re being told by the National Party that the interests of working people are in opposition to productivity and collective effort. It is just simply not true. The reverse is true. Since the 1980s—and we’ve got to a point where now less than one in five working people are covered by a collective contract in this country, compared to the 70 percent that it used to be, and before those radical right-wing reforms of the 1980s and 1990s.

I just want to also challenge the idea that’s been put forward by the National Party that this is left versus right. This is radical right-wing versus, actually, the majority of the rest of the world, and including conservative right-wing people like the Hon Jim Bolger, who led the working party that came up with this proposal. This is not right versus left; this is radical thinking versus the rest of us. The Greens are very happy to stand by the restoration of decent conditions, because those reforms from the 1980s and 1990s that took a sledgehammer to our social structures and employment laws resulted in more people being in precarious work; more people being on low wages; the voices and experience of working people—and most of us will have had this experience—not being valued or heard in their workplaces; and poor decision-making happening as a result; an entrenched, what I would describe as a, health and safety crisis, where our rates of workplace injuries and deaths are so much higher than comparable countries; where productivity has not kept pace with other countries.

And we heard from the Minister how productivity growth in Australia, where they have sector-based bargaining, is 46 percent higher than it is here since we got rid of sector-based bargaining, and where employers have been competing actively on wages, not service, not innovation, not product—on wages; where a previous National Party Prime Minister was proud to say that we were competing internationally on the benefit of our low wages—on the benefit of our low wages. And the consequence of that has been two out of five children living in poverty in this country were in working families where parents did not and do not now have the time to spend with their children that they need to, where they don’t have the time to engage in their community, to return to their homes to reconnect to their marae, and do not have the time or the money to be able to keep a roof over their head. We’ve seen increased transients and poor educational outcomes as a result, and we’ve seen a crisis of mental health. These things are not disconnected; this is the result of policies that undermine our sense of collectivity as a country, that undermine the voice and the value of working people in our country.

And through the pandemic, to me, it’s been incredibly obvious that the country has come to a realisation that, actually, things have been a bit out of whack, that these essential workers—there’s cleaners and security guards and bus drivers and retail workers—who have put themselves and their families’ lives on the line on the daily to look after us have been undervalued. We’ve seen such strong support for an increase in wages to ensure that they are all on a living wage. But we’ve had no mechanism as a country to be able to do that, because we have no sector-based bargaining model. This will enable us as a country to say thank you, to enable those employers and those employees to be able to work together to come up with some decent wages and conditions to say thank you, that essential jobs in a pandemic are essential jobs every day that we need to be valuing the work of every person in this country, and that exploitation has no place in a decent society.

So the Greens are so pleased to be supporting this bill. I will say there will be some things that we will be looking at in select committee that we want to explore and maybe see if we can strengthen. So, for the Greens, we know that the Government has other work going on around contractors, but penalties will apply for employers who try to avoid fair pay agreement coverage by misclassifying employees as contractors. This is a really important area. We do not want to have any system that enables employers to create more precariousness by moving people into contracts out of employment to avoid this. And we need to make sure that the work around the rights and employment conditions for contractors goes alongside and is connected to this work.

We also would like to see the restoration of the recommendations of the fair pay working group around what should be mandatory in agreements. The current proposal is that it’s wages, hours, and overtime. The initial proposal was that it also include redundancy, flexible working, skills and training, and leave. And we would also want to see health and safety because of the crisis that we have in our country around health and safety in our workplaces. So that is something we’ll be exploring.

We’ll also be exploring the denial of the right to strike, because the Green Party are very, very proud to continue to support the importance of the right to strike. And we’ve seen the impact on Allied Health workers recently on them being denied that right to strike, and how it protracts and extends wage negotiations when that right is taken away. We want to make sure this works, though we do support the right for determination.

Anyway, finally, it’s a bloody good day and we’re very happy to support this.

CHRIS BAILLIE (ACT): I rise on behalf of ACT to speak on the first reading of the Fair Pay Agreements Bill, and there are certainly going to be two sides in this debate. It will come as no surprise that ACT will be opposing this bill and making it quite clear that it will be gone after the next election.

This bill amounts to unionism by stealth and will simply make it tougher for businesses who have struggled to keep trading through a one-in-100-year pandemic, and who continue to struggle with the never-ending costs imposed on them by this Government. New Zealanders are free to join a union if they want to. It shouldn’t be forced upon them by Labour’s blind ideology. It’s anti-democratic and anti-freedom. The Ministry of Business, Innovation and Employment has warned against fair pay agreements, saying they’ll reduce productivity and make it harder for employers to grow, especially coming at a time of another minimum wage increase, collecting the youth tax, and another statutory holiday.

What we heard from Minister Wood earlier on today, intentional or not, was just not correct. The “race to the bottom” rhetoric is very disingenuous. The fact is that after declining through the 1980s, employees’ pay and conditions have improved substantially since the introduction of the employment contracts agreement in 1991. We’re going to constantly hear from Minister Wood about how fantastic these agreements are in Australia, but everyone, especially hard-working employees, should be very sceptical. Despite what Jan Logie just said, union membership in Australia and throughout the world is declining, as workers prefer to be treated like adults who are more than capable of working out their own conditions for employment.

This legislation will take us back to the 1970s, as has been alluded to a couple of times this afternoon. I was in my teens in the 1970s, and they were great times. The Benny Hill Show was one of the most watched TV programmes. How do you think that would go in today’s times? Banned from TV—we’ve moved on. Caning and getting the strap was common in schools. I think it’s widely accepted that it probably didn’t do much of us too much harm, but I don’t think it improved productivity that much at all. We’ve moved on. Computers were something we saw on The Jetsons, and now people even work from home—unheard of back then.

Unions were also dominant in the lives of many New Zealanders in the 1970s, but not for a good thing. I grew up with a father who was a staunch union member. He was a marine engineer on the Cook Strait ferries, and I vividly remember the constant talk about “the award,” which at the time seemed like a union version of the Bible. Strikes always seemed to occur just before the school holidays—maximum leverage to get their demands. But even as a 12-year-old, I couldn’t help thinking that going on strike because your beds weren’t being made just wasn’t quite right.

I know that a lot of the current Government have not experienced this time but it wasn’t all roses. Does the Government seriously believe that the fair pay agreements would’ve helped New Zealand get through this one-in-100-year pandemic? We’re in an environment now where employers and employees work things out to cater for their own situation. Sealord has a parentship from 9 till 2 so their workers can work while their kids are at school. COVID showed us and continues to show us that we need a flexible workforce, one that can pivot—that’s a popular word. Or is it so popular now? Because these fair pay agreements will make things much more difficult. How do you think organising workers to work from home would have gone with the bureaucratic nightmare of fair pay agreements?

This Government uses COVID every time it suits their agenda when their incompetence is shown and the blame needs to be laid. Poverty: blame COVID; homelessness: blame COVID; inflation: blame COVID. Just today, the Prime Minister said that these are trying times. Grant Robertson said they’re extremely challenging times. But from the start of this pandemic, they’ve kept attacking businesses. Two weeks into it they put the minimum wage up. It’s just bizarre. Hard luck—just deal with it: “COVID doesn’t matter, you guys. No excuse.” And we find out today that Michael Wood wanted a higher minimum wage—just amazing. Let’s make the minimum wage $50 an hour and everyone’s problems will all be over! The Government must realise that businesses that do survive are doing so in spite of the Government, not because of it. The small business Minister should hang his head in shame. When Business New Zealand refuses to have anything to do with this bill, you’d think it would be cause for some concern.

New Zealand’s workforce has improved from the 1991 introduction of the employment contract agreements, and fair pay agreements are a backward step. One of my employees said to me last week, “What else are they going to do to business. Do they want us all to end up on the dole?” Good employees will suffer. I couldn’t believe my ears when I heard a leader from the Public Service Association recently say that they didn’t believe in performance pay, meaning everyone should get the same. Hard-working New Zealanders should be very concerned about this legislation. Everyone benefits from your hard work.

ACT believes that New Zealanders are more than capable of talking to employers and working out pay and conditions that suit both parties and, most importantly, are affordable. The mechanisms in place in employment contract agreements to support employees have worked fantastically over the last 30 years. Labour just doesn’t understand business—profit is a dirty word; productivity a misunderstood concept. This bill will go to select committee and we’ll get lots of submissions. Consultation will be seen to be done, and it will be very interesting to see if this will be another example of Labour’s very specific definition of consultation—namely, “Thanks. Now we’ll do what we want.” For the sake of hard-working New Zealanders, ACT will be campaigning to dump 19th century compulsory unionism immediately after the election.

MARJA LUBECK (Labour): Thank you, Mr Speaker. It’s a real privilege to be able to take a call in the first reading of the Fair Pay Agreements Bill. Now, it’s clear, as we’ve heard, that parties across the House seem to be agreeing that there are cost of living pressures on Kiwis, and global economic pressures making it even tougher for many to make ends meet. Since we have come into Government, in fact, we’ve lifted wages and done what we could to reduce those pressures for Kiwis, with many measures, including, of course, recently, the 1 April ones, increasing support for 1.4 million New Zealanders. But, as we always say, there’s more to do.

So we were elected to take action on Aotearoa’s long-term challenges, and that includes making sure that we don’t leave our lowest-paid workers behind. For a very long time now, working life for so many working people has been really tough. Many have struggled to make ends meet, and it’s not a matter of just working harder, because New Zealand workers already work some of the hardest and longest hours in the OECD, but they’ve also seen their share in the economy decrease over the last decades.

The problem—and we heard that from Minister Michael Wood very eloquently earlier—is that we had the start of the Employment Contracts Act in 1991, and, of course, what we saw then was an individualised bargaining framework as a model to supposedly come to higher productivity, but that model has absolutely failed. While the economy grew, we saw that growth was not being equally shared amongst employers and employees. So productivity grew and workers worked harder and longer, but their wages and salaries didn’t keep up. Over that same period, we saw good employers being forced out of the workplace by bad employers because there was this continued drive for flexibility and cutting costs, and we had inequality grow.

We refer to this as the race to the bottom. It has been mentioned already several times by several speakers, but the race doesn’t actually benefit anyone. It doesn’t benefit the workers. It doesn’t benefit existing business owners, because those are the ones that are forced into bad practices by other employers—bad employers—just because everybody supposedly needs to compete.

Now, we all know people affected. They have been mentioned today. We see them every day in our supermarkets. They are our security guards keeping us and our property safe. They are the cleaners in our offices making sure that we have healthy and safe environments to work in. They are the care workers looking after our vulnerable, and the drivers on our buses. Lifting the wages of our most vulnerable working people has to be a priority for New Zealand.

Sector-wide pay agreements have the potential to distribute the wealth that New Zealand produces more fairly, and, while they do that, we can then protect businesses that actually want to compete on quality, on innovation, and on investment in their people. When companies can only win a contract by putting in the lowest bid, the impact of competition on wages and labour costs is borne by those workers.

People have mentioned hard-working employees and how well they’ve done under this current system in place. Well, let me mention some of those hard-working employees like Leava, a solo mum of three working 70 hours - plus a week. After three years, she is still on a casual contract, earning minimum wage. She had to give her eldest child to her mum and gets a babysitter to look after the youngest one when she does the night shift. She hardly ever sees her family because, when they are awake, she is asleep, and when they are asleep, she is awake and working. She said she feels like a failure as a mum, and her kids miss out on family time. Leava recently had her cleaning hours cut, but at the same time her workload remained the same.

We have Jess, a solo mum of a six-year-old. They live with her mum in a small apartment. She works in the supermarket. She starts at 1 a.m., she works till 8.30, then she goes and takes her child to school, and then she goes back and works till 10 o’clock. The business recently had to let some staff go, but the work remained the same, and when anyone on the shift is sick, they just need to work short-staffed.

Sui, a security guard, used to work in excess of 60 hours a week on minimum wage just to get by. But then one day, her contract was changed. She’s now part-time, but no reasons were given. She’s not allowed to leave the site during a shift, so that means that because there’s no toilet, she can’t drink while she is at work. She often works at car parks or in railway stations, and she doesn’t always feel safe. She’s casual. That means her roster can change at any notice, really, and she can be sent all over Auckland. She says she can’t plan anything in life, because of that uncertainty in her work. When you ask her, she describes her life as being in survival mode.

Now, these workers have many things in common. They all struggle to make ends meet. They’re too afraid to speak up, for fear of losing their job. They describe similar feelings of helplessness and increased levels of stress, fatigue, and feelings of isolation. There’s little job security, no training, and no career progression. These workers are all in industries that share the same problem: they are trapped in a race to the bottom.

It’s important to know that many employers would actually like to offer fair terms but they’re unable to, because they get undercut by competitors that are offering only the bare minimum. So look at supermarkets, for example. Countdown is unionised, but Foodstuffs has little unionisation because how it is structured is as franchises. Countdown workers are told by their employer that they have to compete against the lower-waged competition, and then that pulls the whole sector down when it comes to terms and conditions. Connor says about that that “A fair pay agreement across the supermarket industry will do a fantastic job at setting a level that can’t be undercut and allowing, as a result of that, for better conditions, better wages, and better livelihoods.” But poor working conditions in these jobs lead to higher risk of injury at the workplace, and then you get reduced quality of work and service, increased sickness, and reduced motivation to work hard or even remain in the job.

Now, that is in very stark contrast to the fact that New Zealand has one of the worst productivity performances in the world, as the Minister mentioned before, but what we see in countries like Germany or in Australia is that it’s the opposite. But these agreements have been operating in those countries—and, in fact, in Australia—for over four decades. But Australia continues to outstrip what our Kiwi workers are getting.

So what would a fair pay agreement (FPA) do? It would enable the parties—the unions and companies—to negotiate a set of industry standards, a decent floor that upholds pay and conditions and covers things like pay, training, qualification, and thereby it would uplift the overall capability of that whole industry. FPAs, by putting a floor on the price of labour, encourage competition on the quality of services, of product, and of innovation, instead of focusing on competition on wages and labour cost. Morale, staff retention, and skills would all be improved, and these jobs that we talk about as low-skilled would actually become sustainable careers.

But, actually, it is much more than just jobs; it is about protecting the basic human rights of workers: the right to be treated fairly and with dignity, to feel respected, and to feel valued. When people are engaged, there’s positive energy, and that then translates to higher discretionary effort. As my colleague Minister Whaitiri said, it’s going the extra mile—you get better productivity.

So the key is that people in these industries are best placed to tell us what they need to have fair, decent, and secure work. They should be able to sit around the table with the employer and negotiate the things that they need to achieve fair and safe working environments. It’s about giving workers a voice in the setting of their work conditions.

When we talk about giving workers a voice, it reminds me of the time that I worked for Air New Zealand, and I was president of the flight attendants’ union and, later, head of aviation of E tū. In 2013, with the arrival of a new CEO, we began to work with High Performance High Engagement (HPHE). It’s a workplace democracy model where people closest to problems in the workplace work together to find long-term solutions. I know that the Air New Zealand CEO at the time really became heavily invested in the process. In his words, he wanted to get away from the Punch and Judy show, because the HPHE process was a way of ending decades of distrust and hardball industrial relations.

That Air New Zealand CEO for five years worked collaboratively with unions, giving workers a voice: unions, workers, and the company sitting around the table, working on solutions. That CEO is now the current Leader of the Opposition, and if the National Party has turned the page, as the Mr Luxon has said before, then this is Mr Luxon’s prime opportunity to show that. But having listened to some of his senior speakers, senior members of the National Party, I am not holding my breath.

As I’ve said earlier, we all seem in agreement that it’s tough for many Kiwis to make ends meet, and National have frequently mentioned the difference in wages between New Zealand and Australia. So, rather than spouting slogans and rhetoric, now is the time to actually do something about it, because let’s be clear that any party that votes against FPAs is, in fact, voting against higher wages.

I would like to thank Minister Michael Wood for the leadership and determination shown. FPAs will make a huge difference to New Zealand workers. As chair of the select committee that will work on this bill, I’m looking forward to receiving and hearing the submissions. It’s therefore a great privilege to commend this bill to the House. Thank you, Mr Speaker.

ASSISTANT SPEAKER (Ian McKelvie): The next call is a split call. I call the Hon David Bennett—five minutes.

Hon DAVID BENNETT (National): Thank you, Mr Speaker. I find it quite disgusting and reprehensible what Labour and the Green Party are doing here today. They are actually going out there to the most vulnerable workers in our community and saying to them, “Look at us. We’re looking after you. This is a plan for you.”, when it will do the exact opposite. This is a failed policy that, basically, sent the country bankrupt in the 1970s and it was the Labour Party that actually turned that around by having the reforms of the mid-1980s. We can’t wind the clock back and say that those reforms were wrong; they were followed around the world. And the economic growth and success New Zealand had in the last generation has been a direct result from those changes.

It really gets me that the Labour Party comes in here and does these speeches about how they’re there for the most vulnerable workers and “Look at us. We’re going to look after you.” What it’s actually going to do is actually hurt the most vulnerable workers, because what’s going to happen from this is there’ll be less production in New Zealand, there’ll be higher costs, and the people that actually take the hit on that occasion are the most vulnerable workers.

There will be inflation out of this. They’ve just said it’s about raising wages. That means inflation. OK, you want inflation at a time that you’ve got more inflation? The only people that really get hurt are the ones that have no assets, low incomes, and are stuck at the bottom. That’s what’s going to happen. You’re going to hurt the very people that all these speeches are saying you’re trying to help.

Then what is going to happen next? It only needs 1,000 workers in one industry to set this up. This enables compulsory unionism in areas that the Government hasn’t been able to get into. Michael Wood’s eyes just raised then. He was on TV this weekend saying he wants to get rid of the contractors in certain cases—don’t you? We know that’s the plan. This is part of that plan. They want to take away the competitive pressure of the New Zealand economy. They say competition doesn’t matter. Competition is bad. That’s what we’ve heard from all these speeches. Well, let’s go out in the world and sell our products and say on them—and put a little logo saying—“We don’t compete.” How are we going to sell those products? Do you think they’re going to buy our milk and our other products just because we say we don’t compete?

Anna Lorck: Quality.

Hon DAVID BENNETT: Quality—quality? Quality is about price and value. If you take up the price because you’re doing this, then you’re going to artificially destroy the New Zealand economy. It’s what happened in the 1970s. The rest of the world has thrown it away. They do not believe in this because they know it does not work. This is blind ideology from a Labour Party that has to pay back the unions. We all know that the Labour Party is now dominated by the union movement. It’s not the Labour Party of the old that actually represented a mix of New Zealanders; it’s a Labour Party that the unions control, they fund, and they own it. And this is the payback to the unions.

Hon Michael Wood: Point of order. For the second time in this debate, an allegation has been made that members of this side are owned and controlled by a force outside of this Parliament. That is in direct contravention of Speakers’ rulings.

Hon Todd McClay: Point of order, Mr Speaker. Speaking to the point of order. Just for clarity, perhaps the member could tell the House the selection process for Labour MPs where unions are sitting there selecting.

ASSISTANT SPEAKER (Ian McKelvie): I remind the member that is not a point of order and—

Hon DAVID BENNETT: Well, let’s look at the selection of the leader. It’s done by the union movement.

ASSISTANT SPEAKER (Ian McKelvie): The member will just be seated. So I just remind the member, and I’ll ask him to withdraw and apologise because he was accusing him—he’ll know what he was saying. I’ve asked him to withdraw and apologise.

Hon DAVID BENNETT: What was I accusing—Mr Speaker, what was the problem?

ASSISTANT SPEAKER (Ian McKelvie): I’ll ask you to withdraw and apologise and if you don’t—

Hon DAVID BENNETT: I withdraw and apologise.

ASSISTANT SPEAKER (Ian McKelvie): Thank you.

Hon DAVID BENNETT: What other business is their leadership determined by an organisation, is funded by an organisation, and doesn’t have any control over that organisation? Maybe that’s the world we live in where there’s no competition. There’s this ideological place that lasts.

This is dumb policy. It’s going to hurt the most vulnerable, and the Labour Party and Green Party should be disgraced and disgusted in the way that they use these people in these speeches to try and promote plans and policies that are only for their own personal gain.

ANGELA ROBERTS (Labour): It is a great privilege to stand here today and bring the worker’s voice to this Chamber. I’m very, very proud to be able to speak for a few moments on the Fair Pay Agreements Bill. It’s really interesting hearing previous speakers talk about blind ideology and, when we ask the OECD what they think about combined sector- and enterprise-level collective bargaining, they kind of like it because they know it helps with productivity. They know it is associated with higher employment, better integration of vulnerable workers, and less wage inequality. They also see it as linking to skills and training pathways with the aim of increasing productivity and sharing its benefits.

This isn’t about ideology; this is about evidence-informed best practice. This is about building a modern, future-focused industrial environment that will support processes where an entire sector can come together and have a really good debate about resolving issues that face the sector. This supports employees and employers. We have seen that this is especially important. I come from Taranaki where we are constantly grappling with the challenges of a just transition, and we have seen sectors come together in arrangements like the workforce development councils where they realise they’ve got to collaborate to resolve industry-wide issues, and fair pay agreements are a really great way of enabling a bright future for our employees and our employers. It will help to improve productivity, sustainability, and inclusiveness.

We see that the productivity is improved, not just by improving wages and goodwill. We see reduced staff turnover. We see workers being seen as an investment, not a cost. We constantly hear from the other side of the House about the cost to business of employing labour. When do we hear about the investment in our workers—making sure that they are safe, that they can turn up to work and have a day’s work with dignity, and get a fair pay? These are fair pay agreements, not outrageous pay agreements. This is about investing in our workforces.

We know—we know—people say we shouldn’t be talking and bringing the voices of workers to the House. Well, I’m going to bring a couple of voices for you; some of our security workers. So, when you talk to Jason, he says each company is cutting each other to the lowest cost: “We get the scraps.” How is it the worker gets the scraps? Wa’el: “I get really anxious and very stressed sometimes before the shift even starts, because I go without being provided with proper gear, without proper training, and without proper support.” These workers are often working alone at night. They need support and training to make sure that, when they are confronted by people who are anxious or angry or drunk, that they’ve got the skills to be able to handle that—that they’ve got a radio so they can get some backup. It is absolutely not just acceptable but more than appropriate that workers are looked after to have a safe day at work.

I’m really looking forward to this coming to the select committee and starting this process of collaboration. This is how we build a future-focused, nimble, responsive industrial environment that will help us to meet the significant, seismic challenges that we are being faced with—with climate change, with the changes in the global economy. When we go to select committee, we will be hoping that employers and employees turn up in good faith, and help us to ensure that this bill—that we’re trying to build something that is a sophisticated and nuanced industrial environment that works for everybody, that everyone—employers and employees—deserve nothing less: fair pay, fair conditions, that work for everybody. It isn’t “workers win and employers lose”. You look after your worker, you invest in your worker; everybody wins. You want productivity ideas? Talk to the workers about that. I recommend this bill to the House.

CAMILLA BELICH (Labour): Thank you, Mr Speaker. Tēnā koutou katoa i tēnei rā nui, rā whakahirahira mō ngā kaimahi o Aotearoa.

[Greetings to everyone on this very important day for workers in New Zealand.]

It is my absolute pleasure and honour to speak at this first reading of the Fair Pay Agreements Bill. To start with, I want to emphasise two key points. The first is that this is a significant change that will bring decent working conditions and fair pay to workers in industries throughout New Zealand. It would be and will be the most significant change to our industrial relations framework since the Employment Relations Act in 2000, and it further reverses the devastating changes for working people brought about by the Employment Contracts Act in 1991. But the second point is that minimum standards or the basic level entitlements that the fair pay agreements will bring are not new to New Zealand. Most of the standards that we take for granted and accept as part of a civil and democratic society are already minimum standards, like sick pay, like the minimum wage, like the right to take a personal grievance. So fair pay agreements, while they may be revolutionary for those that they will cover, will not result in fundamental changes for the people that they don’t. These changes are about workers and fair and decent conditions for working people. It shouldn’t be threatening. It’s just fairness. The clue is in the title of the bill.

Of course, it will be up to sectors in industries to determine where fair pay agreements are established, but a group of workers that has often been discussed as some that may benefit from this proposed legislation are bus drivers. Bus drivers are part of a mature industry in New Zealand, and fixed costs are very similar across operators. This has left terms and conditions as the only real point of competition and differentiation between operators. Penal and overtime rates have gradually been removed from bus drivers, and with them, workers control over their own hours and conditions.

I wanted to mention a particular bus driver: Morris. Morris has noticed that his colleagues have struggled after the removal of penal rates to make a decent wage and to spend time with their families. He says—and this is a quote—“Flat rates just mean drivers work more and more hours to make ends meet. They’re on split shifts. They can be doing 14 hours a day, but not getting paid for these hours. It leaves people with no time for their families and it creates fatigue.” We know we will need bus drivers like Morris more and more in the future as we move towards a different way of travelling, to meet our climate goals. We know that public transport is essential, and we have seen this through the COVID-19 pandemic.

Morris deserves fair wages and good working conditions, but the members opposite are labouring under a misapprehension if they think a single bus driver is able to negotiate his own or her own terms and conditions individually with a strong employer. That is just not the reality for these working New Zealanders. It is not correct that this occurs regularly within our economy or our society. As I said, Morris deserves respect and dignity at work, and this should be the experience for all New Zealanders, and fair pay agreements can deliver this.

We also know, when you increase wages for people on lower incomes, this money is more likely to be spent creating greater prosperity for our economy. Fair wages are not only the right thing to do, they are the road to prosperity for all. And this is not a new idea. In fact, in 1938, the then Prime Minister, Michael Joseph Savage, told an enthusiastic audience, packed into the Wellington Town Hall—and I quote—“No one can say that reduced wages will help trade or bring about prosperity. When workers have money in sufficient quantities, trade, industry, and production are buoyant, but the moment that wages are reduced, the very reverse is the case.” Labour still stands for fairness. We did then and we do today. Labour stands for high wages and for a strong and prosperous economy. We stand against those who would drive down wages in the race to the bottom, as has been mentioned, or who would take the labour of workers and leave them unable to spend time with their families or take care of their children.

Fair pay agreements will not take us back in time as alleged. This is a modern solution to a modern problem of low wages and low productivity, and is a further real and substantive step to the realisation of the dignity of workers and the recognition of working people’s huge contribution to our society. This bill is the culmination of years of work in the labour movement and union leaders such as Helen Kelly and John Ryall. The Employment Relations Act reversed the worst of these changes, but it is not enough. Collective bargaining these days, even for multi-employer, multi-union collective agreements, still only covers those who work in places that are covered by these agreements. And it didn’t stop the race with no winner: the race to the bottom. So workers are still vulnerable, and this is why we need this legislation. Employers cutting wages and conditions to try and win contracts pits too many New Zealanders against each other. Instead, we want a clear and open pathway to better conditions, to higher wages for more prosperous and a fairer society.

I, at this point in my speech, want to reflect on the legacy of one particular union leader and my friend and mentor, Helen Kelly, who sadly passed away in 2016. Her commitment to working people and fairness did not die. It is here in this bill in front of us. In her excellent book Helen Kelly: Her Life, the journalist and author Rebecca Macfie reflected on Helen’s work towards what we now know as fair pay agreements. She mentioned—and I’ll summarise what Rebecca has in her book about this time in Helen’s life: “She put a prestigious amount of work into policy that would drive minimum wage and conditions across whole industries. This was informed by her work [Helen’s work] at the International Labour Organization, where she had collected a bulging file about wage and bargaining systems from around the world. She was particularly interested in regimes—common in Europe—where agreements were negotiated with large employers and extended across entire sectors, establishing uniform standards of pay and conditions. She was also aware of international research that showed that there was a clear link between income inequality declining and declining rates of collective bargaining.”

By 2011, Helen had drafted up a new law providing mechanisms for industry standard agreements. But this wasn’t like the old award system that we had in New Zealand. Under her proposal, workers could be covered by the industry standard, but they wouldn’t be forced to, so as long as their terms and conditions were no worse than the industry standard. The proposal in this bill is not identical to what Helen had proposed, but the concept and the objectives are the same. I wish Helen was here to see the work that Michael Wood and others have done on this proposal prior to the 2020 election, and to be listening or even participating in the debate today.

In 2020, this Government was democratically elected with a strong mandate from New Zealanders to implement fair pay agreements, and this is what we will do. Before Helen died, I remember Helen saying to me, “How can I stop fighting?” And she never did, and we won’t either. Fair pay agreements are also Helen Kelly’s legacy. On this side of the House, we will always keep fighting for decent working conditions and fair pay for people like Morris and the thousands others like him that will benefit from this legislation. However, I do think if Helen was here, she wouldn’t care for the praise. She wouldn’t care for the accolades. She would most likely tell us to get on with it and implement the change that needs to be made to ensure more workers in New Zealand have decent conditions and the fair pay that they deserve. So, with that, I proudly, and without hesitation, commend this bill to the House.

ASSISTANT SPEAKER (Ian McKelvie): I’d just remind members, if they are going to read a speech, don’t do it so I can tell they are.

Hon TODD McCLAY (National—Rotorua): Thank you, Mr Speaker. I was going to read my speech until you said that; now I won’t. It’s very easy to confuse passion with anger, and, in this case, many speakers in Government who have spoken on this bill have seemed angry, not because of injustice but because of an ideology of “We are the Government. We know what’s best. We got a great big mandate at the last election on this one issue alone”—that I think was mentioned once for about 3.5 seconds on the campaign trail—“and don’t worry. We are the Government. We can do anything we want with our majority, and just watch us: we will.”

Members opposite said they look forward to this legislation coming before the select committee. Well, here is a prediction: they won’t make a single meaningful change from anybody other than those who agree with them or are members of a union. Anybody that comes forward from the business community, a small business in New Zealand that has a relationship with their workers, who looks after their workers, who invests in them, who pays them well, who doesn’t believe the Government needs to be involved in that relationship—members opposite, with their majority on the committee, won’t listen; won’t make a single change.

This piece of legislation creates mandatory union deals around the country. In fact, it’s worse than that. It mandates union deals around the country.

Hon Member: It does. Of course it does.

Hon TODD McCLAY: Now, what’s happened from the very back of the Government benches is a whole lot of noise there. Any moment now we will hear from them. “But this is a fair pay agreement.”, they will say, and they know that because it’s in the title.

Well, many, many years ago in Africa, a president of a country—President Mobutu—ran Africa. He said it was democratic and it wasn’t. They had one of the worst economies in the world. Mr Mobutu every year would decide how much people were paid. The country was called Zaire. Then one day the world started putting pressure on him to say “But you aren’t democratic and this isn’t working, you deciding by yourself.” Why can’t businesses and employees have a relationship where they can negotiate and decide how they will work together? Do you know what President Mobutu did? He changed the name of Zaire to the Democratic Republic of Congo. To members opposite, here’s a hint: if you have to put “democratic” in the name of your country, you’re not democratic. If you have to put “fair” in the name of a piece of legislation when it comes to pay agreements, it is not fair to anybody other than making it easier for your union mates. That’s it.

So the unions find it hard to go around the country and to get New Zealanders to sign up and pay them a fee, and if they don’t get those fees, it’s very hard for them to provide money by way of campaign funding to the Labour Party. So together, when they were in Opposition, they came up with a plan and said, “What we should do is go back to the time”—and we heard this from a Green MP—“when 70 percent of the country was covered by bargaining rounds, which meant every year the Government would have meetings for a moment with the sector, and for hours and hours and hours with the unions, and they would come up with the pay rates and all of the conditions, and they would announce it from the Beehive, and it would be rubber-stamped and put everywhere.” Well, this is what this legislation will do: take us back to the days where union-mandated agreement and deals are rolled out for employees and employers who have a perfectly good working relationship and they don’t want the Government involved.

Think of it this way. We have restaurants and bars up and down New Zealand who have struggled as a result of the restrictions this Government has placed upon them in the last two years. We heard yesterday the Prime Minister say, “Actually, because we haven’t invested properly or sorted out the health system, those restaurants and bars—actually, we’re staying in red. They still need restrictions on them for at least another month.” They’re doing it tough. They’re having to bear the costs of the Government’s inaction and not actually when the Government hasn’t sorted out the health system. All right? So it’s very hard for them. They’ve taken on debt. Many of them have closed.

Here’s another guarantee: 10 percent of that workforce, or 1,000 workers, will be approached by union officials, who will get them to sign a paper, and restaurants and bars will be one of—probably not the first, but one of—the first that will have to go through these mandated union deals legislation, the so-called fair pay agreement. For the restaurants in downtown Auckland, who continue to struggle, there will be a decision about how much they have to pay and what they have to do when it comes to leave and whether or not, if there is a 10-minute rest break, the employer and the employee can reach agreement to take it now or take it later or finish 10 minutes early. Well, actually, under the Government, they won’t allow that. The Government will make an announcement of what is happening for the whole country when it comes to the payment for those restaurants and those bars.

But the legislation has been changed slightly to say, “No, no, there can be regional differences.” So if you drive in your car south of Auckland and you get to the bottom of the Bombay Hills and you see the sign that says you’re entering Waikato, there could be different rules set by the Government for there—another area where the restaurants and bars have done it tough. It makes no sense at all for the Government to be that involved in the business of employees and employers that is working well and doesn’t need Government involvement in it, with the exception that this is a Government that thinks it knows best. They’ve brought their ideology here. That passion that was anger is because these guys have always wanted to do this, and they will take New Zealand backwards.

Just think of it this way. Think about what’s happened to the New Zealand economy—putting COVID aside for a moment—over the last two years. We’ve lost the America’s Cup. That’s a billion dollars, when the American cup is held here, for the tourism sector alone. It’s gone. It’s out the door. Do you know why? Because the Minister pledged just $31 million and a whole lot of other stuff in kind that would have to happen anyway, and that deal walked, and it’s overseas now. Thirty-one million dollars—that pledge is less than the Government spent on the Auckland cycle bridge they’re never going to build, which was $50 million.

Think about The Lord of the Rings that’s no longer made in New Zealand by Amazon, the tens of thousands of jobs over a decade or more that will be lost. Think about the high number of people that are on benefits in New Zealand today, more than actually before COVID, yet we have record low levels of unemployment. Think about the cost of living and how hard it is for working Kiwis to get ahead—not because of what they’re paid, because there are people that are earning $80,000 or $90,000 a year that can’t afford to live. They too have to choose between paying their rent and their bills or feeding their kids, because of the huge cost increases that have been piled on consumers in New Zealand through businesses who have had to pass it on, because this is a Government whose ideology says, “We know best.”

If there is a problem to fix here—

Hon Member: Who wrote these talking points?

Hon TODD McCLAY: Who wrote the talking points? I’m writing these myself, and therein lies the issue—therein lies the issue. These guys over there don’t actually care about hard-working businesses. They don’t care about New Zealanders that are working that are struggling. They want to drive this ideology through, and they’re disguising it behind that word “fair” when it is anything but fair. If they actually, this Government, want to do something about employees who are not being treated properly, focus on them alone and the employers who are not treating them well. Don’t come up with a blanket rule that says, “Whether you are a good employer or not or you have a good relationship with your employee or not, we are coming after you because we are a Government that knows best.”

The final point here is actually when this was raised before the last election and in this House previously, the Prime Minister backtracked very quickly. She said, “You don’t have to worry. There’ll only be one or two industries that probably would be part of this.” Well, if that was the case, why would they need to put in place a rule under this legislation that says the Ministry of Business, Innovation and Employment (MBIE) would be the gatekeeper of which fair pay agreement negotiations go ahead unless they were concerned that they would be swamped by five or 10 or 15 of these all at once? There would be no reason otherwise for MBIE to do that, to be the gatekeeper. What that suggests to me is when the Prime Minister stood in this House and she was on TV saying to the public, “You don’t have to worry, because this is going to be fair and there will only be a few.”, she either hadn’t been advised properly by her advisers or she wilfully knew she wanted to kick it for touch so they didn’t have to talk about it before an election.

This will harm the New Zealand economy. It won’t help workers the way that this Government says it will. If there’s a problem to be fixed, they should actually focus on fixing that problem rather than burdening hard-working small businesses of New Zealand who treat their workers very, very well. It is not a good piece of legislation. We will be opposing it and we will be repealing it when we get to Government.

IBRAHIM OMER (Labour): Salaam alaikum, Mr Speaker. It’s a pleasure to take a final call on this historic bill, but, boy, the hatred and the disrespect for working people. When you trash unions, you’re talking about 300,000 workers, Mr Simpson, across the country—

Hon Todd McClay: Point of order. I know it’s not for me to say, but I didn’t hear you as the Speaker say that once to this member.

ASSISTANT SPEAKER (Ian McKelvie): I apologise to the speaker.

IBRAHIM OMER: But none the less, for us on this side of the House, it’s an historic day—we will be celebrating it.

There is an old Māori whakataukī which says: “He rākau wāhi rua he kai nā te ahi.” [A tree split in two is food for the fire: unity is strength.], which means, if workers are united, they will win, improving working conditions. If they are split into a number of small groups, they will lose working conditions.

And this brings us to why collective bargaining in this country is so slow and ineffective. Why is the Government forced to do the heavy lifting around lifting minimum wage when, historically, this country has relied on collective bargaining to carry out the role of the wage distribution. The answer is in the report of the Fair Pay Agreement Working Group, chaired by the Rt Hon Jim Bolger, who said, “New Zealand sits at the far end of the decentralised spectrum. Although our current system permits voluntary sector bargaining, in practice most bargaining takes place at the enterprise level, although there is some bargaining among groups of employers within a sector, through a MECA.” multi-employer collective agreements (MECA) are mainly found within the public sector—mainly in health and education. Workers have tried consistently over and over again to bargain, but they failed. They failed, but this bill is going to improve that.

The introduction of this bill makes the same point as Mr Bolger did. While New Zealand’s labour market has some strengths, it also has a systematic weakness. This includes a significant prevalence of jobs in inadequate working conditions, low wages, and low labour productivity.

The leader of the National Party has publicly spoken about how low-paid workers are having it tough, but he won’t say whether he supports the minimum wage increase, and he doesn’t have any plans on whether he allows workers to be able to negotiate fair wages. The National Party considers low-paid workers who clean our toilets, our offices, keep us safe, drive our buses, look after our elders, bottom feeders—what a shame. The National Party have been beating drums about the cost of living in the last few weeks over and over, yet they are opposing any major step that’s designed to help make low-paid workers lives easy. What a hypocrisy. The National Party has no plans.

Labour supports the regular increase in the minimum wage and through our fair pay agreement system is taking pressure off large minimum wage increases by getting industry, employers, and unions to negotiate their minimum working conditions in low-paid industries. Fair pay agreements will allow employers and unions to be able to negotiate minimum conditions that are appropriate for their industry and to help good quality employers from being undermined by ratbags who pay as low as they can and treat their workers as expendable. Our workers are not expendable; they’re valuable.

At the heart of this bill are people—real people, hard-working people, but yet for years and years undervalued, underpaid, and overlooked. Our security guards, our cleaners, our bus drivers, supermarket workers—these are some of the hardest-working people. Every day, they go on doing 50, 60, 70 hours just to make ends meet, yet they fail because they’re not getting paid fairly.

Competitive tendering is driving down wages. This was stopped by Part 6A but then companies started tendering on the basis of putting more work into the same hours. Malia, I’m going to quote her. Malia to me is not just any worker that I have seen her story on the media, we have worked together. Malia, myself, and Mele have taken a plane to Auckland to negotiate and bargain with employers. After three weeks of hard negotiation, the only thing we got was 18c—18c. Malia said, “Every time we change the contract, it will always be our hours that will be cut down. Hours cut down, still more work to do.” And Mele: “When a contract is tendered, the new company comes in. They all come with their price. They have to cut something to make a margin of profit in there, and they look at who? At cleaners. They cut our hours, yet the work remains the same, even sometimes more.”

Malia, Mele, and many other friends today—my colleagues and the Minister mentioned many names—they are real people. They are not just a number. They are not just numbers to be dismissed or to just muck around with. They are real workers who are making a difference in this country every day, and the last two years have showed us that. While all of us stayed home, keeping safe, Malia, Mele, and their friends would go on every day and get their work done, and often putting their lives at risk and the lives of their families at risk.

And today, the Labour Party and this Government has recognised their hard work, and we have decided to put an end to the misery and the unfairness. Today, these people have a new hero. We’re talking about thousands of people throughout this country, and that hero is called the Hon Michael Wood, who in the last few months went out through the country and virtually engaged with them, he listened to them, he respected them, and, to them, Michael is their hero.

Finally, what I wanted to say is that it’s OK to disagree on things. It’s OK to say no to things, but the disrespect we have seen today towards our hard-working cleaners, bus drivers, supermarket workers, and the many more—300,000 people today have been disrespected over and over again by various speakers in this House, and that is not OK. We can do better. We can disagree, we can be political, we can disagree on things, but disrespecting the hard-working people, and their only wrongdoing is they’re hard workers—nothing more, nothing less.

Today is a good day, and I look forward to having this bill through the select committee process, which I will be fortunate enough to be sitting on with my colleagues and our hard-working chair, Marja Lubeck. And we will be looking forward to engaging with the public, with submitters, and we will be making amendments if needed—if needed. But this bill as it is is a good bill—it’s good enough. And finally, I’d like to thank everyone who contributed today, including those who shamefully insulted the hard-working people. I appreciate you. I’m not going to call you names, just like you did, but today is a good day. I highly, highly, highly commend this bill to the House.

A party vote was called for on the question, That the Fair Pay Agreements 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 Fair Pay Agreements Bill be considered by the Education and Workforce Committee.

Motion agreed to.

Bill referred to the Education and Workforce Committee.

Urgency

Urgency

Hon MICHAEL WOOD (Deputy Leader of the House): I move, That urgency be accorded to the passing through of all stages of the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill.

This bill is part of the Government’s response to the rapid increase in fuel prices that’s had an impact on households and businesses across the country following Russia’s invasion of Ukraine. Its intention is to reduce road-user charges to provide equivalent relief to motorists with a diesel vehicle that is equivalent to the reduction that has been achieved through the 25c reduction to fuel excise duty, as amended by Order in Council in March.

The need for the legislation is immediate. It’s essential that it’s enacted as soon as possible, under urgency, so that its provisions can have maximum effect. It’s essential that there is a period between enactment and the beginning of the temporary reduction period so that essential administration can be put in place by Waka Kotahi to ensure the smooth roll-out of the scheme.

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

Ayes 77

New Zealand Labour 65; ACT New Zealand 10; Te Paati Māori 2.

Noes 43

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

Motion agreed to.

Bills

Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill

First Reading

Hon MICHAEL WOOD (Minister of Transport): I present a legislative statement on the Road User Charges (Temporary RUC Reduction Scheme) 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 MICHAEL WOOD: I move, That the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill be now read a first time.

Well, we’ve just witnessed what I believe they call a bold move. That is the Opposition—or certainly the National Party Opposition—attempting to slow down the Government’s efforts to ensure that we provide relief to motorists who are facing increased transport costs as a result of international pressures. I do acknowledge other parties across the House for their support in according urgency, and am very surprised that the National Party wants to delay that relief going to those people who pay road-user charges (RUCs). I’m sure that they’ll be up to explaining that to the heavy vehicles sector and other diesel users, who might be a little bit surprised by that bold move by the National Party and their new transport spokesperson. But good on them; I wish them luck.

On 14 March, the Government moved swiftly and announced reductions to petrol excise duty by 25c per litre. This was in response to significant increases in fuel prices that have been experienced here in New Zealand and around the world. These pressures have been experienced internationally for two significant reasons. The very first is well known to members of the House and people across the country, and that is Russia’s invasion of Ukraine, which has put serious pressure on international fuel prices. We saw them spike extremely quickly following the development of tensions and then Russia’s illegal and abhorrent actions in that country. That conflict is likely to persist for some time, and we see that those pressures will therefore persist for some time for people who use petrol across our economy and our society.

But secondly, the global recovery from the COVID-19 pandemic has, generally speaking, seen demand for petrol around the world exceed what was expected at this time. So the combination of both increased demand and a shock to supply has seen those petrol prices really shoot up all around the world, and we have seen Governments around the world look to address this in a range of ways. Our Government, of course, has been very focused on the broader set of issues that New Zealanders face around cost increases. That’s why some of our recent decisions around increases to the minimum wage, the 1 April increases to a range of Working for Families payments and other payments, have been really helpful in terms of helping to take the edge off some of those pressures that people are facing. But we have been acutely aware of the sharp increase in transport costs in particular.

The 25c reduction to fuel excise duty that we put into effect—and I think the date, from memory, was 14 March—we decided at Cabinet that day, I signed off the regulation that afternoon, Her Excellency the Governor-General then confirmed it through Order in Council, and it took effect from midnight that night. It was turned around very quickly indeed and it has seen the biggest fall in petrol prices that the Ministry of Business, Innovation and Employment has ever observed in their monitoring of petrol prices. I’ve had some incredibly good feedback from New Zealanders right across the country about how that has helped. It hasn’t taken away all of the cost pressures that New Zealanders face, but they’ve seen the Government responding and making a positive change that has really helped people with some of those back-pocket costs that we know they’re facing. It’s worth noting—I’ll come back to the cost a little bit later, but that has had a real impact for someone, for example, filling up their tank, a 60-litre tank once a week, that’s a $15 saving immediately.

At the same time, of course, we also moved to reduce public transport costs. They’ve been halved for that three-month period as well. And again, there’s fantastic feedback about that; it’s making a difference. It’s reducing the cost pressures and giving people a really great opportunity to give public transport a go. This bill complements those measures and brings in reductions to road-user charges.

It is just worth confirming—for people who don’t spend as much time in the minutiae of how these things work—the difference between fuel excise duty and road-user charges. For people who do purchase diesel, the road-user charge is not, effectively, built into the petrol charge like a fuel excise duty that people who fill up with 91 or 96 have—you know, when you fill up your tank with 91 or 96, the cost of the fuel excise duty is, effectively, built into that, and it’s a charge per litre of petrol that that person purchases. For those people who use diesel, the road-user charge is purchased in advance. It’s not a part of the diesel price and it’s not a per litre price, so it’s much more complicated. It’s set based on distance and weight, and there are, in fact, about 200 different rates of road-user charge that apply to different vehicles depending on their weight and sometimes on the way that axel load is distributed. So it’s a much more complex process to be able to apply a reduction across road-user charges. The decision that Cabinet made was to apply an equivalent reduction in those road-user charges for people who do have to purchase RUC. Effectively, when you do the maths, the 25c reduction on fuel excise duty works out to about a 36 percent reduction. So what is reflected in the piece of legislation that is before the House is a 36 percent reduction that applies across those 200 or so rates of road-user charge. So there’ll be a proportionate reduction no matter what kind of road-user charge licence a person purchases, whether it’s a light vehicle, a heavy vehicle, a bus, or whatever it is.

It’s also the case that, as compared to fuel excise duty, which can just be changed through Order in Council, it is not as simple for the road-user charge, and that’s why this piece of legislation is before the House. There was a protection that’s built into the Road User Charges Act, which sees that before any change is made to a road-user charge rate, there must be 42 days of notice that is provided. Now, primarily, that is provided to protect the sector and give notice where there might be increases to the rate of road-user charges. It wasn’t particularly contemplated, I don’t think, at that time that there might be a significant decrease of this kind. So if we want to provide the benefit of the reduction in road-user charge, we do need this legislative intervention if we want to bring it in as soon as possible—and certainly earlier than that 42 days of notice that we have to provide under the current Act.

So, effectively, what the bill will do is it will shortcut that 42 days of notice that I’ve just outlined, and it also includes provisions which allow us to apply that 36 percent reduction across the whole suite of rates that are otherwise set in regulations. It is just worth commenting on what the quantum of reduction is here and how it will benefit New Zealanders. For someone who purchases 1,000 kilometres of road-user charge for a typical light vehicle, the cost will go down from $76 to $49—that’s a $27 saving. For a person who was purchasing 5,000 kilometres, it would be a $135 saving, so that is a real contribution to assisting people and tackling some of those pressures.

What is also built into the bill are safeguards in order to prevent unreasonable and excessive purchasing of road-user charges at the reduced rate that will apply for the three-month period. The three-month period described in the bill kicks in from 21 April, and the intention of this legislation is that people are able to purchase at the reduced rate for a three-month period. The intention is not that people can load up and purchase at the increased rate for a longer period. Now, we do not expect that New Zealanders would be likely to do that, but it is important that we do have some basic safeguard that is put into the bill.

So, firstly, modelled on an existing provision in the Road User Charges Act, the bill does include a provision that any road-user charges for a heavy vehicle that is purchased while the reduced rate is in place become invalid one month after the temporary reduction period. So that’s a provision that’s already in the Road User Charges Act that continues to apply to this reduced rate for the purposes of heavy vehicles. That’s quite a strong safeguard. That means that the heavy sector is not able to, effectively, load up at the lower rate. I wouldn’t expect that to happen, but there’s the protection that’s in place there.

Secondly, the bill draws on the existing assessment provisions in the Road User Charges Act, giving Waka Kotahi, as the collector, the power to issue assessments and invoices for purchases that they deem to be excessive or unreasonable or abusive of the scheme’s intent. This is really important in terms of the integrity. It will mean that Waka Kotahi can review those purchases and—taking reasonable factors into account if they do believe that there’s been excessive or unreasonable purchasing—they’ll be able to issue an invoice so that that person does not receive the benefit of that unreasonable or excessive purchasing.

I’m very pleased that the Government is able to bring this bill to the House. It is part of our response to the cost of living pressures that New Zealanders are facing. We are moving forward quickly to provide that relief. We have already, through a range of measures to fuel excise duty, reduced public transport, and a range of other supports that we’ve provided. This will be an important complement to that, and I look forward to its swift passage through the House.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Speaker, for the opportunity to take a call on the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. The National Party, while we will be supporting this piece of legislation, will not be supporting the urgency motion, because, guess what? This was policy on the hoof by a Government reacting to a bad poll, trying to find a way to ease the cost of living. And guess what? This policy does not do what New Zealanders actually need it to do and does not go far enough.

The Minister talked about this legislation being needed urgently to deal with the 42-day requirement for notice of new road-user charge (RUC) rates. Well, I tell you what—I’ve just done the calculation and this policy was announced on 14 March and it won’t be implemented under this legislation until 21 April, and that is 38 days. So all that we’re doing here is saving four days. What’s the Minister been doing for the last three weeks? If this was policy that was well-thought-through and was something that was actually being seriously considered in response to the war in Ukraine, the Minister would have had this legislation before Parliament weeks ago to actually make sure that New Zealanders could get relief at the petrol pump and could get relief if they drive diesel vehicles.

Let me also put some other dates out there for the Minister. The explanatory note of the bill says that this bill is responding to the fuel price increase around the world following Russia’s invasion of Ukraine. Well, I just looked at the calendar and the Russian invasion started on 24 February, and the announcement wasn’t made until 14 March. Well, that’s about another 20 days. But what happened in between those two dates? On 10 March, out came a very bad poll for the Government. So what are we doing here?

The explanatory note of the bill says the bill is about responding to the fuel crisis around the world. Actually, this was about responding to a poll that had National ahead of Labour for the first time in two years, and this Government was desperately looking in their drawer for something they could pull out, and they said, “Oh, I know what we’ll do. We’ll make an announcement and then we’ll think about the details later.” Well, I tell you, this piece of legislation—whilst we support providing this relief to taxpayers because they deserve it and they are suffering from a cost of living crisis—does not go the distance that’s required to actually address those cost of living pressures. This is a temporary piece of legislation. It is something that only deals with the issue in a very small manner but doesn’t actually address the fundamental issues that New Zealanders are facing.

Rents are up $150 per week under this Government. That didn’t happen because of the Ukraine crisis and the war in Ukraine. Fruit and vegetable prices are up. Inflation is at 5.9 percent, and that was before the invasion of Ukraine—that happened and now they’re saying, “Well, actually, we’re going to blame it all on Ukraine.” Well, this Government needs to take some responsibility. This cost of living crisis has happened under their watch, and they need to take some responsibility and actually address it.

How long did it take for this Government to even say the word “crisis”? Ages. They said, “Yes, there are challenges facing New Zealanders, there are concerns, and we are very concerned. There are pressures facing New Zealanders.” But they weren’t even prepared to acknowledge that there was a cost of living crisis facing New Zealanders.

Hon Member: Why?

SIMEON BROWN: Because they caused most of it—that is the real reason. Their policies have caused New Zealanders to be paying for this cost of living crisis. We heard the Minister talk about how the rapid increase in fuel costs is a result of the war in Ukraine. Well, I tell you what—two years ago the cost of a litre of 91 was under $2.00. Then it crept up to close to $2.80, and then we had the war in Ukraine, which tipped it over $3. These were not pressures that built overnight. These were pressures that were building on hard-working, middle-income families and low-income families for many, many months prior and this Government ignored them until that poll came through.

But, of course, then they made the announcement and they had to work through the detail. And it took them three weeks from the announcement until yesterday and legislation actually coming before Parliament. It took three whole weeks to work through the details. They first had to work out what is an equivalent reduction in RUC rates as we’ve done for the petrol excise reduction. Well, they did the petrol excise one very quickly, because the legislation allows for that. They then took a number of days just working out what the same percentage was. We had to wait over a week for a press release just to say the percentage is a 36 percent reduction. So why did we not have legislation then, at that point, brought to the House to actually deal with the issue?

Then we’ve got a number of other issues, and the National Party will be bringing these issues out throughout this debate on this bill as we do not believe they have been addressed by this piece of legislation. The announcement was made on 14 March, but people who drive diesel vehicles still have to wait till 21 April to be able to get their discounted RUC rate. They have to wait a total of 38 days. There’s no retrospective ability for them to make an application. What if they went and purchased their RUC in between those two days? Some people, particularly trucking firms, are only able to have a maximum of one month, as the Minister has said, before they have to pay the next bill. In that 38-day period, they’ve had to go load up with a whole lot more RUCs. They don’t get the reduction. If this is such an emergency and an urgent issue and the Government is trying to make out that they’re responding urgently to the crisis that is happening, why are they forcing some parts of the roading sector to not have the opportunity to wait for these reduced fees to come through, and why does this legislation not allow them to make an application to have a refund?

We also note that this piece of legislation gives the New Zealand Transport Agency (NZTA) a whole lot more power to now go around and work out whether someone is purchasing excessive or unreasonable numbers of kilometres on their RUCs. What does excessive or unreasonable kilometres mean? There no definition of what excessive or unreasonable means. It basically says that the NZTA will have the power to, effectively, determine what they think is excessive or unreasonable, taking into account the objective of the temporary reduction scheme, taking into account how the person uses it. How many people are going to be employed by NZTA to run around and make sure that everyone who’s been—

Hon Member: With a clipboard.

SIMEON BROWN: A lot of clipboards—right. I can see them with their clipboards, checking to see—“Oh, no, Scott Simpson, you’re very good. You drive an EV so you’re not captured.” But they’ll be making sure that they have a clipboard and they check: “Oh, no, you’ve got another 500 kilometres this month.”, or “You’ve got 1,000 kilometres in the last three months. That must be excessive. We’re going to have to put you through a complicated formula, which is noted in the bill.” I think it’s (a – b) x (c – d) = e.

Matt Doocey: Oh, the old one.

SIMEON BROWN: So there we are—the old formula. They’ll work you through a formula to work out whether you have exceeded the “unreasonable” test that the Minister has put into this piece of legislation. And the Minister will have I don’t know how many people with clipboards running around and making sure they review everyone’s RUC purchases over the next three months to ensure that they are not being unreasonable or excessive in how many kilometres of RUCs they are purchasing.

The National Party will be looking at these issues. We’ll be asking the questions that we won’t even have a short select committee period to address. We’ll be asking questions around why people who may have had to have purchased within that 38-day period will not have the opportunity to get a refund, and whether 36 percent is actually an equivalent. We know that 36 percent is effectively the same percentage reduction, but some people may use a lot of fuel but not travel that many miles, particularly if it’s a trucking firm where the amount of fuel in relation to how many kilometres they do is not actually an equivalent measure, and so whether they are actually getting an equivalent reduction is something that should be questioned and looked into.

We need to make sure that the assessment and this extra regulation is not being over-burdensome and regulatory. So we will be supporting this piece of legislation. We don’t believe it goes far enough. We don’t believe this Government is listening to New Zealanders and understanding the cost of living crisis that New Zealanders are facing, but at least they are doing something small which will help in a small way. So we can support the bill.

GREG O’CONNOR (Labour—Ōhāriu): I was going to suggest that that speaker Simeon Brown get out more, and, if he were to do so, he would understand that there is actually a war going on in Ukraine. It’s a war that is actually impacting on most of the world and certainly impacting on the price of oil, and that’s really what we’re here about today.

As a Government that actually cares about the costs being imposed by that war and other issues like supply chain issues—and I’ll also say that that member might remember that just as there’s a shortage of container ships in the world, there’s a shortage of containers in the world, all of which is bringing around the price rises that New Zealanders are facing. But, actually, what I should say, at the same time I was going to suggest that that member get out more, is he actually needs to stay in his office a little longer and read the bill, because some of the actual points he brought up are addressed in the bill.

Just before coming to speak here today, I rang a contracting friend of mine who has got quite a big fleet of diesel vehicles. He was unaware of this legislation, but he was quite pleasantly surprised, although he was a little concerned that he had just purchased quite a few kilometres for various vehicles in his fleet—although those listening at home should know that you don’t buy a bill or road-user charges, or RUCs for your fleet. But you still have to buy them for individual vehicles, although organisations try to get it so that they can get all of this done at the same time.

I was able to reassure him that those miles that he’d already purchased that had built up, he was going to be able to get an overlap licence for them, and that is dealt with in the bill. So if he has 1,000 kilometres in the bank, so to speak, for the period of this he can actually purchase new RUCs, or road-user charges, at the new fee or the new sum, and so he—in his case, it’s a him—will not actually lose at all. So can I suggest to that member that some of his concerns may actually be alleviated were he to actually sit down and read the bill.

This is actually also a bit of a catch-up, and there are always catch-ups. One thing I do enjoy about being a member of Parliament is one learns about the systems. We dig down into how these things actually work. I was well aware of what RUCs were. In fact, I recall being with a group of farmers, and there was a young English farm worker who had come over. These farmers were discussing RUCs and the prices of them, and he actually said, “Don’t you guys talk about anything else but rugby?” So we actually had to point out to him that there were other things and that RUCs did have another meaning in New Zealand.

This, of course, is quite appropriate because, of course, this is something that is going to really be an advantage to much of the rural sector, many of whom do drive diesel vehicles and will actually get this discount. For those who are a little afraid that the previous reduction of 25c per litre in gas wasn’t going to apply to them, they can now be part of these reductions as well, so they will actually be beneficiaries of that.

Look, this is a very good piece of legislation. It is a little more complicated, because one thing is that it was relatively easy just to reduce the price of fuel at the pump by reducing the tax. It has been a lot more complicated, and, as the Minister of Transport pointed out in his speech, there are different ways in which companies and individuals can pay their RUCs. So we had to make sure that they aligned so that there wasn’t going to be an advantage to one particular group.

In considering this, there’s also one group that’s going to be quite interesting. As Waka Kotahi and those who administer this know, there is quite an industry in winding back clocks, or winding back the road-user charge mechanisms, and I just wonder whether an unintended advantage of this is that those individuals who habitually wind back the clocks—some of them even wind them too far. I’m well aware of someone who wound his clock back beyond the price of the previous purchase, which was pointed out to him by those selling the RUCs at the time. But I wondered whether an unintended consequence of this is that we may not have those wind-backs happening for at least the period of the three months.

This is a very good piece of legislation. It does ensure the fairness that we on this side of the House are determined to bring about. It means that a section of our society, bearing in mind that this also coincided with a reduction in public transport costs—the halving of public transport costs, which, of course, ensures that those who don’t have vehicles or who are not habitual vehicle users actually can be part of ensuring that this across-the-board decrease in the cost of living can be shared by all, which, again, is another advantage of this related piece of legislation. So I have no hesitation in commending this bill to the House.

Matt Doocey: Madam Speaker.

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! With apologies, before I take the next speaker, could any members who wish to join the debate remotely please seek a call by indicating that in the chat function. If members do that in good time, then it does add to the proceedings of the House. Apologies for that.

MATT DOOCEY (National—Waimakariri): Madam Speaker, I am seeking a call in person. It’s a privilege to rise and discuss this bill on behalf of the National Party, because I think it’s fair to say that at first blush, yes, we support it—ultimately anything that will reduce costs to New Zealanders in a time of cost of living crisis. But let’s not forget that it’s not rose tinted. Labour does not like people who drive cars.

The whole point of the road-user charge is for that charge to go into transport infrastructure. And of course, if you do have a car, whether it be petrol or diesel, you would like roads to drive your car on. This Labour Government will not build roads. And so any relief to hard-working commuters—especially those in regional New Zealand and South Island New Zealand who are sick of their road-user charges being siphoned off to pay for pet public transport projects in Auckland. So how good is it that New Zealanders, and especially regional New Zealanders—because let’s not forget: on one hand, they give it back, but another, they take it away, because a lot of regional New Zealanders are getting a double whammy with the ute tax that’s just been brought in.

So when you look at the explanatory note on this bill—we hear about international pressures and international drivers, but where I’d like to start with is Infometrics economist Brad Olsen saying, “Inflation isn’t an offshore problem that New Zealand is caught up in.” Because we know, on this side of this House, what the response was from this Government. It was, in fact, a gentleman by the name of Christopher Luxon, the Leader of the National Party, who, on a Sunday, clearly outlined in his state of the nation speech the cost of living crisis that was going on for many New Zealanders. On this side of the House we listen. We get out of our offices and talk to hard-working New Zealanders.

Hon Members: Ha, ha!

MATT DOOCEY: And they laugh. But of course, on the Monday after that Sunday, the Prime Minister was on The AM Show, looking down the barrel of a camera and she couldn’t bring herself to say the word “crisis”. Then what happened? There was a poll.

Hon Member: Oh, that’s right!

MATT DOOCEY: That’s right. And all of a sudden there was a flap. And, of course, the top minds of the Labour caucus got together—there wouldn’t have been many of them—and they said, “What are we going to do?” And all of a sudden they dreamed up: “Oh, maybe there is a crisis going on.”

Hon Paul Goldsmith: They consult Helen White.

MATT DOOCEY: I’d like to acknowledge Helen White. It’s good to see the backbenchers finally speaking up and talking about what they’re hearing from the people that vote, their constituents. And so what we had in this bill, and it’s clearly outlined in the explanatory note where they talk about international drivers—but what we know, on this side of the House, is that, in fact it’s actually this Labour Government splashing the cash. Because, of course, what we know is in the last quarter of last year, domestic inflation was higher than international inflation. So it’s domestic inflation that’s driving this cost of living crisis in New Zealand.

So yes, it is good we’re giving New Zealanders a relief in petrol excise tax and, quite rightly, a corresponding relief here in road-user charges (RUCs). But I would have some caution because—why don’t we trust people who are purchasing RUCs? There’s a big emphasis here that we need some system to supervise them, because of course, as the Minister says, we don’t want people stockpiling. Are there any monitors on the forecourts at the moment, monitoring whether petrol users are stockpiling the petrol they’re buying? No.

But, of course, in this bill, we’re going to enact—oh, what was it called? A RUC monitor?

Hon Member: That’s right.

MATT DOOCEY: Yes.

Hon Member: A clipboard and white coat.

MATT DOOCEY: That’s right. Because what we know in New Zealand is we need more bureaucrats in Wellington, don’t we. Here we go—a RUC monitor who’s going to assess whether the hard-working diesel owners are doing the right thing. And what I would say is that here we are, under urgency, spending the time of the House—at great cost and resource—passing this bill. Yes, the end result will be good for hard-working New Zealanders. But, as my learned colleague Simeon Brown quite rightly pointed out, it pretty much saves three or four days. That’s the reality at the moment.

As my great friend and learned colleague from Invercargill, Penny Simmonds would say, this Government couldn’t even run a bath. These guys can’t deliver. They got caught out—policy on the hoof. And I say well done to New Zealanders who actually exercised their democratic right and said, in fact, that if were to have an election tomorrow, we wouldn’t vote these guys back in. They said they’d vote National back in. You know why? Because we listen to New Zealanders—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! I do invite the member to come more closely to the bill. [Interruption] And I don’t need any help, thank you. While I note that under the general policy statement the policy goal is to offset some of the price increases through reducing road taxes, that is a relatively narrow general policy statement. Context is important, I understand that, but I do invite all members to stick within the context of the bill.

MATT DOOCEY: Thank you very much for that clarification. And as we talked about, with our transport spokesperson, Simeon Brown, there are some questions we do want to ask around this draft legislation, as it is going through urgency, especially around the principle of backdating. So we have heard from one Labour MP—Greg O’Connor—who talked about the ability for an overlap licence. But it would be good to interrogate this further, and we will get the ability to do this in the committee of the whole House stage, because, of course, we won’t have a select committee process to go through to hear from heavy vehicle users. I’m quite happy to be wrong, if the Minister can correct me, but I thought the overlap licence was only for heavy vehicles. So what will happen for light vehicles? I think that is something that we’ll be able to look at, at further readings as well. Is there a cost for an overlap licence?

As we’ve said on this side of the House, we are going to support the bill, but it’s incumbent on us to ensure that we do interrogate the drafting of this bill to ensure the words on the bill are the best fit for New Zealanders. Because what we know is when we look at diesel users, I would argue they are some of the best and hard-working New Zealanders around. God bless diesel car users and this is what we are here to support. Sorry.

Hon Member: Diesel turbo.

MATT DOOCEY: That’s right, diesel turbo. All right. I’ve got the feeling there’s going to be a few stories coming up around first diesel cars. Mine was the Hilux Surf, a very good vehicle, I must say.

Hon Member: Still got it.

MATT DOOCEY: No, no, I haven’t got that. I’ve upgraded to the Toyota RAV4 family car, but that’s OK. Things in life change. I’m sure you can appreciate that, Madam Speaker.

Look, overall, we want to support this bill because we want hard-working New Zealanders to have more money in their back pocket. But ultimately, as parliamentarians, we want to make sure this bill isn’t an overreach as well. I’ve got some real concerns about what is the role, what are the powers, what are the delegations of a RUC collector in this situation, and what are we signing up to to allow them to be unleashed on our many hard-working diesel driving New Zealanders. Thank you, Madam Speaker.

PAUL EAGLE (Labour—Rongotai) (remote): Madam Speaker, kia ora. It gives me great pleasure to speak on this, the first reading of the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. And can I just acknowledge that we can still use this function when those in your home have got COVID, unfortunately.

I do want to just point out from the previous speaker, Matt Doocey, around the word “crises”. It’s entirely relevant, but in the context of the geopolitical and economic territory in terms of what’s happening in terms of the invasion of Ukraine and, of course, a positive event—and that’s the ongoing recovery from this pandemic that we’re in and the impact on fuel prices across the globe and, of course, in New Zealand. That’s, essentially, why this has come to be. And we’re putting it through today because, as we’ve heard, hard-working New Zealanders want this, they want this now, and this Government has been agile enough to look at a scheme and put it in place. I want to applaud those who have worked hard to get this on the agenda and to get it on very quickly, because I know that from Friday, 1 April through to 30 June, people will be very happy with the cut in fuel excise duty.

But also, the funding provided for local government in terms of half-price public transport fares—and I do represent a big core user of public transport in east and south Wellington. So there is general happiness—if we can just fix the cancellations, but that’s through drivers having COVID and just not enough of them. We’ve done it with their wages, and I know that in south-east Wellington, it is a real hit. It has made a big difference. I have the pleasure of keeping in touch with our chair of the regional council, who run bus services—that’s Daran Ponter, and he can confirm in a chat this morning about user patterns and what’s happening around the city, that it’s good news.

I have to say that I really do hope that in this—I guess, this three-month period—that we can use it as a pilot, as such, to look at some of that mode shift that’s been long desired, and I know for large urban metros this will, hopefully, have some big impact. I want to just say, too, that the confirmation of the RUC discount does support New Zealanders getting through that global energy crisis. I know that we’ve heard words where it’s unrelated, but it’s entirely related, and this is the sort of action that New Zealanders expect from a hard-working, agile, quick-moving Government who can make changes quickly.

I did pick up that the Opposition is supportive, and that’s important, because what it shows is that this is a good idea. It’s a simple idea; it has some complexity around the road-user charges components, but, all in all, it means that all New Zealanders—whether they own a vehicle or not; being diesel or use public transport as they do in the big cities and other places, of course—it does help them out in the pocket, and that’s what matters most. I know that the road transport industry, who play that vital role in the supply of essential goods across the country, wanted to see a signal from this Government during these challenging times, and that’s what we’ve put on the table.

I’m looking forward to speaking in the second and third readings and putting this through this evening. I commend this bill to the House.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. Tēnā koutou e te Whare. I’m contributing to this bill on behalf of the Greens tonight, at the last minute on behalf of Ricardo Menéndez March, who, of course, is also filling in for our transport spokesperson, typically Julie Anne Genter. This weekend, out in the electorate, a constituent asked me if I thought that the war in Ukraine was going to lead to many countries and negotiators, internationally, perhaps being less inclined to take action on the reduction of climate-changing emissions. This constituent shared that they had been listening to an academic who had said that in moments when unexpected things happen, there is a tendency from decision makers—that is, politicians across the world—to play it safe, to make no sudden movements, and resort to the tried and true rule book. I answer that this is very much a real risk, but that we only have to look, in fact, at the disruption of COVID-19 to see how many nations and politicians will shirk their responsibility for the slow-moving climate crisis when confronted with another crisis.

The problem that we’ve got so clearly is that when one crisis hits, the others don’t stop hitting. We’ve seen time and again that this Government can and does respond to immediate emergency but is at serious risk of ignoring or neglecting the proverbial boiling frog. Two years ago, this House declared a climate emergency, and, in the name of COVID-19, last year Cabinet decided to delay the introduction of the emissions reduction plan. To the point—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Can I invite the member to bring her speech back to the bill which sits before the House?

CHLÖE SWARBRICK: Absolutely, Madam Speaker. So this is not the first of the oil or fuel shocks that we have seen. Over the past few decades we’ve seen oil shock after oil shock. In 1973, when oil prices quadrupled between mid-1979 to mid-1980, oil prices rose from US$13 a barrel to US$34. In 1990, they went from US$13 a barrel to US$34 a barrel. Then again, we saw shocks in 2005 through to 2008, and 2010 to 2014. I dare say to any MP in this House who will contribute to this debate tonight—I dare them to tell me that this oil shock of 2022 is the last one that we will see. It cannot be, and none of them can offer that assertion, because we know that the oil market and fossil fuels are inherently volatile. You know what is sustainable, however? It is renewable energy, and that is why the Greens are opposing this bill today. Because whilst we can totally acknowledge the fact that there are increasing cost pressures on New Zealanders—and we have made a real point of the fact that those cost pressures have been disproportionately felt by lower-income New Zealanders who, Statistics New Zealand data bears out, have borne the brunt of double the cost of inflation, in terms of the reality that they are spending the majority of their incomes on essentials on a daily basis—there are real risks and perverse incentives in cutting fuel taxes when in fact we have the opportunity to use other levers, such as boosting incomes for lower income New Zealanders.

The thing about fossil fuels—which is at the core of this bill, in terms of reducing the costs for road-user charges—is that they are formed from literal fossils of plants and animals that lived millions of years ago. Despite decades of commercial and political obfuscation and delay, we have known relatively clearly since the 1960s that, without a shadow of a doubt, burning those fossil fuels contributes to the warming of our atmosphere. We also had an Intergovernmental Panel on Climate Change report that came out only this past weekend, which demonstrated that we must think ahead and act now. We must make sure that we are not creating perverse incentives and feedback loops, such as the Greens are stating are at serious risk of occurring with the passage of this legislation, when alternatives are available.

What we are debating tonight is an amendment to road-user charges. It’s important to specify exactly what those are, because the Government’s announcement to respond to fuel supply shocks prompted by, as has already been outlined by other speakers, Russia’s war in Ukraine was twofold and it applies for three months. They announced these fuel tax cuts and half-price public transport costs. Those fuel tax cuts come in two forms. They are petrol excise duties, which are able to be reduced through powers under regulation. Then there is what we’re debating tonight, which is, for those who drive diesel vehicles, a more complicated legislative instrument requiring this amendment.

Speaking to those concerns around perverse incentives and in fact, around subsidies for fossil fuels, I think it is really important to draw the attention of the House tonight to a press release, which is available for all to read on the Beehive’s website, from the Minister for Trade and Export Growth, the Hon Damien O’Connor. It’s from 16 December 2021. It’s titled “New Zealand leads the call for Fossil Fuel Subsidy Reform at WTO”. I think it’s really important to give this as context for the Greens’ opposition to this legislation tonight, so I’d like to just read the opening paragraphs of that press release. The Minister, the Hon Damien O’Connor, says, “New Zealand is continuing its leadership in tackling damaging fossil fuel subsidies through a launch of a Joint Ministerial Statement, supported by 45 WTO members. Trade and Export Growth Minister Damien O’Connor announced. In his launching remarks, Damien O’Connor spoke to the environmental, economic, and social costs of fossil fuel subsidies. [He said] ‘Worryingly, fossil fuel subsidies have continued to increase in the past decade, costing governments approximately US$500 billion [of] public funds per annum. These subsidies work against our efforts to address climate change by artificially lowering the cost of fossil fuels, and encouraging their on-going use. This is the opposite of what we should be doing,’ [Minister] Damien O’Connor said.”

Unfortunately, it was only two to three months later that we saw exactly those fears, and the leadership of Aotearoa New Zealand with regard to calling for an end to fossil fuel subsidies turned around a little bit. I want to acknowledge that that part of the package was halving the price of public transport for three months because that, as the speaker just before me, Paul Eagle, noted, is encouraging in terms of mode shift. But it does not go anywhere near far enough. So to speak to the cost of this package, we know that it is around $320 million to $360 million—if I’m recalling correctly off the top of my head—for that three-month fuel price tax cut. That includes those for diesel vehicles, for whom this legislation impacts, and those who drive petrol vehicles. We also know that the cost of that public transport half price for three months is in the realm of $25 million to $40 million. If we are to extrapolate that to full price, free public transport and then to extrapolate that for a year, that half-price public transport for everybody across Aotearoa New Zealand would cost less than the three-month, 25c fuel tax decrease over the next three months.

I don’t know how many other ways we can kind of weigh it up in terms of perverse incentives—that is, incentivising people to do things that are contrary to the interests of our nation and of the planet—

Simeon Brown: But most people don’t go on a bus!

CHLÖE SWARBRICK: —with regard to climate-changing emissions, noting, for example, Mr Simeon Brown, that we have very clear evidence that shows us that even if we were to burn all of the fossil fuels which we have currently discovered and started to excavate, then we would blow way past 1.5 degrees of warming necessary for the survival of the human race. We also are faced with some substantial and unnecessary decisions being made about where we should be investing these funds, noting, of course, that these funds—these road-user charges and the fuel excise tax—are hypothecated. That means that they are put forward in the Budget as being spent on other things. Of course, this is currently being made up by the COVID-19 response fund, but of course, again, the point must be made that there are opportunity costs to these decisions. That is that other decisions are not being made, such as boosting the incomes for lower income New Zealanders.

Just finally, I would like to put it to members of the Labour Party in particular, for whom I do have a substantial political fear for, that the reality of this fuel price tax cut for three months is that in three months’ time, there is going to be a really, really difficult political decision to be made where overnight there is a very real risk that you are responsible for—not you, Madam Speaker, of course; the Labour majority—an overnight increase in the costs of fuel and of petrol in this country. Therefore, this response, while absolutely is responding to the cost of living issues, is not the right proportional or appropriate response. Kia ora.

SIMON COURT (ACT): Thank you, Madam Speaker. The problem that this bill intends to solve is not a simple problem of removing the cost of motoring, the cost of operating diesel-fuelled vehicles. The problem that this piece of legislation is attempting to solve is beyond the capacity of this Government to solve—and that is the cost of living crisis.

I had an email today from Ashley. She asked the ACT Party, on the subject of road-user charges, “Could Labour scrap them forever?” Because the costs that her family are bearing right now, with day care, with rent, paying back her student loan, and paying for all of her family’s costs meant that this small reduction in road-user charges that would benefit her family was not even a drop in the bucket compared to the amount of money that they are spending just to keep the lights on and to make sure that they have food on the table. Ashley wrote and said she lives in Auckland with her partner. He’s a self-employed truckie and he pays himself only $65,000 a year because he can’t afford to pay himself any more because the cost of fuel, road-user charges, and running the truck mean that’s all he can afford to take out of the business.

Ashley mentioned that when her partner filled up his diesel car, it cost $161 and that’s before the road-user charges. This piece of legislation rushed through under urgency will not help Ashley and her family overcome the enormous increase in cost of living that this Government has overseen in such a short period of time. But let’s be clear: this Government’s policies, not only have pushed up the price of everything they’ve caused a housing crisis, there’s a congestion crisis on the roads, and there’s a massive crisis in how we fund and finance infrastructure.

But look, even if this Government could justify taking road-user charges, it doesn’t actually spend them on roads. In response to a written question to the Minister in 2021, “What percentage of the 2021 to 2031 New Zealand Transport Agency budget is allocated to investment in road construction?”, the Minister said it would be 23 percent—23 percent! So while the Minister has stood up here in the House tonight and has claimed that this piece of legislation, which reduces the cost of road-user charges for diesel-powered vehicles, will actually improve the lives of New Zealanders and help reduce their cost of living, what he’s not admitting to is that less than a quarter of the money that the Government takes from road users actually goes into delivering the roads that they depend on for their communities to thrive.

So, if we look at other examples, road-user charges that should be delivering better roads, that should be permitting people who live in cities to get around without having to spend an estimated 40 to 45 minutes if you live in Wellington and Auckland, an additional 40 to 45 minutes every day sitting on congested roads—the road-user charges aren’t even going to fix the problems that this Government and this Minister tell you they’re trying to fix. We know that because this Labour-led Government and the previous Labour-led Government have cancelled roading projects that were deemed absolutely vital not by politicians but by the businesses that depend on road freight and by the communities that want to move safely between home and school and work.

I’ll give you some examples of cancelled projects The four-laning from Whangārei to Port Marsden, that’s a road that has thousands, sometimes 12,000 or 13,000, of heavy vehicle movements a day. That project was assumed to be going ahead but was cancelled by the Minister after the New Zealand Upgrade projects got away from him in terms of cost. What about the Penlink project that was cancelled by the 2017 Labour-led Government but has since been re-announced? No doubt, when it is finally built, it’ll be at an enormous cost, much greater than it could have been. What about the Tauranga Northern Link cancelled by a Labour-led Government in 2017? Although, you know, clearly there was money to build stuff, and that’s going to be delivered no doubt at a much, much greater cost when it is finally built.

The other problem that we have with road-user charges as they’re currently hypothecated to projects that aren’t even being delivered is that a large proportion of that cost is also being diverted to things like the bike bridge over the Waitematā Harbour, where $51 million was spent on consulting fees without even making progress to complete the business case before that project was cancelled.

So what’s the solution? What is the problem we’re trying to solve here? Well, it’s a cost of living crisis the Government says it’s trying to solve by meddling with road-user charges at the fringe. What we really need roads to do is to connect communities so that people who want to work somewhere know they can get to work in a reasonable time, they can get the kids to school, they can pick them up after work and they can get on with their family life.

So what does ACT say? Well, firstly, we’d solve this cost of living crisis by actually giving road users who pay for their carbon emissions through the emissions trading scheme a carbon rebate. ACT announced recently that we would give families around $750 a year that they should get back from the emissions trading scheme because that’s what they already pay for their carbon emissions. We think that’s a much better deal than what this Government’s offering.

When we think about other ways to solve the cost of living crisis—well, firstly, the regulations that are crafted to administer this piece of legislation will, no doubt, be top heavy. They’ll be difficult to navigate. It’ll be an extra cost on business. What we should be aspiring to is less congestion. Road pricing could help solve that. Better public transport—again, users paying for roads could help pay for better public transport. What we should be aspiring to is thriving communities and a healthy economy. ACT will support this bill because it actually reduces taxation, but this is not how we’re going to solve the cost of living crisis. Thank you, Madam Speaker.

ASSISTANT SPEAKER (Hon Jacqui Dean): Members, the time has come for me to leave the Chair for the dinner break and the House will resume at 7 p.m. this evening.

Sitting suspended from 6.02 p.m. to 7 p.m.

SHANAN HALBERT (Labour—Northcote): Thank you, Madam Speaker. It’s wonderful to be back in the House this evening amongst colleagues and such conversations as good legislation, like this particular one, the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill.

On 14 March, the Government announced moves to reduce the burden of high fuel prices on our Kiwi families, introducing a 25c reduction in fuel excise duty, and an equivalent reduction in road-user charges. Since February, I rolled out my new caravan, in the electorate of Northcote, and we’ve been hearing directly from our community around what matters most in Beach Haven, and Birkenhead, and Northcote—some very, very special information. The local community has named the caravan Bert, as a side note, so come on down and see that. But what we hear from people is that they want to share, and have help, in the cost of living—it’s one of the biggest issues that constantly gets raised with me. And this bill is part of the Government’s plan to deliver real relief—to my community and to Kiwi families across Aotearoa.

New Zealand, like the rest of the world, has been hit by a double whammy of inflation caused by shortages as a result of the impact of COVID restrictions that every country—every country—has been forced to introduce to keep people safe, and also, now, by Russia’s appalling war in Ukraine, a key energy producer, which has led to a global spike in fuel prices. We have all seen the impact of these costs at the pump, we’ve seen them in the supermarket, and we’ve seen them impact on families all across our communities. And so this particular piece of legislation, this evening, is about helping families where we are able to, and I commend this bill to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on the Hon Michael Woodhouse.

Hon MICHAEL WOODHOUSE (National): Thank you very much, Madam Speaker. It’s my pleasure to rise in qualified support of the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. While the Government pats itself on the back for alleviating the pain that people are feeling at the pump, they should also look in the mirror for the reasons why that pain is occurring in the first place. As has been mentioned by previous speakers, it is very much due to decisions that they have made, the pressure that they have put not only on fuel but on housing costs and in the supermarket.

I think it’s also worth reminding ourselves why we’re here. We’re here because of the 42-day rule. If it wasn’t for the 42-day rule, the Government would be able to actually just simply do this by Order in Council. The 42-day rule actually has its genesis in 2008. Those who were campaigning that year will remember the truck protest that occurred because of the significant increase in road-user charges (RUC) that was imposed on diesel users. I think it was Annette King who was the Minister at that time who came out and said “Well, basically, if we didn’t put the RUC increase in straight away, truckies would go out and buy kilometres well ahead of what they would otherwise have done.”

Simon O’Connor: Was that Annette King?

Hon MICHAEL WOODHOUSE: I’m pretty sure it was Annette King, Mr O’Connor. That ended up with trucks up and down the high streets in every city and town in New Zealand. It was in response to that, and, as the Minister has acknowledged, it was with the view that the RUC would normally only go up and not down that the 42-day rule was put in place. It occurred because the previous Labour Government did not trust RUC users to do what they should be able to do, which is to buy things in advance before the price goes up, as if that was some kind of heinous crime to actually give the Government money sooner than they otherwise would to avoid a price increase. Well, that’s hardly in the spirit of innovation. I would suggest that they are entirely within their rights to be able to do that. So the National Government actually put in place this 42-day rule.

It’s the right thing to do to be passing this law, but I do worry that we are actually wasting the House’s time on stuff that actually should be belts and braces in the legislation. I think there is a clause in this bill—and we can flesh this out as we go through it under urgency—where the Government can basically extend this indefinitely by Order in Council. I’m checking with the Minister. Maybe that’s the case. We’ll find the appropriate clause in it. I’m not sure that’s actually good law, because this House does need to provide the necessary scrutiny that is to ensure that we’re passing robust laws. I’m not convinced that the framework is in place for that to be able to happen, and maybe we can put some amendments in place to do just that. So it’s with a qualified support that we will continue this conversation, and I look forward to seeing how that conversation goes.

ANNA LORCK (Labour—Tukituki): Thank you, Madam Speaker. I rise as a proud owner of a navy blue Santa Fe diesel—navy blue. And I’ve recently, on 1 March, purchased 8,000 kilometres worth of road user charges (RUC). And I did so because I’m one of these people who likes to buy things in advance and not get caught out without enough RUC. So I was very pleased to hear that I will be able to benefit from this reduction in road-user charges for the three months that they are brought in for. Now, when I drive my navy blue Hyundai Santa Fe, I’m often asked about “Why’s your car blue?” It’s the colour of the flag: it’s actually white, red, and blue. I can say it’s the best conversation starter that I could have, in talking to my electorate, and when I’m out talking to my electorate, one of the best things that’s happened has been seeing the drop in fuel prices and the drop that we’re going to get through our road-user charges. That, I must say, has made a huge difference for people in the community that I represent. Now, National says they’re about doing the business—they represent business—and yet, today, they’ve said they’re not going to vote for this bill. They’re going to drag it out. Well, my suggestion is that the National Party gets on with the business, like we are.

TERISA NGOBI (Labour—Ōtaki): Mālō e lelei, Madam Speaker. It’s always a privilege and honour to stand as the member of Parliament for the Ōtaki electorate but also to take a call in this House of change tonight on the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill.

Firstly, can I thank the Minister of Transport, his team, and, of course, our leadership from our Prime Minister, Jacinda Ardern, who acknowledges and wants to support Kiwis by putting in measures like this to be able to help us at this time. As we know, due to Russia’s invasion of Ukraine, and then, of course, with the COVID pandemic globally and countries starting to open their countries up to travel, that’s made those fuel prices shoot up. So something like this is something that we need right now for our Kiwis in terms of our budgets, and we know that this is part of that bigger piece of work. As we know, this Government’s put in 25c a litre off petrol. We know, in the beautiful Ōtaki electorate, we have $2.57 for petrol at the moment, and if you shop in our supermarkets, you might be able to get 6c a litre off, and that’ll make it $2.51. So, if you’re passing through on the awesome Transmission Gully that this Government has also completed, please stop in, do some shopping, get 6c a litre off, and go and shop in one of our petrol stations.

But aside from that, we’ve also made sure as part of this package—and this bill fits in that wider piece of work—that we’re making our public transport half price as well. Again, for the Ōtaki electorate that means Ōtaki, Waikanae, and Paraparaumu through to the capital is half price for that three months, and, of course, the Capital Connection, which is all stops from Levin right through, which is, again, really helpful right now for Kiwis’ budgets.

But of course, we can’t just leave the diesel drivers out. If we’re going to help the people that drive petrol cars, help people who are using public transport, we need to have these with their RUCs being 36 percent off at the moment for three months. So with that, I commend this bill to the House.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Speaker. National, for the sake of the member Anna Lorck, will be supporting this legislation. But we do so with some caveats and some concerns about the process that has led to us this evening having the House sit in urgency, passing every stage of this piece of legislation without any due scrutiny by select committee, without any opportunity for submitters to have a say, to give us the benefit of their wisdom, for stakeholders not to have any input, and in response to what has clearly been a panicked announcement by the Government as a result not so much of international matters, but as a result of a very domestic but challenging for the Government bad poll.

So what we found was that, in the words of Bob Carter’s famous quote, “Poor planning on your part does not necessitate an emergency on mine.” And now we are, in fact, as a Parliament, having to make up for the Government’s poor planning, for their poor forethought, foresight, and their lack of actual understanding about how the road-user charge (RUC) system works, off the back of their rushed announcement that they were going to give some relief to car drivers who have petrol and diesel vehicles. So not much thought went into it.

It’s easy enough to use a piece of legislation or make the announcement for a temporary reduction in the price of petrol at the petrol pump—that can be done more or less without any legislative need—but for road-user charges, far more complicated. And my colleagues have already addressed several of the matters that relate to the issues that we see in this, but I want to turn to the usual analysis that will be made by way of departmental disclosure statement. Sitting on the table is the disclosure statement from the Ministry of Transport, and it is remarkable in terms of the telling insight that it produces for how ill prepared the Government were and how rushed their announcement was.

So on the face of it we’ve been told that this legislation is required because of international affairs, but those international situations have been now in place for over a month—for quite a long time. And it was obvious right from day one that international oil prices would be affected. All around the world prices were going up and having an impact on people at the pump. So one would have thought that a diligent, thorough, careful, and prudent Minister would have initiated some kind of action earlier than he did. But no, the Minister was completely side-lined by his ideological policy agenda in his other portfolio areas and had neglected to think much about what was going to be required in terms of detail relating to diesel users. So a rapid response to create the announcement—that’s typical of this Government. They do that very well. They announce announcements and they do it oozing empathy but no attention to detail or delivery. And they, of course, completely neglected to understand the implications for offering publicly to reduce the price of diesel, and they didn’t think about the implications for the road-user charge system.

So in the departmental disclosure statement, it says that the policy was developed in response to a rapidly changing international situation impacting on the price of fuel—fair enough. And then it goes on to say—and this is the telling part—“There are no relevant inquiries, reviews, or evaluation reports relevant to the policy.” I’ll read that again: “There are no relevant inquiries, reviews, or evaluation reports relevant to the policy.” There is, however, an intention to release relevant papers relating to the decision to reduce petrol excise duty and road-user charges as soon as they are ready for proactive release. Now, that’s bureaucratic speak for “Nobody talked to the Ministry of Transport, nobody consulted with them in advance, and they had no warning that this announcement was about to be made, and they were not prepared for it.”

The disclosure statement goes on to list a whole lot of sort of standard questions that are usually asked of pieces of legislation. Does the bill seek to give effect to any New Zealand action in relation to international treaty? No. Were any regulatory impact statements provided to inform the policy decisions that led to this bill? And then it goes on to repeat that it was done in response to a rapidly evolving international situation, and as such no regulatory impact statement has been completed. Again, that’s bureaucratic code for “We were blindsided by the Minister, we were blindsided by the announcement, and we weren’t ready or prepared as a ministry to offer advice or assistance on how this policy might be implemented.”

And so the Government has stumbled their way through this in a pretty amateur way really. And it’s probably, I would think, a matter of some considerable embarrassment to a Minister who normally likes to rank himself highly in terms of his efficiency and his ability to be on top of his portfolios. Most of us know that that’s little more than a veneer, but, to the general public, many of them still believe it. But what we find in the disclosure statement from the Ministry of Transport is one of the most telling pieces, which was that the final question is in terms of—well, there were two final questions I wish to highlight in this contribution. One was at 3.6, which says, “Has there been any external consultation on the policy to be given effect by this bill or on a draft bill?” And the answer simply is a one word, stark, “No.” No consultation on the policy to be given effect by this bill.

Then finally, in what is ultimately a most damning indictment on the lack of preparedness by this Government for this piece of legislation, that they are going to ram through the Parliament tonight under urgency using their absolute majority, is the question, “Have the policy details being given effect by this bill been otherwise tested or assessed in any way to ensure the bill’s provisions are workable and complete?” And the answer is that a workshop was held with the New Zealand Transport Agency—the RUC collector—and that was held on 23 March to test and assess the workability of the bill. A workshop was held on 23 March, but the announcement was made on 14 March. So the New Zealand Transport Agency was caught short again by trying to have to administer this legislation, caught without awareness, caught without notice, caught without any kind of sense that it was coming.

So we’ve got some questions in relation to how this could have happened and how the Government could have been caught so flatfooted in terms of what they are seeking to achieve. The bill provides for a temporary respite for people who use petrol, drive petrol vehicles, and, of course, at the same time that announcement was made, the grand sweeping statement was made and the same 25c reduction will apply to RUC. And it was immediately obvious—it was funny. I was looking at social media literally minutes after the announcement was made, and there was an avalanche, a tsunami, of commentary coming from RUC users, diesel vehicle drivers, saying, “Well, how on earth is this going to work? Because we buy RUC in advance, we buy RUC in usually 10,000 kilometre or 1,000 kilometre blocks, and we pay for the RUC not at the pump.” And so the users, the people who were actually involved with this, were very aware very quickly that this was an unworkable solution that had been announced by the Government, and it became very clear almost immediately after the announcement that corrective legislation would be required.

Well, that’s what the House is debating tonight under urgency. That is the corrective legislation that will have to be passed through without any scrutiny by the select committee process that we usually hold dear in this Parliament, and I don’t think that’s good enough from a Government for a temporary measure that is actually going to run out in the not too distant future. The real challenge for this Government will be not the temporary relaxation and assistance they’re providing to New Zealanders who are suffering under the cost of living crisis, but the real challenge for this Government will be what on earth are they going to do at the end of this temporary period when the full impact of the cost of living crisis at the petrol pump and at the diesel pump is going to be again reflected on the long-suffering, squeezed middle in New Zealand, the people who are productive?

HELEN WHITE (Labour): Thank you. I rise in support of this very simple and effective piece of legislation. I look at it and I don’t think it’s actually that complicated, Mr Simpson. What I heard, when it was the announcement, was exactly what has actually occurred. There was an announcement that there would be an immediate reduction in the price of petrol. That petrol went down, even before that came into effect, and there was an absolute notice that this would happen, that there would be a look at what was a complex situation and a practical fix, and that’s what we have tonight. We have a practical fix, by way of urgency, and my friends on the other side of the House, for some inexplicable reason, have decided that they will oppose something which is, effectively, a reduction in tax. It seems a little ironic to me that they would take that particular approach of opposing urgency.

I want to talk to the causes for that urgency, because it isn’t a little situation, and I think the New Zealand public will understand. It’s a situation where we have had COVID. It is a situation where, on top of that, we now have our first European war in quite some time. It’s a very serious situation and it impacted on New Zealanders. This Government took it absolutely seriously. And it understood it because I, actually, have such pleasure in hearing from people like my friend Terisa, who comes from the area, which is one of the—she’s absolutely salt of the earth in terms of her groundedness in that community. And she knows that this is what’s affected people, and that this is one way that we can bring relief to New Zealanders.

And so, in this situation, what will happen is there will be a capacity for people who buy 5,000 kilometres of road-user charge to get an immediate discount of 135 bucks. That is bread on the table. That is a grounded response to a situation that needed to be resolved. That is a good contribution to people’s cost of living situations because that’s real. And it doesn’t need to be held up by the National Party asking silly questions in the next stage. It could, actually, just happen.

This here is a good solution, and it’s a simple solution, and it’s a fair solution. And it sits alongside—and I’m very proud of this—a reduction in petrol, but also a half-price public transport system so that people who don’t have a car and who are reliant on public transport can actually come into my city for free.

I am very conscious that the hard edge of what we’ve been going through in the last 20 years is a movement of our poorer people in Auckland out to our suburbs. So those are the people who most do need this, and they, actually, are going to get it. And they’re going to get it from this Government because this Government actually knows that that’s where the money needs to be spent; that’s where the relief needs to be given. And I am extremely proud of this Government for doing that. I commend this bill to the House.

A party vote was called for on the question, That the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill be now read a first time.

Ayes 110

New Zealand Labour 65; New Zealand National 33; ACT New Zealand 10; Te Paati Māori 2.

Noes 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Bill read a first time.

Second Reading

Hon MICHAEL WOOD (Minister of Transport): I move, That the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill be now read a second time.

As we canvassed in the first reading of this bill, the Government is moving swiftly to tackle some of the cost of living pressures that Kiwis are feeling. We moved very, very quickly on this issue in response to increased pressure on energy prices. Within hours of Cabinet deciding that fuel excise duty would be reduced, that was enacted. We’ve also moved through a $40 million investment to ensure that Kiwis have access to half price public transport over the next three months. Reductions to road-user charges (RUC) are the other part of the package to ensure that all transport users in New Zealand do feel some relief given the increases in prices that we are seeing coming through due to the war in Ukraine and other supply-chain factors.

It is worth noting, and I respond here to some of the debate that’s occurred in the Chamber this evening, that this has been quite a complex piece of work. As has been canvassed, changing road-user charge rates, given that there are over 200 different rates that are set by regulation depending on the weight and axel load characteristics of different vehicles, is a more complex matter than simply enacting a temporary reduction to fuel excise duty. I want to acknowledge officials from Waka Kotahi and the Ministry of Transport who have turned that piece of work around very, very quickly indeed.

Frankly, in the debate that we’ve had tonight the National Party has been spinning around like a top in terms of the lines that they have been putting out in respect of this issue. I think Mr Hamish Rutherford has his work cut out in the next few months in order to try and establish a little bit of message discipline there. Because what we got from a number of the speakers in the Chamber tonight—and we’ll call these people “team Simpson” because he probably led the charge on this—was an allegation that effectively the Government is moving too fast on this issue, that we should’ve slowed down to get more advice, then engage, and check in with officials. We had a lot of criticism from Mr Simpson that the process has moved along too quickly, that actually we should’ve slowed it down and delayed the benefits of this policy coming into effect for those people who need relief on road-user charges. Of course, that is consistent with the parliamentary strategy that we have seen tonight, whereby the National Party opposition has opposed the urgency that the Government put forward to deal with this issue swiftly and want to slow the progress of this reduction down. So that was one perspective that we heard from the Opposition benches tonight.

The other, which we’ll call the “team Brown world view”, was that this process has been too slow, that we should’ve somehow just willed into existence a complex legislative change across those 200 rates with integrity and transition measures in place to make a robust piece of legislation. I think that that is consistent with the way that that member approaches the portfolio from time to time. He is capable of living existentially in two worlds, as we’ve learnt with his opposition to the regional fuel tax but his delight about the fact that it’s building the Eastern Busway into and through his electorate. So that is relatively consistent for that member.

But what I would say is that over a period of three weeks, for officials and Government to turn around this policy and to be able to present legislation to this House to bring this change into effect from 21 April, I think, is very good work indeed. It is worth noting that, when the change comes into effect from 21 April, it will apply for the full three-month period. So it will be a period of time that the reduction will apply that is comparable or that is the same in duration as the reduction to fuel excise duty and also to the public transport half-price fares that we have brought on as well.

There is one other point that I wanted to cover in the course of my comments in this second reading speech, which may provide some useful clarity about how the transition arrangements will work. It’s been canvassed in the debate so far that people obviously do purchase their road-user charge licences in advance. So there is a question about what will happen for people who have purchased those road-user charge licences before the reduced rates come into effect. Are they able to access the benefits of the reductions that will come through this piece of legislation? The good news there is that we have structured this change to enable those people to also get the benefit. So vehicle owners who do have an existing RUC licence with unused distance will be able to purchase what’s called an “overlap licence”. This is a provision which is in existence in the existing legislation; it’s called an “overlap licence”. With that, the licence begins on the current odometer or hubodometer reading at the time of the purchase. The unused distance on the existing licence can then be automatically credited to offset the new licence costs, and that can be done at the new reduced rate. So Kiwis will be able to benefit from this policy by purchasing road-user charge at the reduced rate during the three-month period. But if they have purchased previously, then through this mechanism, they will also be able to access the benefits of the reduced rate as well. I thought that might be useful to inform the remainder of the debate.

So I am very pleased that we’re able to move forward quickly with the second reading of the bill. Very hopeful that we can move through this legislation and put it into effect so that this important change to help Kiwis with cost of living pressures can come into effect from 21 April and complement all of those other good things that our Government is doing to support Kiwis at this time.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Speaker, for the opportunity to take a call on the second reading of this Road User Chargers (Temporary RUC Reduction Scheme) Amendment Bill. I just want to acknowledge some members from the other side of House for some of their contributions. Before, we had “Team White”: I thought it was a great contribution from “Team White”, telling us to stop asking the pesky questions. [Interruption] That’s right, stop asking the pesky questions, because, apparently, we now live under a dictatorship in New Zealand—it’s no longer a democracy. In fact, actually, what we should be doing here in this Parliament is simply, whenever the Government announces something, wait for the legislation and then just rush it through and don’t ask any single question. But I did note “Team McAnulty”, the chief whip, did give her a little telling off. She spoke for a little bit longer, because she was, unfortunately, making too many points. Too many points. And that wasn’t to be had. I’m sure that “Team Wood”, the Minister of Transport down at the front, would not have been impressed with that contribution in that way.

But this has been a rushed process, and it comes back to the point that this Government says in the explanatory note of this piece of legislation: that this bill has been brought through to try to offset some of the costs which New Zealanders are facing due to Russia’s invasion of Ukraine and the impact that is having on fuel prices. I come back to my point: the invasion into Ukraine started on 24 February, the Government announced this policy on 14 March, and in-between that time they hadn’t even had a workshop with the New Zealand Transport Agency (NZTA). The workshop happened on 23 March.

So what actually happened was something which happened on 10 March, and we all know what that was: it was a 1News poll which came out and said National was ahead of Labour for the first time in two years, and that Government panicked. They thought, “Well, we better do something. What are New Zealanders worried about? They’re worried about the cost of living. We better do something. We better do something.” They couldn’t acknowledge it as a crisis. It wasn’t a crisis; just a challenge, just an issue. But we had to do something. And so they quickly made an announcement—and this Government is very good at announcements. In fact, they are very, very good at announcements of an announcement. And what we got on 14 March was an announcement that excise would be reduced, and an announcement of an announcement that at some point in the future, people who have diesel vehicles would get a reduction in their road-user charges (RUC). And that is, eventually, what we’re doing here.

But again, I come back to the point: the legislation says that the Minister can, through regulation, change road-user charges if he or she would give 42 days’ notice. Well, we’re debating a piece of legislation here which will give effect to a reduction in RUC rates within only 38 days after the announcement. That’s right: this legislation is only reducing the period of time between the announcement and when it actually comes into effect by four days—four days. The time frame the legislation requires notice be given of a change to road-user charges is 42 days. This legislation will, effectively, cut that by four days and mean that the road-user charge reduction comes into effect 38 days following the announcement. So we’re spending the night here debating this legislation that saves four days. If this Government was actually, truly serious and was actually addressing the cost of living pressures that were building well before the war in Ukraine—well before that time period and, certainly, before the poll came out on 10 March—they would have been thinking and would have been working on this piece of legislation quite some time ago, so they could have actually acted with urgency at the time when they made that announcement.

So the National Party is looking forward to the committee of the whole House, because there are a number of questions which do need to be asked about this legislation. We do need to tease out some of those issues around people who have purchased RUC prior to this coming into force; whether that applies to light vehicles as well as heavy vehicles; the cost of purchasing those overlapped licences—there is a cost involved in doing that, and we need to ask some questions around what those costs are and then what is the burden that therefore puts upon people doing that. I’d like to know whether the Minister is prepared to actually waive that fee for people who happened to get those overlapped licences, because—I understand it may be a small amount of money, but in terms of the actual benefit, if someone’s going to be only benefiting by $130 and the overlapped licence is going to cost them 10 bucks, well, that actually substantially reduces the benefit that they then get through this piece of legislation. And so we need to interrogate that.

We also need to look at the provision in this piece of legislation around the possible extinction, because this piece of legislation—the Minister hasn’t touched on it, but it, effectively, gives the Minister the ability to extend this temporary reduction, at a different rate. And so we need to ask some questions around how that works and what the Government’s intentions are in terms of having that provision in this piece of legislation. Is the Government actually considering extending the reduction in RUC rates? I think that’s something that New Zealanders would like to know and should know, particularly when they are going to potentially be going out and purchasing large numbers of kilometres of RUC when this reduction comes into force. Is it going to be extended for another three months, six months? Will it not be extended? Why is that provision put into this bill and what is the Government’s intention by putting that piece into this bill?

The final point that I’d like to make is that New Zealanders aren’t just focused here on the cost of living, but when we start talking about RUC—road-user charges—and petrol excise, they actually want to see a Government which delivers. And what we’ve seen under this Government is the money which is being paid in billions of dollars every year—billions of dollars every year in road-user charges and petrol excise—isn’t going anywhere. We’ve had Mill Road cancelled. East West Link cancelled. Ōtaki to Levin, cancelled. The Tauranga Northern Link cancelled and then started again. We’ve had Whangārei to Marsden Point cancelled. Cambridge to Piarere, cancelled. All of these roads, important pieces of infrastructure, and the Minister goes on television and he says, “We’ve got an infrastructure deficit in New Zealand.”

Well, I tell you, Minister, it’s your Government which has created it, because you’re spending all this time writing reports, millions of dollars—$100 million at Te Huia. We’ve got $50 million for a cycle bridge, which has been cancelled but he’s still trying to get it across the line if he can. Thirty-five million dollars on consultants for Let’s Get Wellington Moving, which is actually just slowing Wellington down. Tens of millions, hundreds of millions of dollars being wasted, and nothing being built. This Government’s responsible for the infrastructure deficit, which he crows about on the television over the weekend. And so, Minister, I say that the money that New Zealanders are paying into the land transport fund needs to be spent responsibly, needs to be spent wisely, and, actually, needs to deliver the roads and the infrastructure which New Zealanders need. We’re sick and tired of the reports. We’re sick and tired of the money going on consultants. We’re sick and tired of the absolute waste of money that is happening and the announcements of announcements over years.

And so it’s time to actually get things done. In this Government, the National Government, which is coming in next year, we will get things done. So we will support this bill, but we will also ask the questions which need to be asked, to hold this Government to account. Thank you.

GREG O’CONNOR (Labour—Ōhāriu): Thank you, Madam Speaker. During the first reading I invited that member to go and read the bill. He’s had some time to do it, but he clearly hasn’t. Let me just explain what the overlap licence is. It means that if, as one of my Ōhāriu electorate contractors did, he has purchased in advance quite a large number of road-user charges (RUCs), so that he is not disadvantaged the overlap licence will now ensure that they are taken into account and that he will actually get full consideration of what he has previously purchased. There wasn’t anything that existed in current legislation and that wouldn’t have been able to be allowed for.

This is a Government that ensures that when we are going to do something significant which is going to assist people, like my constituent with a large number of diesel vehicles, to work their way through some costs at the moment, we do it properly. Because what we don’t want to do is have the situation where entrepreneurial people, probably smart people, say: “Hey, these things are going to be cheap for the next three months. Why don’t I buy my next two years’ worth of RUCs?” Now, that would be a legitimate thing to do but for this legislation, and this legislation is designed to ensure that won’t happen. So that will bring the fairness that that member seems to be very concerned is not going to be in there.

There will be another reading of this bill tonight, or certainly in this session, so I would invite that member to go away and have a read of the bill so he understands how some of those concerns will be met. I have no hesitation in commending this bill to the House.

MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Speaker. It’s a pleasure to rise in this second reading. Normally, I suppose, in the second reading we have a look at the select committee stage and think about what was said via the public in submissions. Of course, because we are under urgency, we don’t have the ability to do that. I think, as quite rightly, my learned colleague Simeon Brown has pointed out, it’s taken the Minister and this Government so long to bring this bill to the House, you would argue why there couldn’t have been a truncated select committee in some form to get some feedback and to test exactly the drafting of this legislation and whether it’s actually going to deliver what the Minister and the Government proposes it will deliver.

One thing I would say is, New Zealanders have a great sense of fairness, but what they don’t want is a Government that they feel has switched off, is not listening, and is arrogant. And I think, when you look at that poll which triggered this action, it actually said hard-working Kiwis were saying, “We don’t like watching the Government on TV refuting a cost of living crisis.” That’s what that poll said. So I think it is fairly arrogant for Government members to get up in the first reading, and now the second reading, time after time sheeting the cost of living crisis home to international drivers.

It’s very clear domestic inflation is outpacing international inflation. Rents have skyrocketed, housing, you only need to go to the supermarket. There’s a range of factors—and also the thief in the night, which of course is inflation—which directly link to this Government throwing money out there into the economy. So I think it’s fair for Kiwis to hear from the Government members tonight to actually acknowledge their role in the cost of living crisis which has led us here to tonight.

What I want to focus on for the first part of my speech is the acknowledgment that the fiscal envelope of this initiative will be about $350 million, and I think, if I’m right, that includes the cut in the excise tax as well as this road-user charges. Now, if I look at the press release (PR) that I presume was put out by the Minister, “This means we can continue the Government’s record investment into transport infrastructure without having to cut projects.” Really? When you go around regional New Zealand and see roading projects that were cut when this Government came into office, they have the nerve to now say in their PR, “without having to cut projects.” Really? So what about, say, the Woodend Bypass in my electorate? Announced in 2017 as the next road of national significance; this Government came in and cut it.

So one thing we could have got clarity on in the select committee stage is, when it says, “This means we can continue the Government’s record investment into transport infrastructure without having to cut projects.”, does that mean roads specifically? What projects are they referring to? And are we going to have a cast-iron guarantee we’re not going to be told later down the track that because of this $350 million, vital roading projects won’t continue? Because what’s really concerning is when you look at many mainlanders or South Islanders that pay their hard-earned money into road-user charges and then watch this Government gerrymander the Land Transport Fund and their hard-working road-user charges are funnelled off to pet projects in Auckland, nothing winds mainlanders up more. So we are expecting a commitment tonight that projects will be committed to and proceed as well.

The next point I want to raise: clause 42E, and this could have been interrogated more in the select committee stage. How assessments are to be calculated—got the old formula, A minus B times C minus D equals E. Fair to say, that level of mathematics was not probably my strength, although it was a very good school and the Hon Damien O’Connor, I’m sure, would agree with me on that. But what it says, under B, is the distance covered by RUC licences that the RUC collector considers would have been reasonable to purchase for the RUC vehicle during the temporary reduction period. I suppose we can look at that in the committee of the whole House stage, but it would have been good to interrogate that more in the select committee stage. What does it mean when it says, “reasonable to purchase”? I think we don’t have much detail around that because it’s not actually in the formula. And what will be the criteria that our RUC collectors—this role, RUC monitors; more bureaucrats by the sounds of it—will be assessing what was reasonable to order.

Kieran McAnulty: Point of order, Madam Speaker. There’s a couple of areas of concern here. This is a second reading, and so far in the six minutes of this speech, we’ve had debate on a press release, which is not contained in the bill, and we all know that in the second reading, we must debate what is in the bill as it is written. And the second part is now we’ve had two minutes of talking about what should be in the committee stage, and Speakers’ rulings are very clear that while members can indicate a question that they intend to ask, they must not debate it in the second reading.

MATT DOOCEY: Speaking to the point of order. Thank you, Madam Speaker, I’m sure you’re aware that I’m actually speaking directly to the clauses of the bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): I do invite the member to come back to the bill and contain your comments to the second reading. We are going to go into the committee stage pretty soon and you can actually ask your questions then.

MATT DOOCEY: Thank you very much, Madam Speaker. So with that clause 42E, now we will have to think about how we do interrogate that.

The next point I want to raise is the Minister’s reference in the speech for the second reading about the backdating—or what we’re calling an “overlap licence”—and I’ll take his word for it that’s in existing legislation. But what I am surprised at—and of course, that could have been teased out at the select committee stage as well—is I’m not sure it’s actually referenced in this bill. It’s not exactly pointed to. So it would be interesting to understand why it’s not in the bill, and I suppose it does pose some questions for us around the administration of that, the cost of that, and the difference between heavy and light vehicles as well.

So in the second reading, I’ve hopefully outlined, I think, what would have been some of the concerns that would have come out of the select committee stage. It’s fair to say we are in support of this bill at a time of a cost of living crisis. It’s important that many New Zealanders get to keep as much of their hard-earned money as possible. But also, I suppose, part of our role as parliamentarians is to ask those pesky questions. And I suppose it is important, because it wouldn’t be the first time the Government’s brought things in and then, of course, had to do their own Supplementary Order Papers at the committee of the whole House stage, but actually had to bring legislation back in the House for further work.

So I think it is important that we ask the pesky questions and ensure ultimately what we have here in the sense of the draft legislation and the words in this bill, that it actually delivers on what the intent is: to ensure that hard-working Kiwis get to keep a bit of their hard-earned cash. But also expect that this Government will deliver on vital transport and roading infrastructures that we need. And we know in the South Island, there’s plenty of projects that have been cancelled and I look forward to them getting under way. Thank you, Madam Speaker.

PAUL EAGLE (Labour—Rongotai) (remote): Madam Speaker, thank you for the opportunity to talk for the second reading of this Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. Can I just reinforce the comments of my colleagues who have noted the geopolitical and economic context for the rationale that underpins this bill. We know, as I said in the first reading, that these events—one negative, being the war, and one positive, as we recover from the COVID pandemic—have impacted fuel prices across the globe, and of course here in Aotearoa New Zealand.

Two main points that I’ll reinforce. From last Friday, 1 April through to June 30, funding will be provided to local government to ensure that the half-price public transport fares that cover the core public transport services will be implemented. And as I said, it has already proven to be a hit, a winner, and social media tells me that—only in the last few hours—every Wellingtonian who decided to catch a train or a bus, they’re chock-a-block.

To finish, just to reinforce that road-user charges from late April through to late July will be cut by 36 percent across all legislated rates. We’ll hear lots tonight, but we know that the Opposition supports this, and that’s the main point. I commend this bill to the House.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Speaker. It’s a pleasure to speak on the second reading of the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill.

For viewers, I’d like to reference them to my colleague Chlöe Swarbrick’s first reading speech, which I think contains most of the context of why this bill is in place. As many have noted in the second reading, there is a geopolitical context as to why the Government decided to, effectively, subsidise fossil fuels and subsequently bring in this bill to ensure there’s no perverse outcomes for vehicles that use diesel. For us, in the Greens, we’ve been really clear from the outset that, while we really welcome the Government’s intent to reduce the cost of living pressures by, for example, discounting public transport, we feel that a much more effective way of doing this across the board would have been with cash transfers, as opposed to trying to do what this bill is trying to achieve, which effectively is a really knee-jerk way of addressing the cost of living pressures.

While we acknowledge that the cost of diesel and the way that it impacts freight can have a flow-on effect on the cost of items, such as food, it’s really important that, on top of looking at things in this bill to reduce the cost of essential items, the Government also commits to prioritising better funding for the electrification of our freight system, to ensure that the way that we supply essential goods is not so vulnerable to geopolitical shocks.

So the Green Party does not support this bill. We encourage the Government to look at other measures that look after our people and the climate, and so we won’t be supporting it to go to further status. Thank you.

ASSISTANT SPEAKER (Hon Jenny Salesa): I call on Simon Court—he got here just in time.

SIMON COURT (ACT): Thank you, Madam Speaker. Look, if only the roads in Auckland were as free of congestion as Parliament’s halls on a Tuesday night.

The ACT Party will support this bill, including the fact that it’s under urgency, because there’s nothing that the ACT Party wants to do more than return taxpayers’ money, whether it’s through road-user charges or any other form of taxation, to taxpayers. There is a cost of living crisis, and all New Zealanders are hoping and praying to wake up and find more money in their bank accounts.

One of the problems with this piece of legislation, which, unfortunately, the officials have failed to point out, is that there hasn’t been a regulatory impact assessment. In the departmental disclosure statement, there is no information at all about the cost and benefits of this piece of legislation, how it will be implemented, and all of the issues around implementation. That means that transporters—people in the industry—are actually very concerned about how much of their administration time and how much of their business time is going to be spent trying to make claims to get the 36 percent reduction. Why on earth wasn’t a simpler method canvassed?

Actually, one of New Zealand’s transporting representative groups, Transporting New Zealand, has actually suggested a simpler alternative—that is, rather than give a cost reduction on road-user charges, give the 36 percent - equivalent extension of kilometres. Transporting New Zealand, I understand, has proposed that that would be a far simpler way of administering the system.

When you actually look at the way road-user charges are administered in New Zealand, it’s a system that was set up in the 1990s, when it was intended that those who caused wear and tear to the roads—trucks on the road; heavy vehicles, it was presumed—would pay their fair share based on their weight, the number of axles, and the distance travelled. At the time, when New Zealanders understood how important user charges, road pricing, and having the people who used the service should pay for it was, actually, road-user charges seemed like a pretty smart idea and a pretty good way to recover the cost from heavy transport operators using the roads. But, like most Governments, they couldn’t anticipate the future. They only looked in the rear-view mirror to come up with policy that solved problems of the past.

So, very shortly after road-user charges were introduced into New Zealand, New Zealand had the benefit of receiving a large number of light diesel-powered vehicles—what we call utes or sport utility vehicles (SUVs). Some of us are lucky enough to have turbocharged diesel engines in our utes and SUVs, which are actually highly efficient with very high compression ratios. They’re great for towing. They’re great for hill climbs and for sandy and muddy conditions. But, of course, these vehicles, when they’re used on road, have to pay road-user charges.

The actual administration of the scheme was set up for commercial operators: for people hauling logs, hauling rocks, hauling containers, hauling fruit and vegetables and food to supermarkets in large truck and trailers, articulated vehicles, and B trains. The system was set up for them, but it has had to be adapted to cater for the hundreds of thousands, if not millions, of light diesel vehicle operators, and it’s not fit for purpose. The fact that the Government has to come to the House to pass an amendment under urgency to allow road-user charges to be discounted at this time—which, of course, ACT supports because we believe that taxpayers should be able to keep their own money, and so we support that. But if you actually go on the New Zealand Transport Agency website and look at the road-user charges information on how do you pay them and what are they for, the information appears to be from last century, because, actually, that’s when road-user charges were developed and that’s the system that was set up to deal with a problem of the past.

So if we’re thinking about what this legislation is intended to do, well, it’s not even a band-aid. In fact, if it was a band-aid, it wouldn’t even cover a scratch on your pinkie finger, this discount for road-user charges for people who use diesel-powered vehicles. That’s because the cost of living crisis in New Zealand and the astronomical rates of inflation of nearly 6 percent have far outstripped any concession that this Government might have made. But what is heartening, what we should take heart from, and what the ACT Party wants voters to know is that, actually, tax cuts and reducing Government revenue need not lead to a reduction in services, because what the Government and the Minister of Transport have told us is that they will simply reach into another fund—that’s the general taxation fund—to make up for the road-user charge discount.

But that actually brings us to a far more fundamental problem: road-user charges are hypothecated to build, operate, and maintain roads—

Matt Doocey: And rail.

SIMON COURT: —and, it turns out, rail, as my colleague has pointed out—yet only 23 percent of the funds in the National Land Transport Fund are actually allocated to roads. The system is broken.

I have an answer to a written question here that I asked the Minister last year: “What percentage of the 2021 to 2031 NZTA budget is allocated to investment in road construction?” The Minister said, “The estimated funding allocated by Waka Kotahi (NZ Transport Agency) from the NLTF”—the National Land Transport Fund—“is 23 percent.”—23 percent of the money is allocated to roads.

The system is broken. Road users are not getting value for money. Not only are they not getting value for money but they’re stuck on congested roads in major centres like Auckland, Wellington, and Christchurch, and even Dunedin. I’ve even heard that Invercargill has traffic jams. We certainly know that Tauranga has traffic jams. Hamilton has traffic jams. All of this money that is being collected by the Government through road-user taxes, fuel excise duty, and so forth is not being spent on roads. New Zealanders are not getting fair value for money. Now, the roads in Invercargill, it’s fair to say, are wide enough to turn around a wagon pulled by a team of eight bullocks. Actually, that makes those roads ideal for all kinds of urban development public transport.

But look, in all seriousness, the New Zealand road users are being ripped off. They’re having money hoovered out of their pockets through fuel excise duties and road-user charges, and, of course, they’re paying their fair share for carbon emissions through the emissions trading scheme (ETS), that wonderful scheme which captures all of the carbon emitted by New Zealand industries and allows businesses to trade fairly to mitigate emissions, or to pay for their emissions. In fact, the Climate Change Commission said that no other policy at all is required in order for New Zealand to meet its emission targets in 2050, and this Government is collecting so much money from auctioning credits under the ETS.

Remember, every single road user pays for their emissions through the emissions trading scheme. There is a price—an ETS price, a carbon price—put on every litre of fuel, whether it’s diesel or petrol, that New Zealanders use to put in their cars, trucks, vans, utes, and so on. So that’s why ACT says that, actually, we could give the people of New Zealand—the road users and families—a much bigger discount by offering them back their own money. It’s actually a carbon dividend, taking the money the Government collects through the emissions trading scheme and giving each family back $750 a year in a carbon dividend. They’ve paid that money. They should be able to reap the benefit of New Zealand reducing its emissions. That’s what the emissions trading scheme is—it’s a wonderful scheme.

This bill, which ACT supports, will put a very small amount of money back in the pockets of New Zealanders who rely on purchasing road-user charges to operate their diesel-powered vehicles. ACT fears that, like with most Government schemes, it will be overly complex. It will be difficult to administer, and it will impose additional costs on businesses that the departmental disclosure statement has not addressed—has not actually carried out a cost and risk assessment. ACT will support the bill in the hope that New Zealanders get some tax relief from this tax and spend Government.

SHANAN HALBERT (Labour—Northcote): Thank you, Madam Speaker. It’s great to speak for the second reading of the road-user charges amendment bill this evening. Can I start by responding to the previous speaker’s statement—and let me be clear: tax cuts do equate to a reduction in services and not only in health and education, but, let’s be very clear, in transport infrastructure in Auckland. If we reduce revenue, we take projects away just like Mr Brown’s Eastern Busway. So let’s be very clear about that, team—that tax cuts do equate to a reduction in services.

But tonight, as we go over the road-user charges amendment bill, it’s important to acknowledge that fair’s fair, right? Fair’s fair. And what we want to ensure is that the same opportunity, the same savings that we have offered in public transport and petrol are afforded to people that drive diesel vehicles. That’s what this particular bill is about, and we want to afford them that opportunity.

I would love to see more people on public transport. I think half-price fares are a great opportunity to get Aucklanders back on public transport, lowering emissions, and moving people around our city. But I acknowledge that there are a group of people that this particular bill will benefit. We’ve got to ensure that we are supporting everyone. What we agree tonight is, yes, we all agree that people are feeling the pinch, that there’s lower amounts of money that people have to spend on the things that they want to. We’re feeling it in supermarkets and we’re feeling it at the pump. This Government has acted. We’ve made movements to change and this piece of legislation is yet another one.

Yet the Opposition, they want to slow things down is what I’m hearing tonight. They want to say, no, let’s go back to select committee. [Interruption] Mr Brown, let’s go back to select committee and slow things down. This Government’s not about that. We’ve got to get on with transport. We’ve got to get on with infrastructure. I commend this bill to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on the Hon David Bennett.

Hon DAVID BENNETT (National): There is a problem with this bill here tonight which the Labour Party hasn’t recognised yet, and they will soon find out in the next couple of minutes. They are innocent to the issue that they have created tonight that they haven’t even thought about. Look at the genesis of the bill. So the petrol excise tax was removed as petrol prices were getting so high, under the guise of the war in Ukraine; that was the pretext, and so be it. And then they worked out, “Well, actually, what about RUC?”, because when they did the excise tax they never thought about road-user changes (RUC).

Hon Member: They didn’t even know about RUC.

Hon DAVID BENNETT: No. And then it took a while for a few commentators and trucking companies and others to come to them and say, “Well, what about RUC?”, and then they worked out, “Oh, we need to do that.” So they’re doing this legislation. But there is one fundamental problem with this legislation: what happens in three months’ time? In three months’ time, the war will probably still be going, the sanctions on Russia will certainly still be going, and the inflationary environment will still be here. So, suddenly, in three months’ time, are we going to bring excise taxes back in on petrol? Are we going to bring RUC back in on diesel? No way. Because that will create the biggest inflation spike you will see.

Inflation will already be rampant in three months’ time. It’s not going to change. It’s not going to go away. The Labour Party thinks it doesn’t exist. It will still be here in three months’ time. This is not going to stop inflation. But the Labour Party has a massive problem in three months’ time, because do they bring these costs back into the system? If they do, they spike inflation. They will spike inflation in three months’ time. That is the dilemma they have over there. They haven’t thought through the implications of what actually happens in three months’ time. Are they going to actually continue this for six to nine months, or a year, 18 months to get through to an election? Are they actually going to risk an inflation spike in three months’ time? We don’t hear any answers. Where’s the Labour Party now? Where are those Ministers? What do they think of that time? Did you actually asked yourself that question? I bet you they didn’t. They wouldn’t have even thought of that, because they didn’t even think of RUC in the first place. So they would not understand the implications of this legislation.

And when the Minister takes the chair, we’ll be asking that question: what happens in three months’ time?

Hon Member: Well, do it then, not now.

Hon DAVID BENNETT: Well, we will.

Hon Member: It’s not the committee stage.

Hon DAVID BENNETT: I’m giving him a fair warning and he should answer it, and when he has that opportunity, he will. Sometimes you’re going to lay it out there for them to understand before you actually give them the question, and that’s what we’re doing here now. The Minister had no idea. He should have gone out there and understood what was going to happen in three months’ time. He will have no concept of it. There was no planning done by this Government. It is typical Labour Party economic policy.

Hon Member: On the hoof.

Hon DAVID BENNETT: Just on the hoof. No judgment around the effects of it and no planning of how to deal with it.

Hon Member: Do you want to get on with it—do you want this to happen?

Hon DAVID BENNETT: We want it to happen but we want to know what’s actually going to happen in three months’ time. Are you actually going to make sure in three months’ time that people don’t have the issue of RUC going up? Because all the clauses in this bill that talk about the period of time where people can buy RUC are on the presumption that there’s only a three-month window.

There is no way that the Labour Party, their Cabinet, is going to sit down in three months’ time and bring RUC in and excise taxes back to their full level. They can’t, because inflation is going to be out of control then. They’re going to have spent so much in the Budget that inflation is going to be out of control. Then they’re going to whack on another 30c or 40c on excise duty? They’re going to whack on another RUC to farmers and other trucking companies and that? No way. How are they going to do that? That will spike inflation after the Budget and that will destroy their political ambitions. The Labour Party should be worried, because they never thought of that when they did this grand plan and this grand policy. They thought it was a short-term thing where they look like they’re great. But look at the financial implications of what they’ve done. They are going to create a spike in inflation in this country, post the Budget, that will destroy the New Zealand economy, put interest rates up, make people lose their homes. People will lose their jobs. That’s the reality the Labour Party’s walked into.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! The member’s time is up.

KIERAN McANULTY (Labour—Wairarapa): Thank you, Madam Speaker. Just for those at home that were watching that, if it wasn’t immediately clear, the National Party intend to vote for this bill and they recognise that New Zealanders need a bit of assistance at the pump.

Just to correct what was said by the Hon David Bennett—it was total nonsense, utter tripe, what he was saying. It was signalled at the time of the announcement—the very press release that Matt Doocey spent six minutes debating—that this change was signalled at the time. It was signalled at the time that it would require legislative change in order to achieve this. And yet, tonight, we’ve heard, from different National Party speakers, different positions. We’ve heard from Mr Doocey that he’s worried that this bill will cut expenditure on roads. Yet Mr Brown has introduced a Supplementary Order Paper that would increase the cut of that very tax—they’re not even talking to each other. We heard from Mr Doocey that this bill should have gone to select committee. Yet, at the time, the transport spokesperson of the National Party said, “The Government must introduce urgent legislation in the next sitting block.” Here we are, in the next sitting block, bringing through urgent legislation, and what does Mr Brown do? Whinge.

Anybody that is watching Parliament TV tonight will see that all the National Party are doing is trying to appeal to their core voters whilst they’re actually supporting this bill. And if they really wanted to see this get through the House, they would just stop the politicking, stop the filibustering, and let’s just get on with making a change that New Zealanders want to see happen.

TERISA NGOBI (Labour—Ōtaki): Mālō ‘aupito, Madam Speaker. Firstly, can I just correct or address an earlier contribution or kōrero by Mr Simeon Brown around the cancellation of Ō2NL–that claim is incorrect. I can confirm that Ō2NL is going ahead—we call that Ōtaki to Levin—having lived in Levin last year, when Hon Grant Robertson came to the Southward Museum in the Ōtaki electorate and spoke to the Kāpiti Coast Chamber of Commerce and confirmed that the Ōtaki to Levin road will be going ahead. Just like we completed Transmission Gully, just like we’ll be completing Peka Peka to Ōtaki by the end of the year; and then we start Ōtaki to Levin. We’ve also been really lucky that we’ve already started some of the work there and we’ve already started to acquire some of the land. So, fantastic news. Something that I have lobbied really hard for, along with a lot of other people in the Ōtaki electorate. So great news: Ō2NL, I can confirm, will be going ahead.

But to speak again to the bill. Again, this bill is in response to what we know is happening at the moment globally. And, for us, while unfortunately we can’t control Russia invading Ukraine—and my heart goes out to the people in Ukraine at this time—and we can’t control the global COVID response and pandemic, what we can do, and are taking action on, on this side of the House, is what we can control, and that is making sure that we support Kiwis during this time. And that is around this fuller package, and certainly in this bill, is around making sure we reduce the road-user charges by 36 percent, especially for our diesel drivers. And that goes towards the bigger package of not just our 1 April changes, not just the stuff we’ve already built on, like the winter energy payments, the free lunches in schools, but it also means that the half-price public transport and the 25 percent off petrol will go along with this, and put a bit more pūtea in our whānaus’ pockets.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Speaker. You can tell a Government that’s in trouble when their backbenchers start announcing and promising roads. The Minister sits there, ashen-faced, worried about what the next backbencher is going to say. Helen White’s been talking about crime in Auckland Central. This one is the one-term MP for Ōtaki. She’s worried that she’s not coming back in 15 months, and so she’s starting to make policy up on the hoof, and that’s just the way it’s going to be. The ill-discipline and scared reaction of the Labour Party we’ve seen tonight being expressed, if only by the twitchiness of the senior whip, who seems determined—

Hon Michael Woodhouse: Under pressure.

Hon SCOTT SIMPSON: —who’s not only under pressure but seems determined to think that his whip-ly duties extend to this side of the House, and I’m sorry to inform—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! I invite the member to come back to the bill.

Hon SCOTT SIMPSON: Well, I’m responding, Madam Speaker, to interventions made by previous Government members—

ASSISTANT SPEAKER (Hon Jenny Salesa): And now I’m inviting you to come back to the second reading of the bill.

Hon SCOTT SIMPSON: This is a bill that was created as a result of a bad poll—panic-stricken, bad poll. Refusing to concede until they absolutely had to that there was a cost of living crisis confronting the squeezed middle in New Zealand, this Government panicked. So they did and reverted to type, which was to announce an announcement—as my colleague Simeon Brown so clearly enunciated in terms of setting out the time frame, which is important to repeat because we didn’t have a select committee hearing into this piece of legislation, and just because the transport spokesman in the National Party calls for urgent legislation doesn’t mean that it be passed by urgency. It means that it be introduced to Parliament urgently and then go through a normal parliamentary process. But that’s not good enough for this Government. That’s not good enough for this Government. They want to do things on a knee-jerk, panic-stricken basis, just to get a quick media shot.

So aggressions commenced on 24 February in the Ukraine, and that followed weeks of anticipation from international media, energy commentators, all sorts of people, even New Zealand domestic commentators, in the prelude to hostilities commencing on 24 February, were saying if Putin acts in the Ukraine there will be a negative impact on petrol prices and diesel prices in New Zealand. So it’s not like this came as any sort of surprise. So hostilities started on 24 February, and on 14 March this announced change was made, and then it wasn’t until 23 March that finally a workshop was held with the New Zealand Transport Agency to try to figure out what to do and how to handle the issue relating to road-user charges, because it became apparent very quickly that something needed to be done because it wasn’t quite as simple as just simply lowering the price at the pump as it is with petrol. But what intervened between 24 February and the workshop and the announcement on 14 March was, of course, the public opinion poll that came out on 10 March. So this is the time line, and when members opposite join the dots together, as the New Zealand public have so carefully and easily drawn the dots together, they know exactly what the motivation for this piece of legislation is and why it is.

So this is a temporary measure that sooner or later is going to have to be reversed. The ACT contribution from Simon Court was correct. New Zealanders will be grateful for some small mercy of reduction—some small breadcrumbs really; just crumbs from the table of the massive expenditure that Government has spent. But don’t forget, Mr Court, where this money is coming from. This isn’t actually a reduction; this is smoke and mirrors stuff. This money has been diverted from the COVID fund—diverted from the COVID fund. So that’s money that had already been printed or borrowed in the name of our children and grandchildren, who will be paying for it for the rest of their working lives, to fund a temporary announcement to get the Labour Government off the hook following one bad poll. Well, the sad news for the Labour Government is that the polls are probably—I would think and I’m not a betting person; they’re going to get worse. So we can expect a whole lot more of these sorts of decisions in the weeks and months to come.

Members like the one-term wonder from Ōtaki and Helen White from Auckland Central, they’re going to continue speaking out because they know that their only lifeboat is actually to find a voice, to be independent, to actually speak on behalf of real New Zealanders and to actually put aside the speaking notes that come from the Labour Party’s research unit and start thinking and speaking for themselves, because that’s their only hope of redemption.

So the National Party is going to support this legislation because, as our colleagues on this side have so clearly said, we are grateful on behalf of New Zealanders for even a few crumbs that this Labour socialist Government has deigned to bequeath to hardworking New Zealanders who have suffered so long and so hard under the policy agendas of this Government who are going to continue to be the squeezed middle and continue to be suffering the cost of living crisis. We are grateful on their behalf for these small crumbs and this small gratitude that the benevolent Government has shown them.

HELEN WHITE (Labour): I’m pleased to support the second reading of the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. I think that the New Zealand public may be well confused if they were listening to the Opposition at this point. I think I heard David Bennett suggest that in fact this was not a good idea because it would be inflationary. This is a very good idea. I also think I recall that the Leader of the Opposition party talked about a 10c reduction in the payment of fuel—this is a 25c reduction, on average.

And what this Government did was exactly what it announced. When it announced it, it said that the legislation was complex in this area, and it has found a way of doing that and delivering to the public exactly what they need at this time, which is actually cheaper fuel and cheaper transport in the same package. Which means that I am extremely pleased to see that people who buy 1,000 kilometres will save $28, and that will be real money—real money in real people’s pockets. Not hot air, which is what I’ve heard a lot of from the Opposition. I commend this bill to the House.

A party vote was called for on the question, That Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill be now read a second time.

Ayes 110

New Zealand Labour 65; New Zealand National 33; ACT New Zealand 10; Te Paati Māori 2.

Noes 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

Bill read a second time.

ASSISTANT SPEAKER (Hon Jenny Salesa): The Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill is set down for committee stage forthwith. I declare the House in committee for consideration of that bill.

In Committee

CHAIRPERSON (Hon Jacqui Dean): The House is in committee on the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. I will remind members that they are able to participate remotely, so if you are on Zoom and want to take a call, please put the call into the chat. If you want to raise a point of order, you should also use the chat function if you’re coming in remotely.

Amendments have been lodged on this bill, and these are available on the Table and on the House papers page. If we receive new tabled amendments, I’ll advise members so that they can refresh the House page to see the new amendment.

Finally, it would be helpful for members to ask multiple questions, if they have them, of the member in charge during their call.

Clause 1 Title

CHAIRPERSON (Hon Jacqui Dean): So we come first to clause 1. This is the debate on clause 1, the title. The question is that clause 1 stand part.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair, for the opportunity to take a call on this bill during the committee stage. We come to clause 1, which is the title provision, if I am correct, because this bill doesn’t have multiple parts, meaning that ultimately it requires each clause to be considered one by one. The title provision says that this bill is the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. I think the more apparent name for this bill would be the “Road User Charges (Government Panicked at 10 March Poll) Amendment Bill”.

Kieran McAnulty: Point of order, Madam Chairperson. We’re less than one minute in, and this speaker is already in breach of Speakers’ rulings. It’s very clear that a debate on the title is to be really defined, and any contributions and any suggestions of amendments are to be serious and are not to be used as a critique—

Hon Member: Oh, serious?

CHAIRPERSON (Hon Jacqui Dean): OK, all right. Thank you. Yes, I’ve—

Kieran McAnulty: They are.

Hon Member: Are you serious?

CHAIRPERSON (Hon Jacqui Dean): Thank you.

Kieran McAnulty: It says in there.

CHAIRPERSON (Hon Jacqui Dean): Thank you very much—thank you. Simeon Brown.

SIMEON BROWN: Thank you, Madam Chair. The point I’m making here is that as we’ve already traversed through this debate, this piece of legislation has been rushed into Parliament here, not in response to the war in Ukraine, but in response to a poll which came on 10 March, which this Government responded to, panicking, and made an announcement, but failed to actually think through the details of what was actually needed to deliver on that. So I propose that we amend it with a different name on that particular clause. Thank you, Madam Chair.

CHAIRPERSON (Hon Jacqui Dean): I call the Hon David Bennett, but in doing so, I would just advise the committee that the House is in urgency. Members haven’t had a chance to view the bill and haven’t had much notice. There haven’t been any public submissions, so therefore clause 1 will be a more fulsome debate around the bill, but I still will require members to address the bill that is in front of them. They’ve had two readings in which to provide a very full summary of the context of it, and when I’ve been chairing I’ve been listening to that very carefully. So clause 1, yes—fulsome. Please address the bill.

Hon DAVID BENNETT (National): Thank you, Madam Chair. The word “temporary” is what I want the Minister to answer: does he perceive that is for three months, and is it a permanent change or is it going to be a temporary change? If it is a temporary change, we just need a yes or no that in three months’ time, everybody knows that there will be a spike in petrol prices and there will be a spike in road-user charges. That’s the simple question. That is the first question.

The second question is: if it lasts longer than three months, where does the funding come for the transport budget? Is it still going to come from the potential COVID fund, or is there some other way that the Minister has envisaged that this non-temporary bill could actually be funding transport in New Zealand, because we have hypothecation of transport funding in this country?

The third question, which is another simple question, is: if it does go for further than three months and it is going to be funded through hypothecation, what projects will then be cut? What will the Government stop doing in transport to actually make this balance? Does that mean the end of Auckland light rail? Does that mean the end of that wonderful road we heard about in Ōtaki? Does that mean the end of the cycle bridge that we know will come one day under this Government?

What are the answers to those three simple questions? They are very simple questions, and I’m going to repeat them again for the Minister so he doesn’t try and fluff them and not answer them: is this temporary for three months or will it be longer—that’s the first question—the second question is: if it is longer, where’s the money coming from, and the third question is: if the money’s not coming from the hypothecation and the money’s not coming from COVID funds, then what is he going to cut to balance the budget?

Hon MICHAEL WOOD (Minister of Transport): In respect of the debate on clause 1, which relates to the title, the use of the word “temporary” has its usual meaning, which is “not permanent” and is an accurate title for the bill. To the extent that the member raised any other matters of substance, which was to a very small extent, those are matters which would be addressed in the debate on clause 4.

Clause 1 agreed to.

Clause 2 Commencement

CHAIRPERSON (Hon Jacqui Dean): We come now to clause 2, which is the debate on clause 2, “Commencement”. This is a very narrow, focused debate. The question is that clause 2 stand part.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair, for the opportunity to take a call on the second clause in this bill, and the question I’ve got of the Minister, in relation to the commencement clause—it says, I think, that it comes into force the day after the date of Royal assent. However, in clause 4, the actual road-user charge (RUC) reductions don’t become available until 21 April. I’d like to ask the Minister to clarify why there is a difference in those two dates, and why the Minister is not also making the RUC reductions come into force and available to New Zealanders—which is the intent of this piece of legislation—at a much sooner date, such as the day after the date of Royal assent. I have a tabled amendment on the Table which will address this issue in clause 4, but it is, of course, also relevant to clause 2, which deals with the date of commencement.

I think most New Zealanders would be wondering why we’re here in urgency today, passing this legislation, but, actually, the reality is that this is still not going to become available until 21 April. That comes back to my point: this announcement was made and the delivery is going to take 38 days from the announcement when under the existing piece of legislation, the Minister can issue regulations and have the new RUC rates come in in 42 days. It’s only saving four days. We could potentially save some more days and get that reduction out to consumers, out to taxpayers, much sooner if we amended clause 4 on the date at which it comes into force. As I tie that back through to the date of commencement, I look forward to the Minister’s response.

Hon MICHAEL WOOD (Minister of Transport): As the member himself said in his closing comments, his comments mainly related to the provisions of clause 4, which we will get to in due course. What I would say in respect of clause 2 is the fact that the Act comes into effect the day after it receives Royal assent enables Waka Kotahi, as the collector, to very quickly get on and set up the systems that it will need to have in place in order for the reductions to then come into effect shortly thereafter.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. Notwithstanding the questions that my colleague Simeon Brown has asked about clause 4, we’re debating clause 2, which is the commencement, and it says that the Act comes into force on the day after the Royal assent. Now, given that we are debating this bill through all stages under urgency, my question to the Minister of Transport is relating to the presence of the Governor-General and her warning: is she ready and standing by to sign tonight, or is she expecting to wait several days—and if this whole piece of legislation is as urgent as the Government think it should be, what warning has the Government provided to ensure the prompt and efficient Royal assent be given?

Hon MICHAEL WOOD (Minister of Transport): The member for Coromandel, with all due respect, extends his authority a little too far if he believes that either he or I should be able to dictate the point at which the Governor-General provides Royal assent. That will be done through the usual process at Executive Council.

SIMON O’CONNOR (National—Tāmaki): In response to the Minister, who I assume has read the Cabinet Manual and understands that the Governor-General only works at the discretion and the request of Ministers, can he confirm that he, first and foremost, understands this rather important constitutional element—which I’d be concerned if he did not—and can he also—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! The part we are addressing is clause 2, “Commencement”, which comes into force the day after the Royal assent. I would ask the member—could he sit down, please.

SIMON O’CONNOR: I can—I’m just stretching my legs.

CHAIRPERSON (Hon Jacqui Dean): I would ask the member to address clause 2 directly. So bring it back to the bill.

SIMON O’CONNOR: Well, thank you, Madam Chair. Look, I absolutely want to bring it back to clause 2 because it is the commencement, which requires Royal assent. So, very importantly, this is not a commencement based on a date. It is based simply on the act of a Royal assent, which requires the Governor-General, acting in the right of New Zealand—and we have just had the Minister tell the committee of the whole House that the Governor-General is going to make a decision of when she decides to apply clause 2 in commencement. I think it’s important, therefore, for the committee of the whole House to make sure that the Minister understands his duties under the Cabinet Manual and the constitution. So, once again, my question is very simple so that we can understand the application of clause 2 commencement: does the Minister understand that he and Ministers request the Governor-General to do Royal assent—does he understand this very basic constitutional reality? [Interruption]

CHAIRPERSON (Hon Jacqui Dean): Members will be silent when the Chair is going through procedural measures.

Clause 2 agreed to.

Clause 3 Principal Act

CHAIRPERSON (Hon Jacqui Dean): We come now to clause 3, which is the debate on clause 3, “Principal Act”. The question is that clause 3 stand part.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. I’ve got some questions to the Minister, so I’m following the second reading where we were talking about the interventions to lower the cost of living. I wondered whether the Minister had seen any distributional impact analysis that this bill will have, or whether he’s looking to seek for some. I’m also interested in the Minister’s analysis around the impact this is likely to have on emissions in our other local and international commitments to climate change and whether he thinks that this was the most effective intervention to try and achieve what the bill is trying to do regarding the cost of living and the context of the geopolitical conditions.

Hon MICHAEL WOOD (Minister of Transport): I’m not entirely clear that those matters do come within the ambit of clause 3, but, briefly, as a helpful Minister, I would note that, firstly, we would expect there to be a positive distributional impact and, secondly, that in respect of emissions, observations and advice from officials so far has tended to be that fuel consumption in New Zealand is relatively inelastic in respect of price.

Clause 3 agreed to.

Clause 4 Amendments to Road User Charges Act 2012

CHAIRPERSON (Hon Jacqui Dean): Members, we come now to the final debate: clause 4, “Amendments to Road User Charges Act 2012”. The question is that clause 4 stand part.

Hon DAVID BENNETT (National): Thank you, Madam Chair. I asked the Minister three questions earlier and he said he would answer them in clause 4, so we look forward to his answer. The questions are: he said that temporary means temporary, but does that mean three months, or does that mean a longer temporary time than three months? The second question is: where would the funding come from if it is longer than three months? The third question is: what projects will be cut if there is not hypothecation funding after three months?

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair, and thank you for the opportunity to speak on this clause of the bill. I want to bring the debate back here to the question I asked the Minister earlier in relation to this temporary reduction, which won’t begin until 21 April 2022. That’s still about 16 days away from this bill being passed tonight. The question I want to have answered is: why is this temporary reduction, which is being passed in urgency through Parliament tonight—why will road users out there who have diesel vehicles still have to wait another 16 days before they can get a reduction?

I’ve been through this time frame a number of times tonight, but, effectively, by passing this bill tonight, the Minister is simply bypassing the provisions in the bill by four days. He’s reducing the time frame for the reduction of a road-user charge (RUC) by four days. Now, I think for most people out there, they would sort of be scratching their head and wondering whether this Government had actually thought about the implications of their announcement when they announced this on 14 March, and I think the reality is that most New Zealanders realise that they didn’t. So I’ve got a tabled amendment which will fix that. It will bring the new rates in on the day after this bill receives Royal assent. That’ll be great news for taxpayers and people who need to purchase their new RUC. They’ll be able to get this reduction much, much sooner than this Government is willing to do, which is still another 16 days away.

The second question I have is following on from my colleague Hon David Bennett. It is a question around the potential extension of these temporary reductions, and I think this is a very important question because from what I understand from reading this bill, is this bill allows for the Minister to, effectively, shorten or extend the temporary reduction period to a date specified in the order. Now, that is quite concerning by the fact that not only could there be—well, I mean, it could be good news for consumers that it could be extended, but it could also be shortened. Does the Government have any intentions around actually reducing the time frame that they have promised? I imagine they haven’t, but what is their intention around extending that, because I think New Zealanders should deserve some clarity around that, and will that also apply to excise for fuel for petrol users for their vehicles? What are the implications around public transport and the announcements they’ve made around that as well?

Look, there are other questions which I think need to be asked around this as well in terms of the issue regarding the people who may have purchased RUC over the last three weeks since the announcement was made and how that works—I think my colleague Matt Doocey made a number of questions during his contributions—and some clarity around how that will work for heavy-vehicle users and also light-vehicle users; what the cost of the licence—I think it’s the overlap licence—will be, and what percentage of their savings will be used up in actually paying the administration fee, and whether the Government has actually considered waiving that fee during this three-month period to ensure that consumers aren’t, effectively, having some of that benefit taken away from them by the fact that they may have to actually use that particular service in order to be able to benefit from what this legislation is doing. I look forward to the Minister’s answers to those questions.

Hon MICHAEL WOOD (Minister of Transport): I thank the members for their questions. In respect to the questions that relate to the period of the reduction and the date of commencement of the reduction, I would say a couple of things in response. The first is that when the Government made its announcements on 14 March, they were on the basis of a three-month reduction applying across fuel excise duty (FED), road-user charges (RUC), and public transport reduced fares, and that is what is being provided for in this bill. The date of commencement of 21 April allows Waka Kotahi, as the collector, to establish its systems to ensure that that runs out very smoothly.

It’s important to note that there is no disadvantage to RUC users here because they still get a three-month reduction, which is comparable to the three-month reduction that FED users get. Also the overlap provisions—which have been canvassed in debate already—mean that people who purchase RUC licences in the period beforehand have the opportunity to also obtain benefit during this three-month period, so there is no particular disadvantage there.

I note that Mr Brown’s amendment on this issue has a significant flaw and would create an inconsistency in that it brings forward the date with no consideration to the fact that the collector has to set up its systems to run it smoothly. But notwithstanding that, this would create an inconsistency because it would give a greater benefit to people getting the lower RUC rate than people who get the lower FED rate, which has been set for three months.

In respect of Mr David Bennett’s questions, the bill as it stands establishes a three-month period, and that is what the Government intends for at this point. But it provides an ability through Order in Council to extend that if the Government believes that is justified, but the Government has not made any decision in that respect at this stage. What the Government has done has been to back the reductions to FED and RUC with $350 million to ensure that Waka Kotahi continues to have the same level of funding that it enjoyed were these reductions not to be in place.

Hon DAVID BENNETT (National): Thank you, Minister, for those answers, and that clarifies some of that. Just one of the other issues is that it seems like the Labour Party has assumed all businesses, especially in the road-user charges (RUC) case, run at the same time, but some are seasonal businesses—for example, in the primary sector—and my colleague from the ACT Party will no doubt want to take a question on this as well.

An agricultural contractor, for example, has just finished their autumn work, which is large part of their business. Over the winter, they will be doing very little, and so the next few months they will have little contracting use and little use of RUC, whereas over the last six to eight weeks, they’ve done maize silage and other things like that and will have had a massive transport bill. How will that relate? They’re going to get a discount for the period of time they’re not working, essentially, and having to pay huge RUC at the time that they’re most busy.

I think the Minister assumes every truck is on the road every day for 12 months in the year, and there is no continuity of business, or up and down of a business. He thinks it’s all continuous and there’s no peaks and troughs in how a business operates. I think it’s completely unfair for our rural agricultural contractors that they now will actually have been paying huge amounts in RUC, and through their winter period will actually now be, effectively, subsidising the transport network. It’s the same with Fonterra and other players like that. The winter milk is very small compared with the spring need for transport and even the autumn need for transport.

So what about businesses that are actually going to be negatively impacted, because RUC is not something that they may be having as a continuous amount because their business fluctuates? Has the Government given the ability for businesses to have fluctuation and to be able to look at it as a three-month period over a 12-month process, as often happens in other tax cases like income tax and suchlike, or is this going to be a hard and fast “You’ve got no RUC over the winter. Suck it up.” approach by the Minister?

So would he please answer that question—has he even thought of it?

CHAIRPERSON (Hon Jacqui Dean): I was going to call the ACT member, but he’s sat down, so I call Ricardo Menéndez March. If you want the call, just keep calling.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. It pays to stand up nice and early.

Just in the spirit of not filibustering, I’ll keep my contributions brief. I was keen to unpack the assertion by the Minister around the expectations he had around this bill having a positive distributional impact. I wanted to understand what is that being based on, who’s going to benefit from this—is it lower-income people or which groups is he expecting to sort of benefit the most, proportionately—and have there been any other alternative interventions considered that perhaps could have a more equitable distributional impact that, unfortunately, may have not been brought forward by the Government?

Hon MICHAEL WOOD (Minister of Transport): Just addressing a couple of the questions that have been raised by members, starting with Mr Menéndez March. My expectation is that there would be a positive distributional impact, and that is because transport costs will tend to be a higher proportion of the total household costs that are faced by a person or a household on a low income than they are for a person or a household on a high income. Therefore, any reduction in those costs will have a bigger proportionate impact on that low-income person or household.

In respect of Mr David Bennett’s question about seasonal businesses: the bill is as it is written. The reduction applies for the three-month period between 21 April and 21 July, and I would note to the extent that a business is not purchasing diesel through that period or is purchasing a lesser amount of diesel through that period, they are not going to be facing the cost spike that we are observing at the moment that this policy is designed to mitigate.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I have a number of questions just relating to the departmental disclosure statement. I’m just—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! The member, I’m assuming, is about to ask questions on clause 4 of the bill.

SIMON COURT: That’s right, Madam Chair: clause 4. The departmental disclosure statement says there was no regulatory impact analysis undertaken, and what I’m interested in is what is the cost to administer the temporary reduction in the road-user charges scheme, what is the cost to the New Zealand Transport Agency (NZTA), how many additional staff will be required to administer it at the agency, and will they be employed on a fixed term or casual contracts?

What is the cost to the agents who administer this scheme—that’s where people go to buy road-user charges, say, from their local Vehicle Testing New Zealand or wherever they buy them from in their local town—and what information has NZTA or the Minister received about the cost to businesses to participate in this scheme? Just having had a look at the information provided by Transporting New Zealand offering to assist Waka Kotahi develop a simple scheme that’s easy to administer, it seems that what’s being proposed here in the bill is quite different. So my question to the Minister is: what is the cost to business?

So three questions there, and my fourth question is: what alternatives were considered by Waka Kotahi NZTA when coming up with a scheme to give temporary relief to those businesses who need to purchase road-user charges? Thank you, Minister.

MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. As signalled by my earlier contributions, I think it’d be important if the Minister wouldn’t mind tying off just some of the questions around the road-user charges (RUC) collector, whether the Minister thinks there’ll need to be an increase in the number of RUC collectors to facilitate this initiative, and a specific question around new section 42E in clause 4, at “b” in the formula, where it says that the RUC collector considers what would have been “reasonable to purchase”. I think it would be helpful for the committee to have a bit of detail about what will drive that decision. Thank you, Madam Chair.

Hon MICHAEL WOOD (Minister of Transport): In response to a couple of those questions, the administration costs to Waka Kotahi as the collector are estimated at approximately $2.15 million and they will be met by the overall funding envelope of $350 million that the Government is providing. There’ll need to be a small number of additional staff who are employed to oversee the system. I believe that might be in the vicinity of around about eight to 10 temporary staff for the duration.

In terms of costs to businesses, these are very limited indeed. The cost of purchasing a licence depending on the circumstances is around $3 to $7, depending on the type of licence, which is much more than offset by the benefits of the reduction that is in place here.

In respect of new section 42E and Mr Doocey’s question about Waka Kotahi’s ability to conduct assessments, I note that this is something that Waka Kotahi does in the normal course of events within the RUC system, so there’s a well-developed understanding of how they do that, and, really, I think the answer to Mr Doocey’s questions are in the following parts of new section 42D, is it, we’re talking about—new section 42E, which outline the measures that Waka Kotahi will consider. This can include the advice that Waka Kotahi has provided to the public and can include a consideration of the purpose and intent of this piece of legislation in terms of understanding what is unreasonable.

As I’ve said publicly, there is a bit of a common-sense thing here. If someone regularly purchases a 5,000 kilometre licence for a three-month period and then suddenly pops up and wishes to purchase a 25,000-kilometre licence, then there would be a question to be asked.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, just with reference to your previous answers that the cost to administer would be about $2.15 million, has any consideration been given during the development of this proposal—because I understand it’s happened very quickly—to what more fundamental reforms of the road-user charging (RUC) system could be undertaken to simplify it, because it’s clearly become far more administratively complex to manage over the years since it was first introduced in the 1990s. So is there any work being undertaken or any lessons that have been learnt, any insights gathered, from this rapid development of a policy which will help inform the agency as to, potentially, how to reform the RUC system going forward?

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair, and I just want to continue with one last line of questioning around the road-user charges (RUC) assessments. The Minister of Transport has mentioned a common-sense approach being taken. How will the New Zealand Transport Agency be actually determining which people who purchase RUC licences—will they have a number of triggers inbuilt into the systems to actually check that they are being reasonable in their purchases?

I guess my question is: of that $2.1 million, I think, that was referred to by the Minister as to the cost, what percentage of that cost is actually going to be undertaken in terms of this assessment process, with people with clipboards making determinations of whether someone is purchasing too much, too little, or enough? What is “reasonable”, because I think we would all want to say—yes—we don’t want people necessarily going in abusing a reduction but also we also want to ensure that we’re not overburdening people with regulation and people with clipboards.

On that point, I guess the question which we started with—which the Minister hasn’t answered—is around: is the Government intending to extend this? Because if they are intending to extend this by another three months, well, then, the issue of actually going in there and determining whether someone is purchasing a reasonable number of kilometres or not is actually less important because the Government may wish to extend this temporary reduction for some time. So, actually, what is unreasonable under a three-month period may not be unreasonable under a six-month period, and, therefore, a lot of bureaucratic time gets spent only then to have to, potentially, do it again. So I think some clarity from the Government could actually not only be helpful to consumers but also be helpful in terms of just reducing some of that bureaucratic stuff which is going to take place, and, potentially, even save some money for the taxpayer. I look forward to the Minister’s answers.

Hon MICHAEL WOOD (Minister of Transport): In answer to Mr Court’s question: no, the broader future of the road-user charges (RUC) system is not being considered as part of this work. But the Ministry of Transport does have a broader policy programme in place around the broader future of the transport revenue system, including RUC.

In answer to Mr Brown’s question about what the triggers will be for Waka Kotahi to conduct assessments: that will, effectively, be managed by them operationally and won’t be set by this legislation. In terms of the cost of the assessment within the $2.15 million: I don’t have precise information about that, but I understand it’s probably a minority of that, and I have answered the question already about whether the Government intends to extend the three months. The legislation as is put down is for three months. The Government has not at this point considered extending it further.

CHLÖE SWARBRICK (Green—Auckland Central): Just two quick questions for the Minister at this point. The first is: does the Minister consider this to be a fossil fuel subsidy? The second is: can he confirm that in three months’ time, this subsidy will come off?

Hon MICHAEL WOOD (Minister of Transport): No, I don’t consider it to be a fossil fuel subsidy, because, of course, neither fuel excise duty nor road-user charges are actually the cost of the fossil fuel in existence. They are a levy that is, effectively, added to the cost of the fossil fuel that is consumed to fund transport infrastructure.

In respect of the second question, I think—sorry, I’ve just sort of lost the train slightly. I think it was a question about three months again?

Chlöe Swarbrick: Three months—will it go?

Hon MICHAEL WOOD: Is it three months? So, yes, again, this has come up a couple of times in debate. The intention in the legislation is for this to be in place for three months. The Government has not considered extending it beyond that at this stage.

CHLÖE SWARBRICK (Green—Auckland Central): With regard to the Minister’s point about this not being considered a subsidy, it is, of course, the case, however, that these RUC charges, as well as the other charges on petrol, are—from my understanding—hypothecated in the Government’s Budgets. I understand that with regard to this specific legislation change in the amendment and the regulatory changes made with regard to petrol, they have been backfilled with COVID-19 funding, but none the less this would have otherwise been a hole in the Government’s budget which would have, effectively, been the equivalent of a subsidy, given that this is money now being made up from other pots of money within the Government coffers.

Madam Chair, I have two or three other questions for the Minister, and forgive the fact that I am appealing to a number of different resources on my desk at the moment. But it just may be of interest to other members in the committee that Aotearoa New Zealand is a member of what is called the Friends of Fossil Fuel Subsidy Reform, which Aotearoa has been a part of, I might add, since the National Party was in Government and formed a review in 2015. It was established in June 2010, for those who are interested and following along at home. It is an informal group of non-G20 countries aiming to build consensus on the importance of fossil fuel subsidy reform.

So, to that effect, and referring to the kind of mission statement inside of the Friends for Fossil Fuel Subsidy Reform, is the Minister concerned that as New Zealand has historically considered itself a kind of leading member inside of the Friends of Fossil Fuel Subsidy Reform, these moves keep domestic prices for oil, gas, and coal—as have, typically, the other members of the Friends of Fossil Fuel Subsidy Reform—artificially low? I will leave it at that point for now.

Hon MICHAEL WOOD (Minister of Transport): Just briefly in response: no, I don’t share that concern, although I understand where the member is coming from. This policy is being implemented because we do have a real concern about some of the cost of living pressures that New Zealanders are facing. I repeat my earlier comment: to the extent that there’s a reduction here, it’s not actually a reduction on the cost of the fuel—I know it seems like a fine distinction—but it is a reduction on the levy that the Government places on that fuel. I think the contextual point that I can add that might give the member some additional comfort is that of course this is part of a broader package to reduce transport costs, and I’m very pleased and proud that alongside this we’ve also brought in half-price public transport fares, which I think do go some way towards incentivising people to travel in a way that is more climate-friendly.

SIMON WATTS (National—North Shore) (remote): Thank you very much, Madam Chair. Two questions, if I may, in building on some excellent contributions from my colleague Simeon Brown. I refer you to clause 4 and new section 42D in regards to when assessments may be issued. I’m interested in a little bit of context from the Minister just around some of the considerations around enforcement of these assessments, and, in particular, the practicality of enforcement, taking into account such a short period of time at which these changes will be in effect, which has been noted as three months. So that’s the first question.

The second question is in relation to clause 4 and new section 42B. I think this was touched on a little bit earlier by one of my colleagues—probably again, no doubt, Simeon Brown. But in regards to the cost-benefit analysis, or lack of, that was undertaken in regards to this portion, I would be interested from the Minister in terms of what was undertaken in that regard. What assumptions were made, in particular, around how the underlying fuel price would change over the next three months? I’d be interested to understand, particularly, what officials had advised around the forecasted changes to fuel prices and how that allowed the Government to come up with the position of where they’ve set the price in terms of that cost-benefit analysis. So those are the two questions and I’d appreciate a response from the Minister.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, earlier this evening I asked you whether you had considered, or whether officials had considered, alternatives to the methodology that was arrived at for the temporary reduction in the rates of road-user charges (RUC)—in particular, the administration of them. Stakeholders have written, concerned that the RUC system is already excessively complex. It doesn’t lend itself to the administration of discounts. The framework for claiming a discount will be resource-intensive for those businesses which need to claim discounts—particularly for those that have many vehicles, like the kinds of road transport operators who, say, haul food to supermarkets, haul gravel from quarries to roading projects, or even who haul fuel around the country or concrete and other materials for building.

So their concerns were quite valid and other methodologies were proposed, which included not necessarily giving a cash discount of 36 percent but, potentially, extending the kilometres available for road-user charges holders—people who have already paid for kilometres—extending them by 36 percent, because that seemed to be a much more efficient way of administering the scheme, by giving people who have already paid for road-user charges and who have large fleets of vehicles on the road bringing things to shops and building sites and to people’s homes and who are using diesel-powered vehicles a 36 percent extra distance. So, Minister, those are concerns raised by the peak body, Transporting New Zealand. They’re valid concerns and, Minister, could you please respond to those concerns—that is, what alternatives were considered, and is this the most efficient scheme that officials considered could have been delivered?

Hon MICHAEL WOOD (Minister of Transport): Addressing the questions from Messrs Watts and Court, I believe, in respect of the question about how assessments might be carried out—for Mr Watts—I have addressed that now on several occasions to other members. In respect of the question about cost benefit, it doesn’t necessarily fit into clause 4, nor do the questions about what forecast we might have about fuel prices going into the future. I think the best that I can say there is that the advice from officials is that there is still considerable uncertainty, given the international situation, as to how fuel prices will track, and so we believe, as a Government, it’s best to be decisive and provide a good discount at this stage to assist people with those cost issues.

In respect of Mr Court’s questions, my response, really, is that in a very short space of time, we have been able to stand up this reduction, which will be available to the sector. So while there are some complexities, I think the current system will work well and it will provide that 36 percent discount on road-user charge rates to the sector. It wouldn’t necessarily be easier or simpler to do this in a different way like, for example, extending mileage. There would still end up having to be an interaction between those holders of road-user charge licences and the agencies to do that, so I don’t know that there would actually be any efficiency there. I also note that, in fact, most large fleets are generally already on e-RUC, so the administration is automated and carried out by electronic service providers. So it’s often quite a simple and seamless process for them.

CHAIRPERSON (Hon Jacqui Dean): Before I take the next call, I just want to remind the committee again that this is the debate on clause 4, which is amendments to the Road User Charges Act 2012, and while I have already indicated to the committee that due to the circumstances we are finding ourselves in this evening of not having had a select committee process, I will allow fulsomeness and some latitude. None the less, we are considering clause 4, and so your comments and questions must relate to amendments to the Road User Charges Act 2012. I’m pretty sure that those members who are experienced can work their magic and stay within the Standing Orders.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. So, in relationship to Part 4 and the changes to temporary reduction in rates of road-user charges, I just wanted to understand the precedent setting of these changes, in terms of this not being the first or the last time we’re going to see geopolitical events have an impact in the cost of living or fuel. So does the Minister expect to have this bill, basically, set a precedent where every time a similar geopolitical event happens where there’s an impact on the cost of living, we’re relying on lowering the cost of fuel in order to help families meet the cost of living, or does he expect to explore other options that perhaps are more thoughtfully considered and where there is a better impact?

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

CHLÖE SWARBRICK (Green—Auckland Central): Obviously this amendment bill relates to changes to or reductions of road-user charges, which does have substantial impacts as far as Budget goes. So, as far as Budget goes and as far as the Government coffers go, I do have a number of questions outstanding for the Minister. I’d note that, before, the Minister indicated that he has an expectation with regard to distributional impacts. That expectation, of course, exists in the absence of an impact statement with regard to regulation.

So, as far as that goes and also the absence of a climate impact assessment, and noting that transport emissions are the fastest growing emissions profile in the country, and the upcoming emissions reductions plans, I ask the Minister with regard to whether he has any response to a statement from the Friends of Fossil Fuel Subsidy Reform, of which Aotearoa New Zealand is a member. They say—and I quote—“Fossil-fuel subsidies are a poor social welfare policy and counter-intuitively tend to benefit wealthier consumers.” That is, of course, in quite contradiction to what the Minister has just outlined with regard to his expectations, particularly given that the Government announced these reforms, of which this amendment bill is a part, in relation to increased cost of living pressures.

So too I’d like to ask the Minister, with regard to the cost impacts of this legislation, about the alternative interventions that were considered. He himself just referenced in his contribution in response to other members in this part of the debate the fact that, of course, half-price public transport was part of the bundle of announcements. It is, of course, the case that in just doing a back of the napkin calculation, the fossil fuel subsidies that exist inside of that part of the announcement are more expensive than the cost of extending free public transport across Aotearoa for everybody for a year, and not for three months, as this bill would do—

Dr Duncan Webb: It’s not in the bill.

CHLÖE SWARBRICK: —for a 25-odd cent reduction to road-user charges—Dr Duncan Webb.

Pertaining to both of those parts around, particularly, the cost of living, which, of course, this bill was introduced in order to progress, and, also, to the impacts on Government Budget, those are the two questions to the Minister around, particularly, does he agree with the Friends of Fossil Fuel Subsidy Reform that fossil fuel subsidies are a poor social welfare policy and counterintuitively tend to benefit wealthier consumers; secondly, did he consider those alternative interventions of similar Budget impact, noting that there was substantially less money set aside for that half-price fee public transport; and, perhaps, thirdly, on that distributional impacts point, as raised by the Minister just before, given that there wasn’t any front-loaded consideration or officials’ consideration of this, but on the expectations as laid out, will there in future be a review as to those distributional impacts in reality?

Hon MICHAEL WOOD (Minister of Transport): In answer to the questions from the last couple of members: firstly, to Mr Menéndez March, the Government has responded to the circumstances that are in front of it and is providing relief to New Zealanders through these changes, including this bill. He’s asked whether we would do it again in the event of a future event. The answer is that we would have to consider the particular circumstances at that time and come up with the best response.

In answer to Chlöe Swarbrick’s questions, I’ve been reminded that we did receive formal advice from the Ministry of Foreign Affairs and Trade that changes of this nature are not officially considered domestically or internationally to be fossil fuel subsidies. I do stand by my comment earlier on that these changes will be progressive in their distributional impacts. Consider family A on an annual household income of $60,000, who has to spend $100 on their fuel every week, and household B with household income of $200,000 per year, who does the same. The percentage impact on household A’s budget will be more favourable as a result of this policy.

These are the interventions that we’ve considered in the transport space. We have put in place a range of other interventions as part of our 1 April package, but, obviously, they are not a part of this bill or this part.

SIMON WATTS (National—North Shore) (remote): Thank you very much, Madam Chair. I just wanted to go back to section 42C in clause 4 of the bill. I appreciate the Minister has commented before around the fact that the three-month duration, of which this clause kicks in, is not up for debate, but I wanted to understand why that’s the case when there is a significant amount of reporting, particularly out of the US, that actually diesel prices are growing and going up considerably more than non-diesel, and also the fact that these supply chain issues of which ships and other factors that are using diesel are not looking to be returning back to normal levels any time soon. So in regards to section 42C in clause 4, I’m wanting to get more context and comfort around how the Minister has come to the position that, actually, three months is all that is required, particularly in regards to diesel, when internationally all the signals are that things aren’t moving back to normal by that point?

Hon MICHAEL WOOD (Minister of Transport): I’m happy to answer the member’s question briefly. Three months provides a good impact for household budgets, and we’ve applied that consistently across this bill and the other changes to fuel excise duty and public transport. But, as has been noted in this debate, some flexibility has been provided, potentially, to vary that by Order in Council in the future if we determine that was justified.

HELEN WHITE (Labour): I move, That the question be now put.

Motion agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that Simeon Brown’s tabled amendment to clause 4 replacing new section 42A(1)(a) to read “beginning on 14 March 2022” 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 Simeon Brown’s tabled amendment to clause 4 replacing new section 42A(1)(a) to read “beginning on the day after Royal assent” 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 Simeon Brown’s tabled amendment to clause 4 to replace new section 42B(3)(a) 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 Simeon Brown’s tabled amendment to clause 4 to insert new section 42CC 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 Simeon Brown’s tabled amendment to clause 4 to delete new sections 42D and 42E 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.

Clause 4 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Hon Jacqui Dean): Madam Speaker, the committee has considered the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Third Reading

Hon MICHAEL WOOD (Minister of Transport): I move, That the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill be now read a third time.

Can I thank members from across the House for their participation in the debate that we have worked through this evening. Some useful points have been brought out over the course of the discussion. I think the House has conducted itself generally well. You know, from the Opposition, there has been a little bit of a foot in both camps. They are voting in favour of this legislation and I thank them for that. At the same time, they sort of had to put up a bit of a show and try and raise points of opposition. I understand why that is, but none the less, I thank them and other parties who are supporting this piece of legislation.

The reality that is in front of us, I think, was well summed up by the Government chief whip in a contribution that he made earlier, which is that I think that New Zealanders expect that in these extraordinary times sometimes we as a Parliament do just get on with it and do what is needed to support families and communities and households at challenging times. The reality is that this is an extraordinary era that we are living in, and I think sometimes we forget that in the midst of it. We are coming through two years of a global pandemic that has knocked international supply chains around enormously. We are dealing with a massively disruptive international event—that being the abhorrent Russian invasion of Ukraine that is having profound impacts on supply chains, including the cost of fuel around the world. We do know that Kiwis have been feeling the pressure of that, and that is why it was very important for the Government to move forward with our package of changes to assist Kiwi families and businesses with those increased costs caused by the war in Ukraine.

The package includes the 25c reduction to fuel excise duty, which we turned around within about 12 hours of a Cabinet decision on 14 March. It includes the half-price public transport fares which came in effect from 1 April, which have gone down very, very well in towns and cities all around New Zealand. It is reducing costs for those public transport users and is also incentivising and encouraging people to give public transport a go.

The third part of the package was the bill that we have been debating tonight—that is the equivalent reductions to road-user charges (RUC). This will be of significant benefit to households, but, of course, our freight sector, as well, is a very significant user of diesel and therefore road-user charge licences, and we’ll see that benefit going there and reducing costs that go down the supply chain. The benefits do add up over a three-month period. As I outlined in the debate earlier on, a person with a light vehicle who purchases a 5,000 kilometre licence will save around about $135. Now, that’s not everything, but that is a useful contribution for a household that is dealing with some increased costs at this time, and combined with other changes that we have made, that will make a real difference. There is a broader package of initiatives that the Government has brought forward alongside these changes, including the 1 April changes to a range of supports that we are providing to families. When you put those together, they do make a real difference.

I do want to acknowledge the arguments made by the one party in the House that has decided it will not support this piece of legislation, which is the Green Party. While I disagree with their position because I think it is important that we do deal with the very real cost of living challenges in front of people, I do understand where they are coming from, and I just wish to convey confidence that as a part of this package we are sending a clear message through the funding that we have provided for half-price public transport fares, to incentivise the mode-shift—the shift towards more sustainable transport that we know is necessary. And, of course, we are working very hard on the emissions reduction plan that will be confirmed next month as well. So I just wish to acknowledge that point, despite disagreeing with their vote on this particular piece of legislation.

Finally, I do wish to acknowledge and thank officials from the Ministry of Transport and Waka Kotahi who have worked on this piece of legislation. In the course of this debate, we sort of sometimes heard from speakers that we should have just clicked our fingers and jimmied this up one or two days after the Cabinet made its decision on 14 March. In reality, it is not that simple to change a piece of legislation like this. The RUC system, as we heard from Mr Court, does have some complexities. There are around about 200 different rates applying to over 80 different kinds of vehicles. Those rates are currently set through a complex regulatory mechanism. There is a provision in place which means that those regulations can’t be changed in a shorter period than 42 days. For officials to pull together a piece of legislation that deals with that, deals with the questions of transition that we have discussed over the course of this debate, deals with the questions of system integrity, and deals with the questions around equivalence—because we determined that we wanted to make this reduction equivalent to the fare reduction, and that’s not a totally simple or straightforward question, either. For officials to turn all of that around and come up with a well-formed piece of legislation that we will pass into law tonight and that within a couple of weeks will provide a significant reduction to Kiwi families and businesses, that is a good piece of work at a time when they are already very busy because of the Government’s programme, and I do just wish to thank them for turning that around so quickly.

So, once again, can I thank members of the House for their participation in this debate. We only move forward with urgency on issues like this when we really need to, and I thank members for their understanding of that—for the most part—and thank them for their participation in the debate, and say to Kiwis that this is a Government that does hear the challenges that people are facing with the cost of living and does hear the challenges around the increase in fuel costs because of the war in Ukraine. People can see that we are taking action and I trust and hope that this measure will be of assistance to Kiwi households and businesses. Thank you, Madam Speaker. I commend the bill to the House.

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

SIMEON BROWN (National—Pakuranga): Thank you, Madam Speaker, for the opportunity to take a third call on this Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. I do just want to take a note of the Minister’s comments there where he said, “The Government does listen; the Government does take note.” When you read the preamble of this piece of legislation, we’re all told this is a very serious, well-thought-through response to the energy crisis following the Russian invasion of Ukraine. However, when you actually boil it down, this is a panicked reaction to a bad poll on 10 March, which got the Government thinking, “We’d better do something.” And so what they decided to do was an announcement: “We’re going to announce that we’re going to reduce the fuel excise tax, and we’re going to announce that in the future, we’ll make an announcement about a reduction in the RUC rates.” Well, we’re now here, three weeks and one day on from that announcement, finally putting in place legislation to give effect to that announcement, and it still doesn’t come into effect until 21 April, another 16 days from today.

So when the Minister says this is a Government which listens and responds to the issues in front of them, actually what they’re doing is they had to quickly come up with an announcement and then actually work through the detail. And so when the Minister says the Government needed to act with urgency—well, if he really wanted to act with urgency, he would have actually done the work and made sure that this was ready to go when that announcement was made, not a whole three weeks later.

So the National Party will support this piece of legislation. We do believe that New Zealanders need relief from the cost of living crisis that they are suffering under at the moment. And it didn’t just start with the war in Ukraine. This has been building over the last few years with the cost pressures that this Government has been piling on hard-working New Zealanders—rents up $150 a week, the price of fruit and veges up significantly, other cost pressures building over the last couple of years, inflation recorded at the end of last year at 5.9 percent. I see Mr Greg O’Connor over there, rolling his eyes and saying, “Well, actually, no, you’re wrong.” Well, actually, inflation was 5.9 percent at the end of last year, before the war in Ukraine started in February this year. So don’t try and rewrite history. This Government needs to take some responsibility for this cost of living crisis that New Zealanders are suffering under.

So whilst this provides some relief, it doesn’t go the full way to actually help to relieve the pressure New Zealanders are suffering from. National has a comprehensive plan. We want to cut taxes; we want to ensure that New Zealanders can keep more of what they earn so that they can spend that money on the areas where they are facing those cost of living pressures and make those choices themselves. So whilst we will not oppose this piece of legislation, we do propose a much more comprehensive plan which we know will make a real difference in New Zealanders’ lives.

Finally, I do want to note, and I made this point in my second-reading speech, that New Zealanders pay their road-user charges (RUC), and they pay their fuel excise because they want to get stuff done on our roads. They want to see things built, and under this Government, we’ve had an infrastructure deficit which has been caused by this Government coming and cancelling road after road: Mill Road cancelled; East-West link cancelled; Ōtaki to Levin cancelled until the member for Ōtaki re-announced it this evening—and I just want to congratulate her and Helen White for standing up from the backbenches and actually speaking for their electorates for once. Well, no—Tauranga-Northern link cancelled, now they’re restarting it; Whangārei to Marsden Point cancelled; we’ve got Cambridge to Piarere, cancelled. This Government keeps cancelling; New Zealanders keep paying. They want a Government which will deliver; National will deliver. We’ll be back in Government next year, and we will actually get things done and put people’s hard-earned money to good use. We commend the bill to the House.

GREG O’CONNOR (Labour—Ōhāriu): You always know when the Opposition fully support what our Government is doing on this side of the Table, this side of the floor, because they attack everything other than the piece of legislation that’s before us. Because when you get a piece of legislation that has had to be brought to this House to do what Governments do, which is to mitigate the impacts of those overseas effects that we don’t have any impact on. Sorry, Madam Speaker, is there—?

ASSISTANT SPEAKER (Hon Jacqui Dean): Yeah, thank you. The House may be aware that we are experiencing some difficulties with the remote hybrid arrangements that we have. The techies are working hard to resolve them. It just sounds like there might have been a bit of audio spillage coming out of the tech room.

Hon Members: Oh, no.

Hon JACQUI DEAN: I don’t know. That’s my ruling.

GREG O’CONNOR: Madam Speaker, when you speak as much sense as I do, even through some sort of sound upset, it will still come across, I’m sure, as a very sensible piece, a very sensible delivery. So I’m very relaxed about that. So given the time constraints, I will say that we are now mitigating the impacts of overseas events which we have no control over, and we’re ensuring that we minimise the effect of that on New Zealanders. For that reason, I have no hesitation in committing this bill to the House.

MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Speaker. It’s a pleasure to rise on behalf of the National Party in support of the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill.

Let’s be very clear: this bill’s passing tonight in its third reading is a win for the National Party. The National Party got this win over the line for hard-working New Zealanders. The National Party prosecuted the issue of the cost of living crisis when the Government wouldn’t even mention the word. They wouldn’t even mention the word, and here we were, standing up for New Zealanders, speaking on their behalf because we knew things were getting tough for hard-working Kiwis, especially at the petrol pump. The Government has come kicking and screaming, dragging their heels. They wouldn’t even accept there was a crisis, and then, what happened? A poll came from above and spoke to them, and isn’t it interesting that the knee-jerk reaction was tax relief—everything they had denied for days on end.

Let this be a warning, because the public have now a taste for this—for standing up for themselves and asking to keep their hard-earned dollar in the back of the pocket. So this won’t be a one-off, let me predict. The public will start standing up more and demanding that they get more tax relief for the cost of living crisis. I will put money on it. I’ll bet the Minister here a steak and cheese pie that very soon, this Government will address the creep in tax bracket scope that National has been calling for, because the call for tax relief will only grow louder and louder.

It’s fascinating. Here they were, denying a crisis. Here they were saying that they would never give tax relief because, of course, it’s not in their DNA. But, of course, there was a poll and, straight away, a knee-jerk reaction—here we go. Well, I shouldn’t say “straight away”, because, as we’ve traversed over this night, it has been several weeks to drag them, kicking and screaming, into the House to deliver this bill.

I fundamentally disagree with comments in the House tonight that when we say that maybe you could do more in tax relief, then that is incompatible with saying that we don’t want roads cut, because, I’ll tell you what, there’s a lot more expenditure that could be targeted at the expense of tax relief. The light rail, for example—tens of billions of dollars. I’ll tell you what, being a South Islander and a regional New Zealander, nothing annoys hard-working regional New Zealanders more than watching their hard-earned road-user charges going into the National Land Transport Fund and being siphoned off for pet public transport projects in Auckland—and, finally, they’re getting some relief.

But if you want to cut some things, don’t make it the roads. How about the billions for light rail? How about the billions for a bribe for three waters? What about half a billion dollars for restructuring the health system in the middle of a pandemic? They’re the things that need to be cut.

I’ll tell you what, what great news it was, as my learned colleague Simeon Brown said, about the announcement of Ōtaki to Levin tonight? But isn’t there some cynicism with that, because you’d argue why did they delay it for six years if they were going to do it?

Ōtaki to Levin—why has it been delayed, and the nerve of them to stand up and say, “No worries, it’s going ahead.” all because something’s happening. It’s called a poll—it’s called a shift of vote. Everything they’ve rallied against—watch them—will all just blow away in the wind as they finally start listening to Kiwis, because you can’t have your head in the sand too long and be arrogant like this Government is. New Zealanders were saying to them that things were getting too expensive, but those members couldn’t say the word “crisis”. They were in denial until we had that poll.

So it is a good thing—and good on them—but, in fact, this wasn’t their idea. It wasn’t their decision. It was forced upon them.

I acknowledge the other parties in the House that are voting for this bill tonight, because it’s a good win for the Opposition. What has been good about it as well is those things we got accused of doing tonight: the pesky questions. Good on the pesky questions, because that’s our job as parliamentarians. We stand up and we ask the hard questions. It’s not fun in Opposition. You don’t get to do much, because that’s the job of the Government. That’s why everyone wants to be on the Treasury benches. But, I’ll tell you what, you don’t walk away because it’s tough. You stand up and you raise the issues, and that’s what the Opposition has done with this bill.

That’s what the Opposition has done tonight, and, I’ll tell you what, the Opposition has got a taste for it now as well, just as much as the country has. Those members can sit there tonight and say, “Oh, job done. We’ve reduced the road-user charges for three months and cut the excise for three months and given a few bus tickets out.”, but they know as much as we do on this side of the House that things are a lot more in train, aren’t they? This is all where it’s going to go, because Kiwis have now a taste for this. As the Hon David Bennett said tonight, “Really? Is the Cabinet going to meet and decide to increase this?” That will be fascinating, with all the income cost pressures we have and inflation.

One thing I will leave the House with. I started with a quote in my speeches in the readings earlier on from Brad Olsen, who said, “Inflation isn’t an offshore problem that New Zealand is caught up in.”, because we all know it’s not, is it? The issue here in New Zealand is domestic inflation. You only need to see the last quarter of 2021 to know that. But what I will leave the House and the Government with is another quote, from independent economist Cameron Bagrie. What he said was that “Now is not the time for a big spending 2022 Budget. It will only add to the excess demand and inflation.” Thank you, Madam Speaker.

PAUL EAGLE (Labour—Rongotai) (remote): Thank you, Madam Speaker. It’s a pleasure to be talking on this, the third reading of this amendment bill. Can I say that it’s absolutely a win for all New Zealanders. There seemed to be some confusion in the last speech, around who the winners were: it’s all New Zealanders—it means that if you’re driving a car, a diesel-powered vehicle, or catching a bus, you’re a winner under this plan. I want to acknowledge the transport Minister for his vision, and the Government executive.

Also, I just want to correct one other thing. It was halfway through last year—so I encourage the Opposition to catch up on when things are announced: the Ōtaki to north of Levin expressway. So catch up, mate, by about nine months, and you’ll be back on to it. But never mind; I’m not one to remind people of their tardiness, but tonight is the night for something for the first time, as always.

So can I just say that this will impact on people’s pockets and make a positive difference. I commend this bill to the House.

RICARDO MENÉNDEZ MARCH (Green): I rise on behalf of the Green Party, unable to support the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. It’s been really interesting throughout this urgent process hearing members of the Opposition describe this bill as a knee-jerk reaction to the increase in the cost of living as if our communities haven’t been suffering the effects of the inequality crisis for some time now.

We’re disappointed that despite multiple reports such as the Welfare Expert Advisory Group that is now four years old recommending interventions to address inequality and the cost of living, what we’re seeing is a subsidy to fossil fuels in order to try and address the increase in fuel price as a result of the war between Russia and Ukraine. We’re concerned that this is setting a precedent when we’re seeing inflationary impacts locally, and what we’re calling on the Government to do is to explore other measures that are good for people and the planet, such as making public transport fully free, as well as improving the resilience of our freight infrastructure so that we’re not so vulnerable to these sort of geopolitical events.

We’re keen to see the study that will be conducted after to assess the impact of this bill. And we take the Minister at his word that this will have a positive distributional impact. We hope to see the extent of this and we’ll keep campaigning to ensure that future measures to address the cost of living are ones that genuinely benefit those doing it the toughest. Kia ora.

SIMON COURT (ACT): Madam Speaker, thank you. This problem is a cost of living crisis. This bill won’t solve the cost of living crisis. Simply reducing road-user charges on diesel-powered vehicles for a few months is a short-term solution. The underlying problems that the ACT Party is asking a Government to solve—and we don’t have any hope that this Government will solve it, but a future Government involving ACT will—are the underlying issues that are causing so much cost pressure on energy: long-term increases in the cost of energy—not just liquid fuels like petrol and diesel—like natural gas that powers industry, that heats our homes, that delivers electricity to business and communities; energy that makes sure that communities can thrive and that we can have a healthy economy.

The underlying issues identified by the New Zealand Infrastructure Commission, which said in their report that a long-term problem with transportation infrastructure—a lack of investment and transportation infrastructure—has meant that house price inflation is 70 percent higher than it should have been between 1978 and 2018. And this Government has cancelled roading project after roading project—it’s Mill Road, it’s the East West Link: a project specifically designed to get heavy vehicles off local roads.

These are the underlying problems that are causing a cost of living crisis, a housing crisis, and an energy crisis—and this short-term measure will not help. The ACT Party will support this bill because it involves reducing taxes and giving money back to hard-working Kiwi families and businesses. However, this is not a long-term solution; it’s barely a short-term solution.

SHANAN HALBERT (Labour—Northcote): Thank you, Madam Speaker. It’s my honour to speak on the third reading, this evening, of the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. We’ve heard the discussion this evening about the need to support families with the cost of living—that’s what this particular piece of legislation going through the House this evening is all about. The community that speaks to me, that tells me that they are struggling: this will make a difference for them. Alongside the halving of public transport costs, the work that this Government is doing, we’re taking action now. I commend this bill to the House.

Hon DAVID BENNETT (National): Thank you, Madam Speaker. The National Party supports this bill, as we’ve seen in the House tonight. We have some questions around the long-term effect of it and what the implications will be on the Government, and we note that they will probably have to continue this process through a future of longer than three months, but I look forward to it progressing through the House. Thank you.

TERISA NGOBI (Labour—Ōtaki): Just a quick call, to end this third reading of the bill, to say that, again, we support New Zealanders, and part of that is this bill, supporting New Zealanders at that pump, to be able to live well, put a bit more pūtea in their pocket. Hopefully, we can get this bill through quickly so we can start to do that as soon as we can. Ngā mihi.

ASSISTANT SPEAKER (Hon Jacqui Dean): Members, the time has come for me to leave the Chair. The House is suspended until 5 a.m. tomorrow.

Hon Members: 5 a.m.?

ASSISTANT SPEAKER (Hon Jacqui Dean): What did I say?

Hon Members: 5 a.m.

ASSISTANT SPEAKER (Hon Jacqui Dean): Oh, 9 a.m.—that’s much better.

Debate interrupted.

Sitting suspended from 9.55 p.m. to 9 a.m. (Wednesday)

TUESDAY, 5 APRIL 2022

(continued on Wednesday, 6 April 2022)

Bills

Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill

Third Reading

Debate resumed.

Hon JACQUI DEAN (Assistant Speaker): The House is resumed. When the House rose last evening, we were considering the third reading of the Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. The next speaker is one from the National Party.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Speaker. Well, for those keen and enthusiastic viewers and listeners to the radio and who are watching this on television, let’s do a little bit of a refresher about what happened last night. So the Government put the Parliament into urgency to pass under all stages this Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill. The purpose of this bill is actually to cover up a panicked poll result decision made by the Government after the public poll that came out on 10 March. They’re using as the excuse—and this is all about trying to backtrack and sort out how to give effect to the lowering of prices for people who use diesel in their vehicles. And the way that excise and revenue is collected on diesel vehicles is by way of a road-user charge, and the problem for the Government was that when they made the announcement back on 14 March, they hadn’t done the homework. They hadn’t done the prep work, and decided that, yes, it’s very easy to take 25c a litre off the price of petrol at the pump because that’s nice and easy, but it’s far more difficult to organise a structured way to discount the road-user charges for people who buy kilometres for their road-user charge fee or levy or tax—whatever you like to call it—in advance. And then there’s the added problem of, how do you stop people gaming the system, if, indeed, you want to stop people gaming the system? So these were issues that the Government needed to take into account.

They were using as an excuse for this not the TV1 poll that showed National ahead of Labour, which I think was their reason and rationale for making the announcement, but they’re using the Ukraine-Russia conflict that’s going on. Now, hostilities started on 24 February, but there had been weeks, if not months, of advance speculation by commentators all around the world, including here in New Zealand, who said that this conflict, if it took place, would likely have a very negative effect on oil prices, and that prices of oil and diesel would almost certainly go up. So a Government would have had to have been blind to international commentary on these matters for not understanding that a crisis was going to come if Putin actually came good on his threats. Ultimately, he did, and hostilities commenced on 24 February.

Then, after the poll, the TVNZ poll on 10 March, the Government very hastily made a decision and an announcement on 14 March that they were going to drop the price of petrol at the pump to help the squeezed middle in New Zealand, who are so impacted by the cost of living crisis and the rapidly rising price of petrol, but also they were going to reduce the price of diesel by the same amount. And the problem was that it was much easier with petrol than with diesel, and that’s why this legislation is placed.

But to tell people who are watching this debate this morning what really happened and to give an insight into how disorganised the Government was and how keen they were to make the announcement—because, remember, this is a Government that’s very good at announcing announcements; absolutely hopeless, however, on delivery; hopeless on follow-through; very good on being empathetic but hopeless on delivery and actually doing anything. So an announcement was made on 14 March. It was not until 23 March that the New Zealand Transport Agency ended up actually conducting a workshop on how to implement the reduction in diesel road-user charges. So that gives an insight into the difficulties and the challenges that the Government had, and how again—just once again—they’ve been caught out. So keen to make an announcement but so hopeless on delivery.

So, notwithstanding all that history, we do support this legislation. We support it because this is a small, albeit temporary, respite for some road users, particularly those who are using diesel to fuel their vehicles and also the wider issue of temporary relief for petrol users as well. But, sooner or later, the temporary nature of this legislation and the temporary nature of the change to petrol prices will have to come to an end. And that’s going to be an even bigger challenge for a Government that has lost sight of the squeezed middle, has lost sight of what the impacts of the cost of living crisis are on New Zealanders, and simply doesn’t have solutions when we are in a situation with the highest inflation in 30 years.

HELEN WHITE (Labour): It’s a pleasure to speak last on this bill. This is a very sensible response to an oil shock. It’s part of a suite of changes which include half-price fares and an immediate reduction in petrol amounts, and this was the trickiest part and it’s been done swiftly and efficiently. It’s a little bit of a pity that it’s been held up by an Opposition that delayed the passage of this bill last night and continues to be oppositional despite, from what I understand, supporting the legislation. I think that tells its own story to the New Zealand public. I commend this bill to the House.

That the

Ayes 110

New Zealand Labour 65; New Zealand National 33; ACT New Zealand 10; Te Paati Māori 2.

Noes 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

A party vote was called for on the question,Road User Charges (Temporary RUC Reduction Scheme) Amendment Bill be now read a third time.

Bill read a third time.

ASSISTANT SPEAKER (Hon Jacqui Dean): Urgency is concluded and the House stands adjourned until 2 p.m. this afternoon.

The House adjourned at 9.07 a.m. (Wednesday)