Tuesday, 12 April 2022

TUESDAY, 12 APRIL 2022

TUESDAY, 12 APRIL 2022

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

SPEAKER: I have asked Marja Lubeck to say the prayer in Dutch today.

MARJA LUBECK (Labour): Almachtige God, wij danken u voor de zegeningen die ons geschonken zijn. We zetten alle persoonlijke belangen opzij, erkennen de Koningin, en bidden om leiding in onze beraadslagingen, dat wij de zaken van het Parlement met wijsheid, rechtvaardigheid, barmhartigheid en nederigheid mogen leiden, voor het welzijn en voor de vrede van Nieuw-Zeeland. Amen.

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

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

SPEAKER: No petitions have been presented. No bills have been introduced. Ministers have delivered papers.

CLERK:

West Coast DHB Annual Report 2020/21 and Statement of Performance Expectations 2021/22

Nelson-Marlborough DHB Annual Report 2020/21, Annual Plan incorporating Statement of Performance Expectations 2021/22

Social Workers Registration Board Statement of Performance Expectations 2021/22.

SPEAKER: I’m just waiting for the House to settle on both sides. Those papers are published under the authority of the House. Select committee reports have been delivered for presentation.

CLERK:

Report of the Finance and Expenditure Committee on the Standard Estimates Questionnaire 2022/23

report of the Foreign Affairs, Defence and Trade Committee on the International treaty examination of the New Zealand - United Kingdom Free Trade Agreement

report of the Regulations Review Committee on the Complaint about the Local Government Members (2021/22) Amendment Determination (No 2) 2021.

SPEAKER: The reports are set down for consideration.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. 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. In particular, I stand by this Government’s decision to bring forward a reconnection to the world, to allow Australian friends, whānau, and tourists to re-enter New Zealand from 11.59 p.m. tonight. This comes just in time for Easter weekend and the school holidays, and will help accelerate our economic recovery from COVID-19. This will be a welcome boost to sectors who have done it tough as we welcome Australian tourists back to our bars, restaurants, and tourism hotspots. With the recent removal of mandatory My Vaccine Pass requirements, the expansion of capacity limits, case numbers falling daily, and our reopening to the wider world on 1 May, New Zealand is once again a prime destination for international tourists. The past few years have been incredibly tough, not least for our tourism sector, but we’re primed to welcome old friends and family back.

Christopher Luxon: Is it a good outcome that under Labour, serious assaults have more than doubled and violent crime is up over 20 percent?

Rt Hon JACINDA ARDERN: Firstly, if any Government of the day is wanting to respond to crime generally, you would expect them to have the strongest possible police force and police numbers. This Government has been restoring police numbers since the last term of the National Government. We have an additional 1,400 police, an additional $450 million in funding. We have an additional 700 police working on organised crime, an extra 350 police on the beat in Auckland. Alongside that, additional powers like firearms prevention orders and, of course, the seizure of firearms, not least the 60,000 we’ve taken off the street through the gun buy-back. When it comes to crime as it relates to population growth, generally we’ve seen relatively static numbers across a period of time. When you look at what has changed around violent crime reporting, it is difficult to make comparisons. Since 2018, there has been a change in some of the reporting that is available for family harm, and that is actually the area where you’ve seen some of the greatest increase, and we want people to report family harm. So, when you start comparing, it is difficult to draw those comparisons, but overall, you’ve seen a relatively static rate against population growth.

Christopher Luxon: Does she believe 50,000 more Kiwis on jobseeker for longer than a year and 36,000 more children growing up in a benefit-dependent home is a good outcome for the extra $1.6 billion a year being spent under Labour?

Rt Hon JACINDA ARDERN: Again, I always like to come back to our record and the facts, and we have a lower share of working-age population on benefit in December 2021 than in the global financial crisis: 11.7 percent compared to 13.1 percent. We have 96,000 fewer people than Treasury forecast receiving a main benefit in January 2021, and more than 100,000 more people are employed now than they were 12 months ago. We have just gone through, and are in, an economic crisis. It is important that we have adequate safety nets for people, but at the same time, we also have the programmes in place that are supporting people into work, and the facts speak for themselves.

Christopher Luxon: Was delivering no improvement in access to mental health services in five years a good outcome for spending $1.9 billion?

Rt Hon JACINDA ARDERN: I would be really interested in what the member considers no action, when we have 270,000 sessions delivered to date by more than 300 general practice sites covering 2 million people. That did not exist before this Government. We have 14,000 people every month getting support through that service. That did not happen before this Government. We have funded counsellors across 164 schools, on top of the counsellors in schools programmes many schools already have. We have front-line mental health services like Piki. We’ve invested in new and existing mental health and addiction facilities. We were able to re-establish the Mental Health Commission and we’ve expanded Mana Ake to five different DHBs. I call that outcomes.

Christopher Luxon: Is it a good outcome that every single national performance measure for the health system, including emergency department wait times and cancer treatment, have got worse under Labour?

Rt Hon JACINDA ARDERN: And this is where I find it woeful to have the National Party, who invested nothing—nothing—in health capital over their time in office. When we came into office—need I remind the member—we had mould and waste running down the walls of some of our hospitals, there was a woeful lack of investment, we had DHBs struggling. And that is why, on this side of the House, we have introduced health reforms to fundamentally change health services in New Zealand, and I look forward to the member’s support of those.

Christopher Luxon: Was Auckland DHB CEO Ailsa Claire correct when she wrote to staff about that half-a-billion-dollar health restructure set to begin in less than three months, telling them, “There’s a lot of work and planning to do as to what this means for DHBs. So please don’t feel you’re missing out on knowing something: this work simply hasn’t taken place yet”?

Rt Hon JACINDA ARDERN: What you’ll find from the health workforce is broad support for exactly what we are doing to fundamentally reform the health system in New Zealand. No one, I would hope, in this House would want to see a situation where, year on year, we have continually increased the health budget to record levels but we are not seeing health services universally improve across the country. We have a healthcare postcode, where depending on where you live sometimes determines the type of service you receive. And worse yet, we have inequitable outcomes where if you’re Māori and Pasifika, your health outcomes are worse. We as a Government are making changes to the system to improve all of that.

Christopher Luxon: Is it a good outcome that 760 people in the Southern DHB have waited a year or more for an operation, or does she agree with DHB chairman Pete Hodgson’s assessment of the health system under Labour, that “The social contract has been broken. They paid their taxes, they’ve been entered into the system, and it didn’t do them a blind bit of good”?

Rt Hon JACINDA ARDERN: Again, someone supporting the health reforms that we have put in place—also a member in Pete Hodgson, who was closely supportive of the Dunedin Hospital project, another example of health infrastructure that is under way under this Government. There are a number of examples of why we need to reform the system. If the member wishes to continue to read them out, I will once again remind him that every single one is proof of why we need change.

Question No. 2—Finance

2. 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): ASB released its Regional Economic Scoreboard for the December quarter yesterday, and the member asking the question will be pleased to know that Canterbury held on to the top spot after another strong performance, followed by Manawatū-Whanganui and Northland, who retained second and third place respectively. Taranaki was the biggest mover, rising nine places to fourth, driven by non-residential construction. The report noted employment and wage growth hit new highs. Unemployment fell to a record low 3.2 percent, although it did vary across regions. ASB economists have said that “We’ve also seen impressive wage growth over the past 12 months, with the scope for further acceleration this year.” While these results are promising, ASB said that there are challenges from rising inflation and supply constraints, both due to global factors. While economic growth is forecast to slow this year, the resilience of the economy and our strong fiscal position means we are in a good place to support New Zealanders through this as we deal with these challenges.

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

Hon GRANT ROBERTSON: The New Zealand Institute of Economic Research’s (NZIER) Quarterly Survey of Business Opinion was released this morning and showed that business confidence had stabilised in the March quarter, albeit at lower than long-run averages. Firms reported further weakening in their own activity but remain optimistic of recovery in the June quarter. They remain positive about hiring, with a new 23 percent planning to hire in the next quarter, while they have pared back some of their investment plans. The NZIER said the survey showed the damage that the global pandemic is continuing to inflict on the economy. There is going to be ongoing volatility as businesses work through inflation pressures caused by global factors. We will continue to support them, New Zealand households, and the rest of the economy as we ease the restrictions and open borders to skilled workers and tourists that will help our businesses recover and rebuild.

Dr Duncan Webb: What reports has he seen on business investing in the economy?

Hon GRANT ROBERTSON: The overseas merchandise trade figures for February show businesses are continuing to invest in the economy and New Zealand’s recovery. Imports of machinery and plant rose 32 percent to $745 million in February 2022, compared with the same month a year earlier. For the February year, imports in machinery and plant rose 29 percent to $10.3 billion. While the environment does remain volatile and uncertain, these kind of investments are critical in improving our productivity right across New Zealand.

Question No. 3—Education

3. CHLÖE SWARBRICK (Green—Auckland Central) to the Minister of Education: Is he confident students across Aotearoa New Zealand are receiving the level of support they deserve to engage in tertiary education?

Hon CHRIS HIPKINS (Minister of Education): Thank you, Mr Speaker. Throughout my working life, I’ve consistently advocated for a better deal for tertiary education students, including increases in the level of financial support that they receive. One of our first actions in Government was to make a person’s first year of tertiary study completely free, and we’ve increased the rates of student support available significantly while we’ve been in Government. Am I satisfied that there are no further improvements that need to be made? No, I’m not. And I’ll continue to advocate for a better deal for students. But we were clear coming into this term of Government that, in the context of COVID-19, our two most immediate student support priorities for this term would be the Apprenticeship Boost scheme, and making vocational education free through the Targeted Training and Apprenticeship Fund.

Chlöe Swarbrick: What is the average amount of support that the 16 percent of 380,000 students in this country who are eligible for student allowance receive per week?

Hon CHRIS HIPKINS: I can give the member a bit of a breakdown: in 2020—which is the most recent full-year statistics that we’ve got available—33.6 percent of all full-time domestic students received a student allowance. To break that down further, $588 million was paid out in allowances, including the accommodation benefit, and the average payment of that was $9,582—an average weekly payment of $337.15. Of course, the rate of allowances paid varies quite significantly from student to student.

Chlöe Swarbrick: What is the average amount of hours full-time students work on top of their 40-plus hours of study?

Hon CHRIS HIPKINS: We don’t have direct measures of the hours worked by students, only the income that they have earned, and from that people can extrapolate roughly what they think the level of hours might be. The 2021 study that the Ministry of Education did found that of all full-time students who studied, 52 percent didn’t work, 29 percent worked in low intensity work, 12 percent worked in moderate intensity work, 5 percent in high intensity work, and 2 percent in very high intensity work. In terms of how they are defined, they would need to be earning less than $1,080 before tax per month to be deemed low intensity; moderate is $1,920 per month; high intensity is $3,315 per month; and very high is greater than that.

Chlöe Swarbrick: How many students were denied support from their institution’s hardship fund for learners in the last two years of the pandemic?

Hon CHRIS HIPKINS: We don’t actually have a breakdown of the number of students that have been denied support through those funds, because those funds are administered by their institutions. But I would note, as someone who more than 20 years ago was involved in administering some of those funds, it’s never been the case that everybody who applies for support through those funds has received it.

Chlöe Swarbrick: How much would it cost to reinstate post-graduate student allowances, as had been promised in the last term of Government?

Hon CHRIS HIPKINS: I don’t have an up-to-date estimate of the cost of that. Going back to about 2019, I think, the cost was somewhere around $25 million a year. It would be more than that now though, because the overall rate of allowances has increased.

Chlöe Swarbrick: Is he concerned by a University of Otago survey which shows students are more than twice as likely as the general population to be in damp and mouldy homes, with 79 percent reporting being energy insecure and shivering inside of their home?

Hon CHRIS HIPKINS: Yes, I am, and actually it’s one of the reasons why I’m very proud of the work that the Government has been doing since we became the Government to ensure that the quality of our rental homes is improved. I particularly note—again reflecting on some historical experiences—that in some of those cities that have a higher proportion of tertiary students the rental accommodation can often be of the lowest standard, and that isn’t acceptable.

Chlöe Swarbrick: Does he consider it part of the tertiary education strategy for “barrier-free access” to education for universities to have a qualification completion rate of 52 percent last year for Māori and Pasifika students, with many dropping out due to hardship?

Hon CHRIS HIPKINS: No, I don’t regard that as acceptable. We’ve been working with the universities very closely, particularly through the Tertiary Education Commission, to look at how we improve those retention and attainment rates for our Māori and Pacific students. This is a long-standing problem—Māori and Pacific achievement rates, overall, the trend has continued to improve, but certainly not fast enough for me. I would like to see it continue to improve much faster than that.

Question No. 4—Finance

4. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he agree with Kiwibank economist Jarrod Kerr that “wage growth is not keeping up with the rapid rise in living costs”; if not, why not?

Hon GRANT ROBERTSON (Minister of Finance): As I’ve said a number of times in this House, I agree that the current cost of living increases driven by what Mr Kerr classes as “offshore-originated inflation” are putting significant pressure on New Zealand households. In terms of wage growth, I would note that average wage growth under Labour has been greater than Consumers Price Index inflation, meaning Kiwis are better off now than they previously were. But we do acknowledge that there is significant pressure. That’s why we’ve taken action to buffer the impact of fuel prices on households and have brought in a range of measures to support those on low and middle incomes—a far better policy than untargeted tax cuts that disproportionately benefit those on the highest incomes, as favoured by the member.

Nicola Willis: Well, can he confirm that in the past year, New Zealand’s non-tradable inflation—that is, price increases for those goods and services whose prices are largely determined here in New Zealand rather than by international markets—soared to 5.3 percent in the December quarter, and does he accept that Government decisions have an impact on inflation?

Hon GRANT ROBERTSON: Those are indeed the numbers that the member quotes, but I’d invite her to turn the page over in the Kiwibank report that she used in her original question and see this slide that is entitled “offshore-originated inflation”, and it talks about Russia’s invasion of Ukraine, petrol price impacts, lockdowns in China, and other supply chain issues—offshore-originated inflation.

Nicola Willis: Why does he continue to reject any responsibility for New Zealand’s worsening economic conditions when a Kantar survey released today shows half of small businesses see Government leadership as a top reason for their lack of confidence in our local economy?

Hon GRANT ROBERTSON: I refer the member to Xero’s small business survey data—data on the basis of a survey of small businesses—which revealed rising wages and jobs in the small business sector, as released last week. There is no doubt a number of small businesses have done it tough in New Zealand over the past couple of years. It’s one of the reasons why the Government has supported them to the tune of around $24 billion worth of support.

Nicola Willis: Well, is he concerned that a Kantar survey of small and medium businesses shows the majority of small to medium sized enterprise owners and managers say they are dissatisfied with the performance of the Government over the past 12 months, and does he intend to change anything in response to their concerns?

Hon GRANT ROBERTSON: We always listen to small businesses and work closely with them to support them, as we have over the course of the last couple of years. What I do know is that in New Zealand small businesses have received a greater degree of support than they have in other countries around the world, and that small businesses are getting on with the job now, looking forward to tourists returning, looking forward to more overseas labour being available to them.

Nicola Willis: Does the Minister agree with BNZ’s assessment today that business confidence is shattered, uncertainty is very high, and leading indicators of growth are weak, and if so, what will he be doing to reduce pressure on the generators of wealth in New Zealand’s economy?

Hon GRANT ROBERTSON: In answer to the first set of those questions, yes, there is a very difficult period of time facing New Zealanders at the moment. What I’ll do is make sure that the Government continues to put pressure, as the rest of the international community is, on the Russian Government to make sure that we end the invasion of Ukraine, which is causing massive oil price increases. I’ll make sure that we continue to support our exporters, as we have done throughout COVID-19, by making sure that imports and exports get in and out of New Zealand through our air freight subsidy scheme. I’ll make sure that the Small Business Cashflow Scheme continues to be available and that people take up the top-up where that’s necessary. On this side of the House, we’re very proud of our record in supporting New Zealand households and businesses through COVID-19, which actually means we’re in one of the strongest positions in the world to deal with the challenges of 2022.

Question No. 5—Education

5. MARJA LUBECK (Labour) to the Minister of Education: What recent report has he seen about the take-up of apprenticeships and training?

Hon CHRIS HIPKINS (Minister of Education): Mr Speaker—

Hon Paul Goldsmith: I’d forgotten he was the Minister of Education.

Hon CHRIS HIPKINS: This week I’ve seen a report—well, listen up, you might learn something—on Radio New Zealand identifying that, and I quote, “Trade training is booming with thousands more people signing up for apprenticeships”. The report cited the Building and Construction Industry Training Organisation, which is now part of Te Pūkenga, saying that by the end of March it had 21,600 apprentices—a 77 percent increase since the same time in 2020. For electrical apprentices, the report cites the Master Electricians saying that, from a base of about 4,450 in January 2019, “We’ve rounded off 2022 with 5810 so we’ve had a massive increase of about 1300 apprentices in the industry, which … is quite significant [for us].”

Marja Lubeck: What reason is given for these significant increases?

Hon CHRIS HIPKINS: The report on Radio New Zealand quoted Warwick Quinn, the former head of the Building and Construction Industry Training Organisation who now works for Te Pūkenga. He said that a boom in the house construction industry combined with, and I quote, “a government scheme that paid employers to employ apprentices”—the Apprenticeship Boost initiative—is helping to drive numbers up. Mr Quinn also pointed out that they are being very careful to ensure that we continue the momentum, whilst there is change happening, and a transition happening within the sector, to ensure that our apprentices can continue with their learning without disruption.

Marja Lubeck: How many apprentices has the Apprenticeship Boost initiative supported to date?

Hon CHRIS HIPKINS: As of the end of March, over 43,000 individuals have been supported in their apprenticeships through the Apprenticeship Boost initiative. Of these, about 37,000 of them were in their first year of an apprenticeship, and about 6,000 in their second year of an apprenticeship. Tackling skill shortages by boosting trades training has been one of the key priorities for this Government, and we are absolutely delivering on our commitments.

Question No. 6—Prime Minister

6. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does she stand by all her Government’s statements and policies?

Rt Hon JACINDA ARDERN (Prime Minister): Yes. I especially stand behind this Government’s decision to further support Ukraine against the illegal invasion committed by Russia, through the deployment of a New Zealand Defence Force Hercules C130, with a 50-strong team and an additional eight-person logistics specialist team that together will assist with logistics and supplies throughout Europe. I further stand by the $7.5 million contribution from this Government to procure weapons and ammunition via the UK, who is working closely with Ukraine on their needs; the $4.1 million to support commercial satellite access to the Ukrainian defence intelligence; and the $1.5 million contribution towards human rights and justice. The contributions announced yesterday are in addition to the comprehensive support we’ve offered to date, which covers every aspect of this conflict, including contributions to the NATO trust fund. New Zealand stands proudly with its partners and with the people of Ukraine.

David Seymour: Why, whenever she’s asked this question and can choose any policy at all to stand by, does she never, ever choose KiwiBuild?

Rt Hon JACINDA ARDERN: If the member would like me to talk about the more than 8,000 houses that this Government has built, the work that we’ve done to ensure that Kiwis’ homes are healthy and dry—and I note today the child wellbeing report that we’ve tabled that demonstrates the impact that’s having on the health and wellbeing of children—the fact that we have now record consents and the Government’s house-building programme includes the impact that it is having on the market, and KiwiBuild has been part of that, then I am more than happy to do that. I welcome any other patsy questions the member might have.

David Seymour: Why, if the Prime Minister’s policies are so successful, does the Ministry of Business, Innovation and Employment (MBIE) now forecast that 50,000 Kiwi citizens will leave the country in the year as the border opens—

Rt Hon JACINDA ARDERN: Mr—

David Seymour: —up from—

SPEAKER: Order! Order! The member finished.

David Seymour: Mr Speaker, I did not finish; I paused for effect.

SPEAKER: The member will sit down, for effect, now.

David Seymour: I don’t think you’ll get the same effect, Mr Speaker.

SPEAKER: Order! The member will sit down.

David Seymour: Point of order.

SPEAKER: If the member’s going to dispute my ruling, I’ll regard that as grossly disorderly.

David Seymour: Well, I certainly wouldn’t want to dispute the ruling, but I would like to ask you if I could finish the question.

SPEAKER: You can on your next supplementary.

Rt Hon JACINDA ARDERN: I note with interest that the question comes from a member who spent some time in—if I recall his curriculum vitae correctly—Canada and is being asked to myself, who spent some time in London. It has been part of our history as a nation to frequently have New Zealanders come and go as part of our overseas experience, building skills and talent. If we come to this period here and now, I’d point to the fact that we’ve had forecast by, I believe, including the Reserve Bank that over the coming years we’re likely to have net migration increase in the coming years. So whilst New Zealanders may come and go, the overall impact is likely to be an increase.

David Seymour: Is MBIE, then, wrong when they say in this recent advice to her Government that it won’t be the OE that drives the increase in outflow from New Zealand but rather factors such as Australians earning $38 an hour on average and New Zealanders $28 an hour on average?

Rt Hon JACINDA ARDERN: I welcome the member’s support for increases in minimum wage, fair pay agreements, and other initiatives that are all geared towards ensuring that we have improvements in our terms, conditions, and wages relative to our neighbours. Again, I’d come back to the wider point. The forecast has been from those who, of course, operate in this space, whether it’s economists or indeed the Reserve Bank, that we’ll have net positive migration in New Zealand, because we have always had an inflow and outflow of New Zealanders. But what we want to do is make sure that our businesses have the access to the skills and talent that they need. That is what all of our immigration rebalance work is about, and it’s also, in the period of COVID, what our border exceptions scheme has been geared towards as well.

Hon Chris Hipkins: Has the Prime Minister seen any reports of politicians promising to close the wage gap with Australia, and how did that pan out?

Rt Hon JACINDA ARDERN: Yes. Again, I would point members in this House towards tangible policies that will make a difference, and things like fair pay agreements are squarely focused on closing some of those gaps.

David Seymour: How have the Prime Minister’s “tangible policies that will make a difference” made it more attractive for young New Zealanders to stay in the country when on her watch the average house price has gone up 58 percent, or $387,000?

Rt Hon JACINDA ARDERN: All the more reason why we need to continue to invest in every aspect of a building programme that increases the number of homes and the supply that we have. Part of that has been making sure that we have the skills to do that. You’ve already heard the Minister of Education talk today about the significant increase in apprenticeships that we have in this country as a result of our targeted regimes to make apprenticeships free and to support employers with the cost of having apprenticeships. That means we have equivalent, I believe, to the population of Ashburton—possibly Timaru—in apprenticeship programmes now as a result of that investment. That’s all part of the work we’ve been doing across the house-building programme to make sure that we have the skills and talent we need to build the houses that we need.

David Seymour: How have this Government’s policies on law and order made it attractive to stay in New Zealand when people hear stories of shootings and ram raids near where they live nearly every day now, and young people feel unsafe enjoying city life going out after dark in our main centres?

Rt Hon JACINDA ARDERN: Again, across this side of the House, you’ll see us investing in those very initiatives that make a difference in ensuring people feel safe: the presence of police; targeted organised crime groups; a thousand fog cannons installed across those small businesses that may have felt vulnerable; and, on top of that, in the last month, the Police responding to what they see as some patterns of behaviour across retail by having a specific retail investigation unit within the police force to support retailers. I also note, though, that over the past period of time, we’ve actually seen in some areas decreases in some categories that relate to thefts and robberies. But what we want to see is people feeling safe, and that’s why those increases in Police matter.

David Seymour: Does the Prime Minister think that the number of citizens emigrating permanently from this country over the next two years will be closer to the 35,000 a year pre-COVID, or the 60,000-person-a-year brain drain that we saw after the global financial crisis?

Rt Hon JACINDA ARDERN: What matters is what’s happening with net migration, and what also matters is whether or not people are able to meet the skills gaps that they have. As I’ve already noted, the member himself has spent time offshore; many members in this House will have. That has been part of the New Zealand culture for many years. What matters, though, is whether or not net migration numbers mean that our businesses are able to access the critical workforce that they need. We know that there’s more to do on that front, but unlike, perhaps, the member’s perspective on New Zealand, New Zealand is a very highly desirable destination for workers, and that’s why we’ve already seen thousands of people applying for working holiday visas to come on to our shores.

Question No. 7—Police

7. 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 with reported police intelligence, which states parts of the country have experienced unprecedented levels of gang violence in the past year?

Hon POTO WILLIAMS (Minister of Police): I stand by the full context of all of my answers at question time. In answer to the member’s second question, gangs have been a feature of New Zealand society for well over half a century. What police intelligence shows us is that the arrival of the 501s in 2015 has fundamentally changed the nature of gangs, making them much more overt and sophisticated. This was responded to at the time by cutting police numbers. That’s why, since 2017, we have funded the largest increase in organised crime staff, deployed 1,400 more cops across the country, and introduced legislation to give police more tools to address gang violence.

Hon Mark Mitchell: Why do gangs have more guns under her watch?

Hon POTO WILLIAMS: I would like the member to quantify that for me please.

Hon Mark Mitchell: Point of order, Mr Speaker.

SPEAKER: We’ll take a point of order if the member wants one.

Hon Mark Mitchell: I thought it was the Opposition’s chance to ask the Government Ministers questions not the other way round.

Hon POTO WILLIAMS: Speaking to the point of order.

SPEAKER: Sorry, no. Sorry—I thank the member but I don’t need her help. I should have ruled the question out, all right? You can’t just use an unsubstantiated statement like that. [Interruption] Who said that? Who said that that’s right, then?

Hon Nanaia Mahuta: I did.

SPEAKER: Well, can I ask the member just to stand, withdraw, and apologise.

Hon Nanaia Mahuta: I withdraw and apologise.

Hon Mark Mitchell: Does the Minister agree with Detective Superintendent Greg Williams, “Gangs have always had guns but that is increasing and we’re seeing a greater propensity to use them.”?

Hon POTO WILLIAMS: As I’ve said many times, gangs have been a feature of New Zealand society and that’s why as a Government we have responded by funding more than 700 more organised crime staff, and that’s why we deploy tactical response units, and that’s why we’ve introduced legislation to give police more powers to tackle gun crime.

Hon Mark Mitchell: Point of order, Mr Speaker. I’m seeking your guidance. It was a very direct question and it was asking whether or not the Minister agreed with or not the quote of Detective Superintendent Greg Williams who is in charge of the national organised crime unit in this country.

SPEAKER: Yes, and I think the Minister not only agreed but added far too much to the answer.

Hon Mark Mitchell: So if the Minister agrees with Detective Superintendent Greg Williams’ quote, why do gangs have more guns under her watch?

Hon POTO WILLIAMS: I just want to confirm for that member what I actually said, which was “gangs have been a feature of New Zealand society for well over half a century”. That’s why we have responded by funding 700 more organised crime staff, that’s why we’ve deployed tactical response units, and that’s why we have introduced legislation to give police more powers to tackle gun crime.

Hon Mark Mitchell: Point of order, Mr Speaker. In my last point of order you indicated to me that the Minister had indicated that she agreed with Detective Superintendent Greg Williams’ quote, and in his quote he said that firearms have increased—that gangs have got more firearms. I then went back to the Minister and asked her, based on her response to that, and she’s now refusing to answer the question.

SPEAKER: No, she didn’t refuse to answer the question at all. Does the member have a further supplementary?

Hon Mark Mitchell: Why do gangs have more guns under her watch?

Hon POTO WILLIAMS: I would like that member to provide evidence to that fact—authenticate your question.

Question No. 8—Agriculture

8. JO LUXTON (Labour—Rangitata) to the Minister of Agriculture: What recent announcements has he made about supporting the workforce in the dairy and meat processing industries?

Hon DAMIEN O’CONNOR (Minister of Agriculture): This morning I was pleased to announce an additional border exemption for 1,000 additional experienced workers to come to New Zealand for jobs in the dairy and meat processing industries to support the momentum of New Zealand’s economic recovery from COVID-19. All of these workers will be paid above the median wage, which ensures that while meeting demands for additional labour we continue to increase wages for those already in the sectors and encourage more Kiwis into these sectors. The border exemptions for meat workers now total 650, which will help to tackle workforce challenges that are crucial for preserving vital supply chains. The addition exceptions for dairy workers brings the total to 800 for the sector, ahead of calving season in June and July. This Government has stood by the primary sector throughout COVID-19 with border exceptions granted for the primary sector second only to those granted in the health sector.

Jo Luxton: How does this announcement support the meat and dairy sectors’ COVID-19 recovery?

Hon DAMIEN O’CONNOR: COVID-19 has thrown up many challenges and labour shortage is one of those, so these additional border exemptions will go a long way to alleviate the pressures. They are in addition to this Government’s efforts to encourage more New Zealanders into the primary sector through the Opportunity Grows Here programme, which has seen over 10,000 Kiwis going into work in the primary sector since its launch, including almost 9,000 through direct placements. The Government’s work alongside the primary sectors, in particular our meat and dairy sectors, sees us on track this year to surpass $50 billion in annual food and fibre exports for the first time despite the challenges of COVID-19.

Question No. 9—Justice

9. Hon PAUL GOLDSMITH (National) to the Minister of Justice: Does he acknowledge both violent crime and gang membership have increased since 2017; if so, why has he chosen to prioritise repealing the three strikes legislation?

Hon KRIS FAAFOI (Minister of Justice): No. The three-strikes legislation is not an effective response to gang membership or violent crime; rather, it has resulted in unjustified and excessive prison sentences and made no impact on reducing strikeable offences. That is why we are repealing the three-strikes legislation. The number of violent crime charges has reduced since that member was in Government, and the overall crime harm experience by victims from all violent crime has not changed significantly since 2013.

Hon Paul Goldsmith: Regarding his claim that the three-strikes legislation is not effective, did he see the Ministry of Justice’s advice: “There is no substantial international or New Zealand evidence on the effect of three strikes law on crime. The existing evidence is mixed and more robust research is needed to understand the true effects of these laws.”, and how on earth does he claim that those laws are not effective?

Hon KRIS FAAFOI: If the member would like to continue reading that Ministry of Justice advice, it also said that nothing in terms of the three-strikes legislation could be attributable to any changes in the strike offences.

Hon Paul Goldsmith: Does he agree or disagree with Dairy and Business Owners Group spokesperson, Sunny Kaushal, when he says the offenders shopkeepers are dealing with in Auckland “have no fear of law, they have no fear of being caught or the consequences whatsoever”?

Hon KRIS FAAFOI: I acknowledge the difficulties that some of those retailers are experiencing, but I’d also point out to Mr Kaushal around the investment of a thousand fog cannons that the Government has invested in to make sure we can keep and deter crime being committed against them, and also the investment in 1,400 more police—$350 million investment to make sure there are more police on the beat.

Hon Paul Goldsmith: Rather than heed the call to be tougher on crime, from people such as Sunny Kaushal, is it his message that we’ve actually been too tough on criminals and that’s why the priority is to repeal the three-strikes legislation?

Hon KRIS FAAFOI: You’ve got to walk the talk and the previous Government did not walk the talk in terms of its support for police. This Government invested $350 million more; 1,400 more police on the beat; 360 police targeted on issues in Auckland central; 700 more police officers on organised crime. On this side of the House, we back up our talk; on that side of the House, they cut police numbers.

Hon Paul Goldsmith: Does he give any credence to the views of a submitter on the Three Strikes Legislation Repeal Bill Nick Tuitasi, who said that the three-strikes people have “committed up to 70 offences. The law was designed to take them out of circulation, to reduce the number of victims, to give victims a break, because their victims are still scared to go out at night”, and, if so, why is repealing this bill such a priority for him?

Hon KRIS FAAFOI: When we change the three-strikes legislation, the judiciary will still have the ability and the sentences available to them to pass down an appropriate sentence. I reiterate that the promises that the previous Government made in terms of decreasing victimisation and the reduction in the number of strikeable offences did not become reality.

Hon Paul Goldsmith: Point of order, Mr Speaker. I just noticed that people interrupted on my previous question. I was just asking whether you’d considered giving me an extra supplementary.

SPEAKER: I did consider it.

David Seymour: Does it help persuade the Minister that three strikes is a policy of great merit, that the National Party, which bitterly resisted its introduction at the time, has now become a strong supporter of it, and might the Minister change his mind too?

Hon KRIS FAAFOI: I’ll let those parties sort that out for themselves.

Question No. 10—Defence

10. INGRID LEARY (Labour—Taieri) to the Minister of Defence: What recent announcement has the Government made regarding the provision of support to Ukraine?

Hon PEENI HENARE (Minister of Defence): Yesterday, I joined the Prime Minister to announce that New Zealand would provide significant extra support to Ukraine as it defends itself against Russia’s invasion. Building on the extensive support we have already announced over preceding weeks—I won’t labour this as the Prime Minister has already detailed those—but I will highlight, of course, the deployment of a Hercules is significant; so too is the eight-person team of logistics specialists, given the huge wave of support and goods that have flooded Europe in support of Ukraine; on top of that, our significant further financial contribution of $13.1 million towards military, legal, and human rights support.

Ingrid Leary: What is the significance of the additional support announced yesterday?

Hon PEENI HENARE: The additional support we announced yesterday builds on our comprehensive response to date, which covers every aspect of this conflict—humanitarian, legal, military, transportation, and people—and is in addition to the economic and trade sanctions we have already put in place to help weaken the Russian economy. In the defence space alone, we have already authorised the deployment of nine New Zealand Defence Force (NZDF) personnel to Europe to support our partners in intelligence work over the next three months; provided surplus tactical NZDF equipment, including body armour, helmets, and vests; and contributed $5 million to the NATO Trust Fund, which provides fuel, military rations, communications, and military first aid kits, to support Ukraine. The decision announced yesterday is, of course—as I’ve already highlighted—important because of the huge wave of support for Ukraine that’s flooded into Europe. Logistics and our speciality in this area will continue to support Ukraine in their defence.

Ingrid Leary: How has the Government’s support for Ukraine been received by our international partners?

Hon PEENI HENARE: New Zealand’s response to the Russian invasion of Ukraine has been well received by like-minded partners. The Ukrainian Prime Minister, in his conversation with our Prime Minister, thanked New Zealand for being one of the first countries to take swift practical action against Russia’s aggression. I, myself, met with the Ukrainian Defence Minister, who also acknowledged New Zealand’s significant support. In terms of our close partners, the United Kingdom, Secretary Wallace, their secretary of defence, has also been very complimentary of our support, specifically referring to New Zealand to exemplify the breadth of the coalition in support of Ukraine and in opposition to Russia’s invasion and war crimes. Given our position a long way away from the conflict, New Zealand may be a long way from Europe, but we know that such a blatant attack on a country’s sovereignty is a threat to all of us. That’s why we are doing our bit to support Ukraine.

Question No. 11—Transport

11. SIMEON BROWN (National—Pakuranga) to the Minister of Transport: Does he have confidence in the Clean Car Discount scheme; if so, how many people is NZTA aware of that have had a rebate or fee miscalculated on their vehicles since 1 April 2022?

Hon MICHAEL WOOD (Minister of Transport): The clean car discount has made it more affordable for New Zealanders to buy electric and low-emission vehicles. Over 12,000 approved rebates were paid between 1 July last year and 1 April this year. From 1 April, the rebates have become available to a wider range of used and new fuel-efficient hybrid and electric vehicles. In the one week period from 1 April, 4,264 light vehicles were registered, and of that number, 3,245 have been eligible for a rebate. Of that total number of 4,264, there have be 115 enquiries as to the rebate or fee level, and 57 of those have been resolved. The majority of issues are with some used vehicles which come in from Japan, which sometimes have incomplete or inaccurate datasets, and Waka Kotahi have been working very quickly to resolve them. Overall, I’m very satisfied that in spite of some of these bedding-in issues, that the Clean Car Discount scheme is providing a large number of discounts to New Zealanders, it’s playing an important role in reducing our emissions, and that stands in mark contrast to the National Party whose transport policy in response to the climate emergency is to build more roads, and according to Mr Luxon today, to increase public transport fares.

Simeon Brown: What is his response to Kit Wilkerson from vehicle imports association who said, “The thing I’m worried about is the potential that there’s a lot of people that are being charged incorrectly out there”, and how many Kiwis have had their cars wrongly taxed during this cost of living crisis?

Hon MICHAEL WOOD: What I would say in response to that comment is, firstly, to thank the vehicle importers associations who have publicly gone on record to support the Clean Car Discount scheme. And I also thank them for working with Waka Kotahi on these issues to resolve them as quickly as possible, and as I’ve noted we’re dealing with a relatively small number of cases in the context of over 3,000 Kiwis in the first week who have received a discount.

Simeon Brown: Well, then, does he also agree with the vehicle importers association who said that “It’s the Minister’s fault” for these problems of people being charged incorrectly, and why weren’t these problems fixed before the legislation was implemented?

Hon MICHAEL WOOD: No, I don’t agree with that comment, but what I do note is that the very small number of cases that have been identified have been very quickly rectified—as I noted, 57 of those cases have already been resolved. Again, I note that very virtually every major association in the sector supports a Clean Car Discount scheme, including the Imported Motor Vehicle Industry Association, including the Motor Industry Association, and including the AA. About the only organisation that seems committed to continuing New Zealand’s dirty car policies is the National Party.

Simeon Brown: So will the Government commit to reimbursing Kiwis who have already registered their car, but subsequently found out that they’ve been wrongly taxed during this process?

Hon MICHAEL WOOD: Yes, every New Zealander who purchases a vehicle that is eligible for a discount under the Clean Car Discount scheme will receive that discount. Again, I’ll just note that in the first week of the scheme’s operation, over 3,200 Kiwis have been eligible for a rebate under that scheme, demonstrating that New Zealand has backed the Clean Car Discount scheme, and that we’re supporting them getting into cleaner, more efficient vehicles.

Simeon Brown: How long will it take for those individuals who are wrongly taxed, to have that money reimbursed?

Hon MICHAEL WOOD: As I’ve already outlined to the member on two occasions in this course of questions, 57 queries about the scheme have already been resolved, generally speaking within a matter of days.

Question No. 12—Education

12. CAMILLA BELICH (Labour) to the Associate Minister of Education: What steps is the Government taking to lift literacy in Aotearoa New Zealand?

Hon JAN TINETTI (Associate Minister of Education): The Government has released our literacy strategy that sets out our plan to improve outcomes for Kiwi kids in literacy, communication, and Te Reo Matatini. The strategy has been well received by the sector as it sets up new and innovative ways of doing things to break the mould of the past. Through our plan, we are ensuring that solutions are customised to our kids’ needs rather than a one-size-fits-all approach, fixing assessments so that kids are assessed as individuals and supports are tailored to the learner, and providing clarity for teachers about what they need to teach, and when, backed up with professional learning development and effective resources.

Camilla Belich: How does the strategy draw on expert advice, research, and science?

Hon JAN TINETTI: For far too long, approaches to literacy teaching haven’t had a strong research base. Our strategy is evidence based and draws on domestic and international best practice and expert advice. However, importantly, it also caters to the New Zealand context and ensures that we place the learner at the centre, and leave nothing to chance. This strategy combines both phonemic awareness and whole language. To understand how these approaches work in practice Pauline Jones from Wollongong University said it well recently when she said, “There’d be time for instruction in phonics but there’ll be also time for looser, less explicit teaching where the students are learning to employ those skills in other domains”.

Camilla Belich: What work is under way to foster strong literacy in a child’s first year of school?

Hon JAN TINETTI: Through our Better Start Literacy Approach (BSLA), all new entrant and year 1 teachers have access to training in an integrated approach to developing vocabulary, oral literacy, spelling, writing, and reading skills in the first year of school. This approach is steeped in the best of international and domestic research and evidence developed by the University of Canterbury over the last 10 years. BSLA focuses on the link between spoken and written language, systematically supporting children’s phonological and phonemic awareness, letter sound knowledge, and oral language, and it is delivering exciting results. This Government believes investing in our children as early as possible is critical to ensuring better life-long learning opportunities for our Kiwi kids.

Annual Review Debate

In Committee

CHAIRPERSON (Ian McKelvie): The House is in committee on the Appropriation (2020/21 Confirmation and Validation) Bill. This is a debate on the financial position of the Government and the annual review of departments, officers of Parliament, Crown entities, public organisations, and State enterprises as reported on by select committees. The time allocated for this debate is 10 hours.

Standing Orders 356(2) and (3) have been set aside so there will be no sector-specific debates. Instead, specific Ministers will be available each day to respond. The Government has indicated that the Minister of Finance, the Minister for Infrastructure, the Minister of Police, the Minister of Commerce and Consumer Affairs, the Minister of Statistics, the Minister of Education, and the Minister for COVID-19 Response will be available today. The time for this debate has been allocated to parties on a proportional basis. New Zealand Labour has five hours and 25 minutes. New Zealand National has two hours and 45 minutes. The Green Party of Aotearoa New Zealand has 50 minutes. ACT New Zealand has 50 minutes. Te Paati Māori has 10 minutes.

Each debate will be led off by the chairperson or another member of the committee that considered annual reviews most closely related to the Minister’s portfolios. A motion to report progress on a bill must be moved on a call, not a point of order—Speaker’s ruling 81. When a member moves to report progress on this annual review debate, a presiding officer will call on that member first when the debate resumes. This is a similar process to that used in other debates when they are adjourned. At the conclusion of the debate, questions will be put, noting the committee reports on annual reviews and on the provisions of the Appropriation (2020/21 Confirmation and Validation) Bill. There is no amendment or debate on these questions.

I remind members that they are able to participate remotely. If you’re on Zoom and want to take a call, please type “call” into the chat. You should also use the chat if you want to raise a point of order. Finally, it would be helpful for members to ask multiple questions if they have them of the available Minister during their call.

Members, we start with the Minister of Finance, who is also the Minister for Infrastructure, who is available for 45 minutes to respond to members’ questions. The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the 2021 financial year be noted.

That’s the longest speech I’ve ever made! I call the honourable Dr Duncan Webb.

Finance and Infrastructure

Dr DUNCAN WEBB (Chairperson of the Finance and Expenditure Committee): A very fulsome introduction, and thank you for that, Mr Chairman. Look, I’m very happy to report to the committee of the whole House on the reviews as the chair of the Finance and Expenditure Committee, and it’s a real privilege, I must say, to hold that position.

They were very interesting reviews. We took the finance sector as a whole in our report, so we’ve presented to the House an exceedingly long but, I think, useful report, and, as is to be expected in that important committee, it was a pretty robust but, at the same time, cooperative inquiry that we took into the various entities. It was very interesting to have the Minister of Finance in front of us to hear about the financial statements of the Government, and he presented, as always, in his fine attire his excellent and insightful views.

The financial statements of the Government are actually in really good shape. That’s one of the things that came out, and I think everyone in the House will accept that, against forecast, the Government is in good shape, recognising that the economic downturn has been far less severe than forecast. The operating balance before gains and losses deficit was $10.5 billion less than what was forecast, and core Crown revenue was $6.4 billion higher than forecast.

Now, I’ll be honest and say that the questions of the Opposition were focused on debt, and I think that’s quite appropriate. But the interesting thing also was that the strength of the economy was not in particular sectors, but it was broad-based. Some sectors obviously suffered more than others, but, in fact, the economy overall is very strong. Again, there was some focus on cost pressures, strong demand, supply chain disruption, and other factors. More recently, of course, international events have seen inflation, which was quite properly the focus of some attention. Debt levels are increasing and will continue to increase, and the Minister may want to update us on current forecasts, but at the time of the review, debt was expected to get to about 40 percent of GDP.

A good discussion was had about the Public Finance Act and prudent levels of debt, and the fact that what is a prudent level of debt needs to be taken in context. In fact, it was also very clear with Treasury that the appropriate approach and what was prudent—in fact, it was prudent to increase debt in times of crisis to ensure that we didn’t get into a spiral of contraction as well.

There was some discussion around alternative monetary and fiscal policies, and discussion around what the Reserve Bank was doing with large-scale assets. The Secretary to the Treasury stated that without the economy being supported by both monetary and fiscal policy—monetary policy, obviously, the Reserve Bank; fiscal policy, Treasury and the Minister of Finance—there could have been a severe economic contraction, widespread unemployment, and GDP growth remaining very low, and our unemployment alone, of course, shows us that that didn’t transpire. Treasury was also very keen to talk to us about clusters and the way it wanted to increase the effectiveness of the Public Service by using collaboration and strategic alignment across multiple agencies and also to ensure there’s a much longer-term and intergenerational view, and to enhance the value-for-money reporting.

A couple of other things I will touch on in this brief contribution. The Reserve Bank took some time to stress its work around climate change—that was something which we found very interesting—and the need to recognise climate change not just as a very significant environmental question but one that will affect financial stability as it affects asset prices and the economy more generally.

The Inland Revenue Department was very proud of its Business Transformation project. It’s a good example of, under this Government, a focus on effectiveness and efficiency, delivering cumulative benefits by its IT upgrade of $495 million. Also, I want to recognise—and it was focused—the work that IRD and other agencies have done in delivering a whole lot of programmes to relieve the effects of COVID-19.

I’m sure the Minister, through questioning, will have a lot more to say on these great initiatives.

NICOLA WILLIS (Deputy Leader—National): We review these reports in the context of a cost of living crisis, the highest inflation in 30 years, with New Zealanders experiencing their standard of living declining as prices outpace wage growth. In that context, the Government is spending more than ever, and intends in the future Budget to add an additional $6 billion of expenditure.

So I want to focus a few of my questions to the Minister of Finance on a report that I think is very significant, and that is the report of the Controller and Auditor-General, because what that report highlights is it says that the reporting done by this Government, on the way that it spends money, is inadequate. It highlights the fact that, yes, we have financial metrics about how much is spent—and, goodness me, we know a lot is spent; 68 percent more spent than when this Government came to power—but, as the Office of the Auditor-General reports—and I quote—“Increased risk is an inevitable result of the current environment.” When policies are designed in a hurry, for large sums of money or use higher-trust models, they increase risks to probity.

So there’s, first, that set of concerns. So I want to ask about that—what the Minister has done to mitigate that, given we’re still, as far as I know, in the dark about how much of the COVID fund has been spent without public scrutiny of that spending.

But the second thing, which is more systematic, is that the Auditor-General expressed concern in this review that current performance reporting about expenditure is completely inadequate. He states specifically that he does not believe current reporting gives Parliament or the public a clear picture about whether spending was worthwhile. And he goes on to say, “Too often, the reporting is focused on what is important to government agencies, instead of what the public or Parliament cares about.”

So my question to the Minister of Finance is, given one of the first gestures of his Government was to remove the Better Public Services targets, which National used as a measure of public sector performance, what is he going to do to respond to what I think are very grave concerns from the Office of the Auditor-General?

Hon GRANT ROBERTSON (Minister of Finance): Thank you, Mr Chair, and I thank the committee for their consideration of these matters. I note a number of aspects of the Auditor-General’s work over the course of this year around how we can ensure that all New Zealanders get a good level of understanding of the expenditure that is undertaken on their behalf by Government agencies. Early on, the Auditor-General raised some questions around the COVID-19 response funding. In doing so, he acknowledged that the Government was facing a situation where it needed to move extremely swiftly and at a scale that we had not really seen in New Zealand’s recent history. As a result of that, significant amounts of money have been spent. I would note for the benefit of the member asking the question, Nicola Willis, that we now have initiative-level information being published by the Treasury about the COVID funding that is available for people to find on the Treasury’s website.

One of the issues that arose during the exercise of being able to identify initiative-level spending is, of course, the overall structure of public finances in New Zealand. As I’m sure the member knows, with the creation of both the State Sector Act in 1988 and the Public Finance Act in 1989, we devolved down all of that to an individual agency and departmental level, and that is, of course, the process that members are, indeed, participating in today and do at Estimates time as well. Estimates and financial reviews are undertaken at a Vote appropriation level, and there at that point people can see what the individual initiatives are.

I have some sympathy with the views expressed by the Auditor-General over the course of the last couple of years about that, and that does require some significant reform of the way that we do public finances in New Zealand. The Government has begun to undertake such reform, and that includes, as Dr Webb indicated in his opening remarks, the development of the clusters, which is actually to get to the exact point that the member raised, which is it should be about the services that New Zealanders receive, so rather than worry particularly about whether, for example, a family or sexual violence initiative is funded out of Vote Police or Vote Justice or Vote Women’s Affairs, we look at the initiative itself and say, “Has that worked?” That is not how things are structured today, and it does make it difficult for members of Parliament and members of the public to be able to identify that. So it’s the very reason why we’re making some of the changes that we are making.

More broadly, when the Auditor-General refers to the question of performance reporting, we are happily taking that report away and working out how we can develop a better longer-term approach. What that requires is actually boiling things down significantly more than we currently do. So it would require moving away from the approach we’re doing today, away from the appropriation-level approach to actually understanding exactly who is receiving support or is expected to receive support, priority, and sequencing, compared with that work, and the costs and options available to a Government to deliver those services. That is a significant change. I respect the Auditor-General for putting that change in front of us, and I think he would understand that it will take a little bit more work on behalf of all of us to create that kind of system. But it is what lies at the heart of the modernisation of the Public Finance Act that we’ve been undertaking.

NICOLA WILLIS (Deputy Leader—National): Well, that was an interesting commentary from the Minister of Finance, but I am sure that he is aware that there is no legislative impediment to him, as the Minister of Finance, having stringent requirements for the quality of Government expenditure. He doesn’t require a new law in order to ask of his Ministers that when money is appropriated from taxpayers, they ensure that there are clear targets for what the expenditure of that money will achieve, that there is monitoring of delivery, and that in every instance it delivers more results than if that money had been left in the back pockets of New Zealanders. That is the issue here and there has, of course, in the past few months been some troubling evidence that that is not the case with this Minister of Finance. I point, for example, to the $1.9 billion appropriated for mental health, where there was a press release with fanfare, but clearly no delivery plan, and where we’ve now had a report by the mental health commission highlighting that no additional specialist services were delivered as a result, that the expenditure of that money involved poor accountability and poor coordination.

So my question to the Minister of Finance is: has he learnt anything from the failures to deliver that have occurred under this Government, whether it’s KiwiBuild, whether it’s the mental health report, whether it’s the many other instances where results have not aligned with the amount of expenditure that’s occurred; and what will he be doing in future years to ensure a much straighter line between appropriation of New Zealanders’ money and results delivered for it? To make it really simple, I quote the Auditor-General who says he would like performance reporting to be able to answer fundamental questions, such as whether the total health sector funding has improved health overall, and can that Minister tell us today whether he has actually put in place performance measures for his Ministers that will enable him to give those assurances?

Hon GRANT ROBERTSON (Minister of Finance): I think the member needs to be clear about the two different things that she’s talking about. So the Auditor-General is looking at the overall way in which we do performance reporting. As I’ve indicated to the member, I have some sympathy with the views that the Auditor-General is putting across and we are working on that. When it comes to the individual decisions, programmes, areas of policy that the Government has invested in, there are a range of measures and targets within those, and I draw the member’s attention, as she’s focused on the mental health spending, to the report of the implementation unit—a unit, I note, that is a new initiative and one that is designed to be able to do exactly the kind of deep dive that the member is asking for into how a piece of policy or a programme might actually be implemented. That indicated that, yes, there were some areas where there were shortcomings, but overall the programme was delivering in the areas that had been proposed.

I know that the member will be aware of the many questions that have been asked in the House over the course of the last few weeks around what has been delivered and the views of Ministers on the mental health commission’s report—and the Prime Minister, indeed, today in the House covered some of the outcomes that we’ve seen as a result of that mental health spending. So, certainly, there’s always improvements that can be made when we are trying to reform a sector that had been grossly under-invested in for a significant period of time, but I believe if you take on board the implementation unit’s work and the work of the Minister himself, you will see that we’re making good progress there.

In terms of the wider point—and we’ll continue to use health as the example—this is one of the issues around Health New Zealand, and the importance of the creation of Health New Zealand and the Māori Health Authority is to make sure that we have a much better outcomes framework developed. One of the most significant pieces of work that we’ve been doing in the design of the health reforms is how to get an outcomes framework that means that not only can we be confident about the amount of money we’re investing and what we get for that but also that wherever you live in New Zealand you will continue to get good quality healthcare and it is not dictated by the postcode in which you live.

So all of those add up to areas where I believe we will be able to get better performance out of the sector. It is a sector, the health sector, that has been under significant pressure, clearly, through COVID-19, and it’s withstood that pressure well. It’s been supported by a Government that has put in more resources to the health sector than we have seen in recent years and particularly in the capital spending area as well. So, yes, there is always more to do in terms of how we can provide information to the public. But I believe those examples I’ve given are ones where we’re improving that.

DAVID SEYMOUR (Leader—ACT): Thank you, Mr Chair. Minister, the Finance and Expenditure Committee’s report quotes the Secretary to the Treasury saying that fiscal and monetary support has been necessary over the last couple of years to avoid a severe economic contraction, but what she doesn’t seem to say—that’s the Treasury secretary—is how much financial and monetary policy support was necessary. Now, Minister, when you look at families facing a cost of living crisis and prices of everything going up, when you talk to young people who have seen house prices go up 30 percent during the pandemic period, do you say to them, or do you pause for a moment and think, maybe we printed, borrowed, and spent too much money, and stoked too much inflation in the domestic economy and in house prices?

Hon GRANT ROBERTSON (Minister of Finance): The benefit of governing in hindsight is that one could be perfect and so, you know, when one looks back in hindsight, there will inevitably be things that a Government would do differently. However, we did not have the virtue of hindsight. What we had was the prospect of a global economic crisis far worse than any of us had seen in our lifetimes, and the Government—as all Governments around the world did—took a precautionary approach; made sure that we set aside the funding that we believed would be required to make sure New Zealanders made it through COVID-19 in a good place. And, as I say, while there might be specific things or ways of doing things that would be changed, the outcomes actually stand up very well. So while the member might like to find a range of negative statistics, it’s equally possible to say we’ve got 3.2 percent unemployment; we’ve had annual average growth over 5 percent; we’ve been in a position where our exports have held up. Now, all of these things have happened, in part, because of the very hard work of New Zealand businesses and workers, but also because the Government has stood behind those businesses. So the member can pick things out, but the member might want to pick out whether or not he thinks there should be more support for small business, because I can well recall, during the course of COVID-19, he and his party standing up and asking for more money to be put in place. And so the—

David Seymour: Point of order. Mr Chair, I raise a point of order about the nature of these debates, which are new in their format and evolving. The way it works is that the Minister’s time answering comes off the time allocated to ACT, and we really want to use it to—

CHAIRPERSON (Ian McKelvie): Order! Order! No, that’s not a point of order and it’s not a fact.

David Seymour: Well, Mr Chair, it is a fact that the time that he’s just spent speaking comes off ACT.

CHAIRPERSON (Ian McKelvie): No, no, it does not. It does not.

David Seymour: It’s not? Well, that’s fantastic. Well, then he can carry on; I don’t mind at all.

Hon GRANT ROBERTSON: Thank you, Mr Chair. As I said, if only it were true that time came off ACT, but it isn’t. On this side of the House, we understand it was important that we backed businesses. It was important that we backed households. When I look at the breakdown of the spending that we did undertake, the bulk of it, $24 billion was in the wage subsidy scheme, the resurgence support payments, the small business cash flow scheme—actually that’s in the $11 billion that’s through Vote Revenue—and $7 billion, nearly $8 billion in this period of time that we’re covering here in Health. These were areas that required us to support New Zealand to get through COVID-19. And when we stack it up against how we’ve done against the rest of the world—economically and from a health perspective—it stacks up well.

DAVID SEYMOUR (Leader—ACT): Thank you, Mr Chair. I think people who are watching at home can say the answer to that last question was a yes. Then, because Labour’s got a lot of time and not much to talk about, he kept on going. But I want to ask another question: this Government came in with a Wellbeing Budget. Jacinda Ardern sat on the stage with Bill Gates and said, “We won’t just focus on one thing any more—it won’t just be GDP. We’ll focus on people’s overall wellbeing.”

Now, Minister, you’re responsible for the Treasury. Are you confident in the quality of advice the Treasury’s given about balancing all the needs of New Zealanders’ wellbeing through COVID? And I mean missed operations. Has there been any reporting on the cost of kids missing school due to the use of lockdowns? Have we weighed up the mental health of small-business owners against lockdowns in the COVID response? Are you confident that your Treasury has really reported in the spirit of a wellbeing Budget? Or is it the case that, really, it’s just all been COVID and so many other aspects of New Zealanders’ wellbeing have been forgotten when your Government’s been making those decisions?

Hon GRANT ROBERTSON (Minister of Finance): The short answer—and I know the member likes a short answer on these matters—to that question is yes, I am confident in that. Two aspects of that I’ll draw out. One of those is that, consistently, while the Government has been making decisions about issues such as lockdowns, alert levels, the traffic light system, the Treasury has continued to provide advice during that period of time about the overall wellbeing impacts of those decisions. I think, again, most New Zealanders would say that the fact that we have got ourselves through to this point in the pandemic with such a low death rate—with actually fewer days off work, fewer days off school than many, many other countries around the world—shows that the overall wellbeing of New Zealanders has been upheld.

If the member cares to refer to the Wellbeing Outlook report in the Budget last year, the member will see survey work undertaken there via Statistics New Zealand that actually showed that New Zealanders’ overall wellbeing improved during COVID, and that’s because they had trust and faith in one another—that’s called social capital, and that’s an important part of the wellbeing approach—and they felt well supported through economic interventions like the wage subsidy, and that’s part of financial capital, which is also part of the wellbeing approach. So I welcome the member’s interest in the wellbeing approach and his conversion to its importance within the Budget process. And the answer to this question is, indeed, yes.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. I’d like to refer to three core themes and ask the Minister three questions to that effect in my contribution to this debate this afternoon. The first is with regard to a review into the economic response to COVID-19, the second is about the relationship of monetary and fiscal policy, and the third is around debt targets that the Minister has been alluding to.

With regard to the review into the economic response to COVID-19, members can see, as reflected in this report tabled in the House today, that it has been the case that I, as the Green member on this committee, have been calling for a review into the economic response into COVID-19 for quite a long time now. And I might say that we’ve had support from members on this side of the House, interestingly enough—not a corner that I’m used to particularly collaborating with—but for whatever given reason, we’re all very interested in lifting the lid on some of those metrics and some of those trade-offs that the Government was making in coming into COVID-19.

To that effect, I’d actually just like to challenge the contribution of the Minister earlier when he said that hindsight is of course 20/20, because of course that is the case. But as we have traversed in many of these annual reviews, it is in fact the case, as Official Information Act (OIA) documents from Treasury and the Reserve Bank of New Zealand (RBNZ) have revealed, that as was projected at the beginning of the lockdowns in 2020, if there was an overreliance on unconventional monetary policy, we would see what they called these distributional impacts, which we’re now seeing in the case of that massive redistribution of wealth to those at the top end of town. So my first question is to the Minister: given that the Government has indicated that we are now entering a new phase of the pandemic, will he now finally instigate an inquiry? Or are we likely to see some Labour members support that move in that motion, which has been on the table for a long time now?

Secondly, getting to the issue of monetary and fiscal policy and the relationship between the two—this is, of course, one of the crucial areas that a review into the economic response would look at. But we also have seen here in this report today that the Reserve Bank, over 2020 to 2021, conducted significant monetary stimulus, including the LSAP, or Large Scale Asset Purchase programme, which the Treasury now estimates will cost around $5 billion, after initially estimating that it would be cost neutral. To that effect, my second question to the Minister is: does he accept that greater fiscal stimulus during this period, as also noted in that OIA advice from Treasury and RBNZ at the beginning of 2020, could have taken pressure off the Reserve Bank in their need for monetary stimulus, which in turn could have meant that we had better directed economic support to those at the bottom end of town?

With regard to the issue of debt targets, the Government’s debt target since COVID has been to stabilise net debt by the mid-2020s and then look to reduce it as conditions allow. Net debt, though, has already been stabilised far below the levels that the Pre-election Economic and Fiscal Update (PREFU) in 2020 suggested that it would be. The PREFU had net debt going to 56 percent of GDP, whereas we’ve stabilised at around 35 percent of GDP. So my final question to the Minister is: the Labour Party went into the last election, saying that the PREFU 2020 debt trap was balanced and responsible. Doesn’t that mean in this current context, then, that we now have about $40 billion extra to invest in critical infrastructure to address things like climate change—

Hon Members: Spend it.

Hon Member: Spend up large.

CHLÖE SWARBRICK: —and inequality?

Hon GRANT ROBERTSON (Minister of Finance): I’m pleased that the member’s contribution elicited such excitement across the House. I’ll endeavour to answer all three of her questions. In terms of the review, the position that I personally have taken on this is that the very people you’d want to be undertaking reviews were people who were working extraordinary hours through the period of time of COVID, and that, while we were in the middle of a response, stopping to then do the review would not be a good use of their time, nor would it necessarily provide us the insights that I think the member is looking for when we’re so close to it. In the fullness of time there will definitely need to be a review of many aspects of the Government’s response, and I’m sure the economic ones will occur at that point.

In terms of the second point that the member raises around monetary and fiscal policies, I mean, firstly, I’d say, with the Large Scale Asset Purchase programme, yes, obviously the member’s correct around the difference in terms of the overall cost. I think it’s really important, though, for members to remember the unique way in which central bank holdings are measured in New Zealand compared to the rest of the world. So because they are all on the same balance sheet, actually while it’s a transfer, as it were, between Treasury and the Reserve Bank, it doesn’t change the overall state of the Government’s books. And so it’s important that we understand that in terms of cost to New Zealanders per se, that isn’t there.

The member’s question, though, was around whether there should have been a greater fiscal stimulus as a result of that. I think those watching the debate will be aware that we’ve now had two quite different perspectives on this in the House today. We think we got the balance about right from the point of view of the Government’s role in this. The COVID-19 Response and Recovery Fund, initially set at $50 billion, has had to be added to over time. We have provided significant support to not only businesses but also to individual households and workers, those who aren’t working as well, over the course of the life of the COVID-19 Response and Recovery Fund, and so we think the level of fiscal intervention is about right. Mr Seymour quoted in the House recently its comparison to other countries; it was a larger fiscal response than many other countries comparable with the likes of the US, as a percentage, but clearly a significant one. So my view is that we got the balance about right where fiscal policy is.

The other thing I would note, however, in terms of the member’s third question, which relates a little bit to that one, is that I have consistently said that we need a different conversation about public debt in New Zealand, because public debt is very, very low in New Zealand relative to the rest of the world, and I have a view that it is important that New Zealand keeps its public debt relatively low when compared to the rest of the world, as a small country prone to natural disasters, prone to the effects of economic shocks. That is an important part of our fiscal strategy. But having said that, if a prudent level of debt, which is what the Minister of Finance is required to uphold, in turn means an under-investment in infrastructure that restrains productivity, makes New Zealanders’ health outcomes worse, and makes New Zealanders’ education outcomes worse, then that really isn’t a prudent level of debt. So it is a valid conversation more generally to ask New Zealanders what we think is the right debt target.

I’m pleased we came into COVID-19 with a 19.5 percent net debt, which the Labour Government reduced from what National had left us with. I’m pleased we were in that position, but I do think we need to see that in a much wider context. So I welcome the member’s contribution around what net debt should look like.

NICOLA WILLIS (Deputy Leader—National): I’ll just bring the committee back to a discussion the Minister of Finance was having earlier. He’s very proud of his Implementation Unit, which is designed to ensure we actually get performance and delivery out of Government expenditure. Now, I’m old-fashioned. I personally think that every single Minister should have that accountability and responsibility—that is actually what their warrant is about—but he’s got his Implementation Unit. So my question is: what specific areas of shortcomings in Government delivery and spending has the Implementation Unit identified?

Hon GRANT ROBERTSON (Minister of Finance): The Implementation Unit does its work on a programme-by-programme basis, so it identifies issues as it works through each of those. The mental health report, as I mentioned to the member, is publicly available for her to look at. It identified some weaknesses around the multi-agency nature of that programme and the fact that there was diffuse accountability as a result of that, and that needed to be improved. There were some issues around reporting, which we’ve already covered. It varies, though. In other agency reports, such as those around Jobs for Nature, different issues have arisen, particularly around the relationship with others who deliver, as opposed to the Government—we fund others to do the delivery. So there’s a number of cross-cutting issues there.

I will just note, as I’m about to resume my seat, and noting the time, I will now take the approach perhaps of not answering each individual question but stacking a few up in order that members get their opportunity.

CHRIS BISHOP (National): Thank you very much, Mr Chair. I want to take the Minister to his infrastructure portfolio because two years ago, it was a big day for infrastructure in New Zealand. The Hon Phil Twyford, now sadly departed from the transport portfolio, and Shane Jones announced the Infrastructure Reference Group process to identify so-called shovel-ready projects, and they said that they would start within six months and the Government was going to spend many billions of dollars starting a range of difference projects. And, of course, now we are two years on, and as I go through the quarterly Infrastructure Reference Group update—this is to the end of last year, 31 December 2021—I see a huge number of projects that have been funded but not many that have been completed, and, in fact, some that have not even started two years on, after the projects were announced.

I see an extraordinary number of projects in Northland: 32 projects alone in Northland, and I think many members of the House will know why that is. So my question is to the Minister: is he satisfied in the administration of the shovel-ready project list? In particular, is he satisfied that only three of the 32 projects in Northland have been completed, four of the 25 in Waikato have been completed, three of the 18 in Auckland have been completed, and zero in Gisborne—five projects approved; zero projects completed in Gisborne? And I could go through the list, but members, I think, get a flavour of the underperformance of the shovel-ready project list. Is the Minister satisfied with how the shovel-ready projects are going, and if he’s not, what is he prepared to do to fix the problems?

ANDREW BAYLY (National—Port Waikato): Thank you, Mr Chair. I’m just getting over the rash assertion or question from the Greens member saying that Mr Robertson should spend more money. I think most people realise that Mr Robertson is a spendaholic. Actually, he needs a lot more constraint.

Hon Scott Simpson: He’s addicted to it.

ANDREW BAYLY: Addicted—that is right. So the first question I suppose I’d like to ask the Minister is, how much of the COVID fund is actually left? I see that at May 2021, there was only $6 billion left of the $62 billion fund. So it would be useful just to get an update from the Minister on, actually, how much of the $62 billion he’s blown, because it is a lot of money.

And then, of course, on top of that there’s the imprest supply issue that he put through the House—another $24 billion, just mild amounts from the Minister who just keeps ramming this stuff through. And, of course, it is big, chunky amounts of money. So it’d be good if we did get an update on the COVID spend and also to what extent he’s accessed the imprest supply account.

The other issue I’m very keen to ask him about is—he was talking about how it’s very easy to be smart after the event, in response to Mr Seymour’s question about the nature of the spend and whether it was good quality spend. I suppose the big issue we have with the COVID fund is that, as the Minister’s pointed out, $24 billion was spent towards supporting businesses, and quite rightly so. In fact, some would argue that even now, many businesses are struggling and we have many Government servants and council staff still not back at work, or, if they were back at work, they would be supporting our businesses a lot more. That would certainly underpin the economic performance, particularly of those in retail, cafes, etc. That is a question as to whether, in fact, the Minister’s ever going to require people to come back from work, certainly within the Government sector.

But in terms of the quality of the spend, other than the $24 billion that we believe is appropriate, very much so, there still remains the question of poor-quality spend and lack of delivery of outcomes from that. The Minister will be well aware, you know, part of the total of the $62 billion: a modern approach to night classes, $16 million over four years; Jobs for Nature, which the Auditor-General picked up, $874 million; Radio New Zealand baseline. There’s a whole page of spending here that no one really knows why it was included in the COVID fund and not under the sectors, where it should have been allocated; and, why, in fact, this was actually a priority during the COVID period when the Government is basically taking our debt from $60 billion to $120 billion. There’s just big chunky amounts of money.

Of course, the Minister will recall that we wrote to the Auditor-General and the Auditor-General was pretty clear that parts of this expenditure should have been much more clearly identified, wasn’t, and made it clear—for instance, the National Wilding Conifer Control Programme said that “In our view, this initiative should have been included in the New Policy Initiatives … We have contacted the Ministry for Primary Industries about this, and the Ministry acknowledges that there was an oversight in providing information on this initiative.” There’s a whole stack of these types of issues. The issue we’ve got is the poor quality that was rammed through in a slush fund called the COVID fund, to help Mr Robertson spend more money to make people feel good but actually deliver very little real, tangible benefits to New Zealand.

So please tell us how much of the $62 billion is left; how much of the imprest has been used; and whether, in fact, we might expect to see some tangible results out of some of this wasteful spending that’s been put forward.

DAVID SEYMOUR (Leader—ACT): Thank you, Mr Chair. I want to ask the Minister, in light of enormous spending, inflation which he accepts—even if he thinks its imported—and the pressure that people are feeling on the cost of living, what can the Government now do, given the results of the last year, for people who are actually net taxpayers? I don’t mean handouts, I don’t mean extra benefits, and I don’t mean extra tax credits. I mean what sort of relief is the Government going to put in place so that people who are net taxpayers can handle some of the pressure that is being put on the cost of everything they consume?

Simon Court: Mr Chair?

Simon Watts: Mr Chair?

CHAIRPERSON (Ian McKelvie): I call Simon Court.

SIMON COURT (ACT): Thank you, Mr Chair. It’s true, there are many Simons in this House, but there is only one Simon Court. To the Minister of Infrastructure: Minister, in reply to a question I asked you, written question No. 9773 (2022), the Minister states that “PPP (public-private partnership projects) are privately financed so the private partner has skin in the game and only gets repaid after 25 years if the asset performs.” So will the Minister call for more public-private partnerships so that projects like Mill Road, Penlink, four-laning from Whangārei to Port Marsden, and three waters assets which, when delivered, allow communities to thrive; and if not, why not?

Hon GRANT ROBERTSON (Minister of Finance): I thank all members for those interesting and insightful contributions that they’ve made. In terms of answering Mr Bishop around the Infrastructure Reference Group, broadly speaking my answer to the question is yes. Crown Infrastructure Partners manage the Government’s portfolio of projects within the Infrastructure Reference Group. They are undertaken then in turn mainly by a combination of local government, private sector entities, and some Government entities. There is a role in there for Ōtākaro down in the South Island, helping to manage those projects, and also Kānoa—the regional development unit.

So overall, yes, I am satisfied with what’s happened there. The member is well aware that decisions were taken after that momentous day on 1 July, when Mr Jones and Mr Twyford announced this, where we did rephase some of those projects. Obviously, COVID-19 was the cause of the fund being created but equally has caused significant issues in construction generally, which I’m sure the member is well aware of. The quarterly reports, as he notes, are available. I did suspect that the member might ask me some questions about this, so I did go and check to see if there was any update from the quarterly report. Obviously, the next quarterly report will be out shortly but I can inform the member that around 208 of the 233 projects have started construction; 42 have been completed.

I would note that, again, we rely upon partners for the delivery. The funding’s there, the Government’s approvals have been done—with the exception of one project—but the remaining of them, all have been done from our end. The construction environment’s a challenging and difficult one. I do note that the member’s colleagues right around the country are delighted to attend the openings of various aspects of the Infrastructure Reference Group’s projects.

In answer to Mr Bayly’s question, he’s correct. The exact number is $61.65 billion. What happened there is, members will recall, we allocated an additional $7 billion around the time of the Delta outbreak and then a further $5 billion around the time of the Omicron outbreak. As at the Half Year Economic and Fiscal Update (HYEFU) cut off, we’d allocated $52.7 billion of that. It’s obviously increased as we’ve managed the current COVID support payment and significant additional costs for the health system, particularly around the issue of vaccines and making sure that we’ve got enough testing kits and so forth available.

I do believe this is an important fund and one that’s served New Zealanders extremely well. And I don’t believe that Mr Bayly can actually point to much within the fund that at various times his colleagues have not asked for us to spend more money on. As at the HYEFU date that I mentioned before, it was $24 billion through Vote Social Development, $11 billion through Vote Revenue, $7.3 billion through Vote Health, $5.4 billion through Vote Business, Science and Innovation, $4.7 billion through the Housing and Urban Development, $2.2 billion through Education, $1.8 billion through Transport, $1.6 billion through Building and Construction. All of that information is available for members on the Treasury website but I think in all of those sectors, New Zealanders have benefited significantly from that funding.

In terms of Mr Seymour’s question, we’ve covered this material a bit in the House. The most obvious example is the fuel excise duty and the road-user charge changes, which have actually made a significant difference for New Zealanders: for some of them between around $12 or $15 per tank—so 12 or 15 bucks a week that they are saving as a result of that. More broadly than that, those New Zealanders benefit from properly funded health and education systems and making sure that they have good quality public services in front of them.

In answer to Mr Court’s question, the Government has said consistently that when it comes to particularly transport projects, we’re certainly open to the idea of public-private partnerships. We’ve looked at different ways of those being financed and the special purpose vehicles that are enabled under the Infrastructure Funding and Financing Act are a good example of that and there’s a couple of really interesting projects in the Tauranga area that are designed to have a robust public-private partnership - type approach using the special purpose vehicles.

However, the member will be aware that we are rightly cautious about the widespread use of public-private partnerships, having had the pleasure in the last couple of years of overseeing the end of the work with Minister Wood on Transmission Gully. I can inform the member there that the $400 million or so blowout on that project is going to cost New Zealanders day after day after day because of the appallingly designed and negotiated public-private partnership that the National Party put in place for Transmission Gully.

SIMON WATTS (National—North Shore): Under this Minister and this Government, Crown debt has grown significantly. So what I want to know is whether the Minister still stands by his statement that he mentioned in front of the committee that the cost of borrowing is manageable in the context of the international pressure around interest rates growing significantly over the next couple of years. The other question I have is around comments made by the Treasury noting the shortage of labour within the economy and that high levels of turnover in the labour market are expected soon.

So I’m wanting to understand, in terms of the levers the Minister’s got at his disposal around allowing more labour into the market, which has been completely blocked by this Government to date, what he is going to do in order to provide some relief in terms of those constraints on the labour market. Lastly, I quote—the Auditor-General said, “I have concerns on how Government is accountable to the public and this Parliament.” So I’m interested in terms of his comments around that statement.

Hon GRANT ROBERTSON (Minister of Finance): I thank the member for those questions, and given the time I have available, my answer to at least this one will be relatively brief. In terms of debt levels I remain very comfortable with where New Zealand’s ended up. I didn’t quite answer Chlöe Swarbrick’s full question on that. Yes, it is true that the forecasts as we were dealing with here in these documents, saw us peaking at 40 percent. The member quoted our current debt levels, which have settled on the monthly accounts a little under 35, but they are still forecast to reach 40 percent. I believe that it is an appropriate response, and certainly, for the benefit of the member, compares extremely well to the rest of the world.

If I look at the IMF’s comparable measure for the 2021 year, New Zealand’s net debt was 14.8 percent; Canada, 34.9; Australia, 38.1; the United Kingdom, 97.2, and the United States, 101.9. So I do believe that we have done that well relative to the rest of the world.

In answer to the member’s second question around labour, he’ll be well aware, with the opening up of the border and the bringing forward of those dates, that we will be seeing significantly more people coming into New Zealand. We’ve obviously got the working holiday visa system open. We’ve got the 2021 work visa available to people here to regularise that. I absolutely recognise the pressure that the closed borders have had on the labour market. What I would say is that at the same time, our investment in training New Zealanders during that period is bearing fruit, as the Minister of Education indicated today with tens of thousands of people taking up apprenticeships, and an unemployment rate of 3.2 percent shows that the labour market has had more flexibility. But I do know that employers will look forward to that point coming in. I can’t quite remember the member’s third question, but I’m out of time anyway.

CHAIRPERSON (Ian McKelvie): Members, our time with the Minister of Finance and for Infrastructure has ended. The Minister of Police is now available for 30 minutes to respond to members’ questions.

Police

GINNY ANDERSEN (Chairperson of the Justice Committee) (remote): Thank you very much, Mr Chair. Look, it’s a great opportunity to recap briefly on the main issues covered by the Justice Committee. We covered, to start with, the role of the New Zealand Police in terms of their role to provide those services that the public value so much, including keeping the peace, maintaining public safety, law enforcement, and also crime prevention. But its role also includes community support and reassurance, national security, participating in policing activities outside of New Zealand, and also emergency management.

In 2021, we heard how the Police’s role was highlighted by the need to respond to the COVID-19 pandemic. Overall, in terms of expenditure for 2020 to 2021, Police’s total operating revenue was $2.143 billion, which is approximately 1.42 percent more than the previous year’s spend. In terms of the audit results received by the Auditor-General, there was a statement issued that the standard audit report for Police was satisfactory with the quality of financial statements. The Auditor-General assessed the Police’s management control environment as very good, making no recommendations for improvements in that space.

Some of the main issues that were touched on were the changing nature of gang crime in New Zealand, and members specifically asked questions around the nature of organised criminal groups and also gun crime. It was interesting to note that Police stated that the gang environment has changed significantly due to the return of section 501 offenders who have been deported from Australia. The 501 offenders are often associated with the Australian criminal underworld. Their arrival has resulted in the seeding of additional organised criminal groups and has replicated the Australian criminal environment in New Zealand.

Police stated quite clearly that they are now charging gang members at a higher rate than they have in the past. They told committee members that the rate of charging gang offenders where an offence had been identified is at approximately 92 percent as opposed to previously, which was around the 80 percent mark.

In particular, they referenced Operation Tauwhiro and how it had had an impact on gun crime. Operation Tauwhiro is a nationwide programme aimed at targeting illegal firearm use by gangs and other organised criminal syndicates. We heard that in the year under Police review, Police seized 1,287 firearms and arrested 1,151 people through this operation.

Alongside of Tauwhiro, we heard of operations such as Mist, which specifically tackle the importation of illicit drugs. This recent 10-month – long operation had targeted a syndicate seeking to import drugs into New Zealand from Colombia, and resulted in 50 kilograms of cocaine being seized. Police told us that an interesting feature of this syndicate was its low profile. Syndicate members had not been driving luxury cars or wearing gang patches, and there was little surface evidence of their illegal activities. Police explained that this put into context the need not to focus solely on gangs when targeting drug trade. They noted that 90 percent of those charged with importing, manufacturing, or dealing methamphetamine were not gang-affiliated.

We also heard about improving the front-line safety of staff, with Police allocating $45 million towards improving the safety of front-line officers, including the new funding of tactical response models.

I will touch on also the improvements that Police have taken to police recruitment. The Government has committed to increasing the number of front-line police by 1,800 extra officers. Of these officers, 700 will be specifically dedicated to combatting the rise of organised crime. We asked how many of the 700 for organised crime had been filled. Police believe that they are on track to have the full quota of 1,800 extra officers deployed by 2023. They noted that the experience of some of the setbacks is a result of higher attrition, which has moved around quite a bit because of COVID and the impacts that has made. They’d also noted that the diversity of police has increased as a result of the increased recruitment, and we asked to note how this had been impacted. Police told us that more than 50 percent of those recruited to meet their 1,800 new officers are women.

To wind up, we also heard in detail of Te Aorerekura, a new approach to family harm that was making positive inroads in this space. We also heard about the new Te Pae Oranga rolling out across the country, which aimed to target and prevent lower-level offending being referred to the mainstream justice by, instead, referring to iwi justice panels.

Those, in total, were the main areas covered by the Justice Committee. Thank you.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Mr Chair. There’s a few issues raised there by the chair of the committee that I’d like to address. But, firstly, I’d just like to say that every day in this House, or when we’re here when we’re sitting, we keep hearing from the Government the great news story in terms of investment and numbers and all the rest of it, but the reality is this: a 21 percent increase in violent crime since 2017.

Nationally, police priority one and priority two responses, where it’s required to have a police response, are up by 90 percent, at 48 minutes. Auckland City response times are up one hour and 49 minutes—almost two hours. Retail crime is up 25.7 percent. You would have seen a lot in the media in the last few days about just how tough our retailers and our shopkeepers are doing it, having to deal with ram raids and violent robberies on a daily basis. Theft at retail premises is up, like I said, at 32.2 percent.

In 2017, there were 267 assaults reported on police; in 2021, there were 433 reported. That’s a 62.2 percent increase in assaults on police, and, by the way, that number is under-reported, because I can tell you right now that there are police officers going out, doing their job, protecting our communities, being assaulted on a daily basis. You know what the sad thing is? They’ve just come to accept that as part of their daily duties and work life, and they shouldn’t. They shouldn’t have to be desensitised. They shouldn’t have to be accepting the fact that they’re going to be assaulted when they go to work, but these numbers are indicative: a 62.2 percent rise on assault against police officers in the last three years.

Operation Tauwhiro—what can I say about Operation Tauwhiro? I’d like the Minister to get up and actually tell us in detail exactly what Operation Tauwhiro is about. The Government came out very publicly in their response to a lot of pressure coming on them around the rise in gang numbers and the rise in gang crime and they said, “Our response is Operation Tauwhiro.”, and, I’ll tell you what, the general public thought that that was some sort of dedicated task force that was going to be focused on targeting gangs, search warrants, and removing firearms. But, you know what, it’s all smoke and mirrors. It’s what’s called a Clayton’s operation—an operation when you haven’t got an operation—because what they’ve done is they’ve gone out and they’ve spoken to every single front-line police officer and they’ve said, “If you have an interaction with a gang member or you happen to retrieve a firearm or you execute a warrant, we want you do record that against Operation Tauwhiro.” So, Minister of Police, get up in this House and explain to us, because that’s deceptive.

I’ll tell you what, I was talking to two front-line police officers last night who are right on the front line. They’re dealing with gangs, they’re recovering firearms, and they’re at the pointy end when they’re doing the warrants, and they had no idea. They had not been briefed that they were any part of Operation Tauwhiro. They had no idea that any of the hard work that they were doing and the jobs that they were recording were being captured in this fake “Clayton’s Operation Tauwhiro”. They felt that it was deceptive, and these are front-line police officers.

So the Minister today in the House has wanted me to acknowledge and take note of the fact that her COVID mask has got the Police insignia on it. I’m going to do that, but I’m going to say to you, Minister, that’s a privilege. That’s a privilege to have that Police insignia, and I’ll tell you right now, if you want some honest feedback, the front line at the moment needs some strong leadership, not just politically but from the Commissioner of Police and his team as well, to make the streets out there safer for them and for the public that they swear to come out and protect.

Minister, I want you to get up in this Chamber and I want you to explain to all of us why all of these measures that, actually, we use to understand and measure just how safe it is in New Zealand, how safe people are going about their daily business, how safe our shopkeepers feel when they go and open their doors—stand up in this Chamber and tell us again that there’s been no rise in gang tensions in New Zealand, that your numbers are working, that your investment is working, and that the police aren’t buckling under the strain of very poor policy settings by this Government. They’re supposed to deal with it. You’ve emptied the prison muster by 4,000. Are you telling me there were 4,000 prisoners ready to be integrated back into the community and that they didn’t come back out and rejoin gangs and start committing crime again? The police have to deal with that bad policy setting.

Minister, you stood in this House and, when I asked you about a 60 percent drop in conviction rates on retail crime, you said, “Oh, because we’re looking for alternative actions.” Well, what does that mean? Get up and stand in this House and tell us what “alternative actions” means, because I’ll tell you what it means for the front line. For that thin blue line, it is that they’re out there on a Friday night, making arrests, taking offenders off the street, and they’re back out there on the Saturday night, dealing with the same offenders. So get up and explain to us alternative actions.

Get up and explain to us what the Minister is doing about the fact that the youth justice system is unable to cope with a tsunami of juvenile offending. In Auckland City two nights ago, there were five ram raids. We had an 11-year-old failing to stop, and the problem is this: none of us wants to see our kids out there being involved in crime and starting to move into that criminal justice system. That’s the big social investment piece that we have to work on. You, as a Minister, and our police service have to deal with the crunchy challenge that sits in front of you right now. But I can tell you that an 11-year-old driving a vehicle speeding through the streets of Auckland ram-raiding shops is just as likely to kill an innocent member of the public or a member of the police as a 30-year-old gang member is.

So our police at the moment are buckling under the strain of trying to deal with a wave of youth offenders that they’re trying to take action with on a Friday night, and they’re back out doing ram raids, stealing cars, and, by the way, posting it on social media because now that’s the cool thing to do. The police are having to deal with that. So what are you doing, Minister, to support them, other than making a big, bold announcement with Operation Tauwhiro?

Be honest with the public. Be honest with New Zealand. Operation Tauwhiro is nothing but business as usual under a thin blue line that’s actually being stretched almost to breaking point because of the very poor policy settings of this Government.

By the way, the Minister keeps standing up in this House and attacking me, saying that I’m attacking the police. That’s insulting because, you know what, Minister? The front line actually know that I have genuinely got their back. They know that I understand what is happening. They know that I’m in touch with what they are having to deal with on a daily basis.

Let me make it very clear in the House: I’m not attacking our police. Our police force is the best in the world, and the police agency—and the chair of the select committee said this in her opening statement with the Auditor-General’s report—is one of the best-performing agencies. Absolutely, they are. They’re an incredible agency that provide an amazing service to us as a country.

But let me make one thing very clear, Minister: I’m not attacking our police service or our front line. I’m holding you—and by the way, it’s not personal. It’s a privilege to be the Minister of Police. I’m holding you, as the Minister, to account and I’m holding the Government to account. It’s your actions, or lack of them, and it’s the Government’s actions, or lack of them, that the front line is having to deal with, and that’s the reality of it.

So, Minister, I’ll yield to you, and I’ll allow you to stand in the House and explain to us exactly how Operation Tauwhiro is working. Explain to us why, under your watch, you’ve allowed violent crime to increase by 21 percent.

I’d like you to explain to me why we had Detective Superintendent Greg Williams, who does an outstanding job and is the leader of our national organised crime group—he’s the guy on the front line. He’s the guy that’s responding to the gangs. Let me read to you a couple of quotes from him today: “It would have been easy for us to do a six-month operation to kick in doors and take guns.”, and historically that’s what the police would do. They’d back themselves to do that. They’d have warrants, they’d go to the addresses, they’d use the good intelligence that they had, and they’d actually take positive action and they’d start taking guns off the streets. “But”, he said, “the concern was around the kind of firepower the gangs have access to”, and they’re more willing to use them.

How many times, Minister, do I have to stand in this House and try and get you to understand that, actually, gang tensions, gang violence, gang activity, gang presence, and gang intimidation has grown in this country, Minister, under your watch. So I’ll yield now and allow the Minister to respond to the issues that I’ve raised for her.

Hon POTO WILLIAMS (Minister of Police): Thank you, Madam Chair, and I appreciate the opportunity to respond to that member’s questions. Firstly, can I say, though, it’s really nice to be in the Chamber to be able to speak to the wonderful work that the police do.

Before I address the questions specifically, I do want to say a huge thank you to our police. The last couple of years have been the most extraordinary that we’ve experienced as a nation in recent times, and at the forefront of keeping us safe and giving us comfort have been our police: managed isolation and quarantine (MIQ), checkpoints, assurance visits—all the while while being sick with COVID themselves or isolating as well. Huge amounts of pressure on them, and they have still been able to deliver an excellent, extraordinary service, so my heartfelt thanks to them on that.

Secondly, can I say that Mr Mitchell has had a bit of a rough time with me over the last couple of weeks and he’s had lots to say about me, not all of it particularly nice. So I just wanted to respond to the way we should actually, as members in this House, deal with each other and that is with respect, and I’m not entirely sure that that member has got the memo in that regard. It’s been a rough couple of weeks in terms of the comments that have been made that haven’t been entirely, shall we say, correct, particularly when there are things that are conflated.

You know, I do reference the response times, and I will come back to that, but I do want to start back a little bit further, because one of the issues that gets Mr Mitchell quite particularly exercised is that around gangs. If we go back, we’ve had gangs in this country for a long time, but we noted that the advent of the 501s has added a really critical element to the way gangs behave—much more overt, much more sophisticated. That came about because of some sleepovers that John Key had with Malcolm Turnbull, and a result of that close relationship that they had—the unholy conception of the 501s—became an issue that we had to deal with as a country. That started with John Key in 2015.

Now, in recognition of the impact that 501s were having on the criminal environment in New Zealand, the National Party at that time put in place their gang plan. They announced it in 2016, and actually failed to do anything with that. So by the time that we came in to take office, the issue had become so bad. The National Party had run down the police, they had frozen the budget, and police numbers had dropped. So when the member talks about the issue of dealing with crime, we actually have spent the last four years rebuilding the police force, ensuring that they have sufficient resource to do what they need to do and sufficient funding to do what they need to do, and we have put in place some of the legislative tools that they need in order to do what they need to do. That is a fact—that can be demonstrated. Some of the things that Mr Mitchell has been saying are not quite fact and cannot be demonstrated.

But let’s go back to response times, shall we? As the member asked—

Hon Mark Mitchell: Tell us what they are.

Hon POTO WILLIAMS: —and I’m really happy to answer these questions, but I’d quite like to answer them in silence as I gave that member the opportunity to speak in silence, if that is OK with that member. I do want to talk to response times, because with regard to the comparative periods that Mr Mitchell used, for the February 2022 figure that he quotes, it was a particularly taxing time for our police, if you will recall.

Barbara Edmonds: Was it something happening around here?

Hon POTO WILLIAMS: There was something that was happening around here, actually—you’re right, members. But, more than that, the police rotations were coming out of MIQ, they themselves were impacted by COVID by either being sick themselves—and on some days, those abstractions were up to 460 police—and, on top of that, there were other concerns and issues that were going on. Still, the police were able to respond to emergency calls in eight minutes and 39 seconds, and that, for me—[Bell rung] Madam Chair.

CHAIRPERSON (Hon Jenny Salesa): I call the Minister, the Hon Poto Williams.

Hon POTO WILLIAMS (Minister of Police): I won’t be long; I’ve just got a couple of things that I need to answer in terms of Mr Mitchell. Just over eight minutes for response times, and some of the times that Mr Mitchell is quoting, I think, come from perhaps the 90th percentile, not the 50th percentile. I think we can all say that that’s an extraordinary thing. It’s an extraordinary thing, given all of that pressure, that police were able to respond in that way.

Mr Mitchell referenced retail crime. I just want to say that it’s terrible what happened. The ram raids are shocking and no retailer should have to deal with that, but you have to be able to respond, and what’s the police response? In partnership with Retail New Zealand, they’ve developed the retail crime unit, and that will deal with some of the issues that have come out of the Auckland CBD, which used to be a thriving environment with tourists and people going into work. COVID has leave that place in—you know, there’s not as many people in the CBD as there once were. This is now a feature of many of our towns and cities, where they used to have lots of people come through either for work or for recreation, and that’s not the case. So there is a different dynamic that is being experienced there, and that’s something that the police tell me, but, in response to that, the development of the retail crime unit will help. Not only that, but the additional 1,400 police that we have already put on the front line will support that and help that concern as well.

The other thing that I do want to say about the particular ram raids around some of those high-end shops is that it’s not just a police matter. There are some things that local council can do to support retailers with, perhaps, the development of bollards or something in front of the shops. There are other things that can happen—it’s not just a police response.

In terms of police safety, I was absolutely proud to stand next to the Commissioner of Police in the roll-out of the front-line safety programme, and, in fact, there are two things that I am particularly proud of that we are doing as a Government. We are supporting the police around their front-line safety, and the other piece of work—which will make our community safe—is the firearms register, which we are still working on and we hope to get into place next year. If we get a real good handle on the firearms that are in our community, how they’re being transported, how they’re being secured, and who actually has them, that will increase the safety for our community. So I am really, really proud to be leading that work, and I will continue to lead that work and will be really proud when that business unit is up and running within the police.

Now, there were a couple of other things that the member asked me, and, hopefully, I’ll get a chance to touch on that, but I do want to talk about Operation Tauwhiro. That member has said that Tauwhiro is business as usual. Tauwhiro has been a response to firearms in the hands of gangs, and it is intentional and it is a specific piece of work. It has done such a good job that the police intend to roll it out, but it’s not the only operation. This member over here would suggest to the public of New Zealand that the only thing the police are doing is Tauwhiro. That is not the case, and he is clearly misleading the public of New Zealand in that way.

I’m just going to point to at least four operations that have been running in recent times that have dealt with firearms in particular: Trojan Shield, Tarpon, Seltos, Operation Trout, Weirton, and Bloodhound. All of these are the front-line police getting out there and disrupting gangs and organised crime, and that just because we have resourced them. We’ve had an extra 1,400 police and an extra $450 million resource into the New Zealand Police, and I am proud to be their Minister. I know he’s jealous of my—

Joseph Mooney: Point of order, Madam Chairperson. The Minister just made a statement that the Hon Mark Mitchell had been misleading New Zealand, and I just note that members in this House cannot say that a member is saying something is not correct: Speakers’ ruling 44/4 states that a member may not accuse a member of making a statement they know to be incorrect.

Barbara Edmonds: Thank you, Madam Chair. Speaking to the point of order, throughout the member Mark Mitchell’s comments in his speech, he referred to the Minister and was saying, “Be honest, be honest.” He repeated it three times. So I’m looking at Speakers’ rulings 45/2-3 and 45/5 in relation to that. I did not take a point of order at the time. However, another member has taken a point of order in relation to using the word “mislead”. So I’d like the Chairperson to take that into account, please.

CHAIRPERSON (Hon Jenny Salesa): Yes, I am taking into account the points that you’ve raised, Barbara Edmonds. However, I also overheard the member Mr Mitchell accusing the Minister that—well, actually it was accusing me—“You are misleading the House.”, and I am capable of ruling. I don’t need any assistance. I would like to now go back to the Minister for the remaining 21 seconds to finish off her speech.

Hon Mark Mitchell: Point of order, Madam Chairperson. You’ve just attributed a comment to me that I never said. I never once said that the Minister was misleading the House.

CHAIRPERSON (Hon Jenny Salesa): There was someone from this side of the House as the Minister was giving her speech who said, “You are misleading the House.”, which was actually accusing me of misleading the House, not the Minister.

Hon Mark Mitchell: That may will have been the case, but it was not me and you attributed that comment to me.

CHAIRPERSON (Hon Jenny Salesa): My apologies to the member. But at this time, I would like the Minister to complete her speech before we move on to the next call.

Hon POTO WILLIAMS: Thank you, Madam Chair. I just say that there is more to the police than Operation Tauwhiro, although the public of New Zealand would not know that if they were listening to Mr Mitchell.

I welcome the opportunity to have further discussion about the fantastic work of the New Zealand Police, and I am proud to be their Minister. Thank you.

GOLRIZ GHAHRAMAN (Green) (remote): Thank you, Madam Chair. I just wanted to say that in the midst of all of the Opposition’s what I would call fearmongering about gangs, I do have a concern that I’ve raised with the Minister of Police. I raised it last week in oral questions, but I’d like to get some more detail around it, because I am concerned about the arming of police in reaction to what we’re seeing in the current climate. We’ve heard from the Minister that we’re strengthening the police force, and that’s good, but I am concerned that we now have a very recent report that’s come out that’s attributed death by shooting caused by New Zealand Police at 11 times the rates of England and Wales.

I would like to get some more detail from the Minister around the training and support that police get, as well as what communities get, in preventing deaths by firearms. Especially around this issue, I’m concerned, on behalf of the Green Party, to note that many of the people killed by police were not in possession of firearms. I know the Minister wasn’t sure about that data. But it is—and I have double-checked it—in fact, true that we’re not seeing deaths or even use of force against those who are armed necessarily but many who suffer from mental health issues, and I would like to hear some detail around that training that addresses specifically de-escalation training for dealing with people in mental health crises.

Beyond that, I know that we know the Armed Offenders Squad, in particular, has been identified as deploying people to the front lines without having necessarily completed the training that they would ordinarily be required to do, at least in the past, and I’d like to hear how the Minister has ensured that that is no longer the case. Further to that, again, the Independent Police Conduct Authority has said that the Armed Offenders Squad often has been found to escalate matters in situations where they respond, and, in particular, we know that Māori are seven times more likely than are Pākehā who are engaged in the same or similar actions—that has to be noted—to be at the receiving end of police use of force.

So the combination of that—the fact that people are 11 times more likely to die from the use of firearms by police here, the fact that Māori are seven times more likely to receive any kind of use of force, and the fact that our Armed Offenders Squad, in particular, are not necessarily as trained as we would like them to be—are concerns here. If the Minister could just break down the training and the response to this data and information that we’ve received, especially for mental health sufferers and for Māori—thank you.

Hon POTO WILLIAMS (Minister of Police): Thank you to that member for the question. It’s one that has many parts to it. I think, first, I will speak to the concerns that the member raised around deaths by firearms. When she asked the question in the House last week, it was very clear from what we know of the environment here in New Zealand that the comparator with the UK, for example, is not comparing apples with apples, because the UK have much tighter firearms laws. They are less likely, as a general population, to be armed. In New Zealand, of course, we have people who use firearms for recreation or for gathering kai and the like, or for farm work. So, as a population, we are far more armed, generally speaking, so we cannot do that comparison and come out at the same point—it will not be the case.

I remember saying to that member last week in the House that where police have used this force, generally speaking—not in every case, but generally speaking—it has been against somebody who has been armed. So that was the point that I had wanted to make to her last week. But we are talking about an increasingly unsafe environment, generally speaking, in terms of our mental wellbeing.

When we talk about increases in reporting to police, there have been 50 to 60 percent increases in family harm and in mental health reporting. There’s no doubt that COVID has been tough on our people and our mental wellbeing hasn’t been as robust to deal with that, and a lot of our young people—you know, we have terribly high suicide rates. So the member is pointing to a particular issue that the police have been dealing with, and one of the ways they deal with that, of course, is to have the co-responder model, which has mental health workers working alongside the police, because, as you can expect, the police are not the experts in mental health. However, increasingly their work is in this area, and as a way to deal with that, of course, they have the co-response model.

In terms of training, this issue has arisen in recent times, I know that there are a couple of reviews under way, but I’m also aware of the increased training that happens to the front line through the work that I have already spoken about: the increase in training for our tactical response teams, which will mean we will have Armed Offenders Squad (AOS) - trained staff on shift, and that we’re actually now looking at national standards in terms of the AOS training.

The last thing I’d like to say is in terms of a concern that I have as Minister, and one that I’ve expressed often, about the disproportionate rates of arrest or engagement with Māori and Pacific, and how, as police, they are going to deal with that. I’m very supportive of the work that the Commissioner of Police has commissioned in terms of understanding policing delivery, looking at issues of bias and looking at how police make decisions about who they stop, who they talk to, and how they go on to make those charges. I hope that satisfies the member’s questions, and I thank her for them.

NICOLE McKEE (ACT): Thank you, Madam Chair. Minister, I’m going to be quite short and sharp with some of the questions. The first one is that New Zealand Police have obtained only 6 percent of their 80 percent key performance indicators for firearms administration in the licensing realm. My first question is: what percentage is the Minister expecting Police to fulfil out of that 80 percent this year—so, come June, and also come December 2022.

I also have questions around the fact that Police have just released an extensive consultation document on clubs and ranges at a time when most people are involved with either the roar or the upcoming duck-shooting season. Does the Minister believe that allowing only a six-week time frame on what will become a community safety issue is good practice? Does the Minister have confidence in Police to be able to administer the firearms licensing regime along with the clubs and ranges administration regime, and will she confirm that there’ll be no further firearms licensing delays as a result of the new work for the administrators?

Commerce, Consumer Affairs, and Statistics

JAMIE STRANGE (Chairperson of the Economic Development, Science and Innovation Committee): Thank you very much for the opportunity to take a call in the Appropriation (2020/21 Confirmation and Validation) Bill, Commerce, Consumer Affairs, and Statistics. Look, as the chair of the Economic Development, Science and Innovation Committee, I’d like to acknowledge the committee for the process that they undertook in terms of the annual review, hearing from over 20 Government agencies; a hard-working committee. I’d like to acknowledge all of the staff and the officials for the work that they did in terms of preparing the reports for us to now present to the House.

In terms of questions to the Minister, I’d just like to highlight a couple of areas. The first one is around Stats NZ. I’m interested to hear from the Minister around the measures that Stats NZ has taken to support a successful 2023 Census. We heard from Stats NZ that Census 2018 entailed a number of challenges and issues. The response rate was lower than expected, especially amongst Māori and Pacific. Stats NZ has been focusing on learning from the issues and challenges with the previous census, and it’s talked about a number of changes in its data collection approach for 2023. Now, one of those changes that the committee heard from Stats NZ was around the community engagement aspect. The Community Counts initiative we heard is a development for Census 2023. I’d be interested to hear from the Minister what Stats NZ are planning to do in terms of engaging with the community further, to increase the rates of participation in Census 2023. I understand that there are some other areas that Stats NZ are specifically looking at in terms of increasing that engagement. One of them I’ll be interested to hear from the Minister, as well, is around how Stats NZ are planning to work to improve both the online and the paper data collection—you know, because, as a society, we are evolving to more of an online world, really. And the census is moving online; how do we move online in a way that we also offer the paper-based system so, in effect, people don’t fall through the cracks? So that’s my question about the stats.

Then the second question I have is in terms of market power, and then, obviously, I know other members will have questions following on. But the question of market power: New Zealand is a small economy in relation to other countries around the world, and being a small economy, we often don’t have quite as many active players in markets, and because of that, we can at times be prone to having less competition than would be desirable for consumers. Sometimes this leads to monopolies. Sometimes this leads to cartel-type behaviour. So I am interested to hear from the Minister what changes have been made over the past 12 months to strengthen the prohibition against misuse of market power. Now, we heard from the Commerce Commission a little bit around this, particularly in terms of some of the market studies that they’ve been doing, in terms of the grocery sector. The commission released its final report on the conditions for competition in the grocery sector on 8 March 2022. The other area we heard from the Commerce Commission was around the retail fuel market. In 2019, the commission released its final report into the retail fuel market in New Zealand, and I understand there’s been some changes in that area to increase competition in the fuel market.

The third one is the residential building supplies. Now, I think we’ve all seen quite an escalation in some aspects, in terms of residential building supplies. The Commerce Commission said in their annual review that in November 2021, the Government asked the commission to study whether competition for residential building supplies in New Zealand is working well, and, if not, what can be done to improve it. So I’ll be interested to hear from the Minister why the Government asked that question. Has the Minister identified something in the residential building supplies that needs to change in terms of the competition?

So just to summarise for the benefit the Minister: Stats NZ in terms of the 2023 census, and the second question in terms of the changes that have been to strengthen the prohibition against the misuse of market power, acknowledging that we are a small market. Thank you.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I want to, first, thank the member for the work that he does chairing the Economic Development, Science and Innovation Committee and for the questions that have come my way, which are—you know, two that will be front of mind for members of this House. I will answer the member’s two questions, and I just note that I had a conversation with the Opposition who would like us to focus on the Commerce Act first and then statistics after that. I am happy to take the questions as they come. But perhaps if the committee felt—it’s the committee’s will, but if the committee wanted to organise itself that way, I’d be more than happy, but I’ll answer the member’s questions straight off around Stats New Zealand and the work that’s being undertaken to support a successful 2023 census.

There has been a whole lot more engagement with communities ahead of the census, and, as an example, Stats New Zealand has been working with iwi and Māori stakeholders in their respective regions to try and ensure that there is engagement well ahead of the census so that approaches can be developed that better support the collection of accurate data and statistics from populations who traditionally have not at such high rates responded to the census. There will be more paper forms available this time around, with 44 percent of all dwellings receiving paper forms prior to census day, and that’s a significant increase from 2018, when only 3 percent of households received paper forms in the same period. The final numbers will be confirmed after the dress rehearsal. Look, more than double the number of census collectors will be available at census time. There were 1,800 in 2018, and there’ll be up to 4,000 for Census 2023. There’ll be more assistance to complete census forms: help at the doorstep, or crossing the doorstep, to provide assistance. These are all measures that have been taken in response to the challenges of the 2018 census.

In respect of section 36, the member has asked what measures have been taken around prohibition of market power, and I’m sure this will be raised by members opposite as well. I do want to thank the committee for its support of the legislation recently passed, which strengthened section 36 of the Commerce Act, and the strengthened legislation will give the Commerce Commission better tools to take cases where it observes behaviour that may appear to be anti-competitive, and it will also more likely deter anti-competitive behaviour in the market. It has been very difficult to enforce section 36. Historically, I note that the Commerce Commission has taken five cases only since the legislation was introduced in 1986, and only two of them had been successful, and the last of these cases concerned conduct in the early 2000s. So it’s been felt that, really, that legislation has not had the teeth that was necessary to effectively enforce competition or to dissuade anti-competitive conduct, and the reforms align with the prohibition in Australia, the equivalent prohibition, and uses a test that already operates in other parts of the Commerce Act. I’m expecting the Commerce Commission to provide appropriate guidance around it, too.

So, look, I think I’ll leave that there and I’ll invite contributions from the Opposition.

DAMIEN SMITH (ACT): Thank you, Madam Chair. The questions to the Minister are as follows. Why hasn’t the Commerce Commission’s investigation into fuel companies, which the Government promised would bring down petrol prices by 30c a litre, achieved a reduction in prices at the pump for motorists, and, interlocked with that question, how can New Zealanders have any confidence that the market study into supermarkets will bring down food prices when this market study into petrol companies has failed to achieve anything at all? The third question is—with his policy team on statistics—given the appropriations in the Budget, is he disappointed that nobody picked up the rampant inflation, which is at a 30-year high and is seeping into every aspect of the economy?

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. I want to deal with the member’s question straight off around fuel prices. The first of the market studies that was conducted was indeed into the fuel sector—fuel supplies—and it was conducted before my time in the role currently, but it’s one which still has legislation coming through and the effects of that legislation coming through, not to mention, obviously, the recent reduction in fuel tax that the Government has put through, recognising that families on fixed and/or modest incomes have been feeling the challenges of the cost of living increases connected to the global inflationary environment and the challenges in the Ukraine. So the Government has responded to those issues as they have arisen. But I do want to pick up the member’s—

Damien Smith: Point of order. I’m talking about a period, Madam Chairperson, that was long before the Ukraine crisis, and it has been reflected in—

Hon Dr DAVID CLARK: I was coming to that.

Damien Smith: —the last year.

CHAIRPERSON (Hon Jenny Salesa): I call on the Minister the Hon Dr David Clark.

Hon Dr DAVID CLARK: Thank you, Madam Chair. I think the context of the current situation is important, and I also want to directly address the member’s concern about the market study—the first of its kind—funded by the current Government to really get into competition issues in the sector. There has been a documented reduction in the fuel margins charged since the time that that study was released. We can now have a transparent view of those markets, and over the, roughly, 18 months since that report was released, we can see that fuel margins have reduced sufficiently so that the average family filling up a car every two weeks, which is pretty typical, would have saved around $100 per annum as a result of fuel margins dropping. So I would say that that does amount to something that has greater transparency in the market and some evidence that fuel margins have dropped as a response to the findings of that study.

On top of that, I would also note that there’s a new entrant in the South Island who attributes the ability to enter the fuel market to the changing conditions that were allowed for in the response to the fuel market study. So we’ve seen increased competition in the market as a result of measures that the Government took, and also further transparency around pricing and so forth has recently come into effect.

So there have been a number of changes in the market, and I just do want to challenge the member repeating some of those lines that came out around the time of the study. It is no longer relevant, because we’ve got evidence that that study has had a genuine impact on the fuel market.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I want to turn to the Credit Contracts and Consumer Finance Act (CCCFA) issue. So I suppose my first question is: the bill, which is now the Act, provided for a differential approach to be taken to lender and for borrower—it was in section 9E. Why was it that the Minister subsequently allowed the Ministry of Business, Innovation and Employment (MBIE) to rewrite the Responsible Lending Code, which originally was about 62 pages, and turn it into this mammoth 102-page Responsible Lending Code, and to include things—specifically a diagram on page 25—that state that lenders are required under 4AK to obtain at least 90 days of transactional records from relevant banks to verify the expenses; to do benchmarking; and not, practically, make adjustments for that? So here is a document and a one-page diagram setting out how banks and responsible lenders should be looking at lending practices. Why on earth would a Minister pass regulations, that did not come back through the Finance and Expenditure Committee, to set out such a prescriptive approach that has led to an absolute carnage, in terms of lending, to both people wanting to get mortgages, right through to people trying to get lending for cars or other items? So that’s the first question. Why did he allow this Responsible Lending Code to be so prescriptive and basically tell lenders how to go about assessing lending to borrowers?

The second point is: why didn’t he take a differential approach to different classes of borrowers? The whole purpose of the original Act was to look at high-cost lenders, and section 9E gave the ability to do a differential approach. This regulation, that only the Minister approved, took a carte blanche approach that meant that even regulated financial institutions, which are regulated by the Reserve Bank, which include our banks, through to commercial entities, through to approved lenders, right through to high-cost lenders—which was the original purpose of the legislation—are captured by the same piece of regulation that only the Minister approved. Why did he do it?

And my third major point is: why has he, first of all, when the problem first arose, blamed the banks? And why has he allowed MBIE, as late as late last week, to still blame the banks for very conservative lending, when page 24 of the Responsible Lending Code, that he passed, requires them to get this information from the borrower?

DAMIEN SMITH (ACT): I’d just like to ask the Minister how much margins have fallen on petrol.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I will respond to the member Andrew Bayly’s questions around the CCCFA to start with. And, first, I do want to thank him and the parties in Parliament who unanimously passed the CCCFA legislation, back in 2019, as the whole Parliament recognised it was really important that we pass legislation to protect vulnerable borrowers. And the contributions through the Finance and Expenditure Committee process meant that we passed a law that the whole Parliament agreed on; the banks agreed it was really important also to protect vulnerable borrowers. So that’s the first and fundamental point I want to make.

This legislation which the member’s raising is legislation that the whole Parliament passed, and for good reason, and is supported by the sector—of course, it’s also supported by the budget advocates, those who find themselves as vulnerable borrowers, because, of course, anybody who’s lent money they can’t afford can become a vulnerable borrower very quickly.

What has then transpired, of course, is that the legislation came into effect, and it was observed that there was a drop in lending in December 2021. That drop, of course, is seasonal—we do know that in December, generally, lending drops. Of course, December 2021 was actually more lending to first-home borrowers than December 2019, 2018, 2017, and certainly a lot more than under the previous Government, in terms of first-home buyer lending.

So, none the less, that drop was something which attracted a lot of media concern and stories about people who were not able to get a mortgage, who wanted to get a mortgage. And I observed that, certainly in looking at lots of the media, a lot of the stories were about people who did not meet the current loan-to-value ratio (LVR) restrictions—that is, they did not have a 20 percent deposit. But the CCCFA, as it was newly introduced, had become something of a focus for members of the public, and banks had said that in some instances people had not received the mortgages they had hoped for because of that legislation.

So what I did at that point, as Minister, was bring forward the review into that legislation. The legislation is quite significant legislation. Again, I thank the member and his party, and the other parties in Parliament, for passing that legislation, because it has been described to me as the most significant legislation for the sector since legislation passed during the global financial crisis. That legislation coming into effect, of course, needed a review, as all major changes do. That was scheduled but I chose to bring that review forward because of some of the media concern and some of the cases being raised in the wider context.

The challenge, of course, and the Council of Financial Regulators (CoFR) agencies have been tasked with this, is to discern what of the reduction in lending can be attributed to seasonal factors, what can be attributed to the global economic conditions, the bank’s appetite for risk—we know that the major banks have been asked to de-risk their books by their parent companies—what can be attributed to the LVR changes, what can be attributed to the increase in rates, and so forth? These things are not simple—the official cash rate rise—a lot of these factors, of course, all play into lending decisions. The banks, ultimately, make commercial decisions off the back of all the factors at play in the market, and that’s to be expected. They’ve returned record profits, we’ve learnt recently, of $6 billion—back to Australia—in the past year. They’re making commercial decisions, as you would expect them to.

But, of course, these have implications for New Zealanders. So we wanted to make sure that the CCCFA was working as intended. We’ve already signalled some changes we wish to make. And the one that the member refers to is the change to—and I hold up the diagram: he’s picked out the bit where there’s a big red cross because that is one of the changes we’re proposing to make to 4AK(2)(b) around the collection of information because we’ve discerned that, actually, we don’t think that that is necessary. What is more important is the forward view of the expenses of individuals and their ability to meet the repayment requirements.

So I do want to thank the officials who’ve been working on this, the CoFR agencies across Government who’ve lent their expertise, and the banks who’ve made some very good suggestions, and other lenders who have made some suggested tweaks, which we have responded to, to try to ensure that New Zealanders can access the mortgages that they would desire.

ANDREW BAYLY (National—Port Waikato): I find that answer absolutely incredible. I think the Minister’s asserting that the cause of this issue was the legislation, not the responsible code of lending dated February 2021. So the first thing is: can the Minister confirm whether in fact he as the Minister was the one that approved these regulations, issued by the Ministry of Business, Innovation and Employment (MBIE), called Responsible Lending Code: Revised February 2021? I put it to the Minister—and I’ve heard him talk about this rather cutely previously—that the issue is not the legislation. The legislation provided for a differential approach to be taken either in respect of the lender or the borrower. The issue is not the legislation; it’s the regulation. And this is the document that has exploded by 40 pages, and I’d love to know, and I ask again, whether the Minister will confirm whether or not he as the Minister of Commerce actually approved these regulations.

The second thing is: why did he allow MBIE to lead the review of the regulations of this whole credit contracts finance issue when in fact MBIE was responsible for preparing the code that, in my view, the Minister subsequently improved and has led to the issue? Why was MBIE asked to leave that? Why did the Minister choose not to get an experienced practitioner? Because many of these issues that have come to fruition were highlighted in the select committee process. What people didn’t expect was that there would be a Minister who would subsequently go away and allow this approach to be adopted across all lenders and a responsible lending code that was issued in February.

DAMIEN SMITH (ACT): I would just like Minister Clark to answer the last question, which was in the previous cluster, which is: how much have fuel margins fallen?

CHAIRPERSON (Hon Jenny Salesa): I’d like to know, though, if the Minister intends to answer this question or do we go on to the Minister of Education, who will now be in the chair to answer questions?

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I’m happy to come back to the member. I don’t have that exact calculation in front of me. It’s freely available on the Ministry of Business, Innovation and Employment (MBIE) website. All of the data of fuel margins is published, and the member can do that calculation and check my calculation if he wishes to. That data is available on the MBIE website.

I’ll respond to one more matter that’s been raised by the member Andrew Bayly, and, obviously, then I must vacate the chair. On the matter of whether the regulations chose to be neutral on the matter of whether we’re regulating banks or other lending institutions, we have, consistent with the legislation, chosen to be neutral. We don’t want to privilege one part of the lending sector over others. We believe that there should be competition, and we recognise that, according to survey research, people do fall into hardship. Eighteen percent, actually, of people described themselves as in moderate or severe hardship on an everyday level when consumer surveys were done, which was part of the reason, of course, that the whole House supported the legislative change, and that was not restricted to lending types that were not banks. Banks were included in that wider figure. Now, it is true that some of those other lending institutions probably have more dubious track records, but it seems appropriate to have the same protections and a level playing field for all lenders.

CHAIRPERSON (Hon Jenny Salesa): Members, our time with the Minister of Commerce and Consumer Affairs and Minister of Statistics has ended—

Hon Michael Woodhouse: Point of order. Madam Chair, the Minister assumed the chair, by my calculations, at 4.27 and therefore we still have about eight minutes to go, wherein in the second half of our exchange we were going to discuss matters related to his statistics portfolio. I just want to check the math on that.

CHAIRPERSON (Hon Jenny Salesa): The Minister assumed the chair at around about 4.20. The Government has agreed the time that the Ministers are in the chair and when questions run over time that means that it cuts into the other sessions, including the Minister of Education, who is here for the education portfolio as well as COVID-19

Hon Michael Woodhouse: Point of order, Madam Chair. Can you give the House an absolute assurance that it was 4.20 when the Minister assumed the chair because I was checking the clock? I knew we were late, but it was closer to 4.20—

CHAIRPERSON (Hon Jenny Salesa): If he wants to answer a question on statistics he is most welcome to.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I’m more than happy to take a question from the member. Obviously, it cuts into the next member’s period, but that’s a decision for the Opposition to make and I’m happy to stay a little longer to answer his question.

Hon MICHAEL WOODHOUSE (National): I would point out it’s not our time that’s being cut into; it’s the Government’s time, because we haven’t been able to use ours yet. And if I’m restricted to one, it will simply be this. In answer to written question 2920 on options, including delaying the census—sorry around the discussions around a possibility of a delay to the census—the Minister did say that those discussions were taking place. But he refused to answer a question later on, at question 2924, about whether he had asked for a Cabinet paper to be prepared on the subject of Census 2023. He said it wasn’t in the public interest to disclose the information at this time. I think it’s very much in the public interest to know whether the Government has seriously considered a delay to the next census until 2024. Has he asked for advice from officials and does he intend to take a Cabinet paper in the next few months with a recommendation on whether Census 2023 should be delayed?

Hon Dr DAVID CLARK (Minister of Statistics): Thank you, Madam Speaker. What I would say is that Stats New Zealand continues to prepare for Census 2023. That is the aim, to deliver that census. As the member will be aware, with a global pandemic on, there is consideration given, of course, as to whether there is a need to delay the census, because the tests that were intended to be undertaken have not all been able to be undertaken to date, in terms of new methodologies for collecting these statistics. Having said that, the existing testing does seem to be working very well. I’m assured that the alternative testing methods that have been trialled to try and gain as much information as possible from populations that returned statistics and census data at a lower rate than last time have been successful, and that includes better quantitative analysis, stakeholder and community engagement, market research, focus groups, other methods of trying to assess the collection methods that are proposed, and international peer review of the approaches that are being taken.

I’m trying to be helpful to the member, but I would say that, you know, it’s my expectation that we’ll build a contingency into the Data and Statistics Bill to allow for a delay of census if it should be required. At this stage, Statistics New Zealand is on track to complete the census as planned, but some communities have not yet been ready to engage fully with the census process, including Māori communities who have been very much occupied with looking after their people through a global pandemic. I’m mindful of that, but these things still lie ahead of us.

Hon Michael Woodhouse: Madam Chair?

CHAIRPERSON (Hon Jenny Salesa): The Hon Michael Woodhouse, we are actually out of time in terms of what was determined at the Business Committee—for 30 minutes.

Hon MICHAEL WOODHOUSE (National): Point of order, Madam Chair. During the Minister’s answer, the whip in the chair has been liaising with the clerks to ascertain that there was actually, when I started the intervention, eight minutes to go in this Minister’s time and just under five minutes when he finished. I’ll relinquish, and we will change, but I do think it behoves the committee to make sure that there’s, I think, a better synchronicity of what’s actually happening and how much time is available, because it’s a pretty unfulfilling process if we run out of time that we thought we had.

CHAIRPERSON (Hon Jenny Salesa): It really is up to the Opposition deciding whether you cut into the Minister of Education’s time.

Education

CHAIRPERSON (Hon Jenny Salesa): The Minister of Education is now available for 30 minutes to respond to members’ questions relating to education. Please note that members will have the opportunity to ask questions on the COVID-19 response once our time with education has ended.

MARJA LUBECK (Chairperson of the Education and Workforce Committee): Thank you, Madam Speaker, for the opportunity to lead off the committee stage of this annual review debate for the education sector, being the chair of the Education and Workforce Committee. I acknowledge the Minister in the chair and I look forward to contributions from my select committee colleagues across the House.

In order to ground the debate, I’ll start with an outline of the process our committee followed for this review. We met between 8 December 2021 and 30 March 2022 to consider these annual reviews and, just as we did in 2021, the education sector annual review was made up of seven annual reviews for different Government entities, and that allowed us to report on the sector as a whole. In the interests of time, I won’t go through all the seven entities, but I will add that we separately considered an annual briefing for Te Pūkenga and, in line with the decision of the Business Committee, we are also debating that review and that particular sector debate today. In reviewing the entities mentioned, we conducted a briefing with the Office of the Auditor-General, a hearing with the Minister of Education, the Hon Chris Hipkins, and the chief executives of the entities. We also received a briefing paper for the overall education sector.

As a committee, we asked well over 1,000 written questions of the entities, and also of Te Pūkenga. Unsurprisingly, the dominant topic of our annual review was COVID-19 and, as we noted in our written report, COVID-19 has had pervasive effects on the education sector, impacting NCEA exams, student and staff wellbeing, and much more. We asked the Minister of Education and the ministry about the impact of closed borders on the supply of teachers, and we asked about the equitable access to digital technology because, with the disruption of COVID, widespread adoption of online and hybrid learning had to become necessary. The ministry informed us of the work that they were doing in that regard, and that included hooking up 40,000 households to the internet, providing 50,000 devices to students, and providing hardcopy materials where that was appropriate.

We also asked the Minister about the work under way on improving student achievement, including numeracy and literacy rates, and reducing the disparities. The Minister noted that the decline in numeracy attainment has been 20 years in the making and that, due to the 10- to 15-year horizon that curriculum changes can take, it will take some time for improvements to be seen in the numeracy outcomes. When asked about ongoing work, the Minister told us of the focus needed on professional development and initial teacher training, and the creation of new standards to be piloted in 2022. We also considered the reform of vocational education and the progress made in the establishment of Te Pūkenga and the workforce development councils. We heard about the record number of people going into apprenticeships, with more people training in areas where the skills are in hot demand, and we also heard about the difference that that free trades training has made.

As a last point, I’ll note the ongoing work on pay parity in the early childhood sector. We noted the Minister’s announcement in May 2021 of $170 million to help achieve pay parity for early childhood education (ECE) teachers, with 62 percent of ECE centres having opted in to access that particular new funding available. We also discussed the introduction of network management in more depth with the Ministry of Education.

I want to acknowledge the officials from across the education entities for feeding into this process and supporting us, as a committee, to provide parliamentary scrutiny to the sector as a whole. I want to thank my committee members for their involvement in this review. It has been a comprehensive and collaborative inquiry, and, of course, even more so with the recent increase in ministerial accountability. By participating in this new style annual review debate, Ministers in this current Government are subjecting themselves to parliamentary scrutiny in a way that hasn’t been seen until these changes were made earlier, when we started this term. I’m sure that the Minister, through questions, will have more to share with us. Thank you, Mr Chair.

Hon PAUL GOLDSMITH (National): Well, we’ve just had five minutes of searing parliamentary scrutiny of the Executive from the Labour backbench MP and Chair of the Education and Workforce Committee, Marja Lubeck, so it’s really good to see that this Government is very focused on that.

My pleasure to speak in this debate—unfortunately COVID has ravaged our education spokesman and -woman line up, and so I’ve been asked to step into the breach, and it is a great pleasure to do that because there is no more important topic facing this country long term than the education of our children. We’re familiar with the concerns that have been raised many times about New Zealand’s slide down the international rankings in terms of literacy and numeracy, and there’s been a lot of debate had as to whether that’s important or not, or relevant or not. In my time as education spokesperson, I was surprised by the number of principals of schools who didn’t think that was an issue.

The Minister of Education in our session earlier made the point that—spun it in a rather strange way, I thought—our relative slump from New Zealand was “probably a good thing” because it shows that other countries are improving their performance, and maybe we should be celebrating their success rather than bemoaning our demise. And I suppose the question that I have for the Minister is: does he, on reflection, think perhaps that wasn’t a wise comment? And indeed, when it comes to the ability of New Zealanders to thrive in the modern world, to compete internationally, and to be able to reach their fullest expression—whether in work or in their general lives—in terms of understanding the arts and literacy and all the wonders that come with education, surely our ambitions should be to retain and regain the very high levels of relative education performance that we have delivered in the past and can in the future, so that New Zealanders are well equipped to thrive globally, as we have in so many endeavours in so many ways. And so I just give the Minister an opportunity to recalibrate that, and raise his ambition and the Government’s ambition.

In particular, on the issue of literacy, we note that only 35 percent of 15-year-olds are passing basic proficiency in numeracy and literacy, and the Government has recently released its literacy and numeracy strategy. The concern that we have is that it lacks any specific details on what exact strategies will be implemented. In fact, a very vague outline leads to the final conclusion that the literacy section explains that there will be an “evidence-based approach”. So the relevant question that we have is, well what evidence will it be based on, and what approach will be followed? And what we’d be asking the Minister, specifically on the literacy side, is—there’s lots of debates about these things. We in this country have followed, particularly in years 0 to 2—the very start of learning to understand, and to read and to write—we’ve been using what’s called the “balanced approach” for many decades. There’s a very, I think, compelling argument that it has failed us, and it has failed our children, and is a big part of the reason why we’re going backwards. Will he adopt what’s called the “structured literacy approach” or the “phonics-based approach” as the standard approach to try and turn that around? I’d be very interested in his views on that—some specificity, or are we just going to rather vaguely say we’ll carry on with an “evidenced-based approach”? So there’s a couple of questions to get the Minister started.

One final question, of course, he might ask his colleague the COVID-19 Response Minister, when—and I ask this on behalf of two teenage girls at school—will they not have to wear a flaming mask all day? Because there is nothing more frustrating and irritating for students to have to do that, particularly adolescent ones with pimples. In terms of just restoring a bit of fun, and life, and relaxation, and the ability to interact freely, when are we going to get rid of those masks?

TEANAU TUIONO (Green) (remote): Thank you, Mr Chair, and tēnā koutou e te Whare. My question is around COVID in schools, and I know a lot of parents around Parliament and also parents around the nation will be wondering about what’s planned to come out for winter as well. Schools have been the hotbeds for COVID, with large outbreaks in schools. In fact, for tamariki and whānau in the last 10 days, we’ve had over 25,000 cases in schools alone, and vaccination rates are low as well.

So my question to the Minister—and there’s a series of questions, and I’m hoping he’ll get to all of them—is how’s the roll-out for the mechanical ventilation infiltration going? Will schools have this in place by the start of term 2, before winter kicks in, and also is the Minister concerned about the wellbeing of children and their ability to focus and to learn in cold, draughty classrooms as well, because that’s really important. We’re knocking on the door—winter’s nearly here as well.

On the back of that as well, when will teachers and students have free N95 masks, and if they won’t get them, then why not? Also, what is the Government doing to increase vaccination rates for tamariki Māori and Pasifika children in kura as well.

So if the Minister could work his way through that. I’m especially interested in what’s going to happen around ventilation infiltration, air filtration—particularly as we move into winter. Thank you.

Hon CHRIS HIPKINS (Minister of Education): Thank you, Mr Chair. Happy to work my way through the list of questions that we’ve had so far this evening. I’ll start with the international rankings and my comments that have been badly distorted by Mr Goldsmith on the international rankings. I know that would be an entirely new thing for him to do. But I will say that I did differentiate in my comments in select committee between the decline in the mean scores of New Zealand students, which is something that we should all be concerned about, and the presence of additional countries in the overall international rankings. Bearing in mind that when these started about 25 or 30 years ago, there weren’t as many countries involved in the studies as there are now, and we should welcome the fact that there are more countries participating in these kind of comparative studies, and also that some of those studies, particularly some of the developing countries, are actually doing better. I don’t have a problem with that. I welcome that. I celebrate that. But I do have a problem, and I think we all in this House should have a problem, with the fact that the performance of New Zealand students, even if you forget about what the rest of the world is doing, has been going down. That trend has been evident ever since we started participating in these studies about 25 or 30 years ago. So I think we do need to take that very seriously.

So, in terms of literacy and numeracy, it’s worth remembering that the most prominent of all of those studies is the Programme for International Student Assessment study, and that measures the reading literacy, among other things, of our 15-year-olds. So these kids have already been in our education system, in our schooling system for 10 years at that point, and then if you add early childhood education on before that, they could have spent about 13 years in the education system. What do we know about that? Well, we know that the kids who participated in quality early childhood education actually do better by the time they are at the age of 15. So there’s one area where the Government has placed quite a significant amount of attention.

We do know that we can do better when it comes to those core basics like literacy and numeracy. It’s one of the things that we’ve been investing in since we have been in Government. Mr Goldsmith raised the question of what’s the magical answer when it comes to teaching kids to read. Well, here’s the cold, hard reality: there isn’t a magical answer. Those who grab at phonics and say, “This is the way you should do it and you should only do it this way.”—they are wrong. But those who also grab at the reading in context theory, they are also wrong if they think that that is the only solution, because, actually, you use whatever solution is best for that individual child. Some kids learn by looking at pictures and interpreting the words. Some kids learn by sounding things out. The Ready to Read series that has recently been released combines all of those elements so you can use what is best for the child. I read every night, when I’m at home, with my 5-year-old, using the Ready to Read books that he brings home from school, and I can tell you that they are a brilliant resource, and the newer Ready to Read books are even better than the original ones because they give you such a rich set of materials that you can work with in teaching kids to read.

But we’ve got to invest in teacher professional development because that is how we’re really going to turn things around. When we talk about the quality of teaching, people say we should raise the standard for beginning teachers. That’s all very well and good, but 10 years from now, the majority of teachers in our classrooms will be teachers that are already in our classrooms today. So we’ve actually got to focus on making sure that those teachers who are in our classrooms as of now, have the opportunity to improve their skills and to upskill.

In terms of masks in schools and when they will be removed: when the country moves to orange. Not giving anything away, when the country does move to orange, then the mask use in schools rules change. They move from a requirement to an encouragement, and therefore people can expect to see some change there.

Teanau Tuiono raised some very good questions about COVID-19 and winter. Winter is coming, what’s planned? Well, around ventilation, if I could talk about ventilation because this comes up all of the time, I have looked very closely at the comparative effectiveness of those portable air cleaners versus opening the window. A portable air cleaner will change the air in a room about three times in an hour. Opening the doors and the windows will change the air in the room between 15 and 30 times in an hour. So opening the doors and the windows is still a better solution than putting in a portable air cleaner. Now, you come to winter and you say, “OK, but it’s colder in winter, and therefore you don’t want to have all the doors and windows open in winter.”—fair point. Opening the window by about 1½ centimetres is going to change the air in a room about the same as a portable air cleaner. If you open the window 3 centimetres, which is still going to preserve most of the heat in the room, that will change it at roughly double the rate of a portable air cleaner. So our focus on portable air cleaners has been putting them in those places where there isn’t natural ventilation, but where there is natural ventilation, that is going to be by far the best thing that we can do from a COVID-19 perspective.

In terms of free N95 masks, the science at this point supports making freely available the medical-grade masks—the ones with the blue outers—and that is exactly what we have been doing. In terms of increasing the vaccination rates for our Māori and Pacific children, that is one of the major focuses of our health providers. But I do want to note that vaccination of children is voluntary, and therefore the effort that all of us need to make—and all of us can play a role here—is ensuring that parents feel confident in having their children vaccinated.

DAVID SEYMOUR (Leader—ACT): If opening the window is up to five times more effective than having a portable air cleaner in a classroom, why did the Government bother ordering so many portable air cleaners, when did the Minister find out these facts, and isn’t it convenient that he’s only saying this now because the Government’s bungled getting those portable air cleaners delivered?

Hon CHRIS HIPKINS (Minister of Education): The portable air cleaners were ordered before the latest science was available. There’s no question about that. But there are a lot of classrooms in our schools which don’t have natural ventilation, and there are spaces within schools that don’t have natural ventilation. So we will make use of the portable air cleaners that have been ordered.

Hon PAUL GOLDSMITH (National): Thank you, Mr Chair. Just in terms of the other issue, of course, when we think of how do we improve our educational outcomes, obviously, we need to have world-class teachers. We need to have a world-class curriculum which prepares our students to foot it with the best in the world—not just what we think is maths or science, but what the rest of the world thinks is maths and science—and equipping them well to succeed.

But the most fundamental thing that’s required is that the kids are actually at school, and we still—four years into this Government—have very poor attendance rates. There are, overall, so many children not attending regularly, and I want to know what progress he has made, if any, on that. There has obviously been a real tension over this COVID period, where many families have been so frightened that they haven’t wanted to send their children back to school. I’ve heard comments from the Minister that they should be going back to school, but I’d like to know how big an effort is being made, and I’d like to challenge the Minister to say that there should be no area that is more important and more of a focus for his ministry and his team to focus on getting those kids back to school.

Finally, just a couple of questions in the tertiary space around particularly the reform of the technical training. I want to know why Te Pūkenga has not yet finalised its operating model, and does the Minister still think he’s on track for it to be self-sustaining by the end of 2022? Does he think it’s acceptable that the CE of this new institution, when questioned by the education select committee, didn’t know how many staff he had employed at the head office and didn’t know which subsidiary Institutes of Technology and Polytechnics of New Zealand were operating at a deficit? Does he think that a Te Pūkenga head office of approximately 200 staff is meeting his intentions of a lean, nimble head office that’s not an additional, bloated democracy sitting on top—an additional layer of bureaucracy sitting on top?

And the final question is, when is he actually going to focus on getting the international students back en masse to New Zealand and resuscitating—which is going to be a very long task—an industry that used to be our fourth-largest export earner?

TEANAU TUIONO (Green) (remote): Kia ora. Thank you, Mr Chair. Just to follow up on one of those questions: I was wondering if the Minister could also tell us about guidelines that will go into schools and kura as well. One of the things I’m mindful of is that it’s hard work being a teacher, but expecting them to be health workers as well is a pretty tough call as well. So making sure that support is there, I think, is really important.

Also, some reflections on support for those that support our kids—learning support staff as well. What is going to be happening in that area as well? All of the situations that we find ourselves in with COVID also puts pressure on them, so what’s going to happen with making sure that that support for support staff is there? So some comments around that would be useful and helpful as well.

Also, what’s happening with the high needs review—if the Minister could talk to that. And what has been achieved in the learning support action plan so far? Could he reflect on some of the comments from the Disability Rights Commissioner about the Government spending on residential schools for disabled kids compared to the support for schools and communities in general, and how that balance will be struck to make sure that families that want to have that community support are supported to do so. Thank you.

DAVID SEYMOUR (Leader—ACT): Thank you, Mr Chair. Does the Minister stand by his statement he just made that he’s only recently found out the science on high-efficiency particulate air filters versus windows. Does he agree that the time taken to replace the air in a room by opening the window or having a filter inside the room is a function of the flow rate of the filter or window and the volume of air in the classroom? And can he tell us about the new science where that calculation recently became available after he’d ordered the filters?

Hon CHRIS HIPKINS (Minister of Education): In answer to the member’s question, the work around schools has been looking specifically at a classroom environment and those classrooms that do or don’t have natural ventilation. So no, that information was not available, but information around the benefits of natural airflow have been available from the beginning. It is one of the reasons why I’ve stood in this House many times over the last six months and explained to Opposition members who have been demanding to know why we haven’t ordered more air cleaners that we haven’t because they’re not actually justified.

In terms of Mr Goldsmith’s comments around attendance, I would note that attendance in New Zealand schools had been trending down since about 2015, but had actually started to stabilise before the COVID pandemic hit. Now I’m not saying that stabilising was good enough, in fact we want to see attendance improving, but it had started. We had arrested the decline and then, of course, the global pandemic hit and that changed everything. The last couple of years have been so up and down that I don’t know that the numbers comparison in the pre-COVID environment to now isn’t necessarily a fair comparison. As we come out of the other side of the global pandemic, we’ve got a big task ahead of us to get kids back to school. I think it’s something that everybody in the Parliament should unite behind, that cause. I agree with Mr Goldsmith in raising it regularly, it is something that we need to raise the national consciousness of. I do believe that parents need to take a responsibility here for getting their kids back to school. But we also need to make sure that things like the attendance service are properly resourced so that they can do their part, and that schools are properly resourced for their part of that equation.

In terms of Te Pūkenga, the draft operating model for Te Pūkenga has been publicly released, it’s available on their website. When it’s finalised, of course, is up to them. In terms of the head office, I would note that they are in a point of transition at the moment and many times you do expect to see some increase in numbers before a decline in numbers when you’re doing a big project like that.

In terms of international students, I think we’ve made provision for 5,000 to be guaranteed to be able to have their visas processed before October. After that, processing goes back to normal again and students will be able to apply. So I think the summer school period and the academic year of 2023 is looking pretty promising for international education, and I certainly intend to be promoting the value of an international education in New Zealand.

Teanau Tuiono raised quite a range of issues, and I won’t be able to do them all justice in the space of a minute or two. But in terms of the guidelines for schools around COVID-19, we will provide revised guidance to them. We’ve been trying to do that in a more consolidated way. In the early phases of the pandemic, we were providing schools and early learning services with near daily bulletins, updating them on the guidance, and we’ve been trying to bring that back to a more reasonable level so that they can actually keep up.

In terms of learning support, that’s been an area that the Government has put a lot of focus and a lot of investment into. We’ve seen the wait times for all of those learning support interventions coming down. Having said that, there’s no room for complacency there and we need to keep leaning on that. In terms of the Learning Support Action Plan, we’ve seen things like the learning support coordinators rolling out—that’s making a difference, it’s one of the things that’s helping us to bring those wait times down.

Finally, just in terms of his question about special residential schools and whether those students are better off in special residential schools or in the community, in their local community school, in most cases it is going to be their local community school that is going to be the best place for them. The intensive wraparound service provides the level of support that they need to be educated and supported at their local school. But where—in a very high threshold—there’s a need for some support from a residential school, we want parents and the school communities to have that as an option.

TEANAU TUIONO (Green) (remote): Thank you for those answers, Minister. My next bunch of questions is around Māori education. I was wondering about your engagement with Te Rūnanga nui o Ngā Kura Kaupapa Māori, because I have heard calls for the establishment of an independent Māori education authority. It makes sense, with the Māori Health Authority, and we support that as well. But I want to understand your thinking around there—given that the inequities that exist in health also exist in education as well—and, if possible, to talk about how he can reconcile that with our commitment to Te Tiriti o Waitangi. Kia ora.

Hon CHRIS HIPKINS (Minister of Education): The members will note that the Government’s made a lot of progress around Māori-medium education—a significant expansion in our kura kaupapa and so on. What we have to acknowledge is that the majority of Māori students are learning in an English-medium environment. My colleague the Hon Kelvin Davis has been leading the work in that space, and those questions are probably best directed to him. But it is something I’ve been working very closely with him on. I do believe that we should celebrate the fact that students in Māori-medium education actually are often doing better than the students in English-medium education, and so we should be looking at Māori medium to see what we can learn from that. I don’t disagree that there’s more that we can do in that area, and that’s something the Government continues to work on.

DAVID SEYMOUR (Leader—ACT): Why is the Ministry of Education proposing to ban primary and intermediate State schools from charging intermediate fees? How much has been spent on this project to date? And does the Minister of Education realise that the only net effect is that kids will go to private schools like King’s School instead of State schools like Remuera Intermediate School next door that are using their international fees to pay for things such as te reo Māori classes? How is that possibly a good use of the Ministry of Education’s time to investigate such a crazy proposal?

Hon CHRIS HIPKINS (Minister of Education): As the member indicated, there was a consultation document issued. One of the drivers behind that, of course, was concern around the pastoral care for very young international students in an environment where there was significantly limited movement at the New Zealand border. We’ve had a lot of feedback on that. The Cabinet will consider that in due course, and decisions will be made.

DAVID SEYMOUR (Leader—ACT): So if New Zealand is reopening its border, will Cabinet dump this proposal to ban international student fees being charged by primary and intermediate State schools?

Hon CHRIS HIPKINS (Minister of Education): As I indicated, the Cabinet has not yet considered the feedback that has been received, but it will do so.

DAVID SEYMOUR (Leader—ACT): But if the border and pastoral care during a time of a closed border was the rationale for the policy, and the rationale has disappeared, why would the Cabinet continue to consider it? Or was there some other rationale behind the policy that the Minister’s not telling the committee about right now?

Hon CHRIS HIPKINS (Minister of Education): Because when you ask people what they think it’s generally a polite thing to then consider the feedback that they give you.

DAVID SEYMOUR (Leader—ACT): What would the Minister have to hear to continue the policy? Because if there’s no possible rationale remaining for it, wouldn’t he be better to dump it rather than subjecting the principals of primary intermediate schools, who rely on that revenue, to ongoing uncertainty? Not to mention many people considering coming to or remaining in New Zealand, who are seeing their educational options put in jeopardy by a Minister who continues a policy that he just admitted has no continuing rationale, but curtly says it will be polite to keep listening and keeping those people in uncertainty?

Hon CHRIS HIPKINS (Minister of Education): I envisage that the Cabinet will make a decision on that within the next month.

CHAIRPERSON (Adrian Rurawhe): I understand we have Teanau Tuiono.

TEANAU TUIONO (Green) (remote): Thank you, Mr Chairperson. Actually, I asked my questions in the last round, so that wasn’t me.

COVID-19 Response

CHAIRPERSON (Adrian Rurawhe): OK. If members are ready, we have the Minister for COVID-19 Response in the Chair.

Dr LIZ CRAIG (Chairperson of the Health Committee): Thank you, Mr Chair. It’s a real pleasure, as chair of the Health Committee, to lead off the annual review debate on the COVID-19 response. This year, the Health Committee reviewed the Ministry of Health and DHBs, and we looked at the overall health sector response to COVID-19. Some of the issues that we discussed were around the care-in-the-community model, hospital capacity during Omicron, and equity in the vaccine roll-out. But I’m just also noting that the Economic Development, Science and Innovation Committee also looked at the response, in relation to managed isolation and quarantine.

So from the Health Committee perspective, though, we reviewed, this year, the Ministry of Health, and we also reviewed nine DHBs in depth. We started each of our hearings by just acknowledging the complexity that COVID had brought to the health sector, but also thanking the workforces, the people that have been at the coalface and keeping us all safe from COVID—really important to do that at the beginning and the end of each of those hearings. And just noting that our first hearing was with the Ministry of Health, and it was on 8 December, and at that point we had just moved into the COVID protection framework. But it was before the first case of Omicron had actually entered the community. But by the end, when we were reviewing our DHBs, often, in mid-March, we were actually talking to them about how they were managing because Omicron was at its peak.

I just wanted to talk through some of the themes that we discussed. With that review, in December, with the Ministry of Health, one of the things we did discuss was the advice that they had provided as we entered the COVID protection framework, and the various settings that, say, Auckland versus the South Island would have been at during that time. We also talked about the care-in-the-community model, because, at that point, this had just been introduced, and I think the discussion was around the capacity—because up until then, most cases had been managed in quarantine facilities, whereas now we were planning to manage most cases out in the community—and talking about the resources that would involve. We also talked about the equity of the vaccine roll-out and some of the lessons learnt. I think what the ministry was saying at that time was the equity team was working closely with local providers and iwi because they were getting ready to think about how they were going to roll out vaccine to five-to-11-year-olds and wanted to make sure that all the learnings that had been gained could be used in that process, even at that point when the roll-out hadn’t begun.

When we started to talk through to our DHBs, most of them—because their hearings were in sort of February and March, we were actually at the peak of the Omicron outbreak. And so a lot of the questions initially focused around hospital-bed capacity. And I think, in general, DHBs were managing and they’d put in place ways of assessing patient flow. What they were saying is that, you know, they did have—all the DHBs we reviewed in depth in the hearings—spare beds available, even though we were at the peak of the outbreak. But what they said was that the workforce was very stretched. You know, there had been illness within staff, and other issues. And so what some DHBs were having to do was just redeploy workforces from other areas, so that they could make sure that front-line services were still being delivered, and some had deferred some elective services.

We also talked to them about the equity in the vaccine roll-out, and thinking about some of the lessons that they’d learnt. The DHBs we talked to, they were all very positive about their achievement in terms of the vaccination coverage, and of those that we had hearings with, all of them were 90 percent or above, which was encouraging. And I think, just thinking through some of those lessons learnt, one was about regional collaboration. So the Auckland DHBs and Northland were talking about how they’d worked together to pool resources and coordinate their response. We also talked about the need for close working relationships with iwi and Māori and Pacific providers, and also some DHBs talking about their work with the disabled community and making sure that their vaccination sites were accessible, but also if people weren’t able to get to vaccination sites, how they could deliver vaccination in people’s homes or in some of their residential facilities. And also thinking through how the learnings from the adult roll-out had applied for the children aged five-to-11, and, in particular, the focus on equity for Māori tamariki.

So I think it’s been another busy year, in terms of the COVID response, and, again, I’d just like to thank all of those that have been working at the coalface to keep us safe over the past year. Thank you.

CHRIS BISHOP (National): Thank you very much, Mr Chair. And can I start by echoing the words of the chair of the Health Committee in saying thank you to all of our managed isolation and quarantine (MIQ), Defence, police workers, nurses—everyone out there at the front line of the health response—for a really tough two years. And we do thank them as a Parliament for all the work they’ve done.

I have a series of questions for the Minister. Perhaps I’ll start with one, and then, if he’d like me to read more out and take them in sum, happy to. But maybe start with a question that I know affects a small group of people out there, but a not insignificant minority of people, which is unvaccinated permanent residents of New Zealand who wish to return.

People out there listening will know that unvaccinated citizens have been allowed to return to New Zealand for the last three or so weeks. That was announced sort of late at night one Friday without any Government announcement, sort of surreptitiously—well, that’s a little bit unfair, but sort of without much public prominence placed on the COVID website. But that privilege of returning to New Zealand does not extend to unvaccinated permanent residents, and it has actually caused quite a degree of confusion out there. Now, I’m aware of, for example, a couple of people who have turned up to the airport and have got differing instructions from Immigration New Zealand, the airline staff, the MIQ people, and the various COVID officials about whether or not they’re actually able to enter New Zealand. And so, my question to the Minister is: what is the current status of unvaccinated permanent residents? Why is there a distinction between unvaccinated permanent residents and unvaccinated New Zealand citizens? And can we expect to see some change to that situation in the future?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): I’m very happy to answer that for the member. At the moment, the legal situation is that the New Zealand Government cannot discriminate against New Zealand citizens on the status of vaccination and, therefore, they have been allowed in. We’ve not yet made decisions around the ongoing status of vaccination requirements at the border. It is something that we do keep under review and therefore, you know, we will look at what the ongoing—well, not look at; we’ve been looking at it all along. But we’ll make further decisions around what the ongoing requirements for people coming into the country around vaccination are in due course. I note that a lot of countries still have requirements in place, but—like the testing requirements—the international sands are shifting quite rapidly on that, and we continue to review all of the evidence around that and all of the international experience.

CHRIS BISHOP (National): Thank you, Mr Chair. I’m pleased the Minister mentioned testing, because that was going to be my next question. I was in Australia on the weekend. I took advantage of the reopening of the border, and I duly got my pre-departure rapid antigen test (RAT) 24 hours before I left, and I duly got my pre-departure RAT in Australia to come back to New Zealand. I did find myself sitting there saying, “Is there much utility in this process?” I don’t want to say, “Woe is me” too much, but it was quite a hassle, and Australia is actually getting rid of pre-departure testing from 18 April.

I suppose a couple of questions go to that: when will Cabinet consider pre-departure testing next for New Zealand; is the issue of whether or not we actually need it at the border under consideration; and is there any health benefit now in a world in which Omicron is on both sides of the Tasman—in particular, for Australia? So what’s the latest on pre-departure testing?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): Again, I don’t want the member to feel I’m fobbing him off here, but we haven’t made specific decisions on this at this stage. Do I envisage that we will have the current pre-departure testing requirements for all countries on an ongoing basis for ever? No; I don’t. I think we will reach the point at some stage—maybe at some stage soon—where it becomes more targeted. So it may well be, for example, that there continues to be a pre-departure testing requirement for those countries where there is a significant escalation in COVID-19 cases—significant outbreaks, new variants, etc. So it is one of the tools that will remain in the tool kit for some time yet to come, I think, but will it be right the way across the board indefinitely? No; I don’t think it will. But we haven’t made specific decisions around the timing for when we might shift up the requirements.

CHRIS BISHOP (National): In a similar vein, can the Minister perhaps advise the House as to whether or not the Government is giving consideration to the bringing forward of the—I think it’s step 5 of the reconnecting pathway, which is non - visa waiver countries. People from non - visa waiver countries are allowed in from October. There’s no specific date, but from October is the current understanding and, of course, many people who wish to travel to New Zealand are from non - visa waiver countries. I think the Minister signalled previously that the Government would look to bring that time line forward. Does he have an update for the House on whether or not that’s still the plan and, if so, what that time line might look like?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): Again, there are two Ministers with the responsibility for what happens at the border: me, in the sense of—well, there’s multiple Ministers but in terms of this particular topic, there’s me in terms of the public health considerations and then there’s the Minister of Immigration. Actually now at the border, the primary driver of decisions around timing now are immigration decisions not public health ones, in the sense that a visa waiver country visitor versus a non - visa waiver country visitor, the risk profile for them is more or less the same from a COVID-19 perspective. The public health profile is more or less the same; therefore, the considerations there now largely become ones about immigration, about immigration processing, and so on, rather than public health considerations.

CHRIS BISHOP (National): Turning away from the border for a little bit: a couple of questions in relation to the actual health response. The first is: does he have any more advice on when Paxlovid or molnupiravir—but particularly Paxlovid, because that seems to be the more effective of the two—will become available for use in New Zealand?

I note that Australia is now rolling it out, and other countries are well ahead of us. It’s clearly not a substitute for vaccination, and no one would suggest that it is. But it’s clearly a treatment that we would want to have access to, so do we have any further update as to when that will become available in New Zealand?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): I’m happy to get a breakdown for the member of the various antiviral and various therapeutic treatments that are available for COVID-19 in New Zealand, and the number increases regularly. In terms of Paxlovid, it is available in New Zealand now. What I would say, though, is that our technical advisory group have been giving us some relatively frank advice that some of those early treatments that showed early promise aren’t showing so much promise now.

CHRIS BISHOP (National): So is he saying that health practitioners can prescribe Paxlovid right now? Because, I mean, I think that would be news to people. Is that the Minister’s position? Because I accept that, in the case of molnupiravir, for example, I think the Minister is right to say did show really big promise but has proven to be, I think, less effective against Omicron than people perhaps thought it was. But my understanding—and I’m happy to be advised, wrongly—is that Paxlovid was not yet available, where I think we were expecting it in April, but we’re now in April. So I suppose it’s a question of whether or not it’s available yet.

The Minister is looking at his notes, so maybe I’ll just ask another question, which is the issue of vaccine mandates. Some of the heat in this debate has obviously been taken out by the decision of the Government to phase out mandates—well it’s a misused word, “mandate”, but phase out the requirement to have a vaccine pass and therefore a requirement to be vaccinated in order to work in a place like a cafe, for example. But there are still mandates in place for border workers, prisoners, and health and care workers. Is it the Government position that those mandates will be phased out in time? And if it is the Government position that they will also be phased out, what is the timeline for that?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): In terms of the therapeutic treatments, sorry, I didn’t bring the list with me—you know, what’s here and what’s not. But I’m certainly happy to come back to the member specifically on Paxlovid as to whether or not it is here or not. I’ll get a more specific answer on that.

In terms of the ongoing vaccination requirements, we haven’t made decisions about those three remaining workforces that the member mentioned, as to whether or not those requirements will continue until we’re past the COVID-19 peak or, you know, past the COVID-19 pandemic stage, or whether there might be vaccination requirements there on a longer term basis. We haven’t made that decision yet. We’ll get good, robust public health advice before making any further calls there.

DAVID SEYMOUR (Leader—ACT): What is the point of the COVID-19 protection framework or traffic light system today? It used to be a combination of vaccine pass requirements, which are gone; crowd size restrictions, which now exist only in one restriction of 200 people at red; it used to have masking requirements which now exists only in the difference between green and orange; and it used to be about record-keeping, which we no longer require. So if there’s no vaccine pass, there’s no record-keeping, there’s only one crowd size restriction, and there’s only one masking rule in the entire traffic light system, then it’s become a husk, and we’d be better just to say that you can’t have a crowd over 200, and you have to wear masks in some circumstances, because that’s, effectively, all it’s become.

Now, the Government has said we’ve got to keep it around in case we need to bring it back, but, by keeping it in place without any of its features, it’s been distorted beyond recognition, and meanwhile, we have the question of—regardless of whether we call it the traffic light system—what possible benefit are we getting from knee-capping hospitality events with a 200-person limit inside, when the reality of Omicron is there are so many different transmission sites that one super-spreader event will make far less, or any, difference, in comparison with elimination, when one super-spreader event really could decide whether an outbreak got under control or not? So if the Minister could explain: why do we still have the traffic light system? How can we claim that we’re keeping it around for the future when it’s been completely denuded? Wouldn’t it be simpler just to say there’s a maximum crowd size of 200 and you have to wear masks inside, which is, effectively, all it adds up to now? And, if there is a rationale for a crowd size of 200, what is it and can the Minister explain why it’s worth the enormous cost and impacts it’s having, not only in not being able to have events but the uncertainty of whether events can be had, by restricting indoor meetings to 200 or more?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): I think the member somewhat contradicts his own argument when he says that we shouldn’t have the traffic light system any more, we should just take the rules that we have under the traffic light system and call it something else. Ultimately, we have the traffic light system in place at the moment because we’re still dealing with a global pandemic, and we’re trying to reduce the number of people that get COVID-19.

I would also point out to the member that I get two pieces of very strong feedback from the business community: one is opposition to restrictions. That’s true. There’s no question there is a strong opposition among some sections of the business community to any form of COVID-19 restrictions. And then we also get quite strong feedback from businesses at the moment that they are struggling with the number of their staff who are sick because they’ve got COVID-19, and removing restrictions potentially increases the number of people out of the workforce because they are at home, in bed, because they are sick. Those are the difficult balancing decisions that we make on a daily basis.

We all want to get to the point where restrictions are removed and there is a much greater degree of freedom; life returns much back to normal. We are on the pathway towards that. Things are looking very promising at the moment. Our case numbers have turned down steeply—that’s great—but we have been very cautious to not move so fast that the case numbers turn back up again. We’re on the downward trajectory; we want to stay on the downward trajectory.

TEANAU TUIONO (Green) (remote): Thank you, Mr Chair. My questions follow on from that as well. I was wondering, in terms of the traffic light system, about what sort of mechanisms you’ve got in play just in case there is a stronger wave, a post-Omicron wave as well? There’s a lot of talk about loosening up stuff; what about if we actually need to tighten things up—so what you’ve got in place there as well. And if you could tell us that from the context of the capacity of front-line staff to actually deal with any potential new variants or a new outbreak as well. I echo the thanks to our front-line staff from folks around the Chamber as well. But it’s also very important that we had that planning in mind. So I want to hear a little bit about your plans about that as well.

And on the back of that, what’s being planned in terms of long COVID, the impacts on our vulnerable communities, you know, compromised whānau, and Māori and Pasifika as well? Thanks.

DAVID SEYMOUR (Leader—ACT): Just to clarify, the Minister seems to have misunderstood, and I hope not deliberately, my last question. The problem with what he’s done to the traffic light framework is that by taking out all of its features, it no longer makes sense to have three traffic light colours. He should just say there are two rules, and then, if there was another outbreak or new variant, he’d still have the traffic light system intact, fully understood, and able to be brought back. He’s actually created the worst of all worlds by destroying the traffic light system and yet keeping in place rules that are devastating businesses in certain cities.

Now, the Minister said, “Don’t worry. By having a limit of 200 people indoors, we are helping solve the problem of people being absent from work because they’re sick.” Can the Minister stand up here and tell us what cost-benefit analysis the Government’s done? How much has the amount of cases that we face each day been restricted and the absenteeism from work been restricted by a crowd size limit of 200? And how much does he think it’s going to cost events and hospitality, and do the costs outweigh the benefit? Because my sense is this Government doesn’t do any cost-benefit analysis. They don’t weigh up the impacts on people’s lives against their mission of reducing COVID cases.

Here’s another question related to something another member just asked that the Minister kind of dodged. Can he honestly tell us: what is the cost-benefit analysis of allowing only 5,000 international students, only some horticultural workers, only some people from certain countries? Can he honestly tell us that if we let people who weren’t from non - visa waiver countries come in today, alongside people that have visa waivers, COVID-19 understands the visa waiver programme and would get around it and we’d have more COVID cases if we let people from non - visa waiver countries be reunited with their families? Because my electorate office—and I’m sure many people’s electorate offices—is filled up with people being separated by things like that. The human costs are real.

And if the Minister believes that he has a done cost-benefit analysis on only allowing people from visa waiver countries into the country right now, then can he explain what those costs and benefits are? Because he keeps saying he’s weighing it up and down, but he can never tell us that he’s done the work. Meanwhile, the costs people pay are deep, personal, and expensive.

Hon CHRIS HIPKINS (Minister for COVID-19 Response): In answer to that last question, as I indicated to the member before, the primary drivers around the sequencing at the border are around immigration issues, not around COVID-19 public health issues. So one of the things that the Government has been trying to balance here is that not all visas are equal, and not all visas produce equal value to New Zealand. We want to make sure that those that are the most critical and those that are the most valuable are actually getting in when we need them. So we don’t want to have someone who’s applying for a visa to come here for a couple of days getting their visa processed ahead of someone who’s coming here to work to fill a critical job that the employers are desperate to get people in to fill. So the Government has been balancing that up, and that is—you know, we’ve got to acknowledge that we’ve got two years of built-up demand at the New Zealand border, and we’ve been working to deal with that.

In terms of the cost-benefit analysis, the Government does always look at the impact of keeping any restrictions in place. We look at what that does in terms of spending—consumer spending patterns. We look at what that does in terms of the number of people in or out of the workforce. So we do get that analysis, and that is something that we do weigh up.

Teanau Tuiono asked about our plan around new variants. I can say that there is a lot of work that has been done over the last 18 months or so to continue to update and refine what we might do in response to new variants of COVID-19 that may emerge. I would say that the major thing that has changed in the last six months is that if a new variant of COVID-19 arrives in the country, in all reality, by the time we find out the potential impact of that new variant, it will already be here. So whereas when we had a closed border, we could learn from other countries’ experience of new variants before deciding how we adapted here in New Zealand, the reality is that for new variants now, with the border relatively open, we won’t have that luxury, so we will need to be ready to adapt as we need to to any new variants that come in, and, of course, we are monitoring new variants on a daily basis.

And, finally, in terms of Paxlovid, I’ve got the answer that the member is looking for. It has arrived in the country. Pharmac, I think, announced that it arrived in the country on 31 March, so I was right, and it has been available since just after that.

CHRIS BISHOP (National): Thank you, Mr Chair. A couple of comments. The first is just in passing, really, which is to ask the Minister to get the officials to look at the traveller declaration form that people are having to fill out to enter New Zealand. In the last 48 hours, I’ve had a number of people contact me. The borders are reopening, obviously. Kiwis are starting to come home. A lot of people were reporting problems with the traveller declaration form—the online form you’ve got to fill out. I personally didn’t have an issue with it. But I think, for those who are maybe a little less computer literate—without blowing my own trumpet too much—people have had issues with it. Particularly, I’m getting reports that people who are in transit—I think from Europe via Dubai, Qatar, and Singapore—the system doesn’t cope well with people who are taking long flights with transit destinations. So that’s the reports I’ve had. I’m happy to send the Minister a couple to his office.

David Seymour: Chris Bishop will help you.

CHRIS BISHOP: I haven’t been to Singapore or Dubai, Mr Seymour. It won’t be for a while. But I’ll just pass that on.

The second is the Minister made an interesting admission—or at least an interesting comment—around the fact that the reason non - visa waiver people are not allowed to enter New Zealand yet is not a public health issue; it’s an immigration issue. I know the Minister’s not responsible for this, technically, in his COVID-19 capacity, but it does raise the question as to what the Government was doing in the immigration department for the last two years. There haven’t been visas—or there have been very few visas—issued in New Zealand for the last two years. I think it’s well known that the immigration department has longstanding IT and technical issues, and it is a complicated computer system. No one disputes that. Immigration law, as anyone who’s been an MP—particularly electorate MPs—will know, is highly complex. You sometimes think your electorate staff end up becoming immigration lawyers alongside their more pastoral work. But it does raise the question as to what the Government was doing in the last two years to not try and identify and fix some of the issues in the immigration system, such that when the borders did reopen—as they are now starting to—we don’t have this very, very long lag time between early February 2022 and October. It is an extraordinarily long length of time and, as my colleague David Seymour says, is going to put quite a lot of hardship on quite a lot of people. So I think a lot of people will be asking themselves that question, and I hope the Government is too.

Hon CHRIS HIPKINS (Minister for COVID-19 Response): Just in terms of the traveller declaration system, thank you for the feedback. I’ll certainly take that one away and have a look at the issues the members raise.

In terms of the immigration issues that the member raised, as I’ve indicated, I would note that that is the responsibility of the Minister of Immigration. But I would also note that we did make a decision in recent times to provide those people who are currently in New Zealand with a pathway in order to be able to stay here, and that has resulted in a significant increase in workload in terms of immigration processing.

DAVID SEYMOUR (Leader—ACT): Does the Minister think the comments of the Director-General of Health that rapid antigen tests that found themselves somehow from private warehouses to Government possession were “consolidated into the Government’s stock”—does the Minister think that was a good choice of words, or would it be more accurate to say that a Government that spent a year decrying rapid antigen tests didn’t order them, let people order a selected amount, subsequently found itself with none and basically nicked them? And can he offer reassurance to people who have had their rapid antigen tests taken at the border that he will ensure that Customs allows them to be released so that they can, if not be used in New Zealand, then go back to where they came from in order that refunds can be had, particularly by schools that are out of pocket tens of thousands of dollars as a result. Or is that just too bad and we draw a line under the sorry saga of the Government’s rapid antigen test handling?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): The member is conflating two issues. One is the people trying to import rapid antigen tests that have not been approved for use in New Zealand, and the other being whether or not the Government has directed for supplies that were destined for businesses and so on to be requisitioned by the Government. In answer to the latter part of the question, absolutely not. In answer to the first issue that the member raised, of course. We continue to have border restrictions around the importation of medical supplies, and that will continue.

I move, That the committee report progress.

Motion agreed to.

House resumed.

CHAIRPERSON (Adrian Rurawhe): Mr Speaker, the committee has considered the Appropriation (2020/21 Confirmation and Validation) Bill and reports progress. I move, That the report be adopted.

Motion agreed to.

Report adopted.

SPEAKER: The bill is set down for further consideration in committee next sitting day, and given the proximity to 6 o’clock, I will declare that it is now kai time. The House will resume at 7 o’clock.

Sitting suspended from 5.58 p.m. to 7 p.m.

Bills

COVID-19 Response (Courts Safety) Legislation Bill

Second Reading

Hon KRIS FAAFOI (Minister of Justice): I present a legislative statement on the COVID-19 Response (Courts Safety) Legislation Bill.

ASSISTANT SPEAKER (Ian McKelvie): The legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon KRIS FAAFOI: I move, That the COVID-19 Response (Courts Safety) Legislation Bill be now read a second time.

This bill is necessary to ensure that the judiciary and the Ministry of Justice can manage COVID-19 risks in our courtrooms. It will help court participants to feel safe and be safe in the courts while maintaining access to justice and public confidence in our courts. It does this in three ways. First, it clarifies the ability for the judiciary and the Ministry of Justice to set and enforce safety requirements for entering the courts and some tribunals. Secondly, it enables the judiciary to set safety requirements for selecting and managing juries. And, finally, it confirms that legislative protections for the public and media to access criminal hearings are satisfied when proceedings are held remotely and entry requirements are in place.

This bill embeds protections for access to justice as part of these changes. The bill will not change a person’s entitlement to access the courts when they are legally compelled to do so—for example, if they are a criminal defendant. All the changes in this bill are temporary. Most of the bill will be repealed when the COVID-19 Public Health Response Act 2020 is repealed. A few provisions relating to the deferral and excusal of people summoned for jury service will continue for a further two years.

Some members have previously suggested that the evolving Omicron outbreak means that this bill is not needed, but this bill remains necessary for access and the functioning of our courts. I would like to re-emphasise a point that I made from the first reading that this bill does not prescribe any requirements for the courts. It does not mandate vaccination or any other specific measures and the recently announced changes in the COVID-19 settings therefore do not remove the necessity for this piece of legislation.

The bill is needed to clarify and strengthen the powers of the judiciary and the ministry to respond to changing health risks. We cannot predict how the pandemic will evolve and the bill ensures the judiciary and the ministry can assess what requirements are needed for the courts and implement them, informed by public health advice. This could encompass requirements relating to COVID-19 testing and masks, for example. Even as we pass the peak of the current outbreak, there is an ongoing need to reduce the risk of COVID-19 spreading in the courts, and we need to avoid COVID-19 further disrupting or delaying cases as much as possible, as has been the experience of the last two years.

I also note that the bill contains important clarifications that are not so tied to the severity of the pandemic at a particular point in time. For example, the bill makes it clear that remote hearings ensure the legislative requirements that the public and the media have access to criminal proceedings is ensured. It also ensures people can have their jury service deferred or excused if they or a member of their household or family are particularly vulnerable to COVID-19, or if their finances have been significantly harmed by COVID-19. For this reason, it is important that we progress this bill swiftly.

I’d also like to address suggestions from some members that the bill should have been progressed much earlier in the pandemic. In earlier phases of the pandemic, stay-at-home orders meant very few people physically attended the courts when COVID-19 was in the community. General alert level settings, along with operational measures and specific legislative tweaks, were sufficient to manage risks at that time. In October and November of last year, the Government considered implications for the courts in progressing the COVID-19 Response (Vaccinations) Legislation Act of 2021 and the COVID protection framework. We ultimately decided a more tailored approach was needed to ensure we had an approach that respected the court’s constitutional independence as a separate branch of Government and presumed access to and public confidence in the courts. The current bill reflects those principles and was developed in close consultation with representatives of the judiciary.

Can I now turn to the recommendations that have come about from the Justice Committee. The committee recommends by a majority the bill be passed with small changes that the Government fully supports. And can I thank the members of the Justice Committee for their thorough consideration of the bill within a shortened committee process. I also thank the 126 submitters who took the time to give their views on this bill to the committee. Taking into account feedback from submitters and the advice from the Regulations Review Committee, the Justice Committee recommended changes to make the bill’s intended scope and purpose even clearer. These changes will support the bill’s intent of managing safety risks while preserving access to justice.

The committee’s most substantive changes clarify the scope of the safety requirements that the judiciary may set to manage COVID-19 risks in jury trials. Ensuring the judiciary can set these requirements will help manage the risks associated with jury trials. Selections for juries involve over 100 or more strangers who are compelled to be present at court and will usually involve jurors being in close proximity for several hours to several weeks. These safety requirements can only be set if the judiciary considers them reasonably necessary in the interests of justice and to protect health and safety in the court, taking COVID-19 into account. The Justice Committee also emphasised the requirements are not intended to override the existing juror-related law. They will apply in addition to the existing law not instead of it.

Several submitters also suggest ways the safety requirements could be further targeted, and the committee agreed that the bill could further clarify the intended scope of the safety requirements in some areas. I support these changes because jury trials are a core part of our justice system and it’s important that the law is as clear as possible.

The committee also recommended the bill more specifically address the interaction between safety requirements and a provision in the Juries Act of 1991 relating to a person’s qualification to be a juror. The committee recommends that the intent of the provision could most clearly be achieved if the bill provides that a person must not serve as a juror on a particular occasion if their jury service has been deferred or excused on the basis that they do not meet the safety requirements that are set by the judiciary. This change makes it very clear that core juror qualification requirements cannot be overridden by the bill. The committee also recommended an amendment to make it more explicit that safety requirements cannot vary the circumstances in which a court may proceed with fewer than 10 jurors—and this is a useful clarification from the committee.

As well as discussing what the bill does achieve, I do think it’s important to provide assurance about what the bill is not doing. Many submitters opposed to the bill appeared to believe that the bill created a COVID-19 vaccination mandate for entering the courts. As I have outlined, the bill does not mandate vaccination or any other measures for entering the courts or participating in juries. The judiciary and the ministry will assess safety risks and identify necessary safety requirements in accordance with safeguards for access to justice. The judiciary and the ministry are looking ahead to the requirements that will be necessary once the bill is in place and are seeking public health advice and reviewing the implications of recent health announcements.

I’d also like to be clear that the bill also does not extend or restrict the circumstances in which remote technology can currently be used in our courts. Some submitters understood the bill to enable much wider use of remote hearings, and this is not correct. Existing criteria and protections that apply to the use of remote hearings will continue to apply unchanged. The Criminal Procedure Act contains protections to ensure public and media access to criminal hearings, and the bill clarifies that these protections are satisfied if the hearing proceeds remotely and the public or media has to observe via audio-visual or audio technology, and that’s an important protection to make sure that is continued.

This bill supports consistent, clear, and robust safety requirements in our courts. It is critical to support our courts to continue to operate safely and maintain access to justice. At this point, can I thank the judiciary, the ministry, and the Law Society for the work that they’ve undertaken over the last two years to ensure that justice in our courts and the court system and the justice system has been able to continue to operate despite the challenges of COVID-19. In particular, can I thank the outgoing president of the New Zealand Law Society, Tiana Epati, for the work that she has done to make sure that members of the Law Society have been informed and can contribute to the protections in the court system to make sure that their clients are best served. I commend this bill to the House.

CHRIS PENK (National—Kaipara ki Mahurangi) (remote): Good evening, Mr Speaker. I rise on behalf of the National Party at this, the second reading of the COVID-19 Response (Courts Safety) Legislation Bill. Such is my dedication to the legislative process that I’ve contracted COVID specifically to make a point more strongly in relation to this bill! But I do actually want to make the point, while I’ve got the opportunity to participate remotely, about what has changed, in fact, in the real world since the time of the first reading of this bill.

I acknowledge the points that the Minister of Justice has made in bringing this bill back to Parliament following the select committee process, and, of course, as appropriate for a second reading contribution, I do want to focus heavily on the select committee process itself: the submissions, the excellent ideas that we heard from a number of different contributors. But I also think it’s fair and right to acknowledge the fact that the world is a different place now since the time of that first reading. Certainly, the world is a different place since the time that the equivalent legislation, which was the framework legislation establishing the so-called traffic light system that was established late last year. And, of course, the ideal time for legislation such as this to have been brought in would have been then, back in late 2021.

So since the time of the first reading, at which National supported this bill, a number of things have happened. I will come back to the legislative process, and more particularly the select committee aspects of the last several weeks, but in the real world, and the shape of the pandemic, things have changed greatly as well, of course. But equally significantly, from the point of view of the usefulness or otherwise of this legislation, the Government policy in respect of COVID-19, and our appetite, somewhat, for risk, and our acknowledgment of the reality of the Omicron outbreak is such that the laws pertaining to the world outside the courtroom door have changed vastly. Therefore, it’s appropriate to examine whether this bill is now still fit for purpose and whether the intent that it came to this House with in the first reading, a month or so ago, remains valid.

National believes that, in fact, this bill’s time is now past. It would have been useful, as I say, late last year, significantly less useful a month ago, and now it is useless. For this reason, I advise you in the House that National cannot support this bill at its second and subsequent readings. In the committee of the whole House stage, we will suggest ways in which the court system—by which I mean courts and tribunals, but more particularly, the courts proper—could be reformed in ways that take advantage of the lessons we’ve learnt through the COVID-19 pandemic and how the justice system operates. But that will be, as I say, for that later stage of debate I think we are expecting as early as tomorrow. So just to acknowledge, then, the different stance that National is taking now, reflecting the fact that the facts have changed and we are living in a different world from that which we entered this parliamentary process for this bill.

For the Justice Committee—and I do want to commend the members of that committee. I’m not a regular member of that myself, but I was pleased to be able to act as a substitute for at least one National colleague at different periods of time, in order to have the benefit of the advice that we received from officials and to receive the collective wisdom of various submitters. And I do want to acknowledge them and thank them for participating in the democratic process, as always. And the discussions with colleagues were fruitful, as far as they went. But, as I say, the context is very much that changes that would have been helpful some time ago, when we were anticipating an Omicron outbreak—and then in the Omicron outbreak, as it was ramping up, as opposed to the point at which it is ramping down, so to speak; and, certainly, Government policy is ramping down the response, but it colours the way that we must all consider the usefulness of this bill at this point.

The select committee process, if I can just mention that: a number of changes were proposed by submitters that were very, very thoughtful and useful, so far as the bill itself was concerned. National’s approach in relation to the passage of the legislation is that we acknowledge that with Labour’s majority in the House, any debate will pass regardless of the attitude of other parties. So from our point of view, it was worth supporting amendments that would improve the bill, and we entered into that discussion and process in good faith. The select committee report will record that National supported changes that other committee members also wished to put forward in order to make the bill a better one, knowing that it would ultimately be passed, notwithstanding that our support for the bill as a whole cannot stand.

So if we’re to understand the purpose of the bill in the first place—and the reason that I go back to this—as, traditionally, one does emphasise a first reading speech more so than a second reading—is that, as I say, the world has changed and it is a significantly different proposition that we have now in terms of the way that we allow fellow New Zealanders to access all manner of public and private institutions. There can be, surely, no more important institution than those of the courtrooms of this country, dispensing justice, and I think we hardly need to belabour the point that this is a fundamental issue of human rights, civil and political rights, for every Kiwi. I’m sure there is not a member in the House who would disagree with my proposition that this is an incredibly important area, and so it’s right that the House take the matter seriously and consider whether we are doing the right thing by the court system and therefore in the interests of justice for all New Zealanders.

Reflecting, then, on that initial purpose of the bill coming to the House, and measuring that against the real-world scenario with which we are now faced, National supported the bill for three reasons, primarily. These are outlined in our differing view, or minority report as it would sometimes be referred to, within the select committee report. The first of these was in relation to consistency, the second in relation to comity, and the third, change—and I’ve deliberately chosen three shorthand ways of referring to some somewhat complex and interrelated topics.

But, at its heart, I think the consistency element is largely understood by reference to the fact that the world outside the courtroom door was being modified in ways that the Government brought forward in so-called traffic light legislation, to use the colloquial phrase, in late last year. So consistency with that world and the world of the court room was desirable, to enable New Zealanders to have a degree of certainty and understanding of what might confront them in that legal context as compared with others within their public and in private lives.

The second point is comity, which is, of course, the way we often describe the fact that relationships between the branches of Government should be respectful and should acknowledge the separation of powers, so that the legislative branch, namely Parliament, doesn’t interfere unduly with the way that the judicial branch or the courts want to operate. We were presented with a bill that would allow the judges the certainty of being able to determine in their own courtrooms the way things would be handled from a security or safety perspective, in relation particularly to COVID-19. So we thought that that was a worthwhile thing to encourage, in the spirit, as I say, of comity.

The third was in relation to change, and this was, I suppose, an opportunity that National was keen be taken in relation to reforming the justice system. We have huge backlogs in our court system. Access to justice has never been more challenged or challenging in this country. Major system reforms are needed. We’re seeing very little evidence of an appetite or willingness in the Government to confront those issues. They are longstanding issues, to be fair. They have been exacerbated by COVID-19, to be fair. But that’s not to say that they shouldn’t be taken seriously and tackled. So there are opportunities that the COVID-19 pandemic and the courts’ response to that provide in relation to reforming our court system, and National thought that this bill might provide an opportunity for such opportunities to be taken. It appears that other parties are less willing; certainly, the Government majority on the select committee was least willing. So that’s a topic to which we will return in the committee of the whole House stage of debate.

In my remaining time, then, allow me to summarise by saying the National Party cannot support this bill any further. It is no longer needed. It was well needed some time ago. More recently, it was somewhat needed. Now, it is not needed at all. For that reason, National, at this, the second reading, does not support the passage of this bill going forward, and further contributions from this side will emphasise that. We look forward to the continuation of the debate on this matter. Thank you.

VANUSHI WALTERS (Labour—Upper Harbour): Thank you, Mr Speaker. In preparing to speak on this bill tonight. I had looked through the first reading Hansard, in which the Opposition supported this bill’s passage through to select committee. I actually think my colleague, who I have a lot of respect for, Chris Penk, who’s just spoken, covered very well in the first reading the rationale for the bill at that stage. His arguments in the first reading stand, although I acknowledge that we may disagree about that at this stage, so I’m going to refer to some of his comments in the first reading. But before I do, I would just say that, in my view, it’s good governance, when you have foreseeable risks, to put into place an empowering or framework legislation—it is good governance. This operates as a hinge, allowing decision makers to open doors, close them, or adjust the size of the gap of an open door, to respond at pace to change in very changing circumstances.

At the first reading, Mr Penk covered the high-level arguments for this bill. He spoke to the need for consistency in terms of our COVID response. There is still a foreseeable risk in terms of the pandemic, and for the time being that justifies continuation of our broader COVID framework, the COVID-19 Public Health Response Act. Consistency requires putting in place parallel empowering provisions for the judiciary.

The second thing he spoke to at first reading, and I might quote him because he said it beautifully, was that “we have participants in the court system who are compelled to take part. We shouldn’t take lightly the fact that we are placing them in an environment that might be challenging from a public health perspective, even at the same time as we require them to do so”. Very eloquently put, and I’m sure none of us have to stray far in our minds to think of the people we know who are at heightened risk. The changes in this bill, essentially, provide tools for the judiciary to ensure that individuals who are compelled to attend can do so in a safe way for them and for their family.

Thirdly, the concept of certainty: there’s significant value in explicitly empowering the judiciary to create procedures in relation to COVID should they need to in response to public health advice. And again, we are preparing for foreseeable risk and that’s exactly what these provisions do.

Finally, I do think it’s valuable to have a conversation about the way in which the courts can evolve and mature to suit today’s world. I agree with Mr Penk on that. But it shouldn’t happen in a way that mixes it together with pandemic response issues. That muddies the water as to where the appropriate balance of rights lies. So I look forward to that future conversation, and I commend this bill to the House.

Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. We’re here, at the second reading of the COVID-19 Response (Courts Safety) Legislation Bill, and this is a piece of legislation that this Labour Government is rushing through the House with a very shortened period for submissions from the public and from people who work in the sector and understand what’s going on, in order to try and deal with some issues related to COVID-19 restrictions. The National Party won’t be supporting this bill, fundamentally because most of the restrictions will have been removed anyway by the time this bill, rushed as it is, comes into force. As we’ve all noticed, the world is moving on. The peak has passed. People are wanting to get back to a sense of normalcy in their lives. They’ve worked out what to do, when to wear masks and when not to wear masks, and we need to get on with things. And this bill probably would have been useful for the last couple of months, but ultimately its time has passed.

If we were to step back and think about the justice sector generally and the challenges that we face as a result of COVID-19, there is no question there’s been enormous pressure on the justice system, and we’ve heard a lot about the police in recent times and their inability to respond in a timely fashion to violent crime and incidents throughout our cities over the last year. One of the reasons put forward is that many officers have been working in managed isolation and quarantine facilities and doing COVID duties, and distracted doing other things, and that has been one of the costs of this approach that the Government has taken, and we’ve suffered in terms of our law and order because of that.

Then, if we think about the access to justice, the process of justice, that has been hugely affected over the last couple of years. If I was to look at the justice sector more broadly, I would say that the big challenges facing the country are the rise in violent crime, more than 20 percent increase in violent crime since this Government took office; the 40 percent increase in gang membership, at least—and anybody who lives in any New Zealand city or town is only too aware of the much greater presence of gang membership and intimidation across the city—and also a concerning rise, in that sense, of lawlessness in CBDs and town squares. That on the one side, and then, on the other side, the real No. 1 issue is this very slow access to justice through our criminal justice system, which, of course, is not new; it has been a longstanding issue, but it continues to get worse.

I was in the Auckland District Court recently, just spending a morning there watching things come and go, learning about the system, and the stories that I heard from some of the duty lawyers were just astounding: of three-year waits for justice to be delivered in certain cases—criminal cases, civil cases—people’s lives on hold for extraordinary lengths of time, trying to just get basic things dealt with, and the system is gunged up to an enormous extent, for a combination of reasons. One: legislation, and there is a huge job to be done to deal with the extreme ease with which a clever lawyer can drag things out if they are of a mind to; the efficiency of the court process itself, and the amazing delays that are allowed and countenanced and that drag on; and also the participants themselves. I mean, there’s a whole host of reasons, and the sort of antiquated technology used in many places, much of it with handwriting rather than computer systems, and the lack audiovisual (AV) facilities.

So we have this real challenge. It’s bad in the criminal sector, where, like I say, people’s lives are involved for a very long time. It’s even worse in the civil area in many cases. And, if you try and weigh up those things that people think about when they think of justice, yes, the correctness of the decision is a very important factor, but also the timeliness of that decision and, thirdly, the cost of getting to that decision are equal factors, because it might all be very well if you get to the right decision, but if it takes 10 years and costs too much, that is not justice. And that balance does not seem to have been fully taken into account. And so, if we look in the civil space, if someone steals $50,000 from your business, basically, getting access to justice through the civil courts just does not work. It does not work in a practical sense, in terms of the cost and the time involved.

So, when we confront this crisis with COVID and the lockdowns and the impact that it has had on the court systems, first I do want to acknowledge, like the Minister did—and I was pleased that he did—the hard work of the many people in the sector, who were doing their best in trying circumstances. That is right, and people have been working very hard, trying to make things work as best they can. But still the reality is that huge delays have opened up, and waiting times for delivering cases and getting justice and getting juries through, getting people back to pick up their lives after the calamitous events that often lead of court cases, is a real problem. So when I look at the whole COVID response from this Government, the $60 billion or however many billion dollars Grant Robertson has spent, and this Government has spent, in response to COVID—one of the highest per capita spends in the world, in terms of COVID response—when I look at all that and then I look at what’s happened in justice, which is relatively little, in order to keep these things moving effectively, I don’t think they’ve quite got the balance right; the classic example being, and the Minister was at great pains to point out, that nothing in this piece of legislation does anything to effect remote hearings and the use of audiovisual equipment in the courtroom.

Well, it would have been nice if they could have got round to doing something about that more effectively in the two years that we’ve dealt with this issue. It is a fact, and I’ve just had some written questions come back in the last couple of days, that 29 courts across this country still—still—don’t have any access to audiovisual facilities. So, I mean, has Mr Faafoi heard of Zoom? Does the court system not actually know about modern technology? I mean, is it not possible to get our act together sufficiently to enable people to get access to justice through Zoom or Teams or something like that, something other than us all having to rock up and put on our masks and go past security, and all these things that are outlined in this legislation?

Now, of course it doesn’t fit every element of the legal system; there are some things that do need to be in person, and it’s quite tricky to arrange it, but there is a lot of work that can be done across the system through AV. But, if you’ve got 29 of your courts that don’t have any facilities still, after two years of a pandemic where everybody else in the world figured out that there is a heck of a lot you can do using AV, it is an astonishingly slow response from this Government. So if we scroll through it—and I’ve got this list of all these courts—if you happen to live in, where are we, Dargaville, well, there’s no audiovisual facilities in Dargaville, sorry. Sorry to hear that; tough luck. You’re out of luck. What about Kaitāia? No, you’ve got to turn up. You’ve got to drive in if you happen to live up at Ninety Mile Beach or wherever. You’ve got to drive all the way into Kaitāia to get your justice. If you live in Morrinsville, no chance. Te Awamutu? No chance. Waihi? No, nothing there. Ruatōria? No. So, if you happen to be up at Hicks Bay, you’ve got to get in the car and drive all the way from Hicks Bay—get on your horse—and go all the way into the court because Zoom has not reached Ruatōria, according to this list. Wellington Employment Court? Well, you would have thought the Wellington Employment Court would have been on to it, but no, they’ve got no AV facilities. And so the list is endless.

What we’ve seen is very modest—very modest—progress from the Government on what you think would be interesting, but they bring in a piece of legislation that tinkers around the edges and will come into effect after it is required. And that is why we, on this side of the House, aren’t impressed and aren’t voting for it. Thank you, Mr Speaker.

ARENA WILLIAMS (Labour—Manurewa): Mr Speaker, thank you for the opportunity to take a brief call on this COVID-19 Response (Courts Safety) Legislation Bill, a bill that I am very much encouraged by the cross-partisan approach in this House tonight, because we have heard three speeches of people who are committed to expanding access to justice—this is exactly what this bill is about. But I’m also encouraged especially by the comments of Mr Penk, in how we should continue to work together to make sure that our justice system, our courts, are open to everyone—that everyone can access the court system in a fair way. This is what this bill does, by empowering the judiciary to make the sorts of rules proactively that they need to do to protect vulnerable people who are compelled to be in court.

And it empowers the judiciary to decide when audiovisual (AV) will be used. Things like in sexual violence cases, which this Government has made important changes around allowing the use of AV in those cases. Now it’s a very specific set of circumstances where you would use that. It’s important the politicians aren’t making that call, because politicians think that we might use Zoom in all situations, in Ruatōria or the Employment Court. But that’s not what AV is for. It is used in a specific set of circumstances where that aids access to justice, something that we are all committed to in this House. We use AV in the specific set of circumstances where you would not want someone to appear in court, because they have had the kind of traumatic experience that we do not want them on the stand talking about them in there. It is a specific tool for a specific use, and it’s not what this bill does.

I’m proud to stand on this side of the House, speaking in favour of this bill which makes specific changes around protecting people in the COVID-19 circumstances, and empowering the judiciary to make those calls. Thank you.

ASSISTANT SPEAKER (Ian McKelvie): Our next call is a remote call—

Simon O’Connor: You mean by AV?

ASSISTANT SPEAKER (Ian McKelvie): —and I call Golriz Ghahraman.

GOLRIZ GHAHRAMAN (Green): Thank you, Mr Speaker. [Interruption] I take it there are some amusing heckles that I’m not privy to. I stand in favour of this bill as a former justice sector worker—as a former defence lawyer in the courts—who is also immunocompromised and who has been thinking this whole time of my former colleagues the court takers, the registrars, the prosecutors, the cops, and the judges, who’ve had quite a hard time of it as essential workers and as people who interact with large groups of members of the public, often in distress. That distress has certainly been exasperated by the COVID crisis—and the Minister of Police even referenced this in our discussions earlier in questions—as things like domestic and sexual violence were heightened in their rates and as we face more and more pressure in all sectors. The courts are really where we see that all come to a head. So to allow the courts to regulate their own settings for both staff and members of the public who are trying to participate and access justice—whether as witnesses, as victims, as accused persons, as their support people, or as jurors—I can’t think of a more essential piece of legislation to come through, even if it is quickly.

It’s funny to me to hear the Opposition talk about using Zoom. It’s only very recently that we’ve used Zoom in this House. I recall their former leader insisting on travelling even under level 4 lockdown from Auckland to Wellington to be in the Chamber in person because that was so important, but people like the victims of very sensitive, very personal crime, witnesses giving evidence in those contexts, and jurors who are to come together to make decisions by consensus should be expected to use Zoom. It also speaks to a real lack of understanding of how well resourced people are who are most often coming before our courts—in particular, in the context of serious crime in the jury trial jurisdiction.

This bill takes account of all that and allows for judges, who are the most experienced at conducting proceedings in their own court rooms, to come up with ways of minimising the risk of COVID. That includes things like distancing, the requirement to wear masks, and other types of practical limitations that might mean that people like me, as an immunocompromised person, might feel more comfortable sitting on a jury, for example, or that I wouldn’t have to, for example, choose between representing a client and my own health or the health of family members. That is what essential workers all over New Zealand have had to do, which is why we’ve supported the supermarket workers, for example, having mask mandates placed on members of the public that they interact with as part of their workplace health and safety requirements. As such, in even this House, we have our own safety protocols, which we’re very grateful for.

This makes sense. I would just note two ways that it makes particular sense. We are doing away with the vax mandates, and we have never had them for essential services like courts. So to acknowledge that the next barrier of support for people like me—for immunocompromised community members—is to require things like masks and distancing when we are interacting with essential services, but also to recognise that our courts and our justice system as a whole vastly targets Māori disproportionately to other populations, and that is a group who is most vulnerable. So to say that we wouldn’t have the power as judges to make good faith rules about how to keep people safe in their own court rooms, that we wouldn’t take account of the fact that we’re actually protecting Māori, is sort of obscene to me.

What I would just hope is that the Government does take up the Green Party call to make all N95 and NK94 masks—the best masks; the ones that really protect against Omicron—freely available to everyone, including everyone who is accessing our justice system, which is the next step in ensuring that essential workers and everybody accessing essential services is safe. I do commend the bill.

NICOLE McKEE (ACT): Thank you, Mr Speaker. I stand on behalf of the ACT Party to speak to the COVID-19 Response (Courts Safety) Legislation Bill in this second reading, and I note that this is an omnibus bill and it is being heard under urgency in order to allow our judiciary to mitigate the risk that the impact of COVID-19 restrictions enforced under the COVID-19 response Act.

So what does this bill actually do? We covered this before, but I’m going to cover it again because I think it’s important. It’s amending three pieces of legislation: the Courts Security Act 1999, the Criminal Procedure Act 2011, and the Juries Act 1981. So bear in mind that this bill is being heard under urgency, with reduced time for submitters to prepare and appear in front of the Justice Committee to speak to and of their concerns.

The effect of the amendments on these three pieces of legislation includes: for example, under the Courts Security Act 1999, it will enable the judiciary and the Ministry of Justice to impose requirements relating to COVID-19 for people entering or remaining in any court, and in some tribunals. Those requirements include allowing security stationed at the front of and throughout the courts to determine whether or not a person can enter, remain, or partake in the court process, based on these imposed requirements. Now, that could be anything, because nothing yet is determined that will tell us what will allow or disallow you entry into the courts.

The Minister of Justice says that there’s no vaccine mandates to restrict access, but that’s not determined within this bill. This bill could allow the courts to impose vaccine mandates if they wished, and that is concerning, because it is time to move on.

Also being amended under this omnibus bill is the Criminal Procedure Act 2011, and it’s about the access to justice protections that sit within sections 196 to 198 of the Act. This amendment confirms that courts holding remote hearings, it’s OK to do, and it confirms that it would not be inconsistent with the right of the public or the media to attend criminal hearings. So this is a confirmation of what is already happening in aspect to that bill.

Lastly, the Juries Act 1981: this amendment allows the judiciary to set requirements for managing juries, and I find this intriguing, because I note also that as recently as 24 March 2022, the Ministry of Justice released their jury bubble guidelines for safe operation of jury trials. If the Chief High Court Judge and the Chief District Court Judge can release their guidelines, then why are we rushing through this piece of legislation, which includes amendments to the Juries Act 1981?

Another interesting aspect to this urgent bill is that while nearly everything in this bill will expire on the COVID-19 Public Health Response Act 2020 being repealed, there are aspects about this amendment that will not expire upon that repeal. The ability for a two-year deferral of jury service based on COVID-19 reasoning will be extended for two years after the COVID-19 Act is repealed, as an example.

We’re told that this amendment is needed to manage keeping jurors safe, even though the guidance on exactly this was released nearly three weeks ago by the Ministry of Justice, and I note this amendment allows the judiciary to also make exceptions to their own rules. For example, the judiciary can allow those who don’t meet the requirements that they themselves have set to enter the courts for jury service and be eligible to serve, so why are we legislating this?

This whole bill is about allowing or disallowing people into the courts based on COVID restrictions which are rapidly decreasing, or on COVID requirements made up by the courts and implemented without discussion. So what are the COVID-19 jury requirements that the judiciary can or will impose on those attending courts? We don’t know. It’s whatever the bench decides it to be, perhaps on the day, or perhaps on a trial by trial basis, and whatever the provisions are that they implement, they can continue for two years after the COVID-19 response Act is repealed. The judiciary can change the rules to suit on the day or on the case for one person, with something completely different for another, and we call this access to justice?

When vaccine passes are no longer relevant and the courts are not defined as a mandated service, then we question the relevance of continuing to pass this bill under urgency. When we look set to move to the orange traffic light setting, possibly as early as tomorrow, Labour still continues to move this bill under urgency.

I think it is relevant and important to note that the Clerk of the House has reported back to the committee that they did not get enough time to produce a legislative scrutiny because of this bill going through under urgency, and the committee noted that the fast-tracking of this bill should not include permanency clauses within it when the time frames for submissions have been reduced. They correctly commented that another bill with fuller time frames should address the issues that the judiciary would like to see made permanent.

We conclude that there is no need for this bill at all, let alone under urgency. In a democratic society, everyone should have equal opportunity to have a say. There is no need for this bill to proceed under urgency without the people of this country having had an opportunity to have a decent go at having their say. If we are to have thriving communities in successful societies, then we need to be inclusive and stop making rules that potentially exclude some at the expense of others and at the expense of accessing the judicial system for fair hearings.

The people want control of their lives back. They want to not be caught up in more Government bureaucracy. ACT opposes this bill.

Dr EMILY HENDERSON (Labour—Whangārei): Kia ora, Mr Speaker. Well, what a night of revelations. The National Party, and it appears also the ACT Party, are grappling with the realisation that the pandemic is not in fact over and therefore we still need to give the court the support they need to continue to innovate and do the vital job of giving access to justice and producing justice. It is not over. We need to give the court the power. Why are we doing it now? Because one does not jump in to tell the courts how to run their own business. That is something that I think would assist my colleague from ACT who has just spoken.

The problem here is one of constitutional separation of powers. Our legislative Chamber should very, very seldom interfere with the operation of a court and the way in which a judge wants to run their own court. These are fundamental things that go back all the way to times like the Star Chamber and ship-money and the English Civil War. We do not rush in where angels fear to tread. And that is also, I think, the reason that we have taken this long.

We needed the judges to tell us that they needed the support. But having said that, what that also gives us is the support to know that this is going to be OK, because unlike my friend on ACT’s benches, I am aware that when we say that judges will run things according to the interests of natural justice and that they will do things that are reasonably necessary to ensure the interests of justice and to ensure access, that doesn’t come out of nowhere. That comes from 400 or 500 years of legal tradition as to what those things need. We are giving the courts the backing to know that they can continue to innovate when they need to without fear of appeal or repeal.

In answer to my friend Mr Penk, I am so looking forward to the innovative, forward-thinking National Party members who are going to support the continuing good things that we are going to want to do to ensure access to justice in the future. Although, having dealt with three National Ministers of Justice when I was trying to get those things done, including audiovisual links, and not having made any difference until we had Andrew Little and that lady over there on the Green benches [Member indicates to Jan Logie], I have my doubts. I commend this bill to the House.

ASSISTANT SPEAKER (Ian McKelvie): I call Simon O’Connor—a five-minute call.

SIMON O’CONNOR (National—Tāmaki): Thank you very much, Mr Speaker. Oh, only five minutes. It’ll be a great disappointment to the other side! Look, it’s fantastic to hear the member resuming her seat, Dr Emily Henderson, trumpeting the great benefits of the British legal tradition that New Zealand’s inherited. And I look forward to her engaging her colleagues, maintaining that, as our courts and law professors are discussing how they might change and subvert things.

Dr Emily Henderson: French?

SIMON O’CONNOR: The thought that comes to mind—actually, I was going to use a piece of French. They must have actually seen my notes here. I was going to use the wonderful French quote: “plus ça change, plus c’est la même chose”—

Kieran McAnulty: What’s French for “sit down”?

SIMON O’CONNOR: —the more things change, the more they stay the same, which I had to translate for the likes of Kieran McAnulty, who we’re not even sure can speak English. The whole point is that this bill isn’t changing much, despite its attempt to change things. And the whole point of that—and speakers on this side of the House have already touched on it. This is a temporary piece of legislation which is meant to end when the COVID restrictions end. And it’s been lost, I think, on some members of the Labour side that this is not a piece of legislation which is bringing about permanent changes into our judicial system. The initial clause of this bill is very, very clear: these powers granted to the judiciary, yes, under-hold principles of comity and all of that, are meant to expire when the Government lifts the COVID rules. Now, logically, ipso facto, if these rules are going to end, we’re pretty much headed in that direction already, and a number of speakers on this side have already eloquently put that forward. We are rushing through this House under urgency a whole series of changes which, by and large, are already expired, of no use, or of very, very limited use.

The second, of course, if you’re the slightly more conspiratorially minded, is that it’s a hint that the Government—even though this bill is meant to expire when the COVID Acts go—are sort of still wanting to cling on to all the sort of authorities and controls which they’ve got used to over the last two years. When you listen to the other side, you don’t get the feeling that this is meant to be temporary. There’s always something else to fear and worry about down the line. I sit on the side that says we want to get back to normal. It doesn’t matter if it’s in the courts or in this Parliament, I want to see the end of masks, I want to see these stupid screens go. I want people back face to face. And that’s one of the reasons—as the speaker who’s resumed her seat would know—that, actually, why the likes of AV and AVL haven’t been used all that often is more because of the judges than anything to do with Ministers of Justice. They have their statutes, they have their approaches, they prefer face to face. I think they say kanohi ki—oh, I’m not even going to try it. The nose to nose. I’m getting all my Māori mixed up tonight, which is unfortunate.

Tangi Utikere: We know that.

SIMON O’CONNOR: Ah yes, the purveyors of fake news are still here tonight. But, actually, that’s where we want to get back to. And yet we have a piece of legislation here which is just entrenching some of the controls that are not needed—they’re not needed.

The final point that I’d make is there’s been talk again about AV and AVL. It’s all well and good that this bill touches on how it might be used, but as my colleague Paul Goldsmith, who was here earlier, pointed out, what’s the point of talking about all this AV technology when it doesn’t exist in most of our courts? For a variety of reasons, I sort of have a bit of understanding of what the courts are like up north—north of Tāmaki that is. People struggle to get to the courts. All this talk of access makes no or very little sense if you don’t actually have the equipment in place.

And that’s probably the final point. We hear the Labour Government wax boring—rather than wax lyrical—about what they’re trying to do, but where’s the funds, Minister, to put this technology in? If you’re in power and it’s through the supposed temporary bill, why are you not funding that the technologies available to be used? So for argument’s sake, if the courts, the judiciary, decide they want to implement some of these schedules, well that’s all well and good, but they don’t have the funding for that technology to make it so.

So, as many a member on this side has noted, it’s an interesting bill. There’s elements we did support. But as, actually, the COVID response changes, or it should be changing, the need for it wanes. And certainly the fact that this is being used and rushed through urgency should be something which people at home understand and fundamentally more time should have been given to properly consider aspects of this bill. As I say, the more things change with this Government, the more they stay the same.

HELEN WHITE (Labour): I’m pleased to rise in support of the COVID-19 Response (Courts Safety) Legislation Bill. I just want to clear up a little bit of a misuse of the word “urgency”. I understand that to be something very specific here, and this is not an urgent—it’s not actually being made under urgency. It’s an expedited bill, and it’s a very simple bill, but it’s not a bill that is being called under urgency, and it may confuse people.

I also just want to talk about the issue that my colleague Emily Henderson talked about, the comity of the courts and the separation of powers. This is something where there is an inherent judicial discretion, and it’s been used very effectively. People have used all sorts of tools to make our courts work in a really difficult time, where things have very, very much changed, but actually, they have asked for back up from this legislature, and I think we need to give that to the people who actually are working in our courts. I accept that a lot of those people are vulnerable. They are there because they are essential workers. There are people there because they’re compelled. There are victims. There are defendants. There are all sorts of people that need a deft approach, and this has happened here. So I look through this and I see a really clear balance. Things like the requirements must be consistent with the New Zealand Bill of Rights Act. These are important and sensible amendments, and they’re important balances in our system. I commend this bill to the House.

WILLOW-JEAN PRIME (Labour—Northland): E te Māngai o te Whare, tēnā koe. If I can perhaps start my contribution by assisting the member on the other side, Simon O’Connor, I think he was going to say “kanohi ki te kanohi”. I might just pick up on that point of, as the pandemic moves on, the key point that the Minister made is that the pandemic is not over. And, in fact, this legislation will empower the courts to be able to design and to implement the appropriate measures to ensure ongoing health and safety in our courts. If we are to engage kanohi ki te kanohi, the Minister said the requirements could encompass testing and masking, for example.

So while there has been a lot of emphasis on the use of audiovisual links, courts do continue to meet kanohi ki te kanohi. And through this legislation, the courts will be able to put in place safety measures as the pandemic continues to evolve. I know that there has been mention of courts in the Far North in the debate this evening—and, as many of you will probably be aware, unfortunately in Northland, we do have some of the lowest vaccination rates in the country; we have not passed our peak yet. So I am 100 percent supportive of the legislation as it is proposed tonight to be able to give the courts the ongoing ability to implement measures which are going to ensure maximum health and safety for all of those participants within the process.

So with that, I do not want to prolong this speech. I commend the bill to the House.

JOSEPH MOONEY (National—Southland): I rise on behalf of the National Party to speak on the COVID-19 Response (Courts Safety) Legislation Bill. The thing that springs to mind is that there’s nothing so permanent as a temporary solution. This is proposed as a temporary solution—a COVID-19 response bill that will expire when the other rules and regulations around the COVID response also expire, or, in fact, I think two years after they expire in this case, for a number of reasons.

The Government passed the traffic light system in late 2021 and it became clear that that regime could not apply to the court system. The Government proposed that rules would subsequently be provided in relation to court situations where it was problematic to exclude participants on the basis of vaccination status; for example, accused persons, witnesses, jurors etc. Last month, in March 2022, this bill was introduced and passed its first reading. It was referred to the Justice Committee with a shortened report-back period, 31 March, in order to enable the Government to pass the legislation by mid-April. However, later in March the Government policy changed in relation to the implications of the vaccination status and other key aspects of the COVID-19 response, with most restrictions being removed on 4 April 2022. So things are changing rather rapidly as the country learns to deal with Omicron and the response to it.

However, this bill continues despite that, and the National Party is of the strong view that this bill is no longer required. The bill no longer makes sense. It is intended to enable courts to align with non-court settings in relation to vaccine passes—rules that will no longer apply for many people at most places by the time that this bill becomes law. Given that the mischief which this legislation’s attendant remedy is now moot, the question becomes this: is it really necessary to proceed with a shortened report-back period and the heightened sense of speed on this bill that could impact procedural fairness for criminal litigants?

As another speaker on the other side of the House said, we need to be careful to tread in some spaces where angels fear to tread. One of those spaces is in the operation of the courts, as a key thread that goes through our system is the right for defendants to be heard and the rights of defendants to appear before the court and to face their accusers and to have a fair hearing before a jury of their peers, if they choose to elect a trial by jury. We need to be very cautious in interfering with any of those processes, to ensure that people who are accused in our country face a fair process.

I was also interested to hear a comment about the Star Chamber from a speaker on the other side of the House, and this makes me think of unintended consequences, which we need to carefully think about when we think about a bill like this and a bill that has moved through the House very quickly. The Star Chamber was originally established to ensure the fair enforcement of laws against socially and politically powerful people that ordinary courts might hesitate to convict of their crimes. However, it became synonymous with social and political oppression through the arbitrary use and abuse of the power it wielded. So it is a very good little example of unintended consequences of something that might have a good intent, but ends up having the wrong outcome. That’s something certainly I think we need to be very cautious of with a bill of this nature, which affects an important part of our constitutional framework, which is the courts.

I agree with my colleague Mr Penk, who spoke earlier, the shadow Attorney-General, as well as the submissions of the Auckland District Law Society, that we should thoroughly examine whether it’s desirable to obtain permanent benefits from what would otherwise be merely a temporary COVID-19 related measure. For example, the Courts (Remote Participation) Act 2010 could be amended permanently by this bill to enable the hearing of pleas and sentencing of willing defendants. National would support such a change being made, and I can say, having spent the best part of a decade working as a trial lawyer and working the courts across the country, from Auckland to Tauranga to Christchurch to Gore, Dunedin, Invercargill, Queenstown, and Alexandra, amongst other places, that I’ve worked in all of these courts, some which had audio-visual link facilities, some which didn’t—I have to say that the provision of an audio-visual link does provide a very valuable service. I would say with caution, though, that there should always be the exception that if someone wishes to appear in court kanohi ki te kanohi, face to face, then they should have that option.

However, an audiovisual link or AVL facilities do provide an opportunity for defendants to have faster access to justice. For example, I can speak of many, many occasions in our courts in my region where it was not possible to get a judge to travel the two hours or more to get to the court from, say, Invercargill or Dunedin. However, we could arrange an audio-visual link for a bail application to be made—not always successful, sometimes successful—and that made a big difference for that person and their family.

One of the important principles out of a justice system is ensuring quick access to justice. “Justice delayed is justice denied” is a saying that’s well known, and something that is unfortunately very common in our justice system, as our justice system is, frankly, overloaded a lot of the time, and it is very difficult to get speedy access to justice, particularly in more remote areas. So the audio-visual link facilities are very, very valuable, in my experience. And also from the perspective of a defence lawyer, it’s an extremely useful way of connecting with clients if people are incarcerated for whatever reason, at a distance from various courts. It enables a lawyer who might have to travel two to three hours—and I’ve personal experience of this—one way to get to a prison to connect with their client and obtain instructions much more readily than they otherwise could, and it makes a big difference to representation and a speedy way for those defendants and their families. So I’m certainly someone who is very much in support, from a practical experience point of view, of the audio-visual link process, and I trust that that’s something that will be looked at more, further down the track.

I think I will bring my comments to a close, just noting, finally, that rushed law can unfortunately turn out to be bad law, and there are many, many occasions where we have seen that happen. It’s regrettable that an opportunity has been missed here, in my view, to pass a better quality Act that could be relied on permanently by practitioners and provide our justice sector with greater certainty. With the reduction of the COVID-19 response settings, this bill is just really not needed any more, and we look to the Government to recognise that and to start to indicate to the country the response that we can now take to move on.

I’ll, finally, just say—it’s probably entirely on point—that I’m looking forward to seeing people coming back from overseas tomorrow. That’s an indication that the country is moving on. That’s a very positive thing, and I look forward to seeing more of that. Thank you, Mr Speaker.

SHANAN HALBERT (Labour—Northcote): Tēnā koe, Mr Speaker. I’m privileged to be able to speak and take the last call on this particular piece of legislation. But I would think that the last speaker, Joseph Mooney, my very good friend and colleague across the way—we work and appreciate a lot of things together—but my friend, on this one, isn’t quite correct. What he says is that this isn’t needed any more. On my last check, in the last 48 hours, 11,000 cases of COVID-19 have been reported to the Ministry of Health. We currently have 68,000 active cases of COVID-19 in our country. This pandemic is not over and, while I appreciate we all feel that we would like to move on and for things to go back to normal, our reality is somewhat different.

So this piece of legislation does ensure that we are able to continue to operate, to provide the access that we need to, and it’s this very sensible piece of legislation.

But I also want to acknowledge our chair, Ginny Andersen, for the work that she does in the Justice Committee, and our mana wahine on this side of the House, in Labour, who staunchly represent wonderful pieces of legislation like this one. So can I thank you, Mr Speaker, and I commend this bill to the House.

A party vote was called for on the question, That the COVID-19 Response (Courts Safety) Legislation Bill be now read a second 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 second time.

Bills

Retail Payment System Bill

Second Reading

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I present a legislative statement on the Retail Payment System Bill.

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

Hon Dr DAVID CLARK: I move, That the Retail Payment System Bill be now read a second time.

This bill fulfils a Government pledge relating to merchant service fees charged to retailers, and wants to bring them into line with comparable economies. The retail payment system is what makes it possible for consumers and merchants to sell and receive goods and services. Before the last election, the Labour Party pledged to regulate these fees to make sure that it was no longer the case that New Zealanders could be charged rapacious amounts for the use of these card systems. The common ones we know, the credit and debit cards, the EFTPOS cards, these are familiar to all New Zealanders.

COVID-19 has, of course, changed the way we spend our money, with online and contactless transactions being used more. These payment methods currently have higher fees, and that puts an additional pressure on businesses that transfers also to consumers. So reducing these fees is a priority for this Government. It’s a pledge the Labour Party made at the last election, and it’s an important contribution to the recovery of the economy from the impacts of COVID-19.

The bill itself introduces a new regulatory regime to ensure the retail payment system delivers long-term benefits to consumers and merchants, and the regime does this in three ways. First, it enables the Commerce Commission to regulate participants in designated retail payment networks. Second, to reduce merchant service fees more quickly, it sets an initial pricing standard for the Mastercard and Visa credit and debit networks. That standard will reduce interchange fees. Interchange fees—as members of this House, I’m sure, know—are generally the largest component of fees charged to merchants for accepting payments. The initial pricing standard targets card products issued by Mastercard and Visa because they cover the largest share of the New Zealand market for retail payments, but other providers will follow suit. Third, the bill enables the Commerce Commission to issue merchant surcharging standards. And I note, too, for the House, the bill also provides for investigation, monitoring, and enforcement by the Commerce Commission.

At this stage, I’d like to thank the members of the Economic Development, Science and Innovation Committee for their consideration of the bill. Given the slightly shorter period for the committee to consider the bill, the members met outside of sitting weeks to give the bill due consideration. So I do say thank you to the members of that committee.

Joseph Mooney: Hard-working group.

Hon Dr DAVID CLARK: And as the member opposite calls out, a very hard-working group and I do thank them for that.

I’d also like to thank all the submitters who considered the bill and took the time to provide feedback for that committee to consider. The committee received 30 written submissions on the bill from a range of industry parties. Two of the common views expressed were that buy now pay later products and, secondly, American Express products should be directly regulated by this bill. So I note here for the House’s benefit that the Government is separately considering wider questions around whether and how to regulate buy now pay later products. And officials have received feedback as part of a submission process and are working on that as we speak. My priority for buy now pay later products is to address any triggers that cause consumers to experience financial hardship.

Submitters also suggested that the likes of American Express, as I’ve mentioned, and other card schemes should be directly regulated by the bill, in addition to the immediate price regulation being applied to Visa and Mastercard. I do want to say, so that this is on record for the House, that American Express is absolutely in scope of regulation under the new regime, although it hasn’t been chosen to be designated straight away. So the Commerce Commission can choose to designate them in due course. But my focus in having a price path, effectively, for Mastercard and Visa payments to start is because that brings about the greatest immediate benefit for merchants and consumers. American Express, as we know, has a relatively small share of the market—their model doesn’t involve interchange fees, and they’re also constrained by competing with Visa and Mastercard in what they can charge—and, of course, if we regulate their fees, that will have a knock-on effect to the model for American Express.

I note that the select committee has recommended a number of changes to the bill. Those changes aren’t significant policy changes, but they do represent minor tweaks and, I think, improvements to the bill, which I trust will enable the legislation to work better. So as previously noted, the initial pricing standard will require Mastercard and Visa, as well as banks and other card issuers, to reduce interchange fees, which are generally the largest component of the merchant service fee. The bill now states the commercial credit card payment products, which are intended to be excluded from the initial pricing standard—the fees cap will not apply to credit payment products issued to a business and used exclusively for their businesses’ commercial purposes. However, for the sake of completeness, if a business customer is issued a personal credit card that they might use for mixed purposes, the card will be captured by the initial pricing standard.

The reported-back version of the bill also addresses comments made by a number of submitters on the provision prohibiting net compensation. In other economies where interchange fees have been capped, we see what’s known colloquially as the waterbed effect; fees or arrangements are adjusted—

Andrew Bayly: Waterbed?

Hon Dr DAVID CLARK: The waterbed effect: the fees and so on are adjusted, other aspects of the fees, to compensate the card issuers for the loss of the interchange fees, and the no net compensation provision was targeted at that kind of behaviour. However, some submitters raised issues with banning net compensation altogether and with the definition of net compensation. So the committee, to its credit, has found a better way to stop caps on interchange fees being undermined by compensation to card issuers through that waterbed effect that Mr Bayly no doubt will also comment on. Interchange fees are now defined as including any net compensation that can reasonably be attributed to retail payment transactions.

Finally, submitters commented on the ability for the Commerce Commission to issue standards that limit merchant surcharging. Some submitters opposed having merchant surcharging standards, while others thought they wouldn’t go far enough and that such charging should be banned altogether. And while caps on interchange fees may reduce the need for retailers to surcharge, the bill allows basically for the Commerce Commission to issue standards if it deems it necessary or desirable at a future point. Ultimately, consumers and competition can be harmed if surcharging is excessive, and so the commission has now provided the powers to set standards and guide what is and isn’t acceptable, and I think that’s a good compromise.

In conclusion, retail payments are the nuts and bolts of the market economy. The payment methods make it easier to secure goods and services, but the fees that sit behind them are simply too high. We want to ease the burden of these fees on retailers and other small businesses who are already struggling with the impacts of COVID-19, and we recognise that when we do that, the knock-on benefit is also to consumers, who will rightly see—well, they won’t be paying the surcharge, effectively, through that business, as the business tries to recover its costs.

So this bill is a step in the right direction, will ensure the retail payment system delivers long term-benefits to New Zealand consumers and businesses, and it also fulfils a pledge of the Labour Party before the last election. It’s a delight to actually have here in the House this evening the former Commerce and Consumer Affairs Minister, the Hon Kris Faafoi, who can also celebrate this gain, and I also acknowledge the work of the Hon Stuart Nash in this area. We’re not through all the reading stages of this bill, but the select committee has approved the bill.

Hon Kris Faafoi: payWave, payWave.

Hon Dr DAVID CLARK: They’re discussing the merits of payWave behind me. We know this bill is a sensible bill that will make things better for New Zealand consumers, better for small businesses and aid the economic recovery from COVID-19. I commend this bill to the House.

ASSISTANT SPEAKER (Ian McKelvie): The question is that the motion be agreed to.

ANDREW BAYLY (National—Port Waikato): Thank you, Mr Speaker. It’s a pleasure to be speaking on the second reading of the Retail Payment System Bill. And I hope it gets better than this for the Minister because, whilst this is a good step for small businesses, it is just a minor bit when you compare the over $3 billion worth of costs that the Labour Government has imposed on small businesses across New Zealand. Just hammered them with stuff—holiday pay, 10 days’ sick leave, all of that sort of stuff. Three and a half billion bucks’ worth and, yes, we’re going to save them a bit of money—wow! But, I’ve got to say, yep, for retailers who are hard done by because the public servants won’t come back to work because the Government won’t tell them to come back to work—councillors and council officials are still at home working from the home, who don’t come back into our centres and help places, help our town centres, help our small-business owners, help our retailers; all those operators—that’s probably the more important issue. But I will congratulate the Minister for pushing through yet another piece of legislation, and, hopefully, he’ll make it back into Cabinet, because he is so keen to push this stuff through and, yes, I know it’s an election promise for Labour, and it will give a little bit of benefit but, gee, if I was a small-business owner, I’m not sure I’m going to go, “Yes, I’m saved!”, because I just don’t think it’s going to help that much.

Anyway, let’s talk about some of the detail. I think not everyone will understand what this bill’s about. What it does, it basically sets what’s called the interchange fee. This is the fee that’s charged between a provider of credit facilities and a financial institution—so, to give an example, VISA, Mastercard, American Express (Amex), with the fees that they’ll charge the bank. As the Minister said, that is most of the cost when people are starting to use their credit card when they go to buy something from a retailer. And what this does is allow the Commerce Commission to have oversight of that process and to make sure that the fees are capped, and, at the moment, roughly about 80 percent of the total fee is relating to this interchange fee. Under the new arrangements, they’re going to be set for 0.8 percent on credit card transactions, which is in line with Australia; 0.6 percent for online debit and credit cards—I see you are watching me very closely, Mr Speaker, because I know you are a heavy user of your card or, maybe not you, but your partner is—and 0.2 percent or 5c per transaction for a contactless debit.

Of course, what the Commerce Commission will have the ability to do is to review those fees to make sure they’re appropriate. And, generally, you know there is a reasonable amount of support by Retail NZ, the Restaurant Association, but not everyone thinks this hard nut of writing a new piece of legislation is actually required. In many cases, other jurisdictions have looked at just making sure that the regulations around this are appropriate, without having to go to the extent of spending Parliament’s valuable time ramming through this piece of legislation. A number of the banks were of that view.

It’s interesting to note, and the Minister did talk about it in his speech, that since we’ve seen the advent of COVID 24 months ago, we have seen quite a decline that has voluntarily been put in place by VISA and Mastercard in terms of the fees that they’ve chosen to reduce to make it more acceptable during the period of COVID, when most people—and certainly people if you were going in to try and buy some groceries or whatever—didn’t want to see cash, didn’t want people to deal in cash, and therefore many people were relying on their credit cards or their debit cards to be able to pay for their goods or services that they were trying to buy.

So, I think, first of all, we should acknowledge there has been a decrease in fees quite substantially already, but the background prior to that is New Zealand retailers, in the main, have been paying too much, and this will lead to a decrease. There’s talk of probably about $13,000 for a retailer, on average—although I’m not quite sure whether that is pre or post the recent declines in the voluntary reductions imposed by VISA and Mastercard. All that’s good stuff, and we will be supporting it on that basis.

What I want to just talk about is a couple of little things—first of all, the exclusion of Amex. The Minister did address that in his speech. At the moment, it refers specifically to Mastercard and VISA. Amex has not been included. It has been included in Australia, and they realised that it needed to be included. Amex has quite a smaller market share—we were informed it was less than 10 percent—and the view is that Amex could be captured by this Commerce Commission if it so chooses. There’s a big question why it’s not included at this point in time; albeit it is a relatively small market player but it’s still a reasonably important market player, and the reason why we’ve excluded it yet Australia has deemed that it should be included—it raises some issues around that approach.

The second thing relates to what is termed about rules, and this is covered under clause 19 of the legislation, which I’m desperately trying to find. These are the rules around when there is a change to the rules that may be imposed by the Commerce Commission, what is the process for actually doing that? And I can’t find my—oh, yes I can. So we were very concerned about this because, if you think about it, organisations like Amex, VISA, and Mastercard are large global players. New Zealand is a very small part of their global business, and the thought that the Commerce Commission could be imposing new rules in New Zealand that would lead to a situation where VISA or Mastercard would have to change their entire global protocols to fit for New Zealand was an unlikely proposition, and actually going to lead to some real issues.

On that basis, we thought it was appropriate that there was a slightly softer approach in terms of how the Commerce Commission should go about making those changes, and the requirement to be in consultation with those providers of those services so that there was no unnecessary imposition on those operators, because the last thing we want is to have some of those major global operators pull out of New Zealand, because that would undermine the ability to provide credit facilities to New Zealanders when they’re buying goods and services. So there was a change to clause 19(1)—we took out paragraphs (b) and (c) and just slightly changed the issue around how the Commerce Commission was required to consult with them.

The other thing is the timing of changes. The bill provides for the changes being made within six months of the bill coming into law, and becoming an Act. Providers, particularly VISA and Mastercard, are concerned about this because if the bill goes through committee of the whole House and then the third reading in the next month or so—if you put six months on top of that, what we’ll end up with is actually entering the stage of blackout of IT services, a common term where banks and large institutions choose not to make substantial IT changes. Of course, that would be during the Christmas period—late November through to late January—and so this bill’s timing actually may lead to an issue where it cannot be executed and actioned by the very people it is required to. So I think we will be putting up some Supplementary Order Papers about looking at the delay of this bill, depending on when it passes through the House and, of course, that’s up to the Government to decide that framework. But, as we say, we will be supporting it, but it is not going to largely change the cost structure of small businesses in New Zealand.

JAMIE STRANGE (Labour—Hamilton East): Thank you, Mr Speaker. What an exciting night we’re having in the House tonight, and what a bombshell that was dropped by the previous speaker, Andrew Bayly, where he said that the National Party will remove the increased sick leave and holiday pay that’s come in recently. Well, there we go. I look forward to seeing that in the National Party election manifesto next year.

We also heard something else from the previous speaker. The previous speaker said the Retail Payment System Bill is an “insignificant bill”—$74 million per year is not insignificant. That’s going to make a significant increase to small businesses in New Zealand. I’m thinking of a small business literally down the end of my street, a small dairy. I went in there recently, and I spoke to the dairy owners and I explained this bill to them, and they were incredibly excited. And I said, “Will this make a difference?” And they said, “This will make a big difference for our small business.” And there’s a number of small businesses in that same space.

I’m just going to take a short call tonight—the Minister of Commerce and Consumer Affairs clearly outlined what’s been happening through the process, and, you know, shepherding this bill through. And on behalf of the Economic Development, Science and Innovation Committee I would like to thank all of those who made submissions on this bill, I’d like to thank the select committee members for their work, and I’d like to briefly highlight a submission from the Restaurant Association of New Zealand, who said, “Ultimately the Association believes that regulating merchant fees will go some way in supporting the revitalisation of small businesses, particularly those in the hospitality sector”—we know the hospitality sector have been hit hard through COVID. And the Restaurant Association said that this bill will provide important support for “those in the hospitality sector, who have faced exorbitant merchant fees for far too long.” This is an excellent piece of legislation supporting New Zealand’s small businesses—I commend it to the House.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Speaker—an excellent choice. So this is a bill that the National Party will support. We are the party of small business, we are the party of entrepreneurs, and we’re the party who understands that this is, actually, a small amount of money compared to the massive costs that have been put on to small businesses—but it is still significant. And it doesn’t bear scrutiny to say, as I’ve seen some submitters have said, that it should be self-regulated, it should be this, it should be fine, the Government shouldn’t do this. We’re looking at 12,000 businesses closed permanently; I’m not sure any of those were in the first three months before the Delta lockdown. Twelve thousand businesses closed permanently; I’m not sure any of those were anything other than small businesses, because it’s the small businesses who don’t have the ability to just keep on going, to get some extra borrowing, to get the shareholders to put in more funds, to be able to capitalise themselves better—actually, it’s the small businesses who have failed. And they haven’t so much failed but they’ve had to shut their doors.

If you walk down Lambton Quay during the daytime, if you walk down Queen Street during the daytime, if you walk down any city or town in New Zealand, all over New Zealand, we have small businesses that have closed up in the last two years. That is not their fault. We know that we have been through and still are at the tail-end of a pandemic. But we also know that those businesses have employed people; they’ve paid the wages, also to the owners of those businesses, many of whom work in their businesses, or did work in them; they’ve paid the mortgages on their homes; they’ve paid school fees; they’ve paid for everything their children need. And those businesses have now died. It is simply irresponsible to think that this bill is going to solve that issue; it will help but, for many businesses, it’s too late.

The Government talked about this in 2020. They said this is what they were going to do to help small businesses as they were putting up the minimum wage, as they were adding extra costs on. What’s actually happened is, in that time, while we’ve been waiting for this bill to come to Parliament and to come through the House, more businesses have had to shut their doors.

What is important to also remember—and Andrew Bayly alluded to this, I thought, very well—is that the move has been made, during the pandemic, away from cash to card. That is simply a fact of life. Even though cash is legal tender, and even though people should have to be able to have their cash accepted, the practice has now come, in many businesses, whether it’s a cafe selling coffees and lunch, or larger businesses, where they won’t accept cash. Primarily, that is around fear of COVID.

It’s also around the fact that these banks, the big banks—oh, and Kiwibank—have, in my cases, shut up shop in our suburban New Zealand, and in the Queen Streets, and in the Lambton Quays. So, for instance, in Papakura, in my electorate, there are now no trading banks open. That is a part of Auckland that is growing substantially, and yet, trading banks, if you’re a business owner and receive cash, and you have to bank that cash for, number one, your own safety but also to make you’re complying with all the regulations and rules that you now have, and to make sure that you don’t suddenly have this cash disappear, or you’re subject to a burglary because people know you keep cash at home—you have to go down to Manukau. So you have to go all that way at some time during the couple of hours a day that the bank is going to be open.

I saw this recently where I went to see when this bank was open, and there it was: two hours, three days a week. That’s a major city—well, it was Manukau—a major part of Auckland, a major part of New Zealand. It is really important we understand that things have changed. They’ve changed, substantially, for the way in which banks operate, and the way in which small business has been forced to operate to cope and to adapt to the circumstances. So, therefore, looking at the submissions, what’s pretty clear to me is that the National Party—and, I believe, the Government too—favour the submissions of the hospitality association, the restaurateurs, the people who end up accepting cards because there is no choice.

I think it’s also important that we look at the fact that the Commerce Commission will now be involved, because do we really have that much competition between the major providers of interchange services, between the Visas and the Mastercards? No doubt they believe that we do. But if you’re a merchant, do you really have that sort of competition? Do you really get to choose who you use or what you pay? The answer is that, for many people, they actually don’t. So I think it is important that we accept that this will help some small businesses, those that are still going. It will, however, not solve the problem. It will not reinvent the way in which business operates. It is simply accepting that there is no good reason for New Zealand to be paying double the cost of Australian businesses to do the same thing.

I was really disturbed, too, to read that smaller merchants, such as one- or two-person businesses, are paying, in many cases, higher fees than those of the larger institutions like the supermarkets, those that have the huge volume coming through. For some people, that might make perfect sense because the large volume is a better operating model for the interchange holders, the card holders and providers, than, say, many smaller businesses. But, actually, when cash is taken out of the equation—or almost taken out of the equation—that is simply not acceptable. That is where we do need to have some legislation.

So I think it’s a good thing to do this. It helps restore some sense of interoperability between small businesses in Australia and New Zealand, but also it tends to give some understanding that while our major banks have all been able to benefit in many ways from nobody marching in the streets against bank closures or anything else, or the cheques that have now disappeared from circulation—a petition which, I recall, Andrew Bayly took up for many people in our electorates who still don’t have access to online banking, in some cases because there is no broadband—

Andrew Bayly: Don’t recall much support from the other side.

Hon JUDITH COLLINS: There was no support from the Government, actually, Andrew Bayly. They’ve left people without any other means to do their banking. So it is really important that we consider these small businesses, that we consider the people who use those small businesses.

Before I rose to speak, I wondered whether or not there were some of us who might feel we have a minor conflict of interest, given our dedication towards the economy and making it grow, but I thought that, probably, in the scheme of things, there’s no more conflict of interest than there is for any other New Zealander who is, nowadays, forced to pay with a card rather than cash. Thank you, Madam Speaker.

NAISI CHEN (Labour): Thank you, Madam Speaker. I rise in this House incredibly proud knowing that after we pass this bill, $74 million will be saved for New Zealand businesses—$74 million, a much-needed saving right now in this climate. When I was preparing for this bill today, I thought about telling you guys about my history with contactless payment, and then I realised I probably would start the speech sounding like the confessions of a shopaholic. I won’t.

I’ll briefly just tell people that in 2012, I remember that in the summer holidays of uni, I was in Sydney. That was probably the summer that contactless payment—Visa and Mastercard payWave—was introduced into the New Zealand economy. I still remember very vividly that I was in Australia. Over probably the course of that one summer, the whole entire Australian economy had almost entirely shifted to contactless. They were going through the queues faster, they were going through the shops needing less assistance, and everything was being done at a much faster pace.

Then I came back to New Zealand, and I realised, even though the technology was here in New Zealand, many of our shops still did not offer contactless payment, payWave. I found that incredibly strange, until I realised that we were paying so much more—our New Zealand businesses are paying so much more—than our Australian counterparts. I thought that something needed to be done, and so I’m glad that on our campaign trail last election, our Government had announced that if we were re-elected, we would be reducing the merchant fees for our small businesses. We are now one step closer tonight to achieving that promise.

This is infrastructure building. This is making sure that we have the right cogs in our wheel. If you look at the economy as a machine, this is the right oil in our machine—that’s what payment systems are—and the right cogs to help our economy turn. This is the stuff that we’re doing—the real foundations of our economy—to make sure that we’ve got a good retail system and that we support businesses. On that note, I commend this bill to the House.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Speaker. I rise on behalf of the Green Party to speak on the Retail Payment System Bill’s second reading, partly supporting this common-sense bill. Making the reflections after my colleague on the left, Naisi Chen, who spoke about coming to New Zealand, and realising, I guess, the differences in the payment methods that we experience here. One of the reflections when I came to Aotearoa almost 16 years ago was the technologies that we used—and I grew up in a very cash-based society and realised that New Zealand was one of the guinea pigs where EFTPOS as a technology was being used. But I didn’t realise until quite later in life just how regressive some of these fees incurred to low-income people were when contactless systems came about.

I think COVID-19 has pushed us to be a more contactless society for public health reasons; it also showed us that these regressive fees needed to be addressed. So it’s really nice to see that after an extensive select committee report, we’re going to continue seeing this bill addressing things like a limit on fees for payment services, requirements for participants to disclose information relating to the network or payment services, and more. I’m really glad that the select committee report was quite clear on just how regressive these fees are, particularly on how small businesses are impacted.

While $70 million or so in savings in the scheme of the broader economy isn’t massive, in the context of who are the groups that are going to be impacted—which, again, are those that have been struggling the most during the pandemic—I do think it is meaningful, and as legislators, we should always be striving to ensure that these interventions in the economy are as progressive as possible.

I’d wish to end on a note on something that the select committee touched on about the way in which these higher fees are passed on to consumers by small businesses often engaging in reward programmes. And it really struck me to see the very clear reflection of just how we’ve been caught in a perverse system where, effectively, low-income people who cannot necessarily make multiple purchases in a business or participate in a reward system end up subsidising these high costs for high-income earners who can participate in reward programmes. And I think reward programmes are a really good indication of costs being passed on to consumers that ideally should be regulated, and so I’m really glad to see this bill continuing to progress and we look forward to supporting it to the further stages so that this change sees much-needed money into the hands of some low-income people and small businesses. Kia ora.

DAMIEN SMITH (ACT): I hope the Minister’s recovered from his incident this afternoon with the police Minister tipping some water over you, and that you’ve recovered for tonight.

We will be opposing this bill at this stage, until several modifications are made, and then we will take it for reconsideration. The great thing about retail payment systems is that when you go back down the line, petrol-fuel margins haven’t fallen, and it’s true. If you look at the important margin trending up, petrol is going up, according to the Ministry of Business, Innovation and Employment (MBIE). So I just thought I’d clear that up before we get into the bill.

It’s sad to see how animated Mr Bayly can get. I’d really love to get a shot of what he’s got when he’s coming in here every night.

Dr Duncan Webb: Come on, wrong bill. Misuse of drugs is later!

DAMIEN SMITH: Can anybody tell me, Dr Webb, what it is that he takes?

Hon Members: Berocca.

DAMIEN SMITH: Is it a Berocca? OK.

Well, you know, ACT’s got a different party view on this bill. One of the main purposes of the bill is, obviously, to support competition. There’s actually potential here to reduce competition, which is disturbing. This is a classic Commerce Commission, MBIE hit job that was put together for a good-story message prior to the hustings of the Labour Party, and hasn’t really been thought through at a technical level. So Mr Bayly failed to mention that, but then he’s probably off to get another shot of whatever it is somewhere.

You know, the breadth and scope of intrusion this bill does in terms of rule setting, standards setting, price setting, and the ability to provide, you know, input, it’s just mind-blowingly simplified. I know Mr Strange has been running this at the Economic Development, Science and Innovation Committee, but then just shut off everybody’s input after that. That’s just not good enough. So we want that fully explored when we get there.

In terms of competition, I mean, interchange fees favouring large merchants—that reduces price differentiation between schemes and limits competition, reinvestment, and everything that we should be working for, which is to actually have innovation in the marketplace. So, you know, I hope that the post-implementation period after this reading takes into consideration some of our differing views, which are highlighted in the bill.

So, just to recap those, in terms of network operations, we are about to set a standard that in 140 countries around the world doesn’t exist for Mastercard and Visa, and if we bring American Express into that as well. Now, that, to me, is not well-thought-out by MBIE. Don’t know why the Minister took that advice, and it’s impractical. The Commerce Commission should not interfere into the rules that govern this network.

On Schedule 1, Subpart 3, the initial pricing standard, the language directly relates to the clause on prohibition on certain compensation. If you look at that, that means that the way the clause is currently written has potential to diminish, as I said earlier, competition, access to innovation, and may act as a deterrent to new market entrants coming into New Zealand. We want more competition, and that’s usually how you drive down prices. You don’t take monopolies and sledgehammer them when they’re providing the service in a country of only 5 million people.

ACT believes the bill should place no limits in compensation provided by the networks to banks. This could have been the effect of limiting competition, by constraining a bank’s ability to change providers and deter new market entrants, and Subpart 3 of the initial pricing standard could reflect this. It looks like two networks have been designated, but not all networks have been designated. I’m surprised that neither Labour nor the National Party are prepared to bring that out in the open. We live in a free-market economy where democracy rules, and that includes banking and taking out your credit card to buy things.

There’s an imbalance here that drives, of course, to shop owners. We believe that all the systems within the payment category ought to be treated equally and that the Commerce Commission should be sensible and consider the impacts to innovation and competition in their overview of changing practices in just a New Zealand context, and it isn’t. I haven’t seen any cost-benefit analysis comparing this to Australia on a like-for-like basis. You do get discounts for volume. That’s just how it works in terms of big business versus small business. But small businesses are the ones that benefit from the liquidity of being able to use credit cards and service cards to actually take money instantly from the customer.

So we actually believe that the savings promoted by the Minister and the advisers—we’d like to see a two-year review of that to ensure that that $74 million magic number that they purport is actually going to be achieved, and as if it isn’t, let’s have a look at why that didn’t happen. The Credit Contracts and Consumer Finance Act rules may also affect switching by business for services, and that may curtail benefits itself.

So here we are: capitalist economies and democratic Governments are looking at better ways to do things, better than they have done previously, but I don’t think this bill achieves that. So let’s think about it over Easter eggs. Easter eggs make things sweeter. When buying at retail, let’s have a standard playing field that Duncan Webb—or, sorry, Dr Duncan Webb—can actually espouse to and understand the practical realities of cash movements through the network in New Zealand. Thank you, Madam Speaker.

INGRID LEARY (Labour—Taieri): I’m not sure if I’m speaking on the same piece of legislation as that member, because this bill is all about competition and it’s about levelling the playing field and making sure that consumers and small businesses are able to be competitive in an environment where there are some really big international global players, such as Mastercard, Visa, and so on. As we’ve heard tonight, the changes in this bill will save small businesses—and, ultimately, consumers—$74 million. It’s another piece of legislation brought to this House by my friend and colleague Dr David Clark which is all about making sure that more money stays in the pockets of New Zealanders by supporting the small businesses who run our country. We know that New Zealand is made up mainly of small business.

This is a great piece of legislation. What it does is it enables the Commerce Commission to recommend changes to retail payments, including transaction fees. Rather than wait for a comprehensive review of the retail payment systems, the Minister, in his wisdom, has said, “Let’s look at Visa. Let’s look at Mastercard. We know that these are the two dominant players in this market. Let’s get money into New Zealanders’ pockets now. We can look at the price signals that come from that. We can look at whether they try to do anything underhand to avoid competition, and we can adjust our response to that based on what we do with these two players.”

It’s fantastic to see a nimble piece of legislation like this that puts consumers first, that makes sure that we have an environment going into our COVID recovery that really builds on the small businesses that need support, that makes sure that they can do business, and that gets money into New Zealanders’ pockets. It’s a great piece of legislation. I commend it to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call Melissa Lee for 5 minutes.

MELISSA LEE (National): Thank you, Madam Speaker. It was really interesting listening to members who have spoken earlier, and I completely agree with Damien Smith when he spoke about the passion that our colleague Andrew Bayly speaks with when he’s in the Chamber. I have no idea what vitamins he takes, but I love his passion when he’s in the Chamber, and he spoke with great knowledge and, as always, with high energy.

I just want to take a moment to reflect on the comment that Ingrid Leary, the member who’s just sat down, said in terms of how this bill returns benefits to the consumers. I am actually not quite sure if this bill returns money to the consumers’ pockets. I would like to ask the Minister—and I’m sure that during the committee stage of this bill, the Minister may be able to answer—if, in fact, this bill will provide benefits to consumers, as his colleague Ingrid Leary said, because the overseas experience in Australia and Europe tells us that consumers receive no benefit and tend to lose out on the interchange regulations. However, I just want to say that on this side, we actually supported this bill, and we will continue to support it, bar something going tragically wrong during the committee stage.

As earlier speakers have mentioned, many people in this country pay merchant service fees that are often charged out by the issuing banks that provide credit cards and EFTPOS cards. But, as I think it was the Hon Judith Collins, who talked about her experience, said earlier, during COVID there were many businesses and retailers who did not take cash. I don’t know whether it was fear of the COVID virus, but I know that some retailers who did, in fact, take some cash would actually sanitise it. They would use disinfectants and all that kind of stuff.

So retailers preferred getting credit card payments or EFTPOS payments because of COVID, and often there wasn’t the insert or swipe option on these cards, but the contactless version of the transaction. The merchant service fees for the contactless portion is the interchange portion between the bank that charges it and the fee that they have to pay to Mastercard and Visa. That is the interchange fee, and that is, in fact, like 80 percent of the charge, and it is the highest portion of the merchant service fee. Hence, this bill sets a limit on how much it is. There is a cap on how much the interchange fees will be.

Having seen the speeches earlier in my office, initially, and having listened to Andrew Bayly, I have to say that I agree with him when he says that this Government gives with one hand and takes away with the other. This Government talks about how $74 million in apparent savings is humongous, considering the fact that they’ve just slapped on $3 billion of cost to retailers and small businesses. So when we’re comparing $3 billion and $74 million, I’m not so sure which is actually the greater benefit. I’m sure that the $3 billion cost is going to be something that a lot of retailers and small businesses will be very, very upset about, but any little bit that can help retailers pay less in the transaction fee that is charged on to customers and consumers, I am here to support. So I commend this bill to the House.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Speaker. Look, this is a good—very excellent—piece of legislation, because merchant fees and surcharges are a classic economic problem where there is no actual distinction between the product of one bank and another. So there is actually an incentive to drive the cost of the service up across the board and no incentive to lower them. It’s what is known as “sticky pricing”. It happens with petrol as well, because we don’t mind where we go to. So it encourages what looks a bit like cartel behaviour, but you don’t need to communicate to actually achieve what is, essentially, a kind of price fixing, because everything is so blindingly obvious.

So what we’ve got is, essentially, monopoly pricing for these banking services. It’s absolutely appropriate for the Commerce Commission to come in, and I’m surprised at the ACT Party, because I’d have thought that they would want to have competitive and not monopoly pricing, so that the industry is efficient and innovative. That’s what this bill is aimed at—an efficient and innovative and effective banking service—and that’s what this bill will deliver. I absolutely endorse it and commend it to the House.

DAMIEN SMITH (ACT): Point of order, Madam Speaker. It is the Labour Party that has brought up the issue of price fixing and cartel behaviour—

ASSISTANT SPEAKER (Hon Jenny Salesa): The member will take his seat.

DAMIEN SMITH: No, no, it’s a very important construct, because there’s nobody on this side of the House who has said that.

ASSISTANT SPEAKER (Hon Jenny Salesa): Yes, the member has had a chance to give his speech. I call on Glen Bennett.

GLEN BENNETT (Labour—New Plymouth): Kia ora, Madam Speaker. I am glad to rise and take a call, talking about easing the burden and fees for merchants, ensuring it goes through to customers. We’ve talked a lot about Andrew Bayly tonight, which I’m never that comfortable about, but I don’t think it’s passion; it’s actually just shouty-shouty that seems to come this way, and I actually have removed my earplugs now.

But it has been interesting listening this evening—and these contradictions and this sort of to-ing and fro-ing. We heard from the Opposition they’re the party of small business, but they never got around to doing this when they were in Government, so I’m glad that we are the party of small business who are ensuring that this does happen. This bill will help, and $74 million—it is a small amount. We’ve never talked about it being humungous but it’s those small steps that are significant and, as a member of the Opposition who just sat down said, every little bit counts and that’s why they support this piece of legislation.

I was also concerned by Damien Smith—that he talked about the breadth and scope of intrusion, which I thought was a bit rough. One of the submitters—this is what they had to say in submitting to this piece of legislation. They said, “As a small-business owner we have for years faced price gouging from the banks over merchant service fees. The only tool at our disposal has been to on-charge these increasing fees to our customers through repricing our products or transparently surcharging.” They talked about wanting to get rid of this and move it forward so it is going to get passed down to the customer, and business people—small business—who we serve in part of our manifesto as Labour, we said we’ll do this. We are doing this and so I’m really, really proud that we can move another step forward and I thank you for the support from across the floor and I just hope that we can get the ACT Party there very shortly—and I know they may.

Hon TODD McCLAY (National—Rotorua): I find myself in the unusual situation, in the first time in my political career, agreeing with that last member, Glen Bennett, when he read out and said that the problem with the interchange fees charged by the banks for the credit cards they use is the poor old retailer must pass them on to the consumer. They can’t absorb them. They can’t put them somewhere else. Actually, many of the retail customers, small shops in New Zealand, are doing it very difficult. They must pass it on. And, of course, that is the case whenever a cost is imposed on a business. They must pass it on. With the Matariki bill that was passed just last week, there’s a $450 million cost that’s being imposed upon these businesses, and, just like what the last speaker said the banks are doing, it must be passed on.

In fact, if we look at what the Labour Party has done in the very, very, very long 4½ years they have been in Government—very, very long for the small businesses that the last speaker said they were sticking up for—there’s almost $2.6 billion worth of additional cost that has been imposed not on the economy, not on the taxpayer—because the Government has borrowed it and spent it—but on businesses in New Zealand. So, on the one hand, we have members of the Government coming forward and saying every little bit counts, and the saving, through this legislation, of $74 million for small business—won’t have to pass on to the consumer any more—is very small by comparison to the cost this Government has imposed upon businesses that is being passed on to consumers. It is no wonder we have a cost of living crisis in New Zealand, with inflation so high, because, on the one hand, in four measures alone that this Government campaigned on and has put in place at a cost of over $2 billion, there is this small saving of $74 million. I tell you what, if you go and ask the average consumer, “Do you want another $74 million worth of savings to small business so your costs don’t go up, but, on the other hand, we’re going to put $2 billion back on you?”, they would work it out for themselves.

This is the interesting thing about the Labour Party. It’s the small things that they try to get right, like this legislation, that actually don’t make the difference for consumers. It’s the big things that they instantly, always, get wrong, that is what is harming business in New Zealand and harming consumers. Take the very, very fast and significant increases to the minimum wage. I’m yet to hear anybody in this House—

Dr Duncan Webb: I raise a point of order, Madam Speaker. The member has been talking about all kinds of things, and I’m just referring to Speaker’s ruling 128/8: “Members must confine themselves to the main purposes and contents of the bill; … [not] with matters not provided for in the bill.” The member’s well out of order.

Hon TODD McCLAY: Speaking to the point of order, Madam Speaker. The thing about debate is one gets to rebut, and members opposite, in every single speech—there hasn’t been a full 10 minutes; it’s been a very short period of time—have made the case of how this is assisting and it is helping consumers. I merely, in drawing on the saving that they’re speaking to in this bill—the additional costs that actually aren’t helping consumers—am making the case that consumers are not better off. I’m actually only three minutes into my speech, which is much longer than most of the Government’s speeches.

ASSISTANT SPEAKER (Hon Jenny Salesa): It is up to the Speaker to determine relevancy, and I invite the speaker to come back to the bill.

Hon TODD McCLAY: Thank you very much. Well, the great thing about this bill is there is a saving of $74 million. A quick amount of maths would suggest that whilst that is welcome, it wouldn’t be as welcome as so very many other changes that could be there.

Here’s the most interesting thing about that point of order: it’s that, actually, the Government would like consumers in New Zealand to only think about what’s in this legislation. They’re not willing to allow debate on anything other, in this case, than what is here. And, yes, there is a saving; it’s not a bad thing. In fact, it would be great if there was a way to add Supplementary Order Papers to this, to amend this when we get to future stages, to save the consumer even more. Because here is something you will notice as this legislation enters into force: the consumer will hardly notice the saving because it will be taken over by additional cost, across the board, that will be levied by this Government. Because here’s something else that is extremely important: when the Government stands up and says it wants to save the consumer money, it should do that in every piece of legislation that comes forward. And every time this Government brings legislation to the House that will impose cost upon consumers, we’ll get to stand up and say, “Remember, a long time ago, that piece of legislation when they decided the banks were the bad guys, so they were going to make a change there and save $74 million?”—long forgotten, because there’s extra costs and the additional costs that will be brought forward.

The members of Government talk a lot about small businesses. They talk very little about the small businesses that have closed and that have gone, who are waiting not for this legislation, but any other help that could allow them to get there. The $74 million of savings from this legislation, spread across small businesses in New Zealand, is very small by comparison to the amount of debt that these small businesses have taken on over the last 2½ years alone. And it is the case that when consumers go and they pay for something with their cards—and, in some cases, some retailers on-charge the cost to them of up to a percent and a half; others absorb it—what the consumer then may say to that small business is “Well, why is it that I have to pay 1.5 percent on this retail item that I’m having to buy for my family that is so much more expensive today than it used to be, when this saving the Government is talking about means that prices in the supermarket, or prices in the corner dairy, or prices anywhere will go down?” And the answer to that, sadly, is they won’t.

This is a worthy piece of legislation. It has taken effect in other countries around the world. And, in fact, the Government is merely mimicking, I suppose, or following changes Australia made some time ago. But here’s the other very interesting thing: this was a promise that was made before the last election by the Government, I would suggest, trying to divert attention from the very other many costs that they also said they would impose.

But I remember another promise made two elections ago, which should be being delivered in this legislation at the same time because there would be less of a saving for the consumer, but more money in the pocket of everyday workers: do you remember when they said they were going to get rid of secondary tax? Well, there are members in the House, actually, who, on a daily basis, have constituents get in touch with them, saying, “We are still being charged secondary tax.” Well, how come that hasn’t been fixed, but this one has? Because the cost to workers having to pay secondary tax and then wait until the end of the year to get it back is much, much greater than the $74 million the Government says is a saving in this legislation and therefore one of the best things that they have done. And, in fact, I will give them that: one of the best things that they have done to help consumers over 4½ years is a $74 million saving that’s not going to make the petrol at the pump cheaper. It won’t make the food any cheaper. It’s not going to make the rent any cheaper. And, in fact, if we look at all the other things the Government has done that are bad for business and bad for small business, bad for consumers, the prices are going one way and it is only up.

Can I finally say, to the Minister of Commerce and Consumer Affairs, who brought this forward: he is digging away in his portfolio as hard as he can. I wish he had more support from his colleagues in other areas, because some of the legislation he’s brought forward is worthwhile. It will make a very, very small difference, but at least he’s bringing things forward to the House to make a difference. Where this Government is letting down the New Zealand public is in the big things, not the small things like this. The next speaker in the debate will get up and say, “Well, a $74 million saving is not small.” It is, when you have just piled $450 million worth of cost on to the New Zealand consumer, through small business, in one day alone next year—in one day alone.

Consumers in New Zealand are worse off under this Government. Retailers in New Zealand, largely particularly small ones, are worse off under this Government. In fact, there’s not a single thing this Government’s got its hands on that’s not going up in price. Congratulations to the Minister for being able to get one of the smallest savings I’ve seen in a long time through Cabinet. It’s a great shame they don’t give this Minister much more responsibility. Imagine if he was allowed to do something big that actually could turn the ship around, help business in New Zealand, get them back on their feet, and be good for consumers at the same time. We live in hope. This legislation won’t do it. Albeit, with the tide of extra cost being dumped on New Zealand households and New Zealand businesses, at least here’s a tiny little win for them here. It’s almost worth celebrating.

GREG O’CONNOR (Labour—Ōhāriu): I just want to give an illustration to those at home about how this might work. Recently, I helped a gang member out of a gang, and this gang member told a story of taking $650,000 in cash, wrapped in cellophane, from Wellington to Auckland. He then changed that money on behalf of the person he was prospecting for and brought an equivalent amount of dope back to Wellington. When I mention dope, I’m not talking about the previous speaker, of course; I’m speaking about the illicit substance methamphetamine.

So the transaction cost of that was actually the petrol in the car and the cost of the car to drive to Auckland and the cost of bringing it back. Ironically, that member had to borrow money to drive home, because he didn’t have any. But if that was a legal transaction, there would have been a considerable amount of additional cost: the cost of legally sending that money to Auckland. There would have been a considerable amount of cost in that—all sorts of interchange fees, coming back, the distribution of the—as it was illegal—substance. If that had been a legal substance, people would have gone to the dairy, people would have gone to various retail outlets, and each time there would have been an added cost to all of those transactions. So you can imagine how much more money would have been generated, how much more money would have needed to be generated, to actually allow those transactions to take place.

What this bill is about is ensuring that the amount of costs in a legal transaction going through a system like that, where a product, a raw product, through its various stages is turned into the legal product that people use—there will be a less, reduced cost as a result of this bill along the way, whether it be going to the local dairy to buy the product or wherever you go along the way. So this bill is a way of ensuring that there is simply less cost in the system of doing business, something that, on this side of the House, we are very proud to be part of doing. I have no hesitation in commending this bill to the House.

Hon TODD McCLAY (National—Rotorua): Point of order, Madam Speaker. I move a motion without debate that that member tell us some more about his gang interactions.

ASSISTANT SPEAKER (Hon Jenny Salesa): That is a disorderly point of order, the Hon Todd McClay. The question is that the motion be agreed to.

A party vote was called for on the question, That the Retail Payment System Bill be now read a second time.

Ayes 110

New Zealand Labour 65; New Zealand National 33; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

Motion agreed to.

Bill read a second time.

Bills

Protected Disclosures (Protection of Whistleblowers) Bill

Third Reading

Hon CHRIS HIPKINS (Minister for the Public Service): I move, That the Protected Disclosures (Protection of Whistleblowers) Bill be now read a third time.

Once again, I want to thank the select committee for their deliberations on the bill and thank all of those who took the time to make submissions. This is the first of what will probably be two bills.

ASSISTANT SPEAKER (Hon Jenny Salesa): Point of order, Minister. One moment, please. Does the Minister want to present a legislative statement?

Hon CHRIS HIPKINS: No, Madam Speaker; the legislative statement was presented on the earlier readings.

ASSISTANT SPEAKER (Hon Jenny Salesa): Thank you. The Minister may continue.

Hon CHRIS HIPKINS: Once again, I’d like to acknowledge the contribution of the members of the select committee and, perhaps, review the fact that this is the first of what I’m sure will be probably two bills—another one further down the track to deal with some of the issues that were unable to be captured by this one.

When we started to look at the Protected Disclosures Act 2000, it was, of course, a significant piece of legislation at the time, but it became very clear that the Act was not operating as it was intended. People didn’t understand it, and they were not using it. People were afraid to make protected disclosures, because it had become such a difficult to understand process that it did not give them the confidence that it was designed to give them that they would be protected in the event that they disclosed wrongdoing.

This bill does a couple of things. First of all, it simplifies the existing legislation so that it’s easier to understand and it makes some changes to them. The first thing the bill does is clarify the key elements of the existing protected disclosures regime that will continue in the new legislation. I’ll run through those quickly. A protected disclosure has three key ingredients: a discloser who believes that they have identified serious wrongdoing in their organisation and discloses it, not in bad faith, within their organisation or to an appropriate authority. Disclosers are people who are in a position to see serious wrongdoing in an organisation because they work there or have previously worked there, and they need protection in disclosing that serious wrongdoing to someone who can do something about it because the organisation or the perpetrator of the wrongdoing is in a position in order to be able to retaliate.

The protections that the legislation provides are the confidentiality around who has made the disclosure, immunity from disciplinary action in making the disclosure, and protections from retaliation under the Employment Relations Act and the Human Rights Act. The receiver of a disclosure needs to play their part by maintaining confidentiality, investigating or referring the disclosure, and informing the discloser what they have done about it.

The main changes that the bill makes are the removal of all of the gates and hurdles that have previously prevented or discouraged disclosers from getting their concern in front of an appropriate external authority, requiring public sector organisations to specify in their internal procedures how they’re going to support disclosers, adding to the definition of “serious wrongdoing” the misuse of public funds or authority by non - public sector organisations and the serious risk to the health and safety of any individual, improving protection of disclosers by enabling them to complain to the Privacy Commissioner if the requirement to protect their confidentiality has been breached, and removing the restrictions on the protection of those who disclose supporting information.

That’s, effectively, what the bill does. To turn the House’s attention, though, to some of the issues that people raised that the bill doesn’t necessarily fully address, this bill is predominantly focused on changes in so far as the protected disclosures regime relates to the public sector—in the broadest possible definition of the phrase “public sector”. It does not look at the private sector; more work is required there, and, if there are going to be further changes, then potentially a subsequent piece of legislation can bring those changes before the House.

I was very mindful in making decisions on this legislation that the potential to add significant, potentially additional compliance costs for small businesses, for example, could be significant if we didn’t work our way through that carefully to fully understand the implications of that. This bill does not lean on those topics; it looks at the broader public sector rather than looking at the private sector, although, as I’ve indicated in my introductory remarks, it does afford some protection for disclosures where the use of public money is involved by other organisations, private sector companies, or non-governmental organisations.

The Government, and indeed, I think—from the comments that we’ve heard around the House—the House as a whole, is committed to protecting New Zealanders who speak up about serious wrongdoing; I think that that’s really important. New Zealand is internationally recognised as one of the least corrupt countries in the world; that’s something that we should all be proud of, but it is nothing to be complacent about. In order to maintain that status, we have to constantly be looking for areas where we can continue to improve. The disclosure of wrongdoing and protecting those who blow the whistle is one of the ways that we can safeguard our standing as a country.

Hon Mark Mitchell: “Chippie”, can I meet with the commissioner? That would be a good start.

Hon CHRIS HIPKINS: Well, that’s a parliamentary matter; it’s not a matter for me as a Minister.

Ensuring that people can make protected disclosures with confidence is one of the ways that we can safeguard our reputation as one of those countries that suffers from the least corruption in the world. I commend the bill to the House.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Speaker—I’d better take my mask off here, actually—for the opportunity—

Hon Chris Hipkins: Put it back on!

SIMEON BROWN: Oh, you want me to put the mask back on? I’ll put the mask—

Simon O’Connor: Actually, strictly that would have been a protected disclosure.

SIMEON BROWN: That would have been a protected disclosure, as my colleague Simon O’ Connor says. But it is a pleasure to take a call on the Protected Disclosures (Protection of Whistleblowers) Bill at the third reading, which the National Party will be supporting.

The context of this debate, following a very rousing speech by Greg O’Connor, which I do think was actually in the context of a protected disclosure, telling us a very interesting story about some dealings with someone who was dealing cocaine—I couldn’t quite understand exactly the context of the story, but I’m not sure if this was the actual place where that sort of protected disclosure should have actually been lodged here in the House. I’m not quite sure if the member was aware this is open, being transmitted across New Zealand, and people are able to listen in. So I’m not quite sure if that was exactly what he was trying to do, but a very interesting speech, nevertheless.

But back to the bill. The National Party will be supporting this piece of legislation. I think that, as the Minister has rightly acknowledged, making sure that we have procedures in place to ensure that people who are aware of issues around corruption, safety, or criminal activity have opportunities to be able to report and to ensure that they are able to bring that information to the attention of those who need to know, but also to be protected in that way, in terms of when they are actually making those disclosures so that there is no repercussions back on them—that is a critical part of a functioning democracy, particularly in the public sector. So the National Party, of course, will be supporting this piece of legislation, which will allow that process to not only be continued but also to be able to be refined as New Zealand continues to try to make sure that our legislation protects these people and protects that information.

Whistleblowers serve the public interest by exposing a range of things like unethical practices, threats to public health or safety, and criminal activity—and that is something which is incredibly effective, particularly when it comes to making sure that we reduce corruption or corrupt behaviour is brought to light in an organisation, and that’s something which, I think, from the taxpayers’ perspective, is critically important. Taxpayers want to ensure that Public Service organisations, the public sector is working for them and is making sure that they are effectively responding to those concerns which are raised within those organisations. So having this piece of legislation allows for a very clear process for these complaints, these disclosures, to be made, for people to be able to come forward without having to risk their reputation or negative repercussions which may easily come upon them, and also for the particular organisations to have a very clear process which they then have to follow, which is set out very clearly in the legislation. And so I think it’s a very, very good piece of legislation.

I acknowledge the select committee, which has diligently worked on this particular bill and has made recommendations; the submitters, who, of course, have submitted on this piece of legislation; and I do note there has been a number of points made through that process, which I think are important to touch on. The Minister has touched on the issue around the private sector, and I do think it’s important to put on the record that there is, of course, implications that this bill will have where public money is involved. But, at the same time, it is important that the Government is not imposing significant regulation and costs on to businesses, particularly small businesses if they would also be included in this regime. And so whilst it’s important, of course, for private sector businesses to be considering how they can support and ensure their staff are able to bring forward complaints or issues of these natures, particularly, I think, larger businesses, Government also needs to consider the cost that policies like this would have if they were put in place for the private sector at large. And so I do think this bill does get the balance right on that particular point.

Hon David Bennett: What about Greg O’Connor?

SIMEON BROWN: Well, I’ve already touched on Greg O’Connor, David Bennett, in terms of this is not quite the place for a protected disclosure in Parliament—Parliament is not quite the place. The bill makes it very clear that there is a confidential process whereby protected disclosures can and should be made. But I would not suggest that someone like Greg O’Connor should be making those particular disclosures in Parliament, because, of course, Parliament is open, it’s on the radio, it’s on the TV, and you can watch it on demand, and the Hansard will even be printing it. So what is said here will be on the record for ever. And so whilst, of course, we’re very interested in what Greg Connor has to say, Mr Bennett, I don’t think it’s—

Maureen Pugh: Not everyone.

SIMEON BROWN: Well, not everyone; we’re interested to a certain degree would probably be a better point, Maureen Pugh. But I wouldn’t say everyone’s incredibly interested, but it’s on the record. So I guess the point I’m trying to say—

Hon David Bennett: What did he say?

SIMEON BROWN: Well, I’ve already covered that too, Mr Bennett. But back to the points I was trying to make. The final point I would like to make is that there is, of course, an issue around these types of regimes to ensure that there is a threshold at which complaints have to be met—the risk being that we don’t want to see vexatious or litigious complaints where people constantly are trying to bring complaints forward and just chewing up time. So I do think the definition or meaning of “serious wrongdoing” does strike that balance right where, of course, serious wrongdoing includes something which is an offence, a serious risk to public health, public safety, health or safety of an individual, the environment—[Interruption] Well, Simon Watts, I mean, it could be. I mean, spending $51 million on a cycle bridge which didn’t go ahead. You know, I’m not sure that’s quite an unlawful or corrupt or irregular use of public funds. I mean, potentially. But I would just say it’s important that there is a high threshold, is the point I was trying to make, Mr Watts, in that we want to make sure that we’re not having vexatious or litigious complaints coming through. There has to be a high threshold in regards to these complaints. So, whilst I wouldn’t give you any advice here on the fly around whether you would want to report that or not, Mr Watts, the point is that there does need to be a high threshold around these particular wrongdoings.

So I do think the bill has got that balance right. The National Party supports this bill. We do want to ensure that our public sector maintains the highest ethical standards, that there are good processes in place for people who make these complaints, and that they are dealt with in the most careful and confidential ways, and that those people do not risk their reputation or negative repercussions from that. And so the National Party is supportive of this bill and we commend it to the House.

MARJA LUBECK (Labour): Thank you, Madam Speaker, for the chance to take a call here in this third reading debate of the Protected Disclosures (Protection of Whistleblowers) Bill. Now, I just noticed that Mr Brown went to great lengths to get all his colleagues put in the Hansard tonight. I’m not really sure why he did so, Mr Bennett, but, Mrs Roberts—if you have any idea? We know exactly who was here at his speech.

So this existing legislation that we are amending was written in 2000 and that, of course, is a little bit overdue now for an overhaul, and that is exactly what this bill is doing at the moment. It’s widely accepted, as we’ve heard in all the speeches in the previous debates, that the current legislation isn’t as accessible or easily understood as was likely meant a couple of decades ago, and the Minister for the Public Service already touched on this in his contribution. New Zealand prides itself on being one of the least corrupt countries in the world, and when it comes to transparency we have a lot to be proud of. But, of course, with this Act being more 20 years old now, it meant that we needed to be catching up to international best practice, so that people know how to use the legislation and, at the same time, they feel safe in doing so; the Minister actually mentioned exactly that. At the moment, the way the legislation is written is that people are afraid to use it, and that is of course not what we’d like them to do.

I’d like to start by thanking our officials and advisers for their work on this bill, and my colleagues on the Education and Workforce Committee, and people from across the House for working very collaboratively. As we’ve heard from the speeches, we came together in the right spirit to address this issue. We received 36 written submissions and we heard from 16 submitters in person, and that included some personal stories which made it really clear that this is an important issue that we are clarifying with this bill.

As a result of the amendments in this piece of legislation, we can be confident that those who are disclosing wrongdoing—and serious wrongdoing, as Mr Brown pointed out—can feel protected in doing so. People can safely go through the process, they will know what the process is, and they also can keep their identity and privacy, which is, of course, really important. We heard some really good examples. I remember my colleague Ingrid Leary speaking on this bill in the second reading, and she mentioned some examples from both the private sector and public sector, in fact, from her experience previously as a journalist.

The Minister spoke about this bill removing the gate and hurdles that have prevented or discouraged disclosers from getting their concern in front of an appropriate external authority. So what this bill will do is it will require public sector organisations to specify in their internal procedures how they will support the disclosers and improve protections for those who are disclosing, and, of course, for those people who take the step of disclosing, it will be a massive change from the current situation.

This bill will clarify the key aspects of the Protected Disclosures Act so that it is clear who can make a disclosure, how it works, and exactly how they will be protected. This legislation, once updated through this bill, will give protection to employees who uncover serious misconduct, fraud, or corruption that they see in or by their organisation. Therefore, I commend it to the House. Thank you.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Madam Speaker. It’s a pleasure to take a call on this, the Protected Disclosures (Protection of Whistleblowers) Bill, at the third reading. Although I didn’t sit on the Education and Workforce Committee—so I didn’t hear any of the submissions on this bill—I did take a call, I think, at the second reading, and I just want to reiterate the comments that I made then, in congratulating and acknowledging the Minister—Minister Hipkins—and the work of the select committee.

This is a very good bill, and I just spoke very briefly about my own experience in the private sector, going back to 10 years ago, as part of a very big global logistics organisation, and I was running the compliance programme across 130 countries and 30,000-plus employees. We had a very progressive chairman in Tarek Sultan, and he understood very clearly in an organisation that big, when you’re dealing with multiple Governments and agencies, the responsibility associated with that, but also the risk around bad behaviour and that employees had to have the protection and the ability to be able to report that behaviour without fear of any negative repercussions on them. So we developed a very comprehensive compliance programme that ran globally—and there are some real challenges around that—but it was successful. So I was very pleased to see this bill come to the House.

On a personal level, I think some of the Opposition MPs, in their speeches, have made the point that we lead the world, and especially the OECD, around most targets that relate to transparency and corruption. We should be proud of that as a country and as a Parliament, and we should protect that as much as we can. So it does aggrieve me that, as a member of Her Majesty’s Opposition, recently, through a Minister of the Crown, I requested a meeting with the head of the agency that I’m the spokesperson for. Now, normally in convention, that is a courtesy—to allow the Minister to know that you are seeking a meeting with the head of that agency—but, in this case, it was declined. I have been blocked. And I have to say that my predecessor, Simeon Brown, who made the same request, was granted that meeting.

So, when I look at this bill and I look at the meaning of “serious wrongdoing”, I just wonder whether I could actually make a complaint, because, if you go down to clause 10(e), it’s “oppressive, unlawfully discriminatory, or grossly negligent behaviour,”. And I have to say that it feels pretty oppressive and unlawful as a member of Her Majesty’s Opposition to be blocked from a meeting with the head of an agency—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Can I ask the member how that even relates to the whistleblowers bill? Can I just ask the member to just come back to the bill.

Hon MARK MITCHELL: I think, how it relates to it, Madam Speaker, is that members on the other side have raised transparency and corruption and the fact that this bill is designed to be able to deal and ensure that we remain the most open and transparent democracy in the world. And so what I am highlighting is that that type of behaviour is neither open nor transparent. So I feel that, should I want to use that avenue that is available, maybe I should be using it. Maybe it actually applies to me as well.

So, anyway, Madam Speaker, I am happy to stand and support the bill, and I’m also happy that you did allow me to make what I feel is a very important point. Thank you.

CAMILLA BELICH (Labour): Thank you, Madam Speaker. It’s a pleasure to be able to speak on this, the third reading of the Protected Disclosures (Protection of Whistleblowers) Bill. As we’ve heard from other speakers, this bill is, in fact, a replacement of the Act that was passed in the year 2000, which, coincidentally, was my last year of high school. So we can all agree that many things have changed since then, but the importance of investigating wrongdoing in workplaces hasn’t. So that’s why these types of protections that are introduced by this very good bill are so important.

This is a very straightforward bill, and that is one of the improvements it offers in relation to the law that’s currently in place. There have been special changes made to this bill to make sure it’s accessible and usable for people so that they can tell whether they’re covered by other protected disclosures legislation, and I would commend a close reading of this bill to the members on the other side of the House. I’m sure that once they go through it, they will clearly see that the example that they were previously referring to is clearly not covered by any section of the bill—most notably, the first one: clause 8.

We’ve heard from other speakers that New Zealand is one of the least corrupt countries in the world, and it’s often recognised by very independent organisations like Transparency International as one of the least corrupt countries in the world, but it’s very important that, as legislators, we don’t just seek to implement new ideas. It’s very important that we also look to existing legislation to make sure it’s achieving the aims and purposes that we seek from that particular piece of legislation.

So I think the select committee process—and I was a member of the Education and Workforce Committee—was particularly important, and a lot of the reflections that submitters brought up have been incorporated into this piece of legislation. I thank the select committee members, my fellow people on the select committee, and also all of the submitters for sharing their expertise with us.

Madam Speaker, this bill is important. It is an improvement on the existing Act, but there is more work to do, as the Minister has said, and I look forward to seeing the work that comes forward. So I won’t take any more of your time, but I would like to commend this bill to the House.

JAN LOGIE (Green): Thank you, Madam Speaker. I rise to offer the Green Party’s disappointed support for the Protected Disclosures (Protection of Whistleblowers) Bill this evening. I want to provide a bit of an introduction for people listening, because when I hear the words “protected disclosure” it doesn’t really mean much to me, and I think I wanted to give some examples about what this is, things that this might cover.

There have been some good movies over recent years covering some of the situations that this can relate to. So there’s the movie Serpico around New York police corruption, accepting pay-offs—that’s a form of corruption where you want a whistleblower to intervene, as they did in that case. The Laundromat, a movie where they’re looking at the Panama Papers and the disclosure around that of money laundering and tax evasion and bribes happening globally that reached right into this country, even, and required somebody to blow the whistle to be able to bring that to light. And then there’s the movie The Insider, looking at the tobacco industry intentionally making their products more addictive and hiding the science from the public—another example where we required a whistleblower to be able to bring an incredibly important public health issue to the public for us to be able to make conscious decisions based on real evidence rather than corporate greed. The very well-known one Erin Brockovich, who uncovered a utility company contaminating ground and into drinking water that was putting huge numbers of lives—600 families, I think—at risk through that corruption—again, required whistle-blowing and really concerted effort to be able to fight the efforts to shut that down. And then, of course, the very well-known example of Edward Snowden exposing illegal spying initiatives and where he is now having to live in Russia, of all places, to feel safe and free from Government interests and retaliation for his whistle-blowing, acting in defence of the rights and liberty of American people. These are some of the international examples we know where whistleblowers have been incredibly important.

What we see in many of those examples is how few people have been brave enough to break out and tell the story that needed to be told and how often the organisations, whether they be Government organisations or corporate organisations, have actually tried to shut them down and punish them for acting in the public’s interest. That is what this piece of legislation is about: giving us as a country a framework to enable people who see wrongdoing to be able to come forward and be confident that they will be heard and that the processes will be followed to explore and ultimately shut down wrongdoing.

We think of current examples that we know of, or recent examples in this country, where Rebecca Macfie has just recently published a book around Pike River, where 29 men died. One of the key findings from her research was that every person who comes to you with information about safety is a whistleblower and deserves to be listened to respectfully, that there was a failure at Pike River to listen to those raising concerns about safety, and that it was against the corporate interests at the time, and 29 men died. We’ve heard recently in the news, even tonight, around the actions of the Australian Defence Force in East Timor, where our soldiers saw behaviour that could have led to a trial for murder ended up in charges around brutalising a corpse that were not able to be progressed because our soldiers were not given the assurances of protection in providing their evidence. Links have been made to the failure to act in what was found in East Timor, leading to further abuses of power and very problematic behaviour happening in Afghanistan.

So these are real life examples that have connections to us as a country, and let alone the example of Joanne Harrison that led to this legislation being reviewed in the first place, where there was fraud happening in the Ministry of Transport, and people tried to bring it to light, and for too long were not successful in doing that. So this legislation is really important; however, it’s disappointing that after years of work, what we’ve come up with is, really, the first baby step towards setting up an effective regime.

And I do need to point out, because of the mention around New Zealand being really proud of our record around transparency and integrity, well, there was an article published on the Transparency International New Zealand website last week, I think, about this piece of legislation that noted that the Government’s decision in terms of limiting this legislation and not supporting the Green Party Supplementary Order Paper (SOP) goes against everything that is known about the effectiveness of whistleblowing, including the evidence of the Public Service Commission and the Ombudsman’s own research that a decision was made by the Government not to support amendments that would have put a system of protection around people whistleblowing, which is the centrally most important thing of having an effective system. We know it from the movies, we know it from our reality, when people come forward, and we have to make sure that they are protected.

This legislation has a penalty for any retaliation taken against somebody, but the evidence we heard in the select committee was that people who have been blowing the whistle in agencies in our country have, as a result of that, experienced years of having their names slandered, losing their jobs, having their reputations destroyed, being out of work, and suffering mentally, understandably, and financially, as well as just their standing in the community for years before they manage to go through the systems to get themselves vindicated and the decisions reversed. You can’t reverse that kind of damage. And if you want to give people the confidence to be able to come forward, you have to give them enough assurances that you have a system in place to protect them proactively from that level of harm. And that SOP was based around a research project that has been happening in this country and was based on best evidence.

And the argument from the Minister that it couldn’t be accepted was, really, “What about the smaller NGOs?” Even though, actually, it was quite a simple and, I would have thought, helpful framework, actually, that would have supported them in this situation, because just not having these protections in place doesn’t mean that they’re not going to have, potentially, people coming forward, and that actually having a framework of how you support somebody would be helpful, but the Minister thought that that would be too onerous.

And I would point to Michael Macaulay’s comments in the Transparency International article, noting that this was a self-fulfilling excuse, because, from the earliest incarnations of the bill, the Government flat-out rejected external oversight methods that could have been used to overcome the issues of internal capability and capacity. And what we’ve been told through this process is, “We’ll get to it. Yes, yes, Greens, we recognise the importance of what you’re saying. We’ll acknowledge it’s valid, we’ll get to it sometime.”

But this process has already been going on for four or five years. There’s been every opportunity. And if we care about the integrity of our businesses and our Public Service and our community organisations, then this was a central piece of legislation where we could have really made a difference, and it’s just a bit gutting that the Government took the easy road and didn’t do what we needed.

CHRIS BAILLIE (ACT): I rise on behalf of ACT to take a short call in support of the Protected Disclosures (Protection of Whistleblowers) Bill. It’s a bill that replaces the Protected Disclosures Act 2000, which was introduced to address a number of issues that were going on at the time. It wasn’t used very often back then, but probably because it just wasn’t user-friendly enough, and we think that these issues are dealt with in this bill by its providing protection for employees and other workers who have those concerns and who report those concerns.

The bill recognises and clarifies the definition of “serious wrongdoing”, for which the threshold is high, and quite rightly so. There should be no confusion on what is serious wrongdoing and what are those issues that should be dealt with or can be dealt with through the personal grievance process. It adds specific reference to the use of public funds and the serious risk to health and safety of an individual, to show that situations that were raised in the select committee, such as the neglect or abuse of the vulnerable individuals in care, are covered by this bill.

It enables people to report serious wrongdoing directly to an authority, and that authority will know what to do with those complaints. There is much more clarity as to the appropriate authorities and the ability of those authorities to decline or to refer the disclosure.

It strengthens the protection for disclosers by specifying what a receiver of a disclosure should do, including the requirements for protecting the identity of the discloser. It clarifies the protection, as applicable, of supporting disclosers and it is removing the caveat in the current Act restricting protections to those who volunteer the information.

It enables disclosers to make a complaint to the Privacy Commissioner if the confidentiality requirements are breached, and it really clarifies the internal procedure requirements for the public sector organisations so that they have to state they will provide support in the form of practical assistance and advice to those disclosers.

Not everyone is happy, and I read a report just recently about the Green Party amendment, which read, “when problems arise people frequently don’t know who to turn to, or if they do, they do not trust the processes that follow. The amendment would have helped make it clear where to turn to and develop that much-needed trust.” We feel that this is covered in this bill.

ACT believes this bill does strike a balance that will allow disclosers the security of reporting issues and being confident that they will be dealt with appropriately and that they will be protected from any recourse. There’s a review after five years, which will show up any flaws or unintended consequences, and that can be sorted then. So we support the bill. Thank you.

ASSISTANT SPEAKER (Hon Jenny Salesa): This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow. Pō mārie.

The House adjourned at 9.56 p.m.