Tuesday, 10 May 2022

TUESDAY, 10 MAY 2022

TUESDAY, 10 MAY 2022

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

SPEAKER: Members, this week is both New Zealand Sign Language Week and Rotuman Language Week, and for the second reason, I’ve asked Ingrid Leary to say the prayer today.

INGRID LEARY (Labour—Taieri): Gagaj ‘Ḁitu, ‘ḁmis ‘uḁ‘uḁ‘ḁkia ‘äe ‘e reko ḁlalum ‘atakoa ne ‘ḁmis pō ‘e ‘otomis mḁuri. ‘Ḁmis ‘uḁ‘uḁ‘ḁkia ‘äe ‘e reko måür ‘on Sḁu Hån ta Elisapeti ma far la ‘äe la muḁ‘ḁkia ‘otomis hḁifäegaga ‘e terḁni te ‘i. La pō la ‘ḁmis la a’sokoa ‘amnåk tūtū ne Rī Tḁunå‘ te‘is ‘e ‘ou poto ma ‘inea, ‘e hḁiäf‘ḁkiga, hḁihanisiga ma huḁg vḁivḁi se ‘on lelei ne hanue te‘is Niu Sirḁgi. ‘Emen.

[Lord God, we thank you because of all the blessings that we receive in our lives. We thank you for the life of Queen Elizabeth and ask that you guide our discussions today. So that we may carry out the purposes of this House of meeting through your wisdom and knowledge, in mutual respect, mutual care and humility for the betterment of this nation New Zealand. Amen.]

Appointments

Clerk of the House of Representatives

SPEAKER: Members, I am very pleased to announce that David Wilson has been reappointed as Clerk of the House for a further term of seven years, commencing on 6 July 2022. [Applause]

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

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

SPEAKER: No bills have been introduced. Petitions have been delivered to the Clerk for presentation.

CLERK:

Petition of Juliana Carvalho, requesting that the House urge the Associate Minister of Immigration to exempt Ignacia Vasquez from the acceptable standards of health policy

petition of Iwi Strand, requesting that the House urge the Government to grant 2021 resident visas to migrants who lived in New Zealand for more than three years before getting stuck due to the COVID-19 border closure.

SPEAKER: Those petitions stand referred to the Petitions Committee. Ministers have delivered papers.

CLERK:

Report of the proceedings and operation of the Local Government Commission for the year ended 30 June 2021

Government responses to the interim report of the Justice Committee on its inquiry into the 2020 general election and referendums and on the report of the Petitions Committee on the petition of Trade Aid and World Vision New Zealand.

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

CLERK:

Report of the Economic Development, Science and Innovation Committee on the petition of Katherine Rich

reports of the Environment Committee on the petition of Laurance Paterson ONZM and the petition of Steve Abel on behalf of Greenpeace

reports of the Governance and Administration Committee on the briefing on long-term insights briefings, the Data and Statistics Bill, and the report of the Controller and Auditor-General, Building a stronger public accountability system for New Zealanders

report of the Justice Committee on the petition of Wendy Baker

reports of the Petitions Committee on the petitions of Lucy Mclean and the petition of Margaret Brough

report of the Regulations Review Committee on the complaint about clause 3.38 of the National Policy Statement on Urban Development 2020.

SPEAKER: The bill is set down for second reading. The reports of the Controller and Auditor-General of the Regulations Review Committee and the briefing is set down for consideration.

Speaker’s Statements

Chamber, Lobbies, and Galleries—Members, Mask Exemption

SPEAKER: Members, I wish to advise the House that I have granted an exemption from wearing a mask to one member, after considerable consideration. I would prefer, therefore, that members do not draw my attention to any member not wearing a mask.

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) (remote): Yes—and particularly this Government’s swift action to secure our economic recovery in response to the COVID-19 pandemic.

Christopher Luxon: Does she accept that record inflation is pushing more people into higher tax brackets even though their real incomes aren’t increasing; and if so, will she address this at the Budget?

Rt Hon JACINDA ARDERN: Obviously, as a Government we have acknowledged the impact that inflation is having on the cost of living. Of course, we’ve canvassed in this House, many times before, the global reasons why we are seeing that increase in inflation in New Zealand. The Government has responded by taking targeted action. The 1 April changes mean that 60 percent of families have seen an increase in their family tax credit. On 1 May, the winter energy payment is also acting as cushion for superannuitants and those on Government support. We have repeatedly said, though, it’s not our intention—as it has been the National Party’s—to have a response that includes tax cuts for those on top tax brackets, including those on incomes over $180,000, because we’ve wanted to target our support.

Christopher Luxon: Will there be any tax relief in the Budget for middle-income households?

Rt Hon JACINDA ARDERN: Obviously, I’m not going to speak to the specifics of the Budget. But the member, in seeing our response as a Government, will already have seen that we have moved proactively with the changes that we made on 1 April to cushion the impacts of inflation on households. Not only did it include the family tax credit increase, it’s also included orphan benefit support, increases in main benefit rates, and increases in the minimum wage. So you’ve already seen us be very proactive in this area.

David Seymour: Does the Prime Minister stand by her Government’s action of requiring household contacts of COVID cases to isolate for seven days, even if they themselves test negative for every one of those days, and does she accept that might have an impact by disrupting supply chains and putting more pressure on the cost of living crisis?

Rt Hon JACINDA ARDERN: Where there is an impact on critical services, obviously, we’ve had the ability through, for instance, things like the return to work scheme to enable that. But the reason we have the requirement over isolation for household contacts is just the prevalence and the high level of incidents where those contacts do translate into COVID-19 cases. I know the member will wish well all those who may be isolating in those circumstances.

David Seymour: Why wouldn’t New Zealand follow Singapore and have a simple, workable, and sensible isolation policy that after 72 hours if you’ve tested negative you can go back to work?

Rt Hon JACINDA ARDERN: For certain industries, we’ve had a policy which has allowed people to return to work with daily rapid antigen tests—so we have had the ability in those critical areas for that to occur. But I’m not sure the member would necessarily promote that we mirror every part of Singapore’s regime. Until recently, of course, they were still limiting gatherings for individuals in private households to 10. Every country has had their own approach; ours has been very heavily based on the evidence. We still know the area of greatest transmission is in households where there are COVID-19 cases—unfortunately.

Christopher Luxon: Does she believe middle-income households struggling with the cost of living crisis deserve tax relief; if not, why not?

Rt Hon JACINDA ARDERN: Again, our focus as a Government has been on using those tools that we have to be targeted, and it’s not just in this particular period of time. When we first came into office, we used a package of support, which ran into the billions, to ensure that New Zealanders were seeing an increase in their incomes—but we target it—as I say: the Best Start payment, the winter energy payment, and those increases to the family tax credit way back in 2017. We’ve also focused on seeing increases in people’s wages. Right up until this year, you consistently saw wage increases that outstripped cost of living increases.

Christopher Luxon: What, in her view, is so wrong with just lifting the tax brackets to adjust for inflation so that middle-income Kiwis get a break from the cost of living crisis?

Rt Hon JACINDA ARDERN: Well, of course, it all depends on the circumstances and the situation that you’re in at the time that such a proposal is tabled. I would note that the member’s proposal not only gives tax cuts to those on the highest incomes—and those on the lowest a mere $2 a week—but also has the potential to be inflationary, which is exactly the issue that the member complains about.

Christopher Luxon: Is she ruling out any income tax relief at this Budget?

Rt Hon JACINDA ARDERN: As I’ve already referenced in my answers, I’m not going to speak directly to a Budget that the member only needs to wait a few sleeps for. But we’ve already said, countless times, that our focus is on health services and, for instance, the other challenges facing New Zealand and our economy, including climate change. I note, with the member’s proposal of taking out, for instance, up to a billion dollars from the economy for speculators, that the ability of a National Party in the future to invest in services like health would be seriously constrained.

Hon Chris Hipkins: Supplementary question?

SPEAKER: Yeah, I am going to call Chris Hipkins, but I am going to ask members on both sides to stop the exchange while the Prime Minister is answering questions.

Hon Chris Hipkins: Has she seen any credible commentary suggesting that middle-income earners are those earning over $180,000 a year?

Rt Hon JACINDA ARDERN: Again, I think you will have seen from many New Zealanders who have heard the proposal of tax cuts for those on over $180,000 a year—and, at the same time, a tax proposal that delivers others on much lower incomes $2 a week—I think they themselves have expressed a view on the likelihood that that is helping those who need it most at this time.

Christopher Luxon: Does she accept that every dollar this Government chooses to spend is a dollar less for Kiwi families struggling with the highest cost of living increase in a generation?

Rt Hon JACINDA ARDERN: You can see in the actions of this Government that we have been consistently focused on spending that lifts the services that New Zealanders value the most: education and health, our COVID response, our investment in income support, and making sure that the wage subsidy existed and kept people in work. When you compare, therefore, the economic outcomes that we’ve had in the wake of COVID19 relative to the global financial crisis (GFC), you see the impact that that targeted spending has had. Our GDP sits at 5.6 percent growth, whereas relative to the GFC, you saw a decline of 1.2 percent. Unemployment at 3.2 percent; post-GFC, it was 6.6 percent. And even the proportion of people on main benefits is lower now than it was post the GFC. We stand by our response in the wake of this economic crisis.

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): The Crown accounts released last week continue to reflect the strong position that New Zealand is in to manage the challenging global environment. For the nine months to the end of March, the operating balance before gains and losses deficit was $8.1 billion—$4.1 billion below that forecast in December’s Half Year Economic and Fiscal Update. The investments made by the Government to help keep businesses open and keep Kiwis in work has paid dividends. Projections of 10 percent unemployment and an economy going backwards were avoided because of the actions that we have taken. New Zealand is in a strong fiscal position as we deal with the ongoing economic impacts of the Omicron outbreak and the global inflation pressures.

Dr Duncan Webb: What did the report say about net debt?

Hon GRANT ROBERTSON: We’ve continued to take a careful approach to our spending net core Crown debts to 36.3 percent of GDP—$155 million less than forecast. This is substantially below the countries with which we compare ourselves. Our debt is set to peak at about half of Australia’s, around a third of the UK, and around a fifth of the US measured consistently as a percentage of GDP. Our economy has come through the COVID shock better than almost anywhere else. The recovery has momentum and the easing of restrictions and opening up to skilled workers and tourists will help businesses and the economy rebuild. However, 2022 will continue to be a challenging year for many New Zealanders facing the impact of global inflation and the ongoing impact of the pandemic. Our new fiscal rules will ensure we’re taking a balanced approach: controlling spending but targeting it to those who need it most, keeping a lid on debt and able to make those important investments in infrastructure.

SPEAKER: I am going to allow the member to ask another supplementary but I’m going to advise the Minister of Finance to be briefer in his response.

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

Hon GRANT ROBERTSON: Well, so many but last month credit rating agency Moody’s reaffirmed New Zealand’s local currency and foreign currency rating at triple A with a stable outlook. Moody’s praised New Zealand’s response to the pandemic, calling it effective and proactive. It noted New Zealand’s resilience, supported the country’s medium-term growth potential at a level higher than many advanced triple A countries. Moody’s said New Zealand’s solid fiscal metrics would stand it in good stead to respond to future shocks to growth.

SPEAKER: I think the member had actually answered the question within about five words.

Question No. 3—Finance

3. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: How much more income tax, if any, has the Government collected in the 2021 financial year compared to 2017, and will he commit to adjusting tax thresholds for inflation in Budget 2022?

Hon GRANT ROBERTSON (Minister of Finance): The Crown accounts for the June 2021 financial year reflected the strong position New Zealand found itself in due to the Government’s actions to protect lives and livelihoods in an extremely volatile and uncertain pandemic environment. As a result of the stronger economy, which led to higher business profits, more people in work, and higher wages, total income tax revenue, including corporate tax, in the year to June 2021 was $64.7 billion or 18.9 percent of GDP. In comparison, in the June 2017 financial year, total income tax revenue was $49.6 billion or 17.9 percent of GDP. To answer the second part of the question, the member will have to wait just a little longer to find out what decisions have been made in Budget 2022. What I can say is that we won’t be putting in place untargeted tax cuts, such as the member is proposing, that would see her and her leader get thousands of dollars while those on low and middle incomes would get just $2 a week.

Nicola Willis: How many more billions of dollars is the Government collecting in income tax revenue compared to 2017?

Hon GRANT ROBERTSON: I did give those numbers to the member, so $64.7 billion minus $49.6 billion—I’m sure the member can work it out.

Nicola Willis: Does he agree that bracket creep, the increase in tax over time that has resulted from inflation, can be considered, as described by his Tax Working Group, as a non-transparent increase in taxation?

Hon GRANT ROBERTSON: Many Governments over many years have had put to them the importance of addressing bracket creep. Addressing that has to be considered alongside the many, many other things that a Government needs to address, such as the arrival of a global pandemic, for instance, a one-in-one-hundred-year economic shock, or, for instance, dealing with under-investment in a health system after nine years of a National Government.

Nicola Willis: Well, isn’t it the case that he welcomes inflation-fuelled taxation by stealth because it allows him to spend even more of New Zealanders’ hard-earned money?

Hon GRANT ROBERTSON: What this Government has done consistently since we came into office is strike the balance between keeping a lid on debt so that New Zealand’s debt levels are among the lowest in the world while also investing in the public services that were run down under the National Party. It is always a challenging and difficult balance to get that right, and then, in the middle of that, along came COVID. That meant we had to invest significant resources to support New Zealanders and keep them in jobs. When we did that, the National Party supported it. Now, with their 20/20 hindsight, they want to turn that around. It’s just not believable.

Hon David Parker: Can the Minister confirm that the amount of taxation as a percentage of the economy or as a percentage of GDP is just about identical now to that which it was under the National Party in the same period post the global financial crisis?

Hon GRANT ROBERTSON: Absolutely, I can confirm that. In fact, I can say, when it comes to personal income tax revenue, it was actually around about the same or slightly higher under National in 2009 and 2010.

Nicola Willis: How can he possibly claim he is striking the right balance when this year alone he has collected $2.7 billion more in tax than forecast, and why, in the middle of a cost of living crisis, does he think it’s acceptable to take more tax from hard-working New Zealanders?

Hon GRANT ROBERTSON: Isn’t this interesting? The true National Party opposing more people being in work, opposing businesses getting higher profits, opposing people going out and consuming more and spending in their communities. We have struck a careful balance because we have kept net debt at levels that are much lower than the countries that we compare ourselves to while making sure that we invest in the core public services we need. The validation for that comes from the rating agencies who have given us triple A ratings: the IMF, the OECD, who have all said that New Zealand deserves to be congratulated for the way it’s come through the pandemic.

Question No. 4—Education

4. MARJA LUBECK (Labour) to the Minister of Education: Noa‘ia, Mr Speaker. What action is the Government taking to give continued support to businesses in meeting their skill needs?

Hon CHRIS HIPKINS (Minister of Education): Yesterday I announced, as part of Budget 2022, that we’ll be providing for another 24,000 apprentices, getting the Apprenticeship Boost support, and some 14,000 apprentices will continue to get supported beyond August this year. In recognition of the significant growth in apprentices since 2020—and the employment strength of the New Zealand economy—and to extend the initiative at a reasonable cost, the first year subsidy rate will lower to $500 per month from 5 August 2022. The second year subsidy rate will remain at $500 per month, until the initiative ends in December 2023. There are already 17,000 employers involved in the programme, and today’s investment means that new employers can also join up.

Marja Lubeck: Why did the Government consider it important to make this investment at this time?

Hon CHRIS HIPKINS: New Zealand’s economy is one of the strongest in the world, with record low unemployment of 3.2 percent, and economic activity up on what is was pre-COVID-19—and I know they hate that, over there. That’s in large part due to the investments that this Government has made, including in training and supporting New Zealanders into work. A key message that we hear from business is that they need more skilled workers, and we’ve continued to invest in the training of New Zealanders, who are building our houses and upgrading our infrastructure, because we know how vital they are to the success of our recovery. Over the last two years, over 190,000 people have benefited from Government investment in trades training, including in apprenticeships.

Marja Lubeck: What response has he seen to this investment?

Hon CHRIS HIPKINS: More good news. Business New Zealand has said that the Apprenticeship Boost had, and I quote, “turbo charged” an uptake in the number of people entering trades at the time of skill shortages, adding on to that: “The scheme has worked. We’ve seen tens of thousands of people entering apprenticeships, up 55 percent … [on] the levels [that we] were up to previously.” Another very positive comment from the Motor Trade Association, who called it “brilliant news for the automotive industry”, and the Building and Construction Industry Training Organisation said that the Apprenticeship Boost was “essential for the training of the skilled pipeline of workers needed in the building and construction industry.”

Question No. 5—Housing

5. RICARDO MENÉNDEZ MARCH (Green) to the Minister of Housing: Does she stand by her statement that extending income-related rent subsidies to council housing tenants will “come at the expense of the Government building new houses for people on the public housing waiting list”, or do the recently announced fiscal rules mean that this Government could increase debt to pay for building new housing while also extending rent subsidies?

Hon Dr MEGAN WOODS (Minister of Housing): To the first part of the question: yes. To the second part of the question: the Government’s new fiscal rules apply to fiscal policy as a whole; they don’t specify particular spending outcomes on a portfolio basis. The debt rules are a ceiling, not a target. There are two significant financial constraints in increasing the number of public houses. One is the capital expenditure required to build the homes. The second is the continued annual and ongoing commitment to provide the operational expenditure for the income-related rent subsidy (IRRS). On the first—the capital constraints—Kāinga Ora leverages its own balance sheet to borrow to build houses. Kāinga Ora is able to issue its own debt up to a Government-set limit of $8.3 billion in the private market. It also has nearly $2 billion in loans from the Crown. The debt is not solely for additional housing delivery, as it also funds a number of other activities undertaken by Kāinga Ora, including redevelopment, land acquisition, and infrastructure.

However, the IRRS expenditure, or the income-related rent expenditure the member refers to, is operating expenses, not debt funding, and it needs to come within the operating allowances of the annual budget. Since we have come into Government, I’m pleased to report we have increased the expenditure on IRRS from the $890 million the previous Government annually paid in 2017-18, to $1.318 billion forecast for this financial year. This represents a 48 percent increase in IRRS. If we were to apply the IRRS to council houses that have already been built, we would be applying this to existing housing rather than continuing our record house-building programme. If we are to solve the housing crisis, we simply have to build more homes, and we are unashamedly pulling every lever to increase housing supply.

Simeon Brown: It’s a speech.

SPEAKER: Order! Order! Look—

Hon Paul Goldsmith: It wasn’t!

SPEAKER: The member does have a question later, and he’s a bit lucky he’s going to be here for it. Can I just say that the length of answers is something for my judgment, and reflecting on my judgment is something which is not appropriate. I was warned that that was to be a longer answer. I will say to the Minister that there was probably a bit more in it than was absolutely necessary.

Hon Dr MEGAN WOODS: I like to be helpful.

SPEAKER: The member will stand, withdraw, and apologise.

Hon Dr MEGAN WOODS: I withdraw and apologise.

Ricardo Menéndez March: Does she believe that capping rents at 25 percent of weekly incomes helps prevent homelessness by ensuring social housing tenants can afford a decent standard of living, stay in their homes, and put down roots in their community, and, if so, does she believe it is important to enable this for local government housing tenants as well?

Hon Dr MEGAN WOODS: Of course, the Government’s public housing provider, Kāinga Ora, does have an income-related rent subsidy. It caps at 25 percent, and this is afforded to a number of community housing providers (CHPs) that qualify for IRRS funding. When it comes to councils, I think it’s worth remembering that it is only since 2015-16, when the National Government readied the public housing network for sell-off, that councils became eligible to receive IRRS funding. Previously, they did that by setting their own affordable housing rents and utilised the accommodation supplement. I would point the member to the fact that PricewaterhouseCoopers actually did a review of the proportion of income that council tenants around the country were paying. Some were, in fact, paying less than 25 percent; some were paying substantially more. It’s really down to individual councils for them to take responsibility around the provision of affordable housing for their communities.

Ricardo Menéndez March: Does she agree with her former colleague Annette King’s wish for councils to have had access to income-related rent subsidies during the previous National Government and with the current Labour Party Wellington City councillor Rebecca Matthews, who is calling on this Government to “help us out here with income related rent subsidies.”?

Hon Dr MEGAN WOODS: We have been working with the Wellington City Council for around a year now. It is a complicated issue. There is the matter of the $220 million loan that was given to the Wellington City Council that needs to be delivered on its obligations under that loan by I think it’s 2036—so we’re working around progress around the terms of that loan—and also the level at which Wellington City makes its own contribution and what the city is contributing. I compare this to some other councils around the country who are setting much lower and much more affordable rents for their citizens.

Ricardo Menéndez March: What recent advice, if any, has she received on the potential capacity for local councils, community providers, and iwi to build new, affordable rental housing if the Government underwrote the financing or provided capital grants and provided rent subsidies on an ongoing basis?

Hon Dr MEGAN WOODS: I think if the member were to look closely at what our Government is doing in the area of the provision of community housing, he would see that we are doing just what he talks about. If we look here in this city, at Arlington, this is of course a long-term contract with Wellington City Council, and we are doing this around the country with upfront funding which the CHPs” are able to capitalise or councils are able to capitalise in order to build housing. If he has a look at the number of houses being provided by CHPs under the settings our Government is providing, he will see that it is vastly increased than it was under the previous Government. And one of the reasons for that is because in order to provide public housing, you’ve got to have an annual and ongoing commitment to the income-related rent subsidy. It’s not just the capital funding, it’s also the operating funding.

Ricardo Menéndez March: How would she respond to Wellington resident Debbie Port, who pays 59 percent of her income in rent on a Wellington council flat and said at the income-related rent subsidy petition handover, “How am I meant to pay for food? How am I meant to pay for power? How am I meant to do everything I need to do for my health, if it all goes on rent?”

Hon Dr MEGAN WOODS: Of course, for anybody who is struggling with their household expenses, I would say to them that I understand that things are tough. But I would also say to that resident that she should also talk to her city council. The Wellington City Council sets its rents for its tenants. Other councils around the country set them at lower limits. If we are going to solve a housing crisis, we need all of our community working together. Central government has a critical part to play and we are partnering with CHPs, we are partnering with iwi, and we are partnering with councils, but we also need those who have traditionally provided affordable houses in the community to continue to do so.

Ricardo Menéndez March: What role does she believe local government should have in providing social housing and helping reduce the public housing waiting list, and does she believe current financing arrangements for local government enable them to meet their aspirations as social housing providers?

Hon Dr MEGAN WOODS: In answer to the first part of the question, I think that local government has an absolutely critical part to play in solving this housing crisis, that local government since the 1930s has been at the forefront of the provision of affordable housing for their communities, and that is a long and historic tradition that we want to see continue. I think the member should note it is only since 2015 and 2016—under the corporatisation that the National Government put in place to ready houses for sell off that required the transfer to community housing provider models—that what he is calling for came to exist. I want to see us have far more sustainable, less corporatised models of housing that put people first.

Question No. 6—Prime Minister

6. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does she stand by the statement she made in her pre-Budget speech last year, “We need to be aspirational, and have a plan”?

Rt Hon JACINDA ARDERN (Prime Minister) (remote): Yes, I stand by my full statement, which I will shorten for the benefit of the House and this remote viewing but which included, “We need to be aspirational and have a plan, but we also need to be disciplined and prioritise.”

David Seymour: Why has productivity grown by just 2.6 percent since 2017 while some former Soviet socialist republics have overtaken us, and was her aspiration and plan always to be more like them?

Rt Hon JACINDA ARDERN: The member casts aspersions on this entire House with that statement, given productivity has been an issue that successive Governments have worked to tackle. The member will have seen that over time, of course, we’ve seen improvements—over a number of years, gradual as they may be. But, again, the very issues that we need to address if we’re to improve our productivity as a nation include, for instance, investing in skills and training. I note the member wishes to get rid of the first year free of post-secondary education. We’d also include investment in research and development. I note the member would like to get rid of the R & D tax credit and Callaghan Innovation. It seems we have very different views on what will improve our productivity.

David Seymour: What sort of aspersions would she cast on the Australian Parliament since the median Australian workers’ hourly rate has grown by $3.20 an hour or $6,600 a year more than the average Kiwi worker since she’s been in Government?

Rt Hon JACINDA ARDERN: And, again, an issue that successive Governments have seen, and one in which we’ve been very clear that part of driving productivity includes driving innovation within industry. Higher wages prompt that investment in innovation. It’s one of the reasons that we have promoted the fair pay agreements as a way of, instead of driving towards low wages and poor terms and conditions for workers, encouraging investment that enables greater productivity. I note, again, for the member that fair pay agreements are something that Australia have indeed adopted and implemented.

David Seymour: When the Prime Minister just tried to argue that unionisation is one of those things that will help raise wages in New Zealand, was she aware that only 14 percent of Australians choose to join unions compared with 18 percent in New Zealand?

Rt Hon JACINDA ARDERN: What I was arguing was that decent wages help drive productivity and that in New Zealand you need to have a role to play in driving decent wages. Regardless of the member’s view in that regard, it should not stop him from recognising the role of, for instance, fair pay agreements, which can assist in driving fair terms and conditions for workers. And, again, I reflect the fact that they are used in Australia.

Hon Michael Wood: Can the Prime Minister confirm that since 1991, when New Zealand removed sector-based bargaining from its industrial relations framework, Australia’s rate of labour productivity has been 46 percent higher, on average, per year than New Zealand’s?

Rt Hon JACINDA ARDERN: Yes, and, again, I reflect that the tools that Australia has used to ensure that we don’t have a race to the bottom when it comes to wages are, for instance, fair pay agreements.

David Seymour: Does she believe it’s sustainable to keep our superannuation entitlement age at 65 when Australia, America, Britain, Germany, Ireland, Italy, Spain, to name a few, are raising their ages of entitlement; and, if so, how does she explain that to young taxpayers thinking of leaving New Zealand for more welcoming economic climes?

Rt Hon JACINDA ARDERN: My message would be that if you wish to retire at an older age than your parents, then the fastest track towards that is to have a party in Government, via the ACT and National parties, who refuse to invest in the Superannuation Fund. We’ve made a commitment to that Superannuation Fund, and I see that ACT, again, has announced that they wish to cut their contribution. It’s those kinds of policies which mean that we will not have consistency in our retirement policy.

David Seymour: Can the Prime Minister explain to those young people how investing in the New Zealand Superannuation Fund while also borrowing money to run Government each year, is sensible economics; and would she advise young people to invest in Sharesies using their credit card, because that’s what she just advocated?

SPEAKER: Order! The member’s going to rephrase the question—especially the last part of it.

David Seymour: I’ll try my best, Mr Speaker. Does the Prime Minister believe that it is helpful to borrow money on the global debt markets and put that same money into the New Zealand Superannuation Fund, which is what she is currently doing by investing, as she calls it, in the Superannuation Fund, and, if that is good economic sense, would she advise the same young people to borrow money on their credit card to invest in Sharesies?

SPEAKER: The Prime Minister can answer the first part of the question, for which she has responsibility.

Rt Hon JACINDA ARDERN: I would actually refer the member to the Minister of Finance’s recent reflections around our fiscal strategy, which demonstrate our focus on ensuring that when we are making future investments that require or draw down debt that it is focused, for instance, on those long-term challenges that we have and, for instance, infrastructure as part of that, and ensuring, of course, that our ongoing revenue as a country day to day fuels the spending decisions we make day to day. That is why we have also, alongside our debt ceilings, promoted that we would be working towards surpluses over a period of time of between zero and 2 percent of GDP.

David Seymour: Are our productivity and wages low because, according to the OECD, it’s easier for foreigners to invest in China, Saudi Arabia, and Myanmar than New Zealand, leaving Kiwi workers with less capital and technology to work with?

Hon Damien O’Connor: Oh, God, what a Neanderthal!

SPEAKER: Order!

Rt Hon JACINDA ARDERN: What I can speak to is—

SPEAKER: Order! No, no, sorry. I apologise to the Prime Minister. The member who made that comment will stand, withdraw, and apologise.

Hon Damien O’Connor: I withdraw and apologise.

SPEAKER: Prime Minister, start again.

Rt Hon JACINDA ARDERN: What I can reference is the frequent reference by the OECD and the IMF towards the under-investment historically that New Zealand has had in skills and training that would cover off the skills gap that we have in New Zealand. That has been one of the contributing factors. I note that this is an area where the member is proposing that instead of investing, we see cuts. As a Government, we’ve been proud of the investment that we’ve made in this area. We’ve made apprenticeships free; we’ve got, of course, the Apprenticeship Boost, which has supported employers to continue to keep apprentices on, and we’ve extended that as of yesterday; and the first year of fees-free, we know, has also encouraged a number of young people to continue with their training and education. These are all areas where it’s been noted by other financial institutions that it will make a significant difference to our productivity if we continue that investment.

Question No. 7—Social Development and Employment

7. ARENA WILLIAMS (Labour—Manurewa) to the Minister for Social Development and Employment: What recent announcements has she made about supporting people into employment, education, or training?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): Thank you, Mr Speaker. Happy New Zealand Sign Language Week, Youth Week, Rotuman Language Week, and New Zealand Music Month. Yesterday, Minister Hipkins and I announced the extension to Apprenticeship Boost, Mana in Mahi, and the Māori Trades and Training Fund. Apprenticeship Boost has supported around 45,000 new apprentices and begun building the workforce we need to futureproof our economy. Yesterday the Government announced $230 million in Budget 2022 for additional investment to support another 24,000 apprentices and to continue to support 14,000 more beyond August of this year. There are already 17,000 employers involved in the programme and this investment will provide certainty to them and ensure new employers can sign up. This investment goes a long way to bridging the skills gap and providing work-ready employees for New Zealand businesses.

Arena Williams: Why is the Government extending Māori trades and training?

Hon CARMEL SEPULONI: Māori trades and training is showing incredible promise as a programme. Last financial years it was over-subscribed with high demand for Māori entities willing to deliver employment-focused training programmes in their communities. The by Māori, for Māori approach aligns with the all-of-Government employment strategy and Māori Employment Action Plan, which seeks an improved Māori-Crown partnership to deliver more equitable labour market outcomes for Māori. The contracted programmes that have been launched have 254 participants, with 177 in employment so far. The programmes have a retention rate of 95 percent. A total of 813 participants are expected to be supported through training with a Te Ao Māori focus and into sustainable employment under existing partnerships, with more already being developed.

Arena Williams: Why is the Government extending Mana in Mahi?

Hon CARMEL SEPULONI: Mana in Mahi is performing above expectations. By the end of the programme, participants have had significant investment into their above expectations. By the end of the programme, participants have had significant investment into their skills and experience and are more likely to continue in employment. Currently, 89 percent of the 4,719 participants have found work, are still active on the programme, or have exited their placement early and are not on benefit. More than half of the current participants are working towards a level 4 qualification or above. Mana in Mahi is a fantastic programme that provides significant incentives to employers and participants when they need it most.

Question No. 8—Social Development and Employment

8. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development and Employment: Is she confident the Government’s employment initiatives represent good value for money; if so, why?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): Based on the fact that this Government has got more people off benefit and into work in the last year than any other Government, I’d say our suite of employment initiatives is doing OK. For the first time, the Ministry of Social Development (MSD) now report on the effectiveness of their programmes annually, and publish those results online via a new digital tracking tool. It’s a very transparent process and one I endorse. There will always be programmes that perform better than others, and MSD are constantly looking to evolve and do things better. Our pilot programmes are similar, some work well and others don’t hit the mark. The previous Government’s social bonds initiative—which cost $984,000 and met 12.6 percent of its target—is a good example of that.

Hon Louise Upston: How many of the 176,000 people on the jobseeker benefit secured a job from the online job expos that cost taxpayers $6,626 for every one of the 126 attendees?

Hon CARMEL SEPULONI: Firstly, let me just clarify that of the 170-something-thousand job seekers a number of them are on jobseekers health condition and disability and so therefore are not necessarily work-ready. As I have said to the media with regards to the online tool, it was something that MSD trialled and it provides us with some learnings, with some infrastructure for our digital developments moving forward. However, it didn’t provide a large number of jobs, not like a number of our other programmes. A very similar number, I think, participated in the online Zoom programme—around about 120, which was about the same number that was successful through the National Government’s social bonds investment: 124 versus the 900-and-something, or a thousand, it was funded for.

Hon Louise Upston: Why, almost two years since the Māori Trades and Training Fund was allocated $50 million, has it supported just 44 people into jobs—which is more than a million dollars per job?

Hon CARMEL SEPULONI: I would question the numbers of that member. Also, I would say a couple of things. A lot of the investment has been spent with regards to supporting provider capability. This side of the House is very supportive of supporting for Māori, by Māori. And that’s certainly a major element of our Māori trades training focus. Also, as another side impact to Māori trades training, we have had a pandemic to contend with—that does not mean that the programme is not successful and that we will not continue to invest in it.

Hon Louise Upston: Why is the $311 million Flexi-wage extension not on track to deliver the 40,000 jobs when firms are crying out for staff and 176,000 New Zealanders are on the jobseeker benefit?

Hon CARMEL SEPULONI: Just clarifying again to that member that a large number of the 176,000 New Zealanders on jobseeker benefit actually are on the health and conditions and disability jobseeker support benefit—really important to clarify that. At the time that we made the announcement around the 40,000 places for Flexi-wage, Treasury were anticipating that we would reach the peaks of around 480,000 people on benefit. We haven’t got anywhere near that, but the programme was certainly designed with that in mind. In saying that, we’re just over a year into the programme and I think we’ve seen about 15,000 people go through Flexi-wage. The success rate is still immensely effective and the results are good. And, just like any other programme, we expect it to ramp up and we look forward to that.

Hon Grant Robertson: How much does the Minister think the Government’s employment initiatives have contributed to the fact that there are 291,000 more New Zealanders in work than there were in 2017, and that we have an unemployment rate of 3.2 percent?

Hon CARMEL SEPULONI: The way in which this Government has responded with respect to investing heavily into employment programmes, into front-line, work-focused case management, and to investing in things like the wage subsidy to secure jobs so that people didn’t find themselves unemployed, has meant that we have beaten the odds and not reached the depths that had been forecast initially. I think that it is something we can be quite proud of—that we are in a position where as a country we have a 3.2 percent unemployment rate. We continue to remain focused, and as our announcement yesterday with regards to investment and employment programmes showed, this is very much a priority for our Government.

Hon Louise Upston: Why, despite over a billion dollars being spent on employment initiatives, have long-term jobseeker benefit recipients increased by 60 percent under Labour?

Hon CARMEL SEPULONI: When you see the numbers of people go up, with regards to benefit numbers in general, then you will see that in every category with regards to time frames. I am still heartened by the fact that we are seeing more exits off benefit into employment than what we have seen since electronic records were kept. If I just reflect on the last week, another 1,000—or actually 999 to be exact—New Zealanders have moved off benefit. That speaks to this Government’s track record.

Question No. 9—Police

9. GINNY ANDERSEN (Labour—Hutt South) to the Minister of Police: What recent announcements has she made regarding the number of police officers on the front line?

Hon POTO WILLIAMS (Minister of Police): On Sunday, I was at Counties Manukau Police Station with my justice sector colleagues to announce $562 million in funding over four years into Police so they continue to have the resource they need to keep our communities safe. This is in addition to our already record investment in Police since 2017. Budget 2022 also sets out $50 million from next year to ensure that we continue to grow the number of police officers in line with population growth. This will mean that there will be one police officer for every 480 people, and delivers on a key manifesto commitment.

Ginny Andersen: How many police recruits have graduated since this Government came into office?

Hon POTO WILLIAMS: Last week I attended my 13th police graduation as Minister of Police, which saw 71 recruits graduate and deploy to the front line. This brings the total number of police graduates since 2017 to 3,145. The additional police investments we are delivering through Budget 2022 means that police numbers will not drop as our population increases, as they did in 2011 and 2013.

Ginny Andersen: What does having more police officers on the front line mean for keeping our communities safe?

Hon POTO WILLIAMS: This Government has been clear: more police means safer communities. That is why we have seen over 3,000 recruits through Police College since we came to office, with 1,400 additional police officers on the front line. As one commentator put it, “Don’t underestimate the strength of that thin blue line when it is properly supported and empowered to do their job.”

Hon Mark Mitchell: Why isn’t it working?

Hon POTO WILLIAMS: That’s why Budget 2022 makes further record investments into Police, and I welcome Mr Mitchell’s support for that additional funding.

Chris Baillie: Can the Minister confirm that the net increase in police numbers in the last month was four?

Hon POTO WILLIAMS: What I can say is we are well on track to increase—no, I cannot confirm that. I don’t know where that member gets his numbers from, but what I can confirm is 1,800 extra police by the end of the year, six months ahead of budget.

Question No. 10—Justice

10. Hon PAUL GOLDSMITH (National) to the Minister of Justice: Is he confident the Government’s justice policies are effective in keeping New Zealanders safe from crime?

Hon Grant Robertson: Glad you woke up.

Hon KRIS FAAFOI (Minister of Justice): Noa‘ia, Mr Speaker—

SPEAKER: Order! I’ve been awake the whole time. Thank you.

Hon KRIS FAAFOI: Noa‘ia, Mr Speaker. Yes, we are using all of the justice system to respond to crime through improvements to prevention, investigations, processing, and rehabilitation. This was reflected at Sunday’s announcement of a major package of law and order measures that further increases police numbers, cracks down on gangs, and extends successful rehabilitation programmes to break the cycle of offending and entering a life of crime. This builds on the progress of previous years where the total crime rate has remained relatively static between 2014 and 2021 as have burglaries and aggravated robberies. Youth crime has decreased by approximately 14 percent between the same period and people who commit violent crime are still being sent to prison.

Hon Paul Goldsmith: In light of his comment on the weekend, “In recent years we have seen increases in gun crime, gang activity and even more recently some forms of youth offending that puts both our communities and our police at risk.”, what responsibility does he take for this as a result after 4½ years of Labour’s justice policies?

Hon KRIS FAAFOI: I take great responsibility in announcing in the same way at the weekend the continued record investment in police, continued support for our communities. We’re trying to deal with organised crime through programmes like the Resilience to Organised Crime in Communities, making sure that we resource and work with communities to deal with organised crime.

Hon Paul Goldsmith: Will Sunday’s Budget announcement lead to more action than the 2020 Budget announcement of $20 million to aid the prosecution of strangulation cases and to help victims, which two years later has barely produced anything?

Hon KRIS FAAFOI: What I will take responsibility in terms of this Budget is, as the police Minister has already outlined, we’ll continue to resource the front line, as opposed to the previous Government which saw police numbers drop by 300 between 2013 and 2014.

Golriz Ghahraman (remote): Does he agree with former finance Minister Sir Bill English that justice policies which aim to lock up more people in prisons for longer are a “fiscal and moral failure”; if so, what evidence-based justice policies is he implementing to tackle the causes of it ending in our communities?

Hon KRIS FAAFOI: While, thankfully, I’m not responsible for Mr English’s comments we do agree, as Minister Davis mentioned on Sunday, that prisons are an indication of fiscal and moral failure. The current Government has managed to reduce the prison population quite significantly over the last 4½ years, which means we are doing much better fiscally than the previous Government and much better morally than the previous Government. We are working with the likes of the Green Party Ministers to address the issues such as family and sexual violence, which we are proud to make sure that we are committed to during this Budget as well. And I’d like to again point out the work that we’re doing through a number of agencies around resilience to organised crime in our communities; making sure again we resource communities, aid agencies, and give local leadership to make sure that we’re dealing with organised crime.

Hon Paul Goldsmith: Does he understand the frustration of retailers like dairy owner Mr Vatsa, whose dairy suffered $20,000 worth of damages in a ram raid and said, “There should be stricter penalties for these kids. They should be held accountable for their actions. They know nothing will happen.”?

Hon KRIS FAAFOI: We obviously sympathise with the challenges that some of those businesses are going through at the moment and, as a number of Ministers have said, the justice agencies and Ministers are working on measures to be able to make sure that we can help protect those businesses. What I would say is that the sentencing measures available to police there—the maximum penalty of 10 years—but first to make sure that you sentence you actually have to find the people responsible and again we’ve invested in making sure we have more police on the beat to make sure we can investigate and make sure we bring people to justice.

Hon Paul Goldsmith: Why is his Government contemplating spending money to subsidise bollards in front of shops rather than dealing with the real problem, which is that repeat youth offenders face little or no consequences for their actions?

Hon KRIS FAAFOI: The member isn’t blind to the work that the Government is doing to make sure that we do reduce youth crime. It has been decreasing, as I said, over years, and, at the moment, we are experiencing a spike in that kind of activity, and we are responding to the needs of those people who are being affected by those crimes.

Hon David Parker: Is the Minister aware of any reports that suggest that the last question is wrong, and that most of these ram raids are not repeat offenders, and it’s the first time they’ve come in contact with the police?

Hon KRIS FAAFOI: Yes. Obviously, there has been some commentary in the media recently about the types of youth who are responsible for the crime. There are some issues which cause them to offend: the likes of economic conditions at home, housing—all issues that the current Government is addressing.

Question No. 11—Biosecurity

11. JO LUXTON (Labour—Rangitata) (remote) to the Minister for Biosecurity: What recent announcements has he made on eradicating Mycoplasma bovis?

Hon DAMIEN O’CONNOR (Minister for Biosecurity): Last Thursday, I was pleased to join the Prime Minister, Dairy New Zealand, Beef + Lamb, and the Ministry for Primary Industries at the national bulk-milk testing lab, MilkTestNZ, to announce that we are just one infected property away from becoming the first country in the world to successfully eradicate Mycoplasma bovis. [Applause] Thank you. This is a significant achievement that we have achieved in partnership with the primary sector and once again shows that this Government is committed to supporting our primary sector and rural communities. We have cleared 271 farms of Mycoplasma bovis, and plans are under way to clear that remaining infected property. I want to thank industry and New Zealand’s rural communities for partnering with this Government to take on this challenge.

Jo Luxton: How will the Government manage the M. bovis eradication programme, going forward?

Hon DAMIEN O’CONNOR: The Government is working with industry partners on the transition of the Mycoplasma bovis eradication programme to an agency under a national pest-management plan for implementation within the next year. This will see us move from delimiting to provisional absence of the disease, including significant surveillance testing of herds around the country to provide assurance that there are no undetected pockets of the disease. The world-class bulk-milk testing and beef herd surveillance developed over the past four years will continue to be crucial tools.

Jo Luxton: How will the Government continue to support industry to prevent similar incursions?

Hon DAMIEN O’CONNOR: The Government is strengthening New Zealand’s biosecurity system as part of Budget 2022 to help protect our vital primary sector and native flora and fauna from disease incursions and to manage incursions when they do occur. Last Thursday, I was pleased to announce that Budget 2022 will deliver funding of $42.9 million to bolster the biosecurity system and $68 million over the next year for Mycoplasma bovis eradication.

Question No. 12—Police

12. Hon MARK MITCHELL (National—Whangaparāoa) to the Minister of Police: Does she stand by her statement, “There is no doubt that violence and gang tensions are a feature of our community”, and why has gang membership increased by 40 percent since 2017?

Hon POTO WILLIAMS (Minister of Police): In answer to the member’s first question, I stand by the full context of my statement, which was that gang tensions have been a feature of New Zealand society for well over a century. In answer to the second part of the member’s question, the member is referring to the National Gang List, which is an internal police intelligence tool. As police have publicly said, it remains an unreliable measure of gang membership. The way to deal with gang tensions and gang membership is by giving police the tools and resources they need, and that is why Budget 2022 includes $562 million for police over four years, of which $94 million will go towards tackling gangs and organised crime.

Hon Mark Mitchell: Have gang tensions increased under her watch?

Hon POTO WILLIAMS: In 2017, there were 2,138 violent offences committed by gang members. In 2021, there were 1,704. And I agree with the member that you need more police to get the job done, and that’s why Budget 2022 sets aside funding to ensure police numbers continue to align with population growth, which means they won’t fall as they did in 2011 and 2013.

Hon Mark Mitchell: So is the Minister telling this House that gang tensions have decreased under this Government?

Hon POTO WILLIAMS: The work that we have done has seen the charging rates against gang members increase 92 percent under our watch. We have provided police with the resources that they need to undertake major operations against serious crime.

Hon Mark Mitchell: Is this investment in targeting the gangs an admission that the Government’s soft-on-crime approach has failed?

SPEAKER: Order! The member can rephrase his question. He’s lucky.

Hon Mark Mitchell: Is this investment in targeting the gangs a result of this Government’s soft-on-crime approach that may have failed?

Hon POTO WILLIAMS: Mr Speaker—

SPEAKER: Order! Order! The member will resume her seat. The member can ask another supplementary now if he wants.

Hon Mark Mitchell: What is the Minister most worried about in relation to gangs?

Hon Kelvin Davis: A National Government.

Hon POTO WILLIAMS: Yeah. What most troubles me is that if the National Government ever gets their hands on the Treasury benches again—$562 million is a record investment into police. And what this proves is we back our police—we back them to do their jobs—and we will stand by them every step of the way.

Hon Mark Mitchell: Point of order, Mr Speaker.

SPEAKER: The member’s used all his supplementaries.

Hon Mark Mitchell: Point of order, Mr Speaker. That was a very straight question and all I got was a political answer.

SPEAKER: Well, I think it’s fair to say that the member has dished up quite a series of very political questions, and having a response which is similar to the approach that he’s taken is something that he should expect, given both his prior experience and his parliamentary experience.

Hon Mark Mitchell: Sorry, just a point of order on your guidance, Mr Speaker. Sorry, could you point me to exactly where I’m being political in my questions to the Minister?

SPEAKER: I think it’s fair to say that taken as a general group, the member has been very political. That’s not a criticism, but it’s just a fact of life that when one takes that approach, the Speaker is more lenient with allowing Ministers to respond. And, similarly, where Ministers are more political in their responses, at that point I have much more flexibility for members asking the questions to be political as well.

Hon Mark Mitchell: Sorry, Mr Speaker, point of order. Sorry to re-litigate it, but I have asked specifically for you to point out to me—

SPEAKER: Yes, and if the member wants to come and have a cup of coffee with me, I’ll work it through with him, but it’s not my job to run tutorials for him in the House, especially a member of his experience.

Hon Gerry Brownlee: Point of order. Yeah, Mr Speaker, I think the problem here is that while you might correctly point out that there is a degree of flexibility about how the two Standing Orders for both questions and answers are interpreted by whoever is sitting in the Chair, the answer that was given to that last question was largely in response to an interjection that was made that was rare, hardly reasonable but certainly a little bit humorous. But for the answer from a Minister to be, “Well, my biggest fear in the portfolio is the Government changes.”—that could be an answer to every question that ever gets asked in here. It most certainly would not be in the public interest, despite what the Minister giving the answer might believe.

Hon Chris Hipkins: Speaking to that point of order, if the Opposition don’t want to know what the Minister’s worried about they perhaps shouldn’t ask a question along the lines of “What’s the Minister worried about?”

SPEAKER: No, well, is this going to really add any more value to it?

Hon Mark Mitchell: I think it will, Mr Speaker. Point of order?

SPEAKER: Well, I reckon it’s a long shot, but have a go.

Hon Mark Mitchell: My question was very specific and very direct in relation to a major concern in this country at the moment and that’s around the behaviour of gangs and the proliferation of the numbers. That was a very direct question to the Minister responsible. It was completely political; she talked about the National Party. She didn’t address the question at all.

SPEAKER: The member asked a question which couldn’t actually be much broader within a specific area, and it does open it up to the Minister to respond as she wishes or as she is prompted. And when that occurs, the member can’t complain. If he wants narrow answers, he should ask narrow questions.

David Seymour: Point of order. Just to expand and elucidate, I asked a question earlier about the connection between the OECD’s advice on foreign investment and productivity growth. The Prime Minister never addressed that relationship, but instead answered the question by talking about other issues, specifically domestic investment and human capital and their relationship to productivity growth. Now, it seems to me that if we’re going to require the answers are as specific as the questions, she should have been required to answer that, but she wasn’t.

SPEAKER: OK, the member will resume his seat. He’s six questions too late.

Point of Order—Question No. 9

Hon POTO WILLIAMS (Minister of Police): Point of order? A separate point of order, Mr Speaker. This afternoon I was asked by Chris Baillie the number of police that were recruited—

David Seymour: Uh, oh!

Hon POTO WILLIAMS: —in the last four weeks—

SPEAKER: Which member made that interjection?

David Seymour: That was me, sir.

SPEAKER: Withdraw and apologise. I mean, I’ve spent quite a lot of work trying to get Ministers to correct answers promptly. We’re getting a Minister doing it and we have someone interjecting in a way which is not allowed. Withdraw and apologise.

David Seymour: I withdraw and apologise.

Hon POTO WILLIAMS: Thank you, Mr Speaker. Mr Baillie asked a question about the number of police that have been recruited in the last four weeks. The number he said was four. The number I have from Police is 27.

SPEAKER: Order! Order! No, no. I’m not going to allow the member to come in now. The member cannot correct someone else’s answers or questions by way of point of order. The member can, if she has the facts, use them in a supplementary question, or there’s a number of different approaches that can be taken. That was disorderly. The Minister will stand, withdraw, and apologise.

Hon POTO WILLIAMS: I withdraw and apologise.

Request for Speaker’s Ruling—Supplementary Questions, Prefatory Comments

SPEAKER: I have a point of order from the Hon Michael Woodhouse participating remotely.

Hon MICHAEL WOODHOUSE (National) (remote): Well, thank you, Mr Speaker. When you review question time, you’ll notice that three supplementary questions in question three, six, and 10 all commenced with prefacing comments “Can the Minister confirm” or “Is the Minister aware”, followed by what Speaker’s ruling 183/7(1) would describe as a question “generally not seeking elucidation but seeking to inject information or propaganda a member wishes to be heard”—and therefore is not permitted. The fact that there were three of them today suggested there may have been a change in that ruling, and I wonder if you’d consider and advise the House in the future whether that’s the case?

SPEAKER: I will certainly consider it. But I’m just checking with the member. It was three, six, and—

Hon Michael Woodhouse: And 10.

SPEAKER: —and 10. OK, I will have a look at the questions generally, and I will look very specifically at the questions that those members ask in the future. Thank you, Mr Woodhouse, for your advice.

Offices of Parliament

Address to Governor-General

SPEAKER: Members, on 14 April 2022, the House resolved that a respectful Address be presented to Her Excellency the Governor-General commending to Her Excellency the alterations in the appropriations for the 2021/22 financial year in respect of Vote Audit, Vote Ombudsmen, and Vote Parliamentary Commissioner for the Environment, and the estimates of expenses and capital injection for the 2022/23 financial year in respect of those Votes. The proposed Address is available on the Table of the House. The question is that the address be adopted.

Motion agreed to.

Address adopted.

Bills

Protected Disclosures (Protection of Whistleblowers) Bill

Third Reading

Debate resumed from 5 May.

SPEAKER: The question is that the motion be agreed to—

Simon O’Connor: Mr Speaker? Mr Speaker.

CHRIS PENK (Senior Whip—National): Point of order, Mr Speaker. Thank you, Mr Speaker. I believe, in the hubbub of members on both sides leaving with some degree of noise, that you might not have heard the National Party member calling for that.

SPEAKER: I certainly didn’t. But I hadn’t quite finished putting the question, so I’ll be very lenient and call Simon O’Connor.

SIMON O’CONNOR (National—Tāmaki): Oh, very good, Mr Speaker. Look, delighted to take a call, and thank you to the whip as well. The hubbub is one thing, a mask is another, which makes communicating important. And I think that is even more important, as we just talk about protecting whistleblowers. Not that I have anything particularly controversial or insightful to share here today, but I do have a voice. I do have a voice and I’m very, very pleased that that was not protected, excluded, removed, or otherwise.

Look, this is a bill that National is happy to support. Many of my colleagues have traversed well and truly the reasons why we support it. Look, fundamentally, the law is out of date. It’s not completely out of purpose, it still remains—the older legislation that is—somewhat fit for purpose. But as we know, particularly as we get older, one needs to work a little bit harder at things. And so this Government tidying up the bill, making it fitter, stronger, more relevant, more modern is a very, very positive move.

Look, what it’s going to enable is—across various sectors in society, including the public sector, but not exclusively—a much simpler way of engaging around what we term whistleblowing. Now, let’s be really clear, the law is not going to allow, I think fortunately, vexatious, ongoing—I suppose that’s a tautology. It’s not going to enable continuous campaigning for the sake of it. I know there’s been various debates in the House as the law has progressed to whether or not it should be much, much broader in scope and the flexibility of who can speak and what they can say, but I think, again, on this side of the House, we’re relatively happy where the law has landed. Fundamentally, that’s to allow someone who has serious concerns about the conduct within their workplace or a piece of policy or otherwise to raise that safely. So that’s the first, I suppose, critical element here, that someone who is a whistleblower will be protected. I think that’s probably a message that will be repeated if there are more speeches, one hopes optimistically. That actually those who choose to whistle-blow will know that this Parliament, or the law rather, has their back.

Secondly, amongst other factors of the bill it ensures there’s a process to be put in place to ensure what is said is taken seriously. And those who have responsibility to take those accusations from a whistleblower seriously know clearly what they have to do, including, of course, protecting the person who is the whistleblower. I think that’s fundamentally and critically important because, ultimately, at the heart of any democracy is a confidence in its systems. It doesn’t matter if it’s the Parliament, the judiciary, any arm of Government—particularly in the civil service. I know different people have raised some examples, and it’s not my intention to run through any of those in particular, but it’ll be no surprise as, I suppose, a more modern society, when we approach more controversial topics—it doesn’t matter if that’s domestic; one might even think about how COVID was managed, huge Government powers exerted over the last two years. It’d be good to know that there’s a law in place to allow people to whistle-blow, to highlight issues they think are problematic.

We need think of only overseas jurisdictions, what’s happened there, and even in the New Zealand context—our geopolitical interest overseas and wanting to make sure that what we do here, information that’s being processed here, keeps New Zealand in the best of light. So, again, a protected whistleblower scheme enables civil servants, amongst others, to speak up and again to be protected—which I suppose is at the heart of the bill, because that’s sort of in the title.

Look, I think a very good carve-out and a really important one in my thinking, particularly with my interest in foreign affairs and defence and intelligence and so forth, is that actually those involved in the intelligence sector, those who are involved with the national security of the Realm, are much more restricted in what they can and cannot release. There is always going to be a tension in that space. Just because someone is working in the intelligence or national security space doesn’t mean that, you know, mischievous things may happen, but it does need to be a much, much tighter process.

So from my point of view, looking through the legislation, the carve-out to basically say—there’s a few nuances in this, but the carve-out to say that those working in defence of the Realm, those involved with intelligence and national security matters, are not as protected in this space. It is not really their job to be releasing information that is sensitive. And we have seen from overseas jurisdictions there are some individuals who believe that the information they’ve got deserves to be in the public. I suppose at one level that’s, I don’t know, for their agency to decide, but fundamentally, it’s not the moral thing to do when it comes to elements of national security, and it could apply here in New Zealand sometime in the future. But again, I’m not going to name particular examples from overseas.

But what has always struck me with these whistleblowers is they are people, if you could use the analogy, down in the trenches, which is well and good, but they are not the people who have the overall view of what is happening. And that’s very, very easy, particularly in that space, to think that the information you have and the view you have of it—sorry, not you, Mr Speaker, in the context of the people I’m referencing, that they feel it’s the right and bounding thing to do to release that information to the public, when in fact it doesn’t remain in the national interest. And then perhaps that’s the interplay here—the individual working in the intelligence space probably does not have the overview of what is in the good of the Realm of the nation and hence why that carve-out has been used.

So an excellent move there, but I think, as I said right at the start, incredibly—well, actually that’s probably going to overcook it a little bit; let’s just draw that back. I think it’s a good piece of legislation. Let’s not get too exuberant or superlative. It’s a good piece of legislation. This side of the House supports it. And finally, I think the encouragement for people is twofold—ultimately, once this law is passed—first and foremost to use it, but to use it wisely; it is something to be used to protect society, but not to be abused. So for those people who do have information which is important for New Zealanders to know or to provide a rightful challenge to the system, please do step forward, have confidence that this new piece of legislation is going to enable that to happen much more safely. And I do want to put that little caveat there: this is never going to be completely and utterly safe. There is always going to be a risk for whoever chooses to be a whistleblower, thus Parliament is just trying to make that a little bit better and easier. But do have the confidence to speak up. But in terms of that confidence, it’s probably also, I hope, the intention of this entire Parliament to stress that we don’t want to see a piece of law like this abused or misused, regardless of differences of opinion politically across this House that’s still mine, that New Zealand is a great little democracy, that we are a relatively corruption-free society, that our systems work.

Then probably the final, final thought is that ultimately, while we have a whistleblower piece of legislation which will soon, hopefully, become law, there remain a number of other avenues where people are able to raise their concerns, in fact even through this House, through various parliamentarians.

But anyway, in order not to protect the last 1 minute 47 seconds of my speech, I’m just going to hand that over. I’m not sure if I’ve blown the whistle on that or otherwise, but I’m more than happy to commend this bill to the House.

INGRID LEARY (Labour—Taieri): Noa‘ia ‘e mauri. This bill is really all about integrity, reputation, and democracy. We’ve heard in this House before that New Zealand always ranks really highly on the Transparency International Corruption Perceptions Index, and that is by design, and it is safeguarded through bills like this one. We mustn’t take that for granted, because the Act that this bill is seeking to amend is now more than 20 years old, and it is really timely to make sure that we have the institutions—including the laws—in place to maintain our integrity and our reputation internationally, and to keep our democracy strong. And I say that—and it sounds rather dramatic—but the institutions of the public sector are part of those very fundamental democratic institutions, and it is the people in them who maintain them and maintain their integrity. When things go wrong, it is really, really important that those people have an avenue by which to air their knowledge or their grievance, and that that is taken seriously, and that there is a culture where that is encouraged—rather than a culture of fear where people fear for their jobs or fear a reprisal.

So we do need this legislation to counter corruption, to counter mismanagement, bullying, and to counter the silence that often happens with the bad stuff. We need a culture of safety, and we need a “speak up” culture. Even the fact that rules are strengthened and that there is a process in place, internally, in these public sector institutions may be enough to stop those who would do “bad stuff” from acting in the first place. So we can see the impact of this law is twofold, really: it’s around making sure that people feel safe and that they can speak up, but also sending the signals to the sector and to the institutions that bad behaviour won’t be tolerated. And this sits really well, actually, with the member’s bill that I have the privilege of shepherding through this House, protecting journalist sources. The reason I say that is because currently, with this particular bill that we’re debating today, a whistleblower may be protected, but there would still be a gap in the law if they went to a journalist and the journalist themselves weren’t protected. So I’m really heartened to see this law alongside that one.

There is evidence, we’ve heard already, that shows the culture in the public sector, that shows a culture of a little bit of fear, where people are fearful to speak out. Forty percent of all respondents currently in work felt their jobs would be safe if they reported the wrongdoing. But that’s 40 percent. That could be significantly higher, and that was the Chief Ombudsman’s commissioned report. Fraudsters can even squeeze out multiple whistleblowers. The research showed that whistleblowers felt they might not be protected, or they didn’t think that their identity would be anonymous. So what this bill does, most importantly, is strengthen protections by looking mainly at the role of the receiver of the information, and it puts an onus on the receiver of the information in public institutions to at least acknowledge receipt of the information. They must also consider the disclosure. What will they do with it? They need to take it seriously. They need to deal with the matter, and they need to—very importantly—inform the discloser about what the receiver is doing, and provide reasons for the decision.

So the bill also allows the receiver to take no action—equally importantly—and that is to counter vexatious claims, and that was something that has been levelled both in the media, and also at the select committee stage. We don’t want to see vexatious claimants continually blowing their whistles—it’s a little bit like the boy who cried wolf; eventually nobody will listen to them, but it’s very expensive and troubling for the organisation and for those who might be at the receiving end of that—and so this legislation tidies that up really nicely. It also allows people to report to an external authority at any time of the process—very, very important—because previously there were limitations on what type of information could be disclosed and when it could be disclosed. Now, that doesn’t make for a culture of disclosure. It sends a signal to whistleblowers that somehow, if they got the wrong time or they had something not quite right in their information, they would be rocking the boat, and that they would be punished. So this bill changes that.

It also requires public sector organisations to provide support for disclosures, and that’s important: that those who are going to disclose know in advance that they will be supported, and what will be available to them. There’s a requirement in the bill that says that the procedures must be internally socialised, because part of that is about setting up that culture, that people can feel safe—people know when they go into whistleblowing what they can expect, what the requirement is on the receiver of the information, how they will be protected, and that they will be dealt with fairly, which is at the heart of this.

It also includes serious wrongdoing and extends that, and it includes that in the misuse of public funds and resources, and that extension goes to, whether in a public or a private organisation—if it includes non-Government persons working on behalf of Government agencies. And this is just to better reflect the current reality where employment status is no longer just public servants or contractors. There are hybrid kind of roles; there are people who take on roles and do quite significant work for public agencies who are not technically considered full-time employees, so that catches those people as well. For private institutions, it’s a light-handed approach and that’s good. It avoids the pitfalls that have been experienced in Australia, which has led to inquiries into questions around the scope of the Act. But it’s our view that the private sector would still do well to have a policy around this.

This bill supports New Zealand’s Open Government Partnership National Action Plan 2018-2020. I’ve mentioned the member’s bill that I have the privilege of shepherding, but there are other things sitting alongside it, looking at greater transparency and greater engagement with Parliament, and all of this—again, we’ve talked about the culture of these organisations—is about creating a culture in society where people are proud of the integrity of the institutions, and know how the institutions work, and want to engage with them, and want them to be robust. We can see from what’s happened with the war in Ukraine the threat that robust democracies can have, and how important it is that we make sure that not only is our democracy strengthened but that people really appreciate the democratic processes. So we’ve got programmes around engagement with Parliament, we’ve got a Youth Parliament which is happening in July—I’m very excited, and I’d like to do a shout out to Cam Fraser, my Youth MP in the Taieri electorate. We also have programmes that are looking at extending public participation in policy, so we can have the best possible policies as we govern, and as we hold each other to account.

So the following changes were made at the select committee, and these are just some of the technical elements which were around processes for Officers of Parliament. As I’ve mentioned, the meaning of “serious wrongdoing” has been extended and clarified by the Minister to include health and safety, and risk to health and safety; disclosing to one’s organisation; lots more clarification and emphasis on what the receiver should do; and also allowing for receivers to decide to take no action, but having to really justify that decision, so that it is fair to the discloser.

I agree with what Simon O’Connor said about making sure there are safeguards for those working in intelligence and security information. Obviously, we want to make sure that security is paramount, and therefore this bill very tidily ensures that those pieces of information are safeguarded from inappropriate disclosure, and also there are strengthened protections for disclosures made under a duty of some sort. So those people who are required to disclose under a duty will now feel more protected and more confident about doing so.

So I’ve walked through a little bit about the reasons why I think this is such an important bill. It really speaks to democracy, to integrity, to our international reputation. And that’s not only at a security level, but actually for foreign investment. Those who would like to put funds into New Zealand, get involved with our country, they need to know that the institutions here are transparent, and are sound, and are corruption-free. So we want to continue to have New Zealand remain at the top, or near the top, of the Transparency International Corruptions Perception Index. I feel confident that this bill will enable us to do this, and I commend it to the House.

GINNY ANDERSEN (Labour—Hutt South): Tēnā koe e te Māngai o te Whare. Look, New Zealand 20 years ago was, very proudly, one of the very first countries to introduce a specially dedicated law to protect whistleblowers. That was the Protected Disclosures Act back in 2000. But things have changed and times have changed. It’s great to have this bill—which revitalises and modernises a law that is so important for transparency, for democracy, and for making sure that New Zealand operates in a way that is fair to all—back in the House. This bill specifically repeals the Protected Disclosures Act of 2000 and replaces it with the new Protected Disclosures (Protection of Whistleblowers) Act.

For employees who do uncover serious misconduct—and that would include fraud, corruption, and it’s both in the public and the private sectors—it’s important that these workplaces have a safe way for wrongdoings to be reported. It’s important that those workers, who deserve an effective organisational process as well as having those legal protections in place—so making sure that we have a clear pathway forward, that all workers know where that is, and where those protections exist, to make sure that if they have that important information they can be forthcoming and provide that in a way that protects themselves.

It’s also important to note that if we want to maintain those high standards that have been spoken about throughout this debate—our high ranking internationally as being a country that’s known for its transparency—then we need to maintain these high integrity standards. We have to continue to work hard to tackle serious misconduct within New Zealand, and that’s exactly what this bill does. Whistleblowers perform a really important function. They are critical to maintaining our public confidence in the integrity of Government, and business as well, in New Zealand. To have that function in place is so important in a close and tight-knit country like New Zealand.

International research that has been conducted has found that reporting by employees is the single most important method in which wrongdoing in any organisation is brought to light. So it is only sensible that we make sure we strengthen those processes and enable those protections for employees to be in place.

One of the single most significant hurdles that is in place for uncovering serious wrongdoing is the reluctance of employees to step forward—to step into the light and to make that report. They either don’t know the policy or what the process is within their private or public organisation and, furthermore, they fear retaliation—what are going to be the kickbacks if you step forward and make representations against the organisation, against the Government department, against the employer. They’re not confident that the report will go to someone in an organisation who is actually able to do something about it, and there is a general feeling that “if in doubt, speak up” is not supported well enough. So this bill takes a step to strengthen that culture, to enable people to speak up. That ability to be able to speak up acts as quite a clear deterrent to wrongdoers so that wrongdoing is less likely to occur in the very first place. That is contributing to transparency and increasing public confidence in what we have in place.

As I’ve already mentioned, there’s been some research in recent academic work that’s looked at several misconduct cases to try and analyse how things could be strengthened. The current legislation has come under scrutiny to look at the fact that it is not working as effectively as it could be and, in fact, it lags behind international best practice in a number of key areas. As I’ve already stated, that law is now 20 years old and it needs to be updated. People don’t always know how to use the Act, they don’t know how it exists, and those practices are not embedded within workplaces and publications available to employees within workplaces. So this bill takes some very clear steps to make sure that those changes are made available and are widely publicised to those who may want to use it.

I’d like to acknowledge the work of the Education and Workforce Committee, and that there were some really important changes made and what these changes are in the bill. The bill makes significant changes, not just from select committee but also from that initial bill, and takes into account the changed environment that New Zealand’s now working in and modernises it. Allowing people to report serious wrongdoing to an external authority is important if they wish to—if it is kept in-house, it is not always the most conducive way to increase transparency. But also strengthening protections for disclosers by outlining what those receiving the disclosures should do is important. So, once you’ve handed over that information, it is giving that person—the whistleblower—a sense of security about what the pathway is forward once that information has been disclosed.

In addition to this, there’s also some extra requirements for the public sector to make sure public sector organisations provide support for those disclosures—that there are internal processes, that those who are disclosing information know where to go to and how to receive that extra support if required. Extending the coverage of serious wrongdoing also includes the misuse of public funds or resources, and that includes for public sector as well as private sector. It’s important to note that this also extends for those who are acting on behalf of the Public Service—so the fact that you are contracting in would not be a reason to be exempt from these provisions. That’s important given the way that we use contractors, too, in Government and also in the private sector.

Requiring public sector organisations to state in their published internal procedures how support for disclosers would be provided—so that’s made readily available. Also the bill creates a new schedule to the Act that named the most likely and appropriate authorities for a particular subject matter—a bit of a map for knowing, if you’re in a particular area, how you would negotiate that space.

It’s incredibly important that people know where to go when they have information that is really important, that that process is mapped out. New Zealand has always been a world leader in integrity, transparency, and openness, and consistently at the top of Transparency International’s Corruption Perceptions Index. We want to maintain that high ranking. We want to make sure that our country is renowned across the world for having transparency and having a high level of public confidence in our processes. It’s good to see strong measures being made to modernise legislation in this space.

An effective regime for disclosing serious wrongdoing in the workplace is critical to New Zealand and to maintaining that high standard. This Government is committed to protecting New Zealanders who speak up about serious wrongdoing in the workplace, and making sure there is a clear pathway forward. This bill also fits with our larger plan, in terms of New Zealand’s open Government action plan, and shows how we are committed to being an open Government that makes sure there are clear, transparent processes that the public knows—we know that encourages a good democracy, a healthy democracy, and one that we are proud to be a part of.

I commend the Minister. I also commend those who’ve all done the work in the background from the Public Service to make sure we have a clear and concise bill that puts forward a stronger way for democracy and transparency in New Zealand. I commend the bill to the House.

Motion agreed to.

Bill read a third time.

Bills

Plant Variety Rights Bill

Second Reading

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I present a legislative statement on the Plant Variety Rights Bill.

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

Hon Dr DAVID CLARK: I move, That the Plant Variety Rights Bill be now read a second time.

I want to at the outset of my contribution thank the Economic Development, Science and Innovation Committee members for their hard work in considering this bill, and to the chair, Jamie Strange, I acknowledge you across on our side of the House but over the other side there. The committee has recommended a number of important changes to the bill in response to the submissions that they received. The bill deals with a niche and often technical area of our intellectual property regime, but it’s also one that captures a degree of public interest.

At the outset, I’d also like to acknowledge all the industry stakeholders and Māori organisations and individuals that have played a vital role in the review of the PVR regime. Your expertise has been crucial in refining the proposals that we find in this bill.

The bill governs an area of intellectual property law referred to as plant variety rights or, commonly, simply as PVRs. It’s focused on promoting innovation and economic growth by encouraging the development of new varieties of plants. Many of these new varieties underpin success in key areas of the economy like agriculture or horticulture.

Angie Warren-Clark: Or kiwifruit.

Hon Dr DAVID CLARK: Our beloved kiwifruit, a good example—a very good example—whether it’s gold or green, or even red these days, that’s often mentioned. But there are, of course, plenty more examples of innovative new plant varieties that are of benefit to society.

Another example I might perhaps cite just for illustrative purposes is that there’s a grass that has been developed after many decades of trials that deters birdlife by lowering the amount of insects that are harboured within the grass. That particular grass has the potential to be used near airports to reduce the amount of bird-strike, and I would suggest that that is a good thing.

The PVR regime needs to strike a balance between rewarding plant breeders for their efforts, because we want to reward and encourage innovation and economic development, but we also need to provide access to new varieties for growers and consumers—so it’s striking a balance between those different aspects so that society as a whole can benefit. Now, the bill strikes this balance by strengthening intellectual property rights to encourage that innovation while still freely permitting breeders, commercial and recreational, to build on that innovation and grow new varieties.

On top of all that, what makes this bill unique, perhaps, is that it also recognises the kaitiaki relationships with taonga species and it protects them, should they be impacted by a PVR grant. The bill there has two overarching purposes related to New Zealand’s international and domestic obligations. The balancing of these obligations around innovation and protection of kaitiaki relationships reflects New Zealand’s unique position in the world and our unique approach to plant variety rights, and I think it’s an approach that we in this House can be very proud of. Again, I do want to acknowledge the committee and their work to strike the right balance in this regard.

So, first off, the bill enables New Zealand to meet its international treaty obligations through the CPTPP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. That agreement—the CPTPP—requires us to align our laws with UPOV-91, the International Union for the Protection of New Varieties of Plants 1991 agreement. Giving effect to UPOV-91 will ensure our laws are consistent with international best practice and intellectual property law, and better reflect the realities of modern plant breeding.

Secondly, the bill will also ensure that our PVR regime is consistent with the Crown’s obligations under the Treaty. Ko Aotearoa Tēnei, the Waitangi Tribunal’s report into the Wai 262 claim, found that kaitiaki relationships with taonga species are entitled to a reasonable degree of protection. The bill establishes a Māori Plant Varieties Committee, whose primary role will be to assess the likely impact of the grant of a PVR on kaitiaki relationships with taonga species. If the grant of a PVR is likely to adversely impact that kaitiaki relationship and this impact can’t be mitigated, then a PVR may well be declined.

The bill goes further in strengthening kaitiaki within the PVR system than was recommended by the Waitangi Tribunal because this Government recognises the need to better protect taonga species, taonga works, and mātauranga Māori. The establishment of a Māori Plant Varieties Committee with genuine decision-making power to protect kaitiaki relationships we believe reflects true partnership.

The select committee did an excellent job in scrutinising the bill, and I want to cover a couple of the key changes that have resulted. The first is the inclusion of a right of appeal to decisions made by the Māori Plant Varieties Committee. The bill as originally introduced did not include an appeal right, which meant that these decisions could only be challenged through judicial review. Instead—and we think this is important—the legislation will now provide adequate pathways for those whose rights are affected to challenge a decision made by that committee. The bill as reported back, therefore, includes a right of appeal to the Māori Appellate Court. This was recommended by the Chief Justice following consultation with her colleagues, the Chief Judges of the High Court and of the Māori Land Court.

The committee recommended a number of other additional amendments to strengthen this legislation. Some of the headline changes include revising the purpose clause and including a separate Treaty of Waitangi clause to better reflect the Crown’s obligation, aligning the definition of an “essentially derived variety” with the wording in UPOV-91 to achieve international consistency, extending the term of a PVR for potatoes from 20 to 25 years, and adding a requirement to consult with Te Puni Kōkiri before making appointments to the Māori Plant Varieties Committee.

So, in conclusion, this bill brings Aotearoa into line with the international community, it supports innovation and economic growth while protecting our taonga plant species, it meets our obligations under our free-trade agreement, it supports progressive trade that benefits New Zealanders as a whole, and, at the same time, it stays true to our history and identity as a nation founded on a partnership as reflected in the Treaty of Waitangi. So it is a real pleasure to commend this bill to the House.

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

ANDREW BAYLY (National—Port Waikato): Thank you, Mr Speaker. It’s a pleasure to be talking on the Plant Variety Rights Bill in its second reading. This is my first opportunity to talk on this bill, and it’s very interesting. I wasn’t able to sit on the select committee, so it’s something I’ve had to pick up, and it’s very interesting just reading the background to the bill.

As anyone involved in the industry knows, New Zealand has been at the forefront of developing particular plant species for many, many years. We have some very fine scientists, and we’re world-recognised for certain species. Of course, in my own electorate of Port Waikato, the Pukekohe long keeper onion is one such species that has actually lasted a long period of time, and, of course, it was developed by the growers of Pukekohe and is so-called because of its ability to last a long time when in storage, which, of course, now with modern methods of storage, is not quite so important. But at the time it was developed, it was a very useful onion variety.

Of course, if we reflect back to the sale of PGG Wrightson back in 2010, I think it was—it is a very substantial business that most people recognise in the farming-agriculture sector as a company that provided services to farmers in terms of buying and selling property, cattle, sheep, and livestock in general. But the other, most important aspect of that business which was ultimately acquired by Agria, a Chinese company, was, of course, its seed business. When the takeover offer was made, people sort of underestimated the seed business and over-inflated the livestock aspect of the business. Of course, Agria bought it primarily because of its seed business and has subsequently sold it a few years later for about $400 million to a Danish company, and that just shows you the value of seeds and seed propagation and seed intellectual property (IP).

So this bill seeks to update a very old Act. It’s 30 years since it’s been properly modified. We will support the bill, but with certain caveats, and we will be putting forward Supplementary Order Papers at the time of the committee of the whole House.

The bill, as the Minister noted, deals with the issue of plant variety rights, or PVR—that’s what that stands for. Largely, in terms of meeting our requirements under the CPTPPA—of course, the National Party signed—well, tried to push the TPPA, but the new agreement is called the Comprehensive TPPA—

Hon Dr David Clark: Come on—“Progressive”.

ANDREW BAYLY: All right. “Comprehensive”, “Progressive”—there’s not much difference. Let’s just call it marketing, Minister. Anyway, our concern, of course, was that in meeting the obligation, New Zealand made sure that its plant varieties met the International Convention for the Protection of New Varieties of Plants, or UPOV-91, if you really want to know, Mr Speaker—I can see you are watching very carefully on this. We were keen to make sure that we give effect to meeting those requirements as opposed to implementing something that is, rather, acceding to those requirements, and we think that in having that flexibility about what we do with the plant species that are developed in New Zealand, it is very important that we meet international requirements but we don’t necessarily have to roll over entirely. It’s an important point of difference.

With regard to the bill, it has some very specific issues that it deals with. One is to deal with this issue of intellectual property, and this is essentially what this bill is about. It is a piece of intellectual property, and I’ve got to say that this is an area that I find that the Minister has not focused on sufficiently, particularly in the area of commercial intellectual property. This is just the question of plant IP: how we protect that which has been developed or is native or indigenous to New Zealand. What it does, like with music IP or whatever it might be, is it extends the term of protection for woody plants to 25 years and for all other plants, basically, for 20 years. There is a special carve-out for potatoes—

Hon Member: Ha, ha!

ANDREW BAYLY: —and of course, coming back to my electorate, potatoes are an important export crop, Mr Duncan Webb, and I’m sure if you come up to Pukekohe—oh, I’m sorry; Jamie Strange—you might find how important that is to our local economy.

There’s also an exemption for farm-saved seed, which is where you’ve used the seed and a farmer is then able, as a right, to use it in the subsequent year if that seed is available on their property. It also defines what’s called EDV—essentially derived variant—which means a new variant doesn’t have to look exactly like the former species. It can have other scientific differences, but it doesn’t have to exhibit the importin such as cosmetic features or how it looks that differentiates it from another variety.

So, anyway, the Economic Development, Science and Innovation Committee did a very good job, I think, in terms of working through some of the technical detail, and I think strides have been made in that area. But I think the main thing for us is, first of all, we’ve got to recognise that New Zealand and its IP around its plant varieties need to be protected incredibly significantly and comprehensively. One of the issues we’ve got is, obviously, with an industry like Zespri, with development of new plant varieties—and we’ve seen instances where the varieties have been taken offshore—we need to be very, very careful, and I know my colleague the Hon Judith Collins is going to talk more about that. But we need to be going into this environment with our eyes open that intellectual property—and it takes years to develop these plant species—is protected and New Zealand can capture the economic value from developing and selling these plant varieties in the open market. So that is the first point of principle; it’s absolutely vital that we get to that point.

We also have some concerns about clarifying the role of the Māori Plant Varieties Committee. The original proposal was a five-person committee. Of course, there’s only five people in the plant part of the Ministry of Business, Innovation and Employment, so this is a doubling of the numbers, and we have some concerns about, in fact, what should be the role of this committee. Our view is that it should be an advisory committee. At the moment, some of the wording in the bill talks about it having a much greater role, and as some of the growers have highlighted, it’s quite difficult to understand who might you go to get approval from—this term kaitiaki—and is it a hapū you have to go to, or is it an iwi? What is the process if there are competing claims, and how do you go about making sure that you know that you’ve got the right approval? As the Minister noted, there is the right to go the Māori Appellate Court, but that whole process needs to be very, very clear. It doesn’t look that clear to me from my first reading, and it’s certainly something I’ll be asking the Minister during the committee of the whole House stage.

The actual definition of taonga and kaitiaki—what that means. There’s a definition that if plant species were brought on the original waka to New Zealand, that would form part of that definition. If they’re “indigenous” to New Zealand, what does that mean? Certainly, some species like mānuka have migrated and been hybridised over time, and so how do we define that, and there’s a worrying thing that a lot of this is going to be written up. There’s a definition and a list of these particular kaitiaki that are going to be included by regulation, which means it’s not subject to House oversight because regulations are passed once the bill comes into force. I think just the general process around doing that and in going through that process, we want to make sure that there’s absolute clarity, because we do not want our plant breeders to be in a situation where they’re disadvantaged economically and cannot get the material advantage that has come about through their hard labours, and for the benefit of New Zealand so that everyone in New Zealand can benefit. This is about growing the economy, creating more jobs, and moving to a smarter environment. That is why this bill is so important, and it’s important that we get all elements as appropriate as possible. Many thanks.

JAMIE STRANGE (Labour—Hamilton East): Thank you, Mr Speaker. I appreciate the opportunity to take a call on this bill. On a probably rather rare occasion, I agree with much of what Andrew Bayly, the previous member, said, and I do appreciate his invitation to visit his electorate in the north Waikato region. In fact, I was actually passing through his electorate on the Te Huia train recently, and as I looked out the window, I saw the beautiful fields there. I’m sure the member would like to join me at some point on that journey as well, which obviously passes right through his electorate.

I stand as the chair of the Economic Development, Science and Innovation Committee, a role that I am certainly honoured to hold in this Parliament at this time. In that role, on behalf of the committee, I’d like to thank the Minister of Commerce and Consumer Affairs, the Hon David Clark, for bringing this bill to the House in a timely manner.

In terms of the requirements under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It was the TPPA; now it’s changed to the CPTPP, but it’s basically a trade deal that was signed in 2018 with a number of countries around the Pacific Rim. It’s already had significant benefit for New Zealand’s economy, and I’ll move into that a little bit soon.

I’d also like to thank all of the staff who have worked incredibly hard on this bill, as they work incredibly hard on all the bills that go through this House. I know all the members regularly join with me in terms of thanking the staff at this wonderful institution that we have.

I’d like to thank the submitters who submitted on this bill. It really was a pleasure to hear from these submitters. We had a very diverse range of submitters, primarily in the horticulture area. As we’ve heard from the Minister and the previous speaker, there has been a slight change in the bill in terms of the potato area, where there’s been a change from 20 years to 25 years, and that was based on one of the submissions. We had a submitter come in who brought potatoes with them, and, actually, really went into the details in terms of the R & D and the investment that goes into a potato. Now, I’m sure many people would cook up a potato at dinner and eat that potato without really thinking about how much money has gone into creating that potato.

As I move on in this bill, I will give other examples of intellectual property (IP) and R & D and how we protect those really important New Zealand businesses in terms of their trade agreements. The R & D goes in early, and often there’s quite a long time before businesses can reap the economic benefits of that R & D that goes in. If they put the R & D in and don’t have the protection of the IP, then those businesses will fall over. So it’s absolutely important that this bill goes through the House.

The bill represents a new and uniquely New Zealand approach to plant variety rights. We’ve signed up to the CPTPP, as I said before, and we’ve already seen benefits—particularly in our kiwifruit industry—in terms of some of the free trade in areas like Japan, but what we’ve done is we’ve taken a uniquely New Zealand approach. We have fulfilled the requirements of the CPTPP, but we’ve done it in our way, so we’ve linked in the Treaty of Waitangi, some of our local indigenous plants—we’ve taken the opportunity to protect the IP around those—and we’ve done a few other things that are unique to other countries but we have satisfied what’s required under the CPTPP.

I’d just like to touch on kiwifruit a little bit. Our kiwifruit sector returns over $3 billion a year through our economy. I was at the Fieldays around two years ago, and the next Fieldays is coming—a little plug there—in November. It’s an absolutely wonderful event which showcases much of our agriculture and horticulture from New Zealand businesses. While I was at the Fieldays, I tasted a red kiwifruit from Zespri—

Angie Warren-Clark: Wa-hey!

JAMIE STRANGE: —and I acknowledge other members in the House who have also tasted one of those red kiwifruit. And—[Speaker gestures]—oh, there we go; even the Speaker of this House has tasted these red kiwifruit—the reason I highlight this is as an example of what’s possible in our horticulture sector and the value-add that we can add in terms of bringing money into New Zealand. Zespri—full credit to them—have done an absolutely fantastic job—

Simeon Brown: When are they making blue ones?

JAMIE STRANGE: —in terms of developing—yes—red rather than blue on this occasion, Simeon Brown. But who knows? Maybe a blue one might come at some point. We’ll have to wait and see. But, look, I highlight this in terms of the value-add and in terms of the IP.

Now, if Zespri don’t have certainty on the IP for that red kiwifruit, then it begs the question: will they make that significant investment? If they don’t have guarantee of that IP, there’s a good chance that they won’t make that investment because the risk is too high. So what the Government is doing here is lowering the risk threshold for wonderful businesses, New Zealand businesses like Zespri. So it’s certainly important. For example, SunGold, which I believe is the biggest seller, returns $1 billion to New Zealand’s economy every year, and there are many other examples right across the horticulture sector of this value-add.

So, as I was saying, the bill satisfies the CPTPP. It makes good strides in terms of protecting IP and it does it in a uniquely New Zealand way.

Inadequate plant variety rights legislation has been a problem for 30 years in New Zealand, and this Government is solving this problem. I acknowledge the support from the National Party, and, hopefully, other parties in this House will also support this bill as it goes through.

Trade is the lifeblood of our economy. We are a small nation. The reality is, as a small nation, we can’t and we shouldn’t make all the products, so we make the products that we specialise in and we sell them to the world. Other countries make products that they specialise in and they sell them to the world. If we didn’t have free and open trade across the world, countries the size of New Zealand would really struggle. Our standard of living would be nowhere near where it is at the moment.

I’d like to acknowledge the arable sector in New Zealand. The previous member spoke about seeds and the IP that goes into seeds, and he is exactly right. I think it’s important that we continue to highlight this. Look, as someone who lives in the city, I feel like I have a connection to our rural New Zealanders. Both my uncles are in the agricultural sector; both have farms. I’ve worked on those farms, and it’s important for people who live in the city to have an appreciation of our agricultural and our horticultural sector and some of the risks that they take in terms of business. They are very dependent on the weather at many times and we have seen in terms of climate change some of the challenges that are coming, and, as a Government, we will continue to work with those in the agricultural and horticultural sector to support them. But everything that we can do, we will support.

Just touching on some of the changes that the select committee made—and the Minister highlighted them, but just to dig into them a little bit more—the first is the inclusion of the right of appeal to decisions made by the Māori Plant Varieties Committee, and our select committee felt that this was important in terms of fairness. We felt that there needed to be a right of appeal and we’re, obviously, making that recommendation to the House. In recognising that Māori should be self-determining about issues affecting Māori, the bill as introduced did not include an appeal right, which meant these decisions could only be challenged through judicial review. But it’s important for legislation to provide adequate pathways for those whose rights are affected to challenge a decision. The bill as reported back includes the right of appeal to the Māori Appellate Court.

Just a couple of other changes: revising the purpose clause and including a separate Treaty of Waitangi clause to better reflect the Crown’s obligations; aligning the definition of an essentially derived variety with the wording in UPOV-91—and, obviously, it’s important that we are consistent with UPOV-91 to achieve international consistency—as I mentioned before, extending the term of a PVR for potatoes from 20 to 25 years; and, finally, adding a requirement to consult with Te Puni Kōkiri before making appointments to the Māori Plant Varieties Committee.

This is an excellent piece of legislation. It’s certainly needed, and in a country like ours, where we are so dependent on trade, this bill will support our horticultural sector—our many businesses who do absolutely amazing work in the horticultural sector. So this bill will continue to support them as they trade internationally. I commend it to the House.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Speaker. We’ve heard a lot spoken about this bill this afternoon—the Plant Variety Rights Bill—and we’re in its second reading. We’ve been told it’s very important, which seems a bit strange that we’ve waited a year to have it come back to the House if it’s that important.

I was pretty concerned to get a message from one of our major exporters this afternoon about this bill. We are, as of course we all know, an exporting nation. Without exports, we’d basically just have no money, frankly, but lots of food. We are an exporting nation of plant breeders who are developing high-value varieties, and we should be encouraging those breeders to do so with their low environmental impact and their healthy and high-yielding varieties, and encouraging investment and innovation and making it easier for them to be able to have these varieties protected and their returns generated. The comment was that this bill falls well short.

So Andrew Bayly, who spoke earlier this afternoon, and I have just discussed this, and neither of us were on the select committee at the time. We are going to be following this up and looking at putting in some Supplementary Order Papers in the committee stage of the House because I think the whole of Parliament should be on the side of helping our New Zealand plant breeders to do the very best that they can to invest in and to want to invest in new varieties. As we know, people are actually the key to so much of our export market.

Some of us can well remember Chinese gooseberries, little hairy green things that we had to climb up a vine—I know, Madam Speaker, you may well remember that, too—

ASSISTANT SPEAKER (Hon Jacqui Dean): Hmm, hmm.

Hon JUDITH COLLINS: —and go and collect them and then stick them in a cupboard so that they could ripen before the birds got them. Thankfully, some very enterprising scientists decided to change the way in which that plant was bred.

So now we’ve talked this afternoon about Zespri and the excellent work that they do, helping the economy and helping to make New Zealand a richer place, but we also need to remember that they’re constantly trying to improve what they’re doing and what they’re selling. They are under constant attack from overseas. We all are aware of plant stock being taken, stolen, used overseas, and actually then used to undermine the work of our New Zealand exporters. So it is really important that we get this right.

I think this is the sort of thing where we can take a pretty apolitical view on it, which is looking to see what’s the best piece of legislation. So once I get some more information, I’ll discuss it with our caucus and then with Jamie Strange, the chair of the Economic Development, Science and Innovation Committee, and with the Minister.

We had some concerns noted by some of the submitters, and there were some submitters who were absolutely, wholeheartedly delighted that something was happening—it is time for this legislation—but they did have some other views as well. They thought it was very good to have the first comprehensive review of the Plant Variety Rights Act since the 1980s and to try and put in place some robust plant protection laws.

It’s also the issues around what is taonga and kaitiaki, and what should be included is certainly one that’s caused some submitters some concerns. I think that there are some good points raised around knowing exactly what is included in that, and I think we should be able, if we’re putting these sorts of provisions in place, with an entire five-person Māori committee when the whole of the Plant Variety Rights Office in the ministry only has five staff—this is a very heavy weighting when around 7 percent of applications will, potentially, be affected by the Treaty provisions. I think we need to be a little sensitive to, obviously, concerns by Māori relating to taonga, but we also need to be very concerned that plant breeders themselves may wonder as to whether or not the plant that they are seeking to breed from is going to be covered by this or be caught up in any sort of legislative or bureaucratic nightmare.

So I think we do need to have some more clarity on that. Hopefully, that can be addressed in the committee stage of this bill, because, as we so often see with legislation these days, we seem to spend an inordinate amount of time talking about our country, issues in it—those between Māori and the Crown and everybody else—and have so little understanding that we are in a highly competitive environment and that our enemies are not within but are actually overseas. We need to very much focus on the fact that if we are going to benefit all of New Zealand, the best way forward is for us to be on the side of those people who are trying their very best to build our economy. We in the National Party believe that it is important that we need to acknowledge the Māori interests, but we also need to be very much aware of the commercial needs and flexibility and speed of decision making.

I’m very privileged to have the wonderful portfolios of science, research and innovation, and technology, and what is really clear to me when meeting so many scientists—and we have scientists in New Zealand whom we should be very proud of, working away, and also in the technology and innovation area—is that whatever we think we’re working on in this country, someone else in another country is probably working much harder with far more people with much more money going into it. So our people have to be able to work with absolute speed, and I think that’s one of the concerns that we were alerted to by some submitters. It’s certainly one that gives me some cause. Having spent now quite a lot of time with New Zealand scientists, it is just how fast they have to be, and if they’re not fast, another country will have developed something, or somehow they’ve got hold of that technology or that innovation.

So we’ve got to be really careful that when we’re trying our very best to make sure that all the peoples of New Zealand are properly respected and honoured, we do so understanding that the rest of the world is actually getting on and they don’t care about us. They’re not going to care about our wellbeing, they’re not going to care about anything else, and so we just do need to make sure—and I think that it could be addressed by a statement as to what is actually covered.

We all know about kūmara and we all know about various other plants. We need to make sure that we don’t end up in having an enormous amount of time, hearings, and money going and working out whether or not something is going to be covered. Otherwise, we might as well give up and go home and give it all to Australia, because they already seem to have something called manuka honey, by the way, which comes from a place called Manuka in New South Wales. I thought that was a pretty dirty little Aussie trick myself, but it turns out they really do have it, and it’s another tea tree variety. So we just need to be really careful with that.

So I’m going to be taking some advice from the people who are actually working in science in this area and I’ll put up some submissions. I’ll talk to, as I said, the caucus but also to our colleagues on the select committee and the Minister to see if there’s any willingness to just improve a few things there, because otherwise it’s just going to be yet another bill that we have to fix up when we become Government in 18 months’ time. Thank you, Madam Speaker.

RACHEL BROOKING (Labour): Thank you, Madam Speaker. Lovely to be standing here speaking on the second reading of the Plant Variety Rights Bill, which, of course, we’ve heard has gone to the Economic Development, Science and Innovation Committee. They have heard the submissions and reported back to us. So thank you to that committee, their staff, and everyone that submitted. That is a small select committee, small but busy. They seem to have a lot of bills in front of them at the moment. I have not had the privilege of being on that particular select committee, but I am on the Regulations Review Committee—like, I see, some other members in the House today—and we did give them some feedback, and that was listened to and reported on in the select committee report. I’m also on the Environment Committee, and I think it’s with that hat that I am speaking on this bill today.

Madam Assistant Speaker Dean, I’ve chosen today to wear my camellia brooch, one that was presented to me from you, because, of course, we are talking about the intellectual property of plants. I’m sure that there are—or I know that there are—people in New Zealand who breed things like camellias and rhododendrons.

Now, this is an interesting bill for a number of reasons, and I’m going to focus particularly on the provisions that have come from the Wai 262 inquiry and reports. But it’s interesting because, of course, it is about intellectual property and that’s always interesting. We are updating this plant variety right (PVR), which we’ve heard about from the other speakers. We’ve heard about the economic importance of having good regulations in New Zealand in this area and regulations that fit with international agreements. It’s also interesting because it has some definitions in it, and one of them, at clause 31, is a whole section in itself on the meaning of “novel”. It’s not a meaning of “a novel”; just the meaning of “novel”, and there are a number of these very clear definitions in the bill, which I commend to the House because it’s very good to have clarity on definitions.

It also recognises the recommendations from the very long-running Wai 262 inquiry. There are explicit provisions on the Treaty relationship, and, as we’ve heard from the previous speaker, the Hon Judith Collins, there’s a lot—and we heard it from the Minister as well—here about Māori involvement and saying what a kaitiaki relationship is with a taonga plant species and if this relationship should be protected. I will go to that in a minute—to those definitions of what a taonga species is and how that kaitiaki relationship works.

We’ve heard from the Minister in the first place that this bill sets up a regime for these PVRs. So you can apply, and there’s a process where your application will be considered with various different criteria, and one of those criteria is whether or not Part 5 applies. Part 5 is the part about these kaitiaki relationships and taonga species. If Part 5 applies, whether or not the Māori Plant Varieties Committee has said it can proceed or not will determine how the application goes, and, of course, they can also say that there should be conditions. So that’s how those two issues link together.

I wanted to first of all look at the purpose of the bill, because the purpose includes “to protect kaitiaki relationships with taonga species and mātauranga Māori in the plant variety rights system:”. That’s at clause 3(b), and then there’s a specific Treaty clause, which says “This Act recognises and respects the Crown’s obligations under the principles of under the principles of Te Tiriti o Waitangi/the Treaty of Waitangi in relation to the law on plant variety rights, through the provisions of Part 5”—which I’ve just mentioned—“and related provisions that support the purpose of Part 5.”

Then “kaitiaki relationship” is defined in the definition section and it’s “in relation to a plant species, means the relationship that any particular iwi, hapū, individual of Māori descent, or Māori entity has, or Māori in general have, as guardian, trustee, or caretaker of—(a) an indigenous plant species; or (b) a non-indigenous plant species of significance”. That second point is a very interesting one, because not only does this bill apply to indigenous species that we can think of—perhaps we could think of the cabbage tree, which might have some importance. Obviously, lots of the harakeke—the flax—also have importance, but it may be that these non-indigenous plants can also have significance and be taonga species. So the obvious one that comes to mind is the kūmara.

That works when we look to Part 5 of the bill—so that is from clause 52. Then, at clause 53, there is more on this “non-indigenous plant species of significance;” and the interpretation in clause 54 is “ ‘non-indigenous plant species of significance’ means a plant species—(a) believed to have been brought to New Zealand before 1769 on waka migrating from other parts of the Pacific region; and (b) listed in the regulations as a non-indigenous plant species of significance”. So it’s important that that “and” there does require these non-indigenous plant species that are taonga species to be defined in those regulations, and there are later provisions about how the regulations are made.

I just note that in relation to some of the other speeches, we heard concern from the member Andrew Bayly about who applicants would ask about whether or not there was a kaitiaki relationship with a particular species where an application for a PVR is made. One of the functions of the Māori Plant Varieties Committee is to give such guidance, so, hopefully, that will appease that concern.

In summary, this is a really important piece of legislation. It’s updating these intellectual property rights that needed to be updated for international law reasons, but it’s given very much a New Zealand feel and tries to really respond to our Treaty relationship and respond to that Wai 262 report by introducing this idea of the Māori committee being able to make recommendations or make decisions and suggest conditions as well, if that’s appropriate, for where the kaitiaki relationship with a taonga species might have some adverse effects. So, for those reasons, I commend this bill to the House.

RICARDO MENÉNDEZ MARCH (Green): Tēnā koe. Privileged to rise on behalf of the Greens to convey our views on the Plant Variety Rights Bill in its second reading, and what a privilege to get to do it after Rachel Brooking, who gave a really expansive rundown of what the bill contains. So, as with the first reading, I will contain our points as to the Green Party perspective on the bill.

As all the speakers have noted, the intent of this bill was to ensure that the plant variety rights regime met our trade treaty obligations. As submitters noted in the Economic Development, Science and Innovation Committee, there are many interests to balance as part of this process. So I do want to commend the work of the committee in trying to balance the many different views, and I’ll pinpoint some of the submissions that I think speak to our Green Party concerns, starting with Te Hunga Rōia Māori o Aotearoa—the Māori Law Society—who I think gave a really strong submission around the fact that when designing such a regime, we need to be thinking first and foremost about our Treaty obligations. In general comments, they talked about how, unfortunately, this bill is inherently limited in terms of its ability to meet a true partnership until broader constitutional conversations are had regarding true partnership and the rights of Māori under the Treaty.

When the Māori Law Society was talking about Part 5 of the bill, they really encouraged us to be taking a broader look at how we meet our Treaty obligations, particularly in regards to how they thought the purpose clause had been framed quite narrowly, only recognising kaitiaki relationships with taonga species and mātauranga Māori within New Zealand law. They noted that in order for us to meet our Treaty obligations in full, we needed to go way beyond that, and I think this is something that was echoed as well with other submitters. While many of them were encouraging of the Government’s intent to update the regime and were encouraging of the intent to ensure that we were looking at meeting our Treaty obligations, people were, I guess, cautious about the fact that we’re doing it in the context of a trade agreement as opposed to, first and foremost, constitutional issues.

This was echoed by Jane Kelsey, who is a professor at the University of Auckland and a really strong advocate for fair trade deals. She really emphasised that there was an unwillingness from the Crown to take full advantage of the possibility to properly look into how we enable the exercising of tino rangatiratanga and kaitiakitanga over taonga species and mātauranga Māori. In the context of this bill and in our trade obligations, it does feel, she reflects, that it is closing the door on doing proper justice on Te Tiriti, and so she’s calling, effectively, for us to do a broader view and to sort of delay this process and take a bit of a slow-down and a breather to reflect on what it is that we need to do to ensure that we’re properly meeting these obligations.

Te Kāhui o Rongoā also echoed some of these concerns, particularly, again, noting that this bill is not really reflective of an equal partnership arrangement between Treaty partners and, again, because it is not designed to put that at the forefront, it fails to acknowledge a Māori perspective on the natural world. They reflected that in Te Ao Māori it is not possible to own a species plant and they kind of invited the committee at the time to reflect more broadly about how we design law in relationship to our natural environment.

The Law Society echoed some of these concerns around taking a balanced approach to the interests of kaitiaki and breeders recommended by the Waitangi Tribunal. I want to note that the Waitangi Tribunal did find that even though the trade agreement that we’re trying to kind of meet the obligations of contains a Treaty protection clause, this was insufficient to protect Māori rights and our obligations pursuant to Te Tiriti. So I think there’s a lot left to be desired around how we’re designing this legislation. I think it is putting trade interests above broader constitutional conversations we should be having that are really, really, really important.

So what we would encourage the Government to do is take a step back and look at what broader consultation and work we can do to genuinely put our Te Tiriti obligations first and foremost before our trade obligations, because, ultimately, if we are thinking in that framework, then in the way that we engage in trade, unfortunately, we’ll be putting those interests before deals that we’ve made that don’t reflect the other pieces of work in Government to move towards a more Te Tiriti - centred way of working. So for that reason, the Green Party won’t be supporting this bill at second reading, and we look forward to the contributions from the rest of the speakers in the House.

MARK CAMERON (ACT): Thank you, Madam Speaker. It’s a pleasure to rise on behalf of the ACT Party to speak to the Plant Variety Rights Bill. I just want to note the previous remarks from my Green colleague where he noted that the Treaty obligations should be in front of trade. I find that a striking indictment, given that we are a primary-producing country at the bottom of the world with about $50 billion - odd worth of product that goes north of here, so how you balance that view I’m not quite sure to be quite honest.

But none the less, the plant varieties bill speaks to acceding to the International Convention for the Protection of New Varieties of Plants (UPOV-91). I think we’re all cognisant of the importance of staying in line with our trading partners, and I’ll name a few. Just for the sake of the House, I wasn’t in the select committee that sat through the first submission process so I’m not intimately versed, but I will go back and name a few of the countries. I believe it was South Korea, Australia, Russia, Canada, USA, and others that have acceded to UPOV-91, and we are arguably outdated.

It came to my attention through talking to some interest groups that did speak to the concern of what the plant varieties legislation meant for them that there had actually been no cost-benefit analysis done by the Ministry of Business, Innovation and Employment in regards to what ultimately this piece of legislation would bring to industry in terms of additional cost.

Just quickly, for the sake of the House, ACT does support this bill in the second reading. But there are reservations in it—and let’s just go back.

The International Union for the Protection of New Varieties of Plants (UPOV) is an inter-governmental organisation based in Geneva, and the mission of UPOV, which currently has 77 member States, is to provide and promote an effective system. So I think we all agree on how deeply important it is to protect intellectual property (IP) to create an environment in New Zealand that those that come to New Zealand to invest in IP have the protective mechanisms and frameworks to support that investment. Seventy percent of the plant varieties sanctioned for investment here in New Zealand come from offshore and there are—as you can imagine—for many, many international partners that would choose to invest in that technology in New Zealand a degree of reservation.

As you can imagine, the ACT Party—and I think this was canvassed by our National colleagues earlier—highlighted concerns about the commitment to adhere to the Treaty elements in the legislation. Now, this is not that we have umbrage with New Zealand’s adhering to our Treaty obligations. Where the issue comes in is that there is a designation for a plant varieties committee that speaks to taonga and kaitiaki and the likes. When we are making determination of what is taonga species—and I just want to mention the previous member Rachel Brooking, who brought up kūmaras. I live in Northland. I’ve been there for 33 years, and I see kūmaras going in the ground every spring and coming out in early summer. I can also tell this House the amount of investment in technology—IP in this instance—that has gone into that industry has by virtue had significant investment. A lot of it has actually come from overseas. I know a lot of growers in Northland travel overseas routinely seeking to get better hybrids and better hybrid technology, and by virtue of that are investing significant money doing so.

When we talk to what the plant varieties committee will do and what it will mean for those that seek to invest in plant varieties and IP and the technology there in New Zealand, I think it’s important we actually engage in the discussion of what their role is, and I’ll just quote verbatim a couple of parts. In Part 5, I believe it is, clause 56: “The functions of the Māori Plant Varieties Committee are to—(a) issue engagement guidelines and provide advice to applicants for a PVR and kaitiaki:”. Well, that’s fine and we take no umbrage with that, until you’re an investor, and we are deeply concerned that the kind of language that this committee is emboldened to engage in will stifle and mitigate those that have a desire to invest in IP here in New Zealand.

I mean, how do you determine that? The fact is that there are five people on that committee, the same number of people as was aforementioned in the industry, and it references that taonga species must be clearly defined. Well, that’s interesting when we have 70 percent of the technology coming from offshore.

A couple of the things that submitters raised with me after the fact—and I reiterate I wasn’t on the select committee. Adherence to the UPOV-91 wording is critical. The wording used in the international UPOV-91 convention is replicated in the new Act. The draft of the new bill departs from this and has a number of important clauses which will not only create confusion in the international breeding community but may isolate New Zealand due to its bespoke wording.

Again, I reiterate the point that ACT does support this bill, but it seems that it needs to go through further consideration—go back to select committee, have the kinks ironed out. There is every reason to support those that invest in this kind of technology in the world of climate change, and others—in the horticultural industry especially. It’s deeply important we get the framework right that not only adheres to our Treaty obligations but, equally, does not disincentivise those that would seek to come to New Zealand and invest potentially hundreds of millions, if not billions, of dollars in their IP here for development.

ACT will support the bill with reservations and, alongside our National Party colleagues, we’ll be tabling Supplementary Order Papers to square away our concerns. Thank you very much, Madam Speaker.

NAISI CHEN (Labour): Thank you, Madam Speaker. I rise today not only as a member of the Labour Party but also a proud member of the Economic Development, Science and Innovation Committee. Just for the benefit of the member Mark Cameron, who has just resumed his seat, I’d like to relay back to the House of all the process—the painstaking process—that we have gone through during the select committee process to actually consider all of the details that the member has just mentioned and has just questioned. I just wanted to start off by thanking not only my colleagues on the select committee and our chair, Jamie Strange, but also every single submitter.

My relationship with this bill started at Fieldays last year. For the very first time, I had people come up to me—I might say it’s in the member Angie Warren-Clark’s electorate, right? Yeah, your people in your electorate came up to us during Fieldays and really passionately expressed their opinions on this bill. So I still remember that that started way before it had even gotten to the select committee process.

But I thank every single submitter to the select committee. We had lawyers and people who are very, very experienced in dealing with the International Union for the Protection of New Varieties of Plants (UPOV) and the Plant Variety Rights Bill—sorry, the Act, the one that we had previously. We had, obviously, growers, we had investors, we had exporters, and we had different types of farmers as well. All these people came to our select committee to give us their opinions from the ground, grassroot-based and reality-based, and their suggestions on how we could improve this bill, and improve this bill we did.

I think the legislative process for this bill was one of the ones that I remember most vividly, because for the very first time there were submitters who actually brought packets of seeds into the select committee room to make sure that we knew what we were talking about. We were actually legislating for plant varieties and we actually got to see the things that we were impacting—they were bags of seeds. But, actually, bags of seeds were probably the least of our—I think we all kind of knew.

But I just want to turn the House’s attention to the topic of potatoes. Now, do members in this House know that potatoes don’t grow from seeds? That was probably something that I didn’t think about before I had started on this legislative process for this bill. Potatoes grow from potatoes, so when we had mentioned the word “seed” in the Plant Variety Rights Bill, there were submitters—potato growers—who had come into the select committee room to remind us, or to make sure that we had not only legislated for seeds but also potatoes, because, obviously, seeds don’t actually cover potatoes, and, gosh, potatoes are so important to the New Zealand diet, aren’t they? We have all these different types of varieties of potatoes—

Tangi Utikere: Hot chips, potato chips.

NAISI CHEN: Hot chips, that’s right—for roast, for mash, and all the different consistencies, the taste, the colour. So we have to make sure that we have a robust enough bill to make sure that we protect all of that intellectual property to make sure that in our economy, whatever we’re exporting or importing into New Zealand, we uphold the vigorous protection of our intellectual property of all these different types of plants.

Also, one submitter that I remember very fondly told us the process, the love, and the labour that they have to go through in terms of actually getting a plant variety right registered. We heard from them that understanding a development of any new variety could take up to decades, and that new technology actually would accelerate the development.

Also, the level of investment now in modern-day New Zealand is actually really high. So the reason why we’re supporting this bill is because this bill will actually protect the hard-earned money of all of the investors in terms of what they’ve put into our industry to support not only the domestic market in terms of our food supply but also our exporting market, which we’ve seen has stayed so strong in these COVID days. We have really seen that being a real pillar of strength in our economy.

The reason why we’re able to recover so much better from COVID is because of that strong export number. So this bill will make sure that we have a good enough system for us to protect the money of our investors in the industries to ensure that our exporters stay strong, and also for us to meet our international obligations under the International Union for the Protection of New Varieties of Plants to make sure that we have aligned ourselves with our international partners so that if they have registered their plant variety right here in New Zealand, they will be afforded the similar levels of protections across the world.

During the select committee process, we had also thought very, very deeply about whether we should be following the Australian model or the European model, knowing that there is a bit of difference currently. But we had a tip-off from one of our experts, actually, that the Australians would be changing their approach as well, so that’s something that I do look forward to a bit more progress in this space as we go through our legislative process as well.

We also, as a select committee, looked at the appeals process for the Māori side—for our commitment to the Treaty as well. So I’m very happy, as a member of the select committee, that we were able to implement the new Māori Appellate Court to be able to have their rights of appeal through this process.

So, through and through, I thank my colleagues on that select committee for the thorough work that we’ve done in terms of our part of this process, and I do look forward to seeing this bill go through the House. So I commend this bill to the House.

JOSEPH MOONEY (National—Southland): Thank you very much, Madam Speaker. It’s a pleasure to rise as the member for Southland in the second reading of the Plant Variety Rights Bill. National supports this bill. This bill replaces the Plant Variety Rights Act 1987, which is now over 30 years old—older than some members in this House—and has not kept up with changes in the plant breeding industry. The bill implements an updated regime for plant variety rights. It expands the protection provided to plant breeders in a number of key areas to better safeguard intellectual property rights for new plant varieties. This includes providing protection to, essentially, diverse and dependent varieties.

The more than three-decade-old Plant Variety Rights Act is no longer fit for purpose. Reform was attempted in 2005, but didn’t materialise. The current system means that New Zealand is an outlier relative to our key trading partners, being Australia, Canada, the EU, Japan, and the US, who are all parties to the International Convention for the Protection of New Varieties of Plants. Aligning our legislation with the International Convention for the Protection of New Varieties of Plants will give plant breeders a predictable and strengthened intellectual property rights system in order to continue to invest in and provide improved crop varieties for the benefit of New Zealand farmers and our country.

There are many significant benefits of gaining improved access to new and innovative products across the pastoral, arable, and horticulture sectors, where New Zealand has important domestic and, particularly, export markets. It’s hard to imagine a situation where plant breeders aren’t able to secure strong legal protections for their plant intellectual property rights and to obtain a sufficient return on the investment. This would potentially result in some breeders questioning whether to bring their plant varieties to New Zealand or to continue their local research and development, which wouldn’t be beneficial for New Zealand.

According to the New Zealand Plant Breeding and Research Association’s submission, New Zealand companies collectively spend over $35 million annually on plant breeding activities. Plant breeding involves a considerable investment of time and resources. It typically takes around 10 years and millions of dollars to develop a new variety for market. Moreover, when breeders start to develop a new variety, they rely on long-term assumptions about what farmers need and what end users such as food and beverage processors, feed manufacturers, etc., will want in 15 to 20 years’ time from now. They factor in a range of assumptions about future needs.

This all means that this bill’s updated and strengthened plant variety laws are necessary for New Zealand to remain competitive with our overseas markets. Aligning our plant variety laws with the International Convention for the Protection of New Varieties of Plants will help planning for plant breeding in New Zealand for the long term and incentivise the development and release of new cultivars for farmers.

On this point, I refer to KPMG’s 2021 Agribusiness Agenda report, which was issued at Fieldays last year. That report noted, “without the right [plant] varieties it does not matter how much land is planted, [New Zealand] will never create the premiums we are looking for.” That report also noted that we need the right legislative protections surrounding plant variety rights to secure the most modern cultivars.

As National’s spokesperson on Treaty of Waitangi negotiations, I spent a little bit of time on this bill’s approach to implementing the Crown’s obligations to the Treaty of Waitangi in relation to the plant variety rights regime. The legislation will bring into existence a Māori Plant Varieties Committee. That plant varieties committee will consider all applications for a new variety where the variety is wholly or partly derived from a taonga species, and where the material from which that variety was sourced in New Zealand. They will assess the effect of the grant on the kaitiaki relationships, and, in contrast to the Māori advisory committee under the Trade Marks Act 2002 and the Patents Act 2013, the Māori Plant Varieties Committee will have the power to make decisions on whether the plant variety right application should proceed, which are binding on the Commissioner of Plant Variety Rights.

The committee will also have advisory roles, providing non-binding advice to the commissioner on whether use or approval of a proposed denomination for a plant variety is likely to be offensive to Māori. Information relevant to the applications are: novel, distinct, uniform, stable, and denomination criteria. National believes, however, that the scope and function of the Māori Plant Varieties Committee needs to be clarified. We believe the scope of the Māori Plant Varieties Committee should be limited to an advisory body, as recommended by the Waitangi Tribunal in their Wai 262 report: Ko Aotearoa Tēnei.

There are precedents for advisory bodies. Māori advisory committees operate under both the Trade Marks Act 2002 and the Patents Act 2013 to advise commissioners whether proposed trademarks are likely to be offensive or whether commercial exploitation of an invention proposed for patent registration would be likely to be contrary to Māori values. In Wai 262, the Waitangi Tribunal recommended that the commissioner be supported by a Māori advisory committee in his or her consideration of the kaitiaki interest. National believes the Waitangi Tribunal’s recommendation is a more balanced arrangement—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! The member’s time has expired. I call Marja Lubeck—five minutes.

MARJA LUBECK (Labour): Thank you, Madam Speaker. It’s an absolute pleasure to be able to take a call in the second reading of the Plant Variety Rights Bill. Now, I was not a member of the Economic Development, Science and Innovation Committee, which we normally refer to as the EDSI Committee for obvious reasons—superbly chaired by my colleague Jamie Strange—but I have learnt a lot from listening to the previous speakers, and quite interesting facts, such as are pertaining to, for example, potatoes, like I heard from my colleague Naisi Chen.

I just wanted to sort of go back to what this bill is actually about, because we’ve heard a lot of facts and there are a lot of abbreviations mentioned in this bill that I will probably use myself, but it’s important that we remember that what this bill actually does. It repeals an old bill. I think my colleague Joseph Mooney, the previous speaker, said it was 30 years old. I can’t quite recall, but I think that’s what he said—1987. Yeah, it must be a bit older than 30 years. What it would implement, then, is a type of intellectual property right granted to breeders of new plant varieties. So it modernises that plant variety right or PVR regime to account for developments in the plant breeding industry.

Also, as we have heard quite extensively from my colleague Rachel Brooking on kaitiaki about the Crown’s obligations on Te Tiriti o Waitangi as well as under the CPTPP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—it’s those acronyms that get me, trying to read through all the material. Of course, meeting our obligations under the CPTPP opens the door wide open to progressive free trade for New Zealand’s plant breeders and gives them certainty that their intellectual property rights will remain protected.

Now, the committee did a lot of work in their proposed amendments and made changes, for example, to clarify the bill’s intention in clause 3, “Purposes”. Also, where some submitters had argued that the definitions were too narrow, the select committee agreed with that particular submission and made some amendments to clarify that the provision was not intended to limit the Crown’s general obligations.

Now, it’s really important to support this bill, and, obviously, from the previous speeches it’s clear that there’s widespread agreement on this bill. New Zealand has a thriving plant breeding industry underpinned by a very strong and innovative research community. So what the changes will do is they will strengthen our local industry but at the same time they will make New Zealand a very attractive destination for foreign breeders that are looking to bring their investment abroad.

But having the uniqueness that we have here in New Zealand brings with it also certain obligations and responsibilities. So in addition to supporting the plant breeding industry for the benefit of all New Zealanders, we must also ensure that we do adhere to our obligations under Te Tiriti o Waitangi. So the changes in this bill will give Māori a direct say in how kaitiaki relationships with our taonga plant species should be protected within the plant variety rights regime.

The Government’s goal is to create a productive, sustainable, and inclusive economy where the interests of both businesses as well as consumers are protected. I believe that is what this bill does, and therefore I commend it to the House. Thank you, Madam Speaker.

ANGIE WARREN-CLARK (Labour): Thank you, Madam Speaker. It’s a real pleasure to stand and speak on this bill. I got to speak in the first reading of this bill, and as a result of that I was very fortunate in that BLOOMZ New Zealand came to see me and speak to me about the bill itself, because, obviously, when we sit in the House sometimes we get bills that we don’t know very much about. So I’d just like to do a wee shout-out to Louisa and Andy from BLOOMZ New Zealand, who are a local Tauranga business, who came and spent a good hour, two hours, talking to me about why this bill is so very important to a very particular niche community. So a wee shout-out to them. I’m sure they will be watching because, in fact, they watched the first reading, which is often missed by a lot of people. So, first and foremost, thank you.

So it was not tongue in cheek to Minister David Clark that I actually did get up and say that I was really happy to speak on this bill, because I found it fascinating. I literally found this bill to be fascinating. It has so many facets and applications across so many areas in our community that, actually, while it is quite a big piece of legislation, there are so many things to talk about around this bill.

First and foremost, I do want to just acknowledge the Minister of Commerce and Consumer Affairs, the Hon Dr David Clark, for getting this bill to the place that it is in, and Jamie Strange and the Economic Development, Science and Innovation Committee. So there are only five members on that select committee, and we’ve heard from Naisi Chen and Jamie Strange from our side, who are on that committee. Their contributions, I think, were so much easier and enjoyable because they were actually sitting there in the process. So there were, I understand, 38 submissions and 20 of those were oral submissions, and I imagine they were quite in-depth because this is a group of really passionate, fascinating people.

So we’re here talking about the Plant Variety Rights Bill, which replaces the Plant Variety Rights Act of 1987, and what we know is this is about the intellectual property rights granted to breeders for plant varieties. Now, I live in the beautiful Bay of Plenty, the home of the kiwifruit and the home of the avocado, so this is an incredibly important aspect for our community because we are, in fact, the beneficiaries in our community of an amazing amount of industry export that actually really keeps our community going. So what we do know is that there was $3.96 billion in fiscal 2021 in regards to kiwifruit. It was a record year last year, and it looks like SunGold and green and red are, in fact, again going to smash that last year. So it’s really important for our community.

We have this reputation in the world for high-quality, safe food, we have excellent growing systems—I’d like to talk a little bit about eliminating food waste, but I will do that another time—and we have lots of novel products. So this is one of those pieces of legislation that really improves things.

The previous Act was aligned with the UPOV-78 convention. So everyone has said it, but I will say it again: it is the International Convention for the Protection of New Varieties of Plants—UPOV. This bill basically moves everything forward into the 1991 convention, which is the most common convention.

We’ve heard from a lot of people, and I’d just like to acknowledge my colleague Rachel Brooking, who talked with some real authority about the Tiriti of Waitangi areas of this bill and how Wai 262 has been applied. So I don’t actually want to talk on that particular aspect—I think that’s a really fascinating aspect, and I think we’ve got the balance right there.

Nevertheless, I would like to talk about a couple of other things that haven’t been raised today, and this is from my background of geese farming when I grew up, and also from my mother, who is a gardener. One of the things we know about gardeners is that they do cuttings and they do seeds and they do swapping and they do those kinds of things. Now, this bill doesn’t apply to those particular private gardeners, but there is a very interesting test that does apply. It’s the farm-saved seed exception, and I want to talk about that because this is one of those things we know that our farmers are doing out there.

So a farmer grows a crop, she harvests that crop, she collects the seeds, the seeds get kept over that winter period or over a period, and then it’s used to be sown again the next year. Now, there is a limited life in how long that can last or how long that can happen, but, nevertheless, there is a carve-out here: an exception that actually allows people to grow crops and gather the seed and keep the seed. What the exception makes very clear—and I think this is very sensible—is that you can’t then onsell that seed. You cannot take away the right of the licence owner to do that, but you can, in fact, do your normal planting, growing, and yield processes, and I think that that’s a really useful practical application.

So I’d also like to, in the last three minutes—gosh, I could talk on this for a bit more than that. I remember when BLOOMZ New Zealand came to talk to me and they were a little bit concerned about the loss of the Plant Variety Rights Office. So the reason they were concerned about that is that, essentially, that was the place that everyone knew where to go. So the rights office was going to be closed down and it was of concern to them—and a concern, obviously, in the submissions that we saw—that this was going to happen. It’s a very small, little area within the Ministry of Business, Innovation and Employment. It’s a unit within, not information technology—I’ve lost the word—but it’s a very small, little unit, and this bill is actually saying that we don’t need to get rid of it. We don’t need to get rid of this expert little area where we can actually go and we know we can lodge everything and we know what we can do. So that is being kept as well.

Look, like I said, I found this bill quite fascinating and I’ve really enjoyed speaking on it. I appreciate the work and the submissions, and thanks to the Minister for bringing it to the House as well. I think my time is probably up, but I commend this bill to the House.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Speaker. I don’t usually like to start a contribution by agreeing with Labour members, but I’m actually going to do that in relation to a couple of them. So, firstly, Naisi Chen talked about the importance of the potato in New Zealand’s culture, I don’t think it’s too far to say. As a starchy, white matter, best consumed in moderation, myself, I feel I’m uniquely qualified—well, not uniquely qualified, but well qualified to speak on the virtues of the potato, so I thought I would chip in there, Madam Speaker.

ASSISTANT SPEAKER (Hon Jacqui Dean): Oh no—order! We can—

CHRIS PENK: There’s the one—come on!

ASSISTANT SPEAKER (Hon Jacqui Dean): No, that’s too—no.

CHRIS PENK: The other member with whom I’m going to have to agree is Angie Warren-Clark. She said that it’s a fascinating bill, and, actually, I would reluctantly agree with her. But I found other aspects more fascinating than others, perhaps. So I’ll trouble you to go through at least some of those in as close to 10 minutes as I can manage. My colleague and friend Joseph Mooney gave, basically, a 10-minute speech that he did his best to compress into five minutes. I don’t want to lift the curtain too much on the internal workings of the National Party, but suffice to say I am going to give, basically, a five-minute speech that I’m going to try and compress into 10 minutes, Madam Speaker, so wish me and everyone luck.

The reason that I do actually find the bill quite interesting at this, its second reading, is that it is at the intersection of a number of different other bits of law and other kinds of law such as the Treaty of Waitangi, as others have mentioned, and Rachel Brooking, among others, has given somewhat of a dissertation on that, very helpfully. But also I found really interesting the international obligations and the way that this bill interacts with those and actually reflects the way that they interact with each other.

So, first of all, I guess it’s worth pointing out the overall purpose of the bill—lower case “p”. I mean, it’s got a purpose provision, of course, and that’s significant in itself. But the whole—

Hon Paul Goldsmith: Get to the point.

CHRIS PENK: —basic idea—Mr Goldsmith urges me to get to the point. I’m trying very hard not to, Mr Goldsmith, in the way that a bad lawyer can delay a trial by weeks, and a good one by months. I’m two minutes in and just sort of getting to the purpose of the thing, which is, of course, to update an existing bit of legislation, the 1987 version thereof: the Plant Variety Rights Act 1987. So it’s in the manner of an update, and part of the reason for the update, apart from the fact that it’s worth having a looking at something that’s been on the statute book that long, is to reflect on the fact that that, in turn, was ensuring that we met international obligations. Those have changed, so it’s appropriate that this legislation, in turn, also changes.

Of course, there have been discussions and, indeed, findings of the Waitangi Tribunal that are relevant. The decision known as Wai 262 has already been referenced, so I won’t go any further down that path, but suffice to say that there is a body known as the Māori advisory committee—abbreviated to MPVC within, for example, the legislative statement and, no doubt, the bill itself—which is established, effectively, by a recommendation of the Waitangi Tribunal in relation to that particular case. The other key recommendation which flows through to this legislation is the grant of a PVR, which is to say—he said, looking for the acronym—a plant variety right, essentially, and to refuse that grant if that would affect a kaitiaki relationship with a taonga species—that is to say, something that has value or is treasured, I suppose, in that sense, in the nature of a plant variety.

Others have talked about what it means to have a plant variety, and, of course, not merely identifying or defining that as a “seed” but as other sort of forms of plant as well. I’m not a botanist by any stretch of the imagination, but I do recognise, of course, that that’s important that we fairly recognise the importance of good coverage in that sense.

So the bill does a number of things that I think are quite interesting. One is that it encourages breeders to seek to identify kaitiaki and engage with them. My understanding, as best I can know without having participated in the select committee process, is that that should form part of the basis of an application and would be a relevant consideration in the way that that’s viewed in terms of whether an application is approved or not, and that information is confidential within that process. So it’s encouraging that relationship and encouraging that consultation, but it might be that, I suppose, a specific kaitiaki is not identified at that point, in which case, the committee would have the job of considering the impact if a PVR—the plant variety right—were to be granted, and the effect on kaitiaki relationships with Māori in general. So that seems the basic sort of mechanism of how that operates, and I think that seems pretty sensible to recognise existing rights, as I say, under the Treaty of Waitangi, but I think it’s also worth talking about the international obligations—so I’ll do that now, with your indulgence, Madam Speaker.

So the obligations in the first instance come from the CPTPP, which is one of those abbreviations that sort of seems harder, if anything, than the whole thing. It’s like World Wide Web, which, of course, is only three syllables, and you get www, which is nine of the buggers—nine syllables, I mean, Madam Speaker, and for the Hansard. So under the CPTPP, we hear that New Zealand is required to “either ‘accede’ to,” UPOV-91—to which I’ll return—“or ‘give effect’ to” UPOV-91 through a sui generis system. So lots to unpack there, even leaving aside the split infinitive “to either ‘accede’ ”, but I think, other than that, it’s probably not terribly objectionable.

So the UPOV-91 is, of course, the International Convention for the Protection of New Varieties of Plants, and that obligation that we have to various other nations within the international rules-based order is given effect to within CPTPP—which we all know so well that I won’t bother to spell it out. What we’re hearing there is that New Zealand either needs to give effect to that under the most recent version of that international convention, or to say that there should be a system where there is a recognition in a sui generis way. So for those who have enough Latin to have fudged their way through law school, they’ll recognise that that means something that’s unique or, literally, in itself—a class of its own, I suppose we might say. It’s somewhat oxymoronic because, of course, if something’s by itself, it’s not really in a class. But anyway, there we go.

One way or tother, we do need to recognise this international obligation, so the bill does help us to do that because it’s got a number of key provisions that reflect the strengthening of plant breeders’ rights within UPOV-91. One of these is extending the exclusive rights to those who are given the right to include production or reproduction, conditioning, selling or offering for sale, importing or exporting, and stocking for any of those purposes. But it does actually, at the same time, provide exceptions for the rights of private and non - commercial use experimental purposes, which I presume is important in an R & D kind of a way, and it extends the terms of a PVR—the right itself—and that’s consistent with the minimum requirements in UPOV, which I understand are 25 years for woody plants and their root stock and potatoes—they’re our potatoes; we’ve been looking forward to those—and 20 years for all others.

So, again, it’s a matter of consistency and alignment, and I think that there are some pretty good lawmaking practices that have been reflected in the bill as it comes before us. To some extent, these probably reflect the work of the select committee. I think I’m looking at the select committee chair across the way—I am. I’m getting a nod from Jamie Strange. He’s claiming it, in any case. So congratulations to you, sir, and your team for working hard on this bill. It seems to me just from where I stand as an outsider to that select committee process that it appears as though there’s been a really good, robust discussion and a constructive one at that, so we probably have in front of us a bill that is all the better for it.

So the public interest test for compulsory licence is probably quite self-explanatory. I wouldn’t even mention it, except that I have, so there we go—moving on—but we also have got the repealing of the offence provisions in the previous version of the Act, and we’re here because they’re adequately covered by the pieces of legislation. I think that’s good lawmaking to say that where in the statute book we’ve got coverage and overlap, we don’t want either duplication or contradiction between different pieces of legislation, and, on a similar note, to provide remedies consistent with other intellectual property regimes. So we are concerned about intellectual property, of course, and I do acknowledge, of course, that cultural considerations, research and development, technology, and lots of different public policy areas do come together. But at its heart, it’s recognising the right of a person or of a people, again, with that tangata whenua element emphasised—but it is their right to have a particular relationship, so to speak, with different plant varieties that we’re concerned with.

So there’s a lot going on in the bill. At this, its second reading, National, as we’ve said, does continue to support its passage through the House. I do commend the bill to the House.

TANGI UTIKERE (Labour—Palmerston North): Kia orana, Madam Speaker. It’s a pleasure to rise and take what I think is the final call on the Plant Variety Rights Bill. Can I just acknowledge our colleague Mr Penk, who has filled his 10 minutes covering Latin acronyms and then some. So can I congratulate the member on doing that.

Can I also just acknowledge the Minister of Commerce and Consumer Affairs, the Hon Dr David Clark, for his leadership in this space in bringing this bill to the House. It is a piece of legislation that is seeking to reform a number of issues and matters of a plant nature that is 30 years in the making. Can I also just acknowledge the chair and hard-working members of the Economic Development, Science and Innovation Committee. I think colleagues this afternoon have indicated that that is a small select committee, but no doubt it is a hard-working one, Mr Strange. While I don’t sit on that select committee, I have had the joy and benefit of being in a joint hearing with the committee, so it’s keen to see how collegially that committee works.

I see from the committee’s report that it received 38 submissions and heard 20 oral submissions, whether they be from individuals, organisations, or other entities. So it had in front of it, as a select committee, quite a bit of information to digest and has returned a report to the House that has identified a number of changes.

As Mr Penk recently touched on, one of the matters for alignment in this legislation is that of an obligation and responsibility under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and he certainly did a good job at explaining that, so I won’t canvass that information or that area again. But in a sense, I guess, it’s about ensuring that there is a sense of consistency, that internationally there are standards and there are protections, and that New Zealand as a country is able to have a regulatory regime when it comes to plant varieties and the rights thereof that captures and encapsulates that. That’s the first thing. The second, in relation to the purpose, is that this bill seeks to deliver on the Crown’s responsibility under Te Tiriti, specifically around the relationship when it comes to kaitiaki and that relationship with a species and, in particular, with species that could be identified or defined as a taonga species.

This bill seems to me to deliver in that area of flora and fauna—of course, flora, because that is, effectively, plant species. But I reflect on my involvement with the Environment Committee, and certainly there is much flora and fauna in that space and much biodiversity. I know and I share the excitement that our colleague Angie Warren-Clark expressed to the House this afternoon in that this is something that, effectively, got the blood going, and the juices flowing, as well, and I reflect on the Parliamentary Commissioner for the Environment’s report on weeds, because that, in essence, was also something that was quite similar, actually—and I look to my colleague Rachel Brooking, who plays a leadership role in that select committee. While we didn’t have potatoes as a form of tubers being smacked on the select committee table by the parliamentary commissioner, the fact that the committee had in front of it seeds was, I guess, going to the heart of what was in front of the committee, both on paper and literally as well.

I have to say, I’ve learnt quite a bit from the select committee and from the contribution of parliamentary colleagues today on the potato. I don’t intend to go through or touch on any of those puns, but, as a tuber, extending the coverage from 20 years to 25 years identifies the complexities and some of the issues that that particular item has as part of this regulatory regime.

I heard earlier this afternoon the Hon Judith Collins talk about the significance of research and development, and, in particular, the importance of innovation and research and development in that space. When I look at this bill, it goes some way to delivering on that, and that’s really important that we do have strong, skilled researchers in Aotearoa New Zealand. I have to share with the House that most of them actually come from Palmerston North, because we have a very strong sense of research, innovation, and development with our Crown research institutes, Crop and Food Research, FoodHQ, and many others on the doorstep of Massey University. So this is really important to my electorate and the people in the electorate because it goes quite some way, actually, to underpinning that strong sense of research, development, and innovation, and that’s an important part of this bill.

The bill itself does strengthen recommendations that flow from Wai 262 and that inquiry by establishing a Māori Plant Varieties Committee. The important thing, I think, there is that it’s not just a committee that has an advisory power but it’s one that has a full suite of decision-making powers as part of its responsibility and that its approach to making decisions is by way of consensus.

The individuals within that particular entity, that particular decision-making organ, would go about their business by consensus, and when we actually look at what drives the appointment process for those individuals—it is contained in clause 55 of the bill—the select committee has recommended some slight change in terms of inserting a new subclause (2A). That is where the commissioner—and in this sense, it is the Commissioner of Plant Variety Rights—is seeking to appoint individuals to that Māori Plant Varieties Committee, firstly, the commissioner must consult with the chief executive of Te Puni Kōkiri but also, in appointing individuals to that committee, the commissioner him- or herself must be satisfied that the individuals are qualified.

There are four riders that are identified in the bill that lead to the qualifications that must be present with the appointee. The first is that the person’s knowledge of mātauranga Māori—which is Māori traditional knowledge—is there, or that there is an aspect of knowledge in relation to protocol and culture or tikanga Māori; that knowledge of Te Ao Māori, or the Māori world view, is in existence; or, specifically, around knowledge of taonga species. But also, in making the appointment, the commissioner would also consider whether the individual has standing in the community and has the mana, skills, knowledge, or experience, to be able to deliver on that appointment.

What’s really, I think, quite important is that the bill itself, in terms of clause 55(7), identifies that the commissioner may not delegate the appointment or the establishment of responsibilities to any other person. So in that sense, that responsibility for how that particular organ would be constituted—not in terms of legislation, but the appointments under legislation—is something that the commissioner must make and take themselves.

I want to just also identify that the select committee obviously turned its mind to a matter of process, and that is that where there is a decision that has been made by the Māori Plant Varieties Committee, there currently, as the bill was introduced, was no right of appeal. So what the committee has recommended is that there should be the insertion of new clauses 68A through 68D, which will allow for appeals to be lodged, and that the appropriate appellate court is the Māori Appellate Court. I understand that that might be something that perhaps some heads of benches may have indicated is an appropriate way forward.

Mr Penk and others have briefly touched on the issue of compulsory licences, and that’s contained under Part 7 of the bill, which would allow the commissioner to grant compulsory licences in relation to plant varieties. They are quite a distinct and separate licence in their own right, but they do have some overriding and overarching considerations that the select committee obviously turned its mind to. What the report from the committee identifies is the suggestion of some changes: that when it comes to the propagating materials and also the material that would be harvested, it actually shouldn’t be the either/or; they should be both included in there. Also, there would be a number of issues such as the quantity and quality of the materials that would be up for consideration, as well. So that, I think, is a good example of the select committee responding to the submissions that had been placed before it and, as a result, presenting a report that identifies some good change for the House’s attention.

Just in conclusion—because I see that my 10 minutes is almost up—there are a number of other recommendations that the select committee did identify, and I just want to circle back on one that I think is important. It’s around ensuring that a specific purpose listed within the bill is that of protection for relationships but, in particular, the special relationship that kaitiaki have with the taonga species, and also that mātauranga Māori falls within that, as well. So I thank the select committee for the work that they’ve done and I commend this bill to the House.

A party vote was called for on the question, That the Plant Variety Rights Bill be now read a second time.

Ayes 107

New Zealand Labour 65; New Zealand National 32; ACT New Zealand 10.

Noes 12

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

Motion agreed to.

Bill read a second time.

The result corrected after originally being announced as Ayes 108, Noes 12.

ASSISTANT SPEAKER (Hon Jacqui Dean): I declare this House in committee.

House in Committee

House in Committee

CHAIRPERSON (Hon Jenny Salesa): Members, the House is in committee on the Retail Payment System Bill, the Crown Pastoral Land Reform Bill, and the Maritime Powers Bill. I remind members that they are able to participate remotely. If you’re on the Zoom and want to take a call, please type “call” into the chat. You should also use the chat if you would like to raise a point of order. If we receive a new tabled amendment I’ll advise members so that they can refresh the House papers page to see the new amendment. Finally, it would be helpful for members to ask multiple questions, if they have them, of the member in charge during the call. We come now first to the Retail Payment System Bill.

Bills

Retail Payment System Bill

In Committee

Part 1 Preliminary provisions

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. I rise to offer a few introductory remarks on the Retail Payment System Bill. Transactions, the exchange of money for goods and services, are a fundamental part of our economy. What makes these transactions possible is the retail payment system. These are elaborate networks that process different payment types, and the ones we’re most familiar with, of course, are credit, debit, and EFTPOS card payments. The costs of operating these networks are, ultimately, passed on to merchants in the form of fees and then subsequently, in large part, on to consumers.

Today in the committee, we’re progressing a Labour Party manifesto commitment to lower merchant service fees and bring them into line with comparable economies around the world. The bill does this by establishing a new regulatory framework for the retail payment system. It’s currently unregulated, and I would note for the committee, as has been noted before, that New Zealand’s merchant service fees are set much higher than they are in Australia, and they add significant overhead for retailers, who often pass these costs on to consumers through higher prices. So the outcome of this bill will benefit both small businesses and consumers. In fact, a conservative estimate has the benefit to small businesses at approximately $74 million each year, and, as I say, much of this gets passed on to consumers.

Before I draw this committee’s attention to some of the more notable features of the bill, I’d like to acknowledge again and repeat my thanks to the Economic Development, Science and Innovation Committee for its time considering this bill. They have made some suggested changes which I will touch on. The bill is designed to address certain inefficiencies which are resulting in poor outcomes for many merchants and consumers. As I mentioned before, the charges merchants face for accepting certain payments are high by international standards, particularly credit card and online debit transactions. It just so happens that consumers are incentivised to prefer those more costly payment methods in the current retail payment system.

So competition appears to be lacking in some aspects of the market. The largest retail payment networks are dominated by a few large banks who service both sides of the transaction. They sell payment products to consumers and charge merchants for processing payments that use those products. The various participants in the payment network are often incentivised to keep fees high. Moreover, difficulty accessing network infrastructure is thought to be stifling innovation and the entry of new competitors. So I expect parties in this House that support competition will be right behind the changes that we’re making here.

Small merchants are particularly disadvantaged in all this. They face disproportionately high merchant service fees and have limited bargaining power. On top of that, because smaller retailers cannot afford to lose customers, they are likely to feel they have to absorb the fees rather than surcharge or refuse certain card types. And, indeed, I’ve spoken to small businesses who feel the pressure to do just that and are reluctant to call the banks out on their pricing practices for fear of retaliatory action.

The bill’s purpose is to promote competition and efficiency in the retail payment system for the long-term benefit of merchants and consumers. There are broadly three ways it delivers on this promise. First, it empowers the Commerce Commission to scrutinise and regulate participants in a retail payment network if that network is designated by Order in Council. The commission would have a range of regulatory tools to address competition or efficiency issues in these networks, such as requiring participants to grant access to essential services or network infrastructure. The designation approach allows the regulatory regime to respond to any changes in the system, such as new payment methods that may emerge.

Secondly, the bill will more immediately reduce merchant service fees in the MasterCard and Visa credit and debit networks. It does this through an initial pricing standard that will cap the interchange fees in these networks six months after the bill has passed. I will note now, we thank some of the work that the select committee did on ensuring that that particular effect happens in the right way. Interchange fees are the largest component of merchant service fees and therefore have the opportunity to make the most material difference to the regime in the first instance. Those savings, of course, will benefit merchants and then may well be passed on to consumers. But it’s particularly important for those smaller merchants who don’t have the leverage and also those who rely on credit card or online sales.

The select committee, as I mentioned, has helped to ensure these provisions are effective, anticipating attempts to game the interchange fees by compensating card issuers, because we wouldn’t want to see those interchange fee caps gamed in any way that might be attempted to do that—for example, compensating card issuers for reduced income through other methods. So I do thank the select committee members who have worked on that and produced a more watertight way of dealing with what are called waterbed effects, as it happens.

Finally, the bill affords the commission some control over merchant surcharging practices to ensure they are transparent and do not exceed the actual costs to merchants. I don’t view surcharges as problematic if they merely pass on costs. If nothing else, it makes consumers aware of those costs of accepting certain payment types. But surcharging standards will be used to ensure consumers are not harmed by surcharging in excess of the caps and costs that are in place.

When the bill was read a second time, I discussed a few of the important questions raised by submitters—for example, why do we target just the Visa and MasterCard types in the first instance networks in the initial pricing standard and why not American Express? As the responsible Minister, I’m satisfied the House has now addressed those questions.

I’d like to mention one other matter that I understand the select committee considered in some detail. Under clause 24, the commission needs to approve substantive changes to an operator’s network rules. The select committee considered the practical implications of this requirement in the case of Visa and MasterCard networks, whose rules are extremely complex and not confined just to the New Zealand market. In the end, I understand the committee was reassured by a few observations. Whether the rules in a particular designated network are subject to this approval requirement is entirely at the discretion of the commission. I note the following: the commission must exercise this discretion in accordance with the purpose of the bill, the principles in clause 4, and the criteria in clause 25. In practice, I expect the commission will be selective in how it makes use of directions under clause 24. Before making any such direction, the commission is required to publish its proposal and consult with affected parties. This will help it to identify any genuine practical issues.

A direction requiring its approval of rule changes is just one kind of direction that the commission can make if it has concerns about the impact of rule changes on efficiency or competition. An alternative would be for the commission to require an operator to notify it of any rule changes. If a change then raises concerns for the commission, it could make a direction changing the rule itself after following the same process. These directions do not have extraterritorial effect; they would only affect networks here in New Zealand.

I’m confident the scope of these direction-making powers is appropriate. They’re a good example of the way the bill affords the commission flexibility in finding the most targeted and effective way to intervene in the interests of competition and efficiency, and similar provisions can be found in the UK’s financial services legislation and in the Financial Market Infrastructures Act 2021. The commission ultimately has no interest, let’s acknowledge, in imposing impracticable requirements, whether for participants in the market or, indeed, for themselves and for the network itself. In any case, there are good safeguards in the bill to prevent regulatory overreach.

So to conclude, reducing merchant service fees is a priority for the Government. It delivers on a Labour Party manifesto promise and it supports the recovery of the economy from the impacts of COVID-19. Consumers expect to be able to use easy and innovative payment methods like payWave, and merchants want to accommodate these expectations, but the fees as they currently stand in many categories are too high. This has been putting additional financial pressure on small businesses, on small merchants in particular, and we know that those costs are frequently passed on to consumers. This bill will deliver a more efficient, more competitive retail payment system. It establishes a regulatory regime capable of ensuring the costs of retail transactions in New Zealand will be reasonable, both in the short term but also in the future as the retail payment system evolves due to the opportunity for the Commerce Commission to involve itself as appropriate. This bill will ultimately benefit New Zealand consumers.

CHAIRPERSON (Hon Jenny Salesa): Before we continue, I want to remind members that we are debating Part 1, which is clauses 3 to 9 and Schedule 1.

Hon JUDITH COLLINS (National—Papakura): Oh, that was a very nice speech from the Minister. Thank you. There’s a few things and questions I’ve got for the Minister. So it is designed to, obviously, cut down the costs for retailers so that they don’t have to then pass those on, but is it also going to be useful when it comes to things like retailers who now can’t access banks during normal working hours, when they’re busy themselves, to actually drop off cash? Because that’s one of the issues that I’m getting from retailers. Particularly in Papakura, not one bank is now open and so people are having to go to Manukau, and I think it’s going to be the next stage that the Government is going to look at. Is this bill designed in any way, shape, or form to be able to be amended during the stages of this particular bill to take that into account, Minister?

ANDREW BAYLY (National—Port Waikato): Thank you. Just in a similar vein, I note that Minister David Clark talked about this helping small businesses. As we’ve canvassed in the first and second reading, the economic or financial impacts of this for many small businesses is an absolutely small percentage when compared to the avalanche of costs that the Labour Government has imposed on small businesses, particularly around employment practices etc., which we estimate are nearly $3.5 billion. Yet this bill deals with a very small element, which is the interchange fee charged on transactions. So, in the light of that, the purpose statement in Part 1 talks about “The purpose of this Act is to promote competition and efficiency in the retail payment system”.

So clearly this bill—and we’ll talk more about it when we get to the subsequent parts of the bill—imposes specific costs, or caps the cost that can be charged on the interchange component of a merchant fee. But what I’d like to understand from the Minister is, given the intent of this bill—which is to limit cost and be much more prescriptive around who can be a network operator and the rules that must apply—how in the dickens does this bill help promote competition and efficiency in the retail payment system? Because if you’re a retail payment operator around the world, you’d look at this bill and go, “Gee, that’s a lot of regulation.” Albeit we might be bringing ourselves up to other jurisdictions around some parts of the world, but I don’t see how this is actually going to promote competition and efficiency. Because many people would actually argue this is actually not going to do that—we’re going to get a reverse outcome. So I’d be keen to understand the Minister’s view on that.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. The Green Party is supportive of this bill. As we mentioned in the second reading, we noted that the estimated $70 million in savings while not huge in the context of the broader economy—what we want to understand from the Minister is whether he has an understanding of the distributional impacts of the savings. Who’s likely to benefit, and just for him to give us some broader analysis on that to understand exactly—you know, we talked about the regressive nature of how some of these fees end up affecting consumers. So I guess I’d be keen to get his perspective on how he sees those savings being passed on to those who need it the most.

MELISSA LEE (National): [Member removes mask] Taking off the mask might actually help. Thank you, Madam Chair, and thank you to the members who have actually asked some questions. This Retail Payment System Bill was considered by the Economic Development, Science and Innovation Committee and I’d like to thank my colleagues in the select committee for giving this really good consideration, but as always, with select committee bills, they come in and we deal with it and it actually gets passed back to the House, and we move on to the next bill and sometimes you forget what the bill was about. So I had to go back to my notes to actually try and figure out what this bill was actually all about. Because, you know, sometimes financial things sort of go out of my head.

But in terms of the merchant payment fees that the Minister talked about, I think it might be really important, particularly for people who watch Parliament TV and who are actually listening to this debate, is to perhaps actually talk about what this Retail Payment System Bill literally deals with. I think when we actually talk about the bank charges, a lot of people would have experienced in their time, when they’re either using credit cards or EFTPOS, that there are some fees attached to the services that they are wanting to use. For example, particularly during COVID, people were not able to use the insert option for the EFTPOS terminal because they didn’t want people to touch them, so the contactless payWave system was used and that actually incurred fees as well. So the high merchant services fee that the Minister actually talked about is the interchange portion, which is actually the biggest portion in the merchant service fee that customers are actually charged, which is often what the merchants, as in the shops that we go to, pass on, because it is the banks who actually charge these things to the merchants and the merchants basically pass it on to the customers.

So, effectively, what happens is that the transaction fees are for the use and the, I guess, privilege of using those services, whether it’s actually credit card or contactless payment, and it is literally passed down from the issuer, the bank, who actually goes through, for example, the Visa or MasterCard who actually provide those cards, and the system that actually provides the transaction infrastructure, effectively, means that us, the users of these cards, end up paying for the service. What literally happens is that apparently in New Zealand we pay the highest fees compared to our close neighbours.

So one of the things—I mean there are lots of things to talk about, but I think the Hon Judith Collins actually asked a really, really sensible question, especially because technology is actually moving. I would like to ask the Minister: is the Minister confident that the changes put into this bill will keep up with the emerging technology and digital innovations, including those we may not be able to anticipate due to technological innovation—

Andrew Bayly: What a great question!

MELISSA LEE: —yeah—that we may not even think about today? And is this bill written for futureproofing to make sure that we actually look at those technological advancements in the banking services or transactional services that we may not even think about? So I would like the Minister to answer that if he could, please.

DAMIEN SMITH (ACT): Thank you, Minister. It really is great to see that the Labour Party is embracing competition, and it’s essential, this process, to the economy and we hope to see more of that.

But, as we discussed, we still have a couple of concerns around the competitive landscape in this bill. In the ACT Party, we like to promote a transparent market with a level playing field, so one question I have which we’d like clarification on is that the bill only regulates MasterCard and Visa, and not other card payment systems such as American Express or Diners Club. Just to declare an interest, I do have an American Express card and a MasterCard, but with an American Express card, as an example, there is a higher cost to small business. Leaving them outside the payment system regulation increases the cost to small businesses, especially if their usage grows, and it’s not just one card but there are a series of companion cards you can get, as well. So we’d just like to ask the question that the Minister will ensure a level playing field, just like other jurisdictions in Europe and Australia that have included American Express in their regulatory frameworks.

The bill also calls out MasterCard and Visa for regulation where other existing players are not included in the proposed initial regulation, so we’re trying to get the commission to make sure that there are no regulatory gaps and imbalances. International experience does show gaps and imbalances will be exploited, with potentially poor outcomes for consumers and businesses.

The final part of our question set is that the interchange flows between the merchant bank, the cardholder’s bank. In other markets which have regulated a reduction in the interchange, it has not been clear that the savings have actually been passed on to the merchant banks or to other participants in the ecosystem. So actually being confident that retailers and consumers will get that is questionable, and in terms of the cost-benefit analysis, there seems to be a lot of money to set up the administration of this, whereas if you take the millions of transactions that are out there, the savings are relatively low. All of the main issuing banks in New Zealand are also acquiring banks, so they’re all superior to just issuers or just acquirers. So the final part of the question is: what guarantees do we have that the proposed $74 million will not get stuck in the system and will get to businesses and consumers? Thank you.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): There’ve been quite a number of wide-ranging calls so far. Many of them have offered some commentary on the general flavour of the bill, and very few questions pertaining to the part we’re in, but I’ll work my way through each of the contributors none the less. In answer to the Hon Judith Collins’ question: no, cash is not a payment network so it does not address the issue that she’s raising on behalf of her local constituents.

Andrew Bayly—well, as he himself pointed out, his initial contribution addressed a number of issues that we’d come to when we came to that part of the bill, and so didn’t really address Part 1 of the bill. He spent a lot of time talking down the economy and not acknowledging the 5.6 percent GDP growth that there has been in the economy and the triple A ratings that New Zealand’s had from the rating agencies recently—something that’s very rare in the world. The extraordinary leadership of the finance Minister, Grant Robertson, has to be acknowledged. As a result of his general negative talk about the economy, he doesn’t seem to have faith in businesses in the way that the Labour Party does, but there we are—that’s his prerogative. I’m sure he will raise relevant provisions in the other parts; he frequently does.

In respect of Ricardo Menéndez March’s question around how savings are passed on and, given the regressive nature of some of these fees, I think that is worth picking up. And the point I’d make is that EFTPOS is free to merchants to use, including small merchants. Often you’ll see with small merchants they say “no payWave” or “no credit”, and they apologise for it. It’s because they can’t bear the costs of doing business associated with those other networks. And under the designation here in the bill, EFTPOS will remain free. So actually one thing people can do to help support small businesses, which are often local or doing it tough, is to use EFTPOS where they can. Of course, payWave, in times where we’re concerned about a pandemic, has its merits too, and that doesn’t have particularly high fees. So we are regulating to make sure that they do not go higher. But there is a regressiveness built into the system currently whereby often those who are using those methods are, effectively, subsidising those who have rewards systems through some of the more sophisticated credit card networks. And we want to put a cap on that kind of behaviour, and that’s one of the things this bill achieves, so I do thank that member for raising that issue.

Melissa Lee suggested that she would in her contribution remind herself and the House what the bill is about, so that was most of her contribution. But she did ask the question whether changes in the bill will enable—well, whether the bill is futureproof for future changes. As I mentioned in my initial contribution, yes it will be. And that’s one of the reasons we’ve given the Commerce Commission discretion, because there will be adaptation and new payment methods that come on to the market.

In respect of the member Damien Smith’s contribution, he raised again the question that was covered in previous readings around why we’re regulating MasterCard and Visa and not American Express or Diners. The reasons have been canvassed in the House before, but I think it’s useful to air them again. That is in large part because they’re a very small part of the market. They don’t charge interchange fees, which is the thing that we are regulating here, but they can be designated. The Commerce Commission will have the power to designate them if it feels that is becoming a problem issue there. But I would acknowledge as well, while the other cards have capped fees in order to be competitive in the market, those smaller players will have to adapt to the conditions.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I see the Minister’s starting out in the normal vein—he normally does something very dismissive. So, first comment, can he confirm the annual savings this will have for all the small businesses he’s reputedly standing up for, whether in fact it is $6 million a year, because the figure was quoted before. That would be nice if he could confirm that this is a $6 million saving to the roughly 530,000 small businesses across New Zealand.

The second thing, in relation to my question—it was quite a specific question, it was actually related to clause 3, the purpose—and I’ve read it out to him just to be very helpful to him. My question was: how does this Act promote competition efficiency? Not in the general economic or “New Zealand Inc.” perspective which he responded to, around what Labour was doing to help New Zealand businesses—but the purpose relates to the retail payments system. So what does it do to promote competition efficiency? I understand where the bill seeks to reduce the cost of certain elements, but that’s different from promoting competition and efficiency. And how does this go about actually allowing other network operators to come into New Zealand and making sure that we are ending up with an even lower cost that is driven by the market rather than through regulation, which is the chosen method that the Minister always likes to take in relation to the financial markets industry: regulate, rather than allow the markets to operate more efficiently?

MELISSA LEE (National): I completely agree with my colleague who just sat down, Andrew Bayly. In terms of the purpose, in this part the bill actually does talk about promoting competition and efficiency in retail payment systems. But I just want to add and ask the Minister specifically: what benefit, what long-term benefit this actually has on the merchants and consumers? I know that, you know, when consumers go shopping or whatever and use their cards, they want to actually not have to pay the extra 2 percent or extra 3 percent that the merchants actually put on for the privilege of using the credit card or whatever payment methods. I guess one of the issues that I actually foresee is what it does actually provide—long-term benefit—for the merchants. By reducing the interchange fees, does it really promote competition for the merchants, for example? And how will this bill interact with the digital identity bill is another question that I would actually like to ask the Minister—which is awaiting the second reading. As we transition into a different digital world, how will this bill interact with the digital identity bill?

ANDREW BAYLY (National—Port Waikato): Thank you. I see the Minister scrawling furiously. I’m just hoping he’s got sufficient time to answer this question because I’d hate to think that we’re going to move through Part 1 without having a response.

So on my reckoning, if it’s $6 million saving per annum and there’s 536,000 businesses, that would be a benefit of $11 per business per annum. But, of course, all businesses won’t use these types of facilities. So (a) I really would like to know whether $6 million is the estimated saving and, secondly, how many businesses might benefit from this because I’d quite like to know what the contribution—given, as I said in my opening remarks, the Government has imposed $3.5 billion of additional costs on small businesses to date.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. In response to the member, I’m not sure where he’s plucked $7 million from. As I said in my initial contribution, the very conservative estimate is $74 million per annum—a little different to six. That has been canvassed across the various readings of this bill to date.

I would also note that it falls very unevenly because it’s the small merchants that benefit disproportionately from capping these fees.

Andrew Bayly: How many might that be?

Hon Dr DAVID CLARK: As the member knows, a large number of New Zealand businesses are small businesses. But the access to priority, or lower, fees tends to dominate amongst the very large businesses currently. So this bill will disproportionately benefit small business, as opposed to the bigger businesses that the member might want to support.

In respect of the growing economy, I mean, he will repeat his assertions; I’ll repeat mine. New Zealand’s economy has been growing at a remarkable rate considering the COVID period we’ve been through. It’s a better position than most economies around the world. In fact, many others acknowledge that; the ratings agencies give it a triple A rating for New Zealand. That’s very rare around the world, but two agencies have recently given New Zealand that rating, saying that we’re on very sturdy, sound financial grounds and the conditions for growth are there in the recovery from COVID-19.

The member did ask, I thought, quite a good question around how competition will be achieved. If a network is designated, the network can be required to allow other competitors to access its infrastructure and services. And that is, effectively, the way into ensuring competition through that mechanism.

Melissa Lee asked how the bill will interact with the digital identity bill. I’d make the initial observation that that bill—the digital identity trust bill—has an important role to play in building trust in online services, transactions, and amongst our population more broadly. We want a population that can take advantage of the advantages that come with digital, and can trust and securely transact online. So that bill goes to trust and confidence, and that all underpins a successful economy.

This bill, too, goes to having a reasonable and fair economy where people can transact fairly, where we can have competition in the market. A lot of this does go to ensuring we live in a country where everyone who wants to get involved in business can have a crack and can participate on a level playing field in a trusted environment. So I guess I’m extrapolating on the fly on that, but I do see those kinds of connections existing in response to the member’s question.

A party vote was called for on the question, That Part 1 be agreed to.

Ayes 109

New Zealand Labour 65; New Zealand National 32; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

Part 1 agreed to.

CHAIRPERSON (Hon Jenny Salesa): Members, this debate is interrupted. I will resume the Chair after dinner at 7 p.m.

Sitting suspended from 6 p.m. to 7 p.m.

Part 2 Designated networks

CHAIRPERSON (Hon Jacqui Dean): Members, when we rose for dinner break the committee had just considered Part 1 of the Retail Payment System Bill. We now come to Part 2. This is the debate on clauses 10 to 28, designated networks. The question is that Part 2 stand part.

KIERAN McANULTY (Labour—Wairarapa): I raise a point of order, Madam Chair. I seek leave for all parts to be taken as one question.

CHAIRPERSON (Hon Jacqui Dean): Is there any objection? There is.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. We’re moving so rapidly with this bill; it’s a fascinating conversation, today. I just want to turn now to clause 12. This is the commission’s recommendation to the Minister that a retail payment network should be designated, and the Minister said earlier in his contribution, before the dinner break, that Diners and Amex were not part of the designation. This is set out in Schedule 1, I see at the back here, where MasterCard, both its credit and debit facilities, are designated under the designation order; this is Schedule 1. And Visa is designated, both in terms of its credit and debit products. My question to the Minister is: what’s the threshold that might lead to a designation occurring?

I do want to take this opportunity to correct a statement I made during the second reading, that I was under the view that Amex had been, effectively, designated or included in the provisions in Australia, and I now understand from them that that is not the case. But, in light of that, I’d be keen to understand from the Minister what might be the threshold, given both Diners and American Express are already operating in New Zealand, albeit maybe with relatively low market shares. But what is the test going to be? And I know that it sets out in clause 12(2) that in deciding whether to make a recommendation, the commission must take into account the features of the retail network, the nature—including the number, value, and nature—of transactions, and the Financial Market Infrastructures Act. But, really, I’m trying to understand: what are the broad thresholds that the commission might look at? Do you have to have a market share of 10 percent, 5 percent? What is deemed to be the point at which you might be contemplating—one of these other networks or, heaven forbid, we might get a bit of competition and more people, although the Minister was pretty reluctant to address the question earlier about how this bill is going to bring about competition. But what are the broad parameters that would mean that a network might be deemed to be necessary to be designated?

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I note the member has asked a question in respect of clause 12. If he were to read subclauses (1) and (2) in clause 12, he might find the answer to his question: “In deciding whether to make a recommendation, the Commission must take into account the following: (a) any features of the retail payment network, or any conduct of participants in the network, that reduce, or are likely to reduce competition or efficiency: (b) the nature of the network, including the number, value, and nature of transactions that the network currently processes or is likely to process in the future: [and] (c) the Financial Market Infrastructures Act 2021 and any other regulatory requirements in … New Zealand laws that the Commission considers relevant.”

So it has a discretion, and the Minister, as laid out in clause 11, can accept a recommendation from the commission, should he or she choose in the future, but ultimately it’s the commission’s judgment about the impact on the market of the different networks that are currently in play.

ANDREW BAYLY (National—Port Waikato): I think the Minister was preoccupied when I was addressing the issue. I think he was talking to his advisers. I did refer specifically to clause 12(2)(a), (b), and (c), which he’s just conveniently repeated back to me. That wasn’t my question, Minister. My question is: what are the broad thresholds—and I use the tests around market share, because presumably there comes a point—and I know this specifies the criteria that might be used, but it doesn’t actually give an indication. Does American Express, if it had the 5 percent market share—would it be likely to be regarded as an entity or a network that would be required to be designated? That’s what I was trying to get, the broader picture, rather than just repeating back what I’ve just repeated to him.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): In response to the member, as I did state before—thank you, Madam Chair—it’s at the commission’s discretion, and they are the experts on what’s going on in the market. And, of course, a Minister could request that they investigate things if there is public interest in the growth of a particular network, or concerns about harm, or a fear of undermining competition in the market.

ANDREW BAYLY (National—Port Waikato): Thank you. Well, I think we got to the same result, so let’s move on. So, in terms of the designation, maybe for the listeners that are tuning into this exciting exchange, could the Minister tell us how long a designation lasts for? Then, in clause 15(3), it talks about “If a network ceases to be a designated network,”. So I’m now putting the contrary view back to him: at what point, and I’m sure that the commissioner has got some jurisdiction around there—but what would it mean that a network no longer becomes a designation? So that was it. Because I was hoping the Minister might answer the question: what would mean that you wouldn’t become it? And presumably it’s not because you go out of business, because that’s self-evident. But if you get to a market share of 2 percent, which I think may be Amex’s at the moment, and hasn’t been designated, would that be a type of criteria that would be adopted to remove the designation order?

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Equally, in clause 15 it states that a designation may be up to a period of 10 years, so there’s a clear demarcation in the bill around how long a designation will last. And of course, again, the member seems quite fixated on particular thresholds for different products in the market, but clause 12 lays out the conditions, as we have already canvassed in the debate, for the commission reaching a judgment about whether it is in the public interest to designate a particular network.

MELISSA LEE (National): Thank you, Madam Chair. In relation to the question that my colleague actually asked, in similar vein in terms of designation, I do realise that there are many different ways that people now make payment with technological advancement, particularly using new digital wallets that we actually have through our smartphones and often social media platforms also provide payment systems through their apps. These are done through those digital wallets, whether it’s actually Alipay, whether it’s actually Kakao Pay or Apple Pay, for example. Often these are done, you know, connecting through the bank accounts but it also uses other forms of cards and I’m wondering why some of those have not been designated.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): So the standards, for example, for the interchange fees for the designated networks will apply only to domestically issued cards in New Zealand, only to non-commercial credit cards, and to any payment instrument, not just physical cards, including virtual cards using methods like Apple Pay and Google Pay. So they are indeed captured within that framework.

ANDREW BAYLY (National—Port Waikato): Just moving on, this issue of issuing network standards and also in terms of the commission giving directions around network rules, there was quite a significant concern by some of the network operators that a network that operates across the world, and it just so happens that they also choose to operate in New Zealand—that the commission might try and unilaterally impose specific rules to New Zealand that couldn’t easily be put in place by the networks either, because they cut across all the other operations across the 192 countries in the world, or in fact just the time delay to do that.

So can the Minister provides some assurance to the committee and, I presume, the network operators listening to this conversation that replaced clause 19(b) that has been inserted, which reads “consult affected persons or persons that the Commission considers to be representatives of affected persons about the proposed standard code including the Commission’s reason for issuing the proposed standard.” or equivalent wording for directions that the commission might give—can the Minister just provide some certainty to the network operators that we’re not going to have a New Zealand Government or New Zealand Minister putting unnecessary constraints on those network operators?

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. I would observe that the schemes themselves already have different rules for operating in different jurisdictions that they themselves operate. And as I noted in my introductory comments, these directions do not have extraterritorial effect. They would only affect network rules in New Zealand.

MELISSA LEE (National): Thank you, Madam Chair. I’d like to refer to clause 19, where it talks about “Process for issuing network standards”. It actually talks about—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! Part 2—correct me if I’m wrong—is the debate on clauses 10 to 28, and is the member addressing clause 29?

MELISSA LEE: No. It’s 19.

CHAIRPERSON (Hon Jacqui Dean): Nineteen. Thank you.

MELISSA LEE: I did say 19, Madam Chair.

CHAIRPERSON (Hon Jacqui Dean): Thank you.

MELISSA LEE: Thank you, Madam Chair. I shall clarify. It is actually Part 2, clause 19, “Process for issuing network standards”. It talks about how the commission must make a proposed standard publically available and also talks about how it will—in (b), it says “consult affected persons, or persons that the Commission considers to be representatives of affected persons”, and I’m wondering if the Minister has a standard for the commission on who the commission should consult with and how widely the commission should consult.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): Ultimately, these are the kinds of decisions that the commission has expertise in, and I would expect them to apply appropriate judgment in the exercising of these particular responsibilities.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 109

New Zealand Labour 65; New Zealand National 32; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

Part 2 agreed to.

Part 3 Merchant surcharging, monitoring and enforcement, and miscellaneous provisions

ANDREW BAYLY (National—Port Waikato): Well, let’s start at the beginning, Madam Chair, clause 29. So this deals with merchant surcharging standards, and the Economic Development, Science and Innovation Committee made a change. I just want to understand what this means and the Minister’s perspective on it, because what subclause (1) states is “The purpose of this subpart is to ensure that [the] payment surcharges for payment services”—and this is what was removed—“are not excessive and reflect”—and instead inserted—“are no more than the cost to the merchant of the payment services used for accepting retail payments.” So can I ask, is it the Minister’s understanding that this new definition, which removes or changes from “not excessive and reflect the cost” to “are no more than the cost”—does that mean that the service can not include any profit element at all? It is a straight cost aspect, cost transfer, and there cannot be the possibility of any profit being included in the surcharge?

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): The way I read this change is a clarification from the select committee, and I thank them for it.

Andrew Bayly: Just to give the Minister a bit of time, because I know he’s got his advisers there—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! Would you like to seek the call or—

Andrew Bayly: Thank you, Madam Chair.

CHAIRPERSON (Hon Jacqui Dean): Andrew Bayly.

ANDREW BAYLY (National—Port Waikato): May I seek a call, Madam Chair? Fantastic. Well, just to give the Minister a little bit of time, because I know he’s got some advisers sitting beside him, perhaps he could just lean over and ask the officials, if he doesn’t know the answer himself, whether, in fact, this revision of clause 29(1) actually enables the possibility of any profit element or whether it has to be strictly on a cost basis. And what does that mean?

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): We’ll try again. I see this as a clarification of the wording that was put forward originally, and it says “no more than the cost to the merchant of the payment services used for accepting retail payments.” I think it’s pretty clear.

A party vote was called for on the question, That Part 3 be agreed to.

Ayes 109

New Zealand Labour 65; New Zealand National 32; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

Part 3 agreed to.

Schedule 1

CHAIRPERSON (Hon Jacqui Dean): We move now to Schedule 1. The question is that Schedule 1 stand part.

Schedule 1 agreed to.

Clauses 1 and 2

CHAIRPERSON (Hon Jacqui Dean): We now come to our final debate. This is the debate on clauses 1 and 2, the title and commencement.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported without amendment.

Bills

Crown Pastoral Land Reform Bill

In Committee

Debate resumed from 16 February.

Part 1 Amendments to Crown Pastoral Land Act 1998 (continued)

CHAIRPERSON (Hon Jacqui Dean): Members, we return now to the interrupted consideration of the Crown Pastoral Land Reform Bill. When we were last considering this bill, Part 1 was being debated. The question is that Part 1 stand part.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. It’s good to be finally back on this piece of legislation, even if it’s very poor legislation. This has been a slow, drawn-out, painful exercise for the leaseholders who maintain their responsibilities under the Crown pastoral land reform Act of 2020. They’ve been literally dragged through the high hills of the South Island on this journey of this piece of legislation, and all for nothing, because, as people who have been listening to the previous debate on this piece of legislation will know, a re-elected National-led Government is going to repeal this legislation at the first possible opportunity. We want to make that, again, very clear at this committee stage: a National-led Government will repeal this legislation at the first possible opportunity. It is poor legislation, it is bad legislation, and it is not in the best interests of New Zealand, the Crown pasture lease area, or, indeed, the families and businesses that operate those leases.

I want to turn particularly to the amended purpose in the bill. The bill talks about, at new section 1A, in clause 5, “The purpose of this Act is to provide for the administration of pastoral land in a way that seeks to achieve the following outcomes: (a) maintaining or enhancing inherent values across the Crown pastoral estate for present and future generations, while providing for ongoing pastoral farming of pastoral land”. What it doesn’t say is anything about supporting the relationship between the land, the Crown, and the leaseholders, who are stewards of this land and have been, in many cases, for generations.

The clause goes on to say that the Crown supports its relationships with Māori under Te Tiriti and enables the Crown “to get a fair return on its ownership interest in [the] pastoral land”. So, again, there is no mention of the inherent value, or enhancing the inherent value, of the existing relationship with the leaseholders, who, by dint of the lease that they have with the Crown, effectively have a treaty in their own right—a treaty in their own right—with the Crown. Doesn’t that sound a little bit familiar to those who often talk about Treaty obligations that the Crown has in other matters?

So why is it, I’d like to know from the Minister in the chair, that there is a lot of talk in new section 1A in the purpose section of this new bill about maintaining and enhancing inherent values across the Crown pastoral estate, supporting the Crown in its relationship with Māori, but zero mention of the inherent value of the relationship—let alone enhancing that relationship—with the leaseholders? I’m interested to know what the Minister’s rationale is for that, frankly, insulting omission from the purpose of this legislation.

MARK CAMERON (ACT): Thank you, Madam Chair. Well, look at all the political pontificating in this piece of legislation. Further erosion of the trust that 150 years, Minister, of farming in the high country has created—a dash and it’s all gone. The Rt Hon Scott Simpson pointed out—oh, the Hon; I apologise. All in short order—the Hon Scott Simpson.

Inherent value. How do you, Minister, reconcile 150 years of farming, breaking in the land, the asset investment, the back-breaking work that went into reconciling and making this land profitable for rural New Zealand? This process erodes that trust. How do you reconcile that? Because this, to me and my party and the parties on the right, is an absolute disgrace—and most of the landowners that this piece of legislation seems to erode all their trust in agree with me.

NICOLA GRIGG (National—Selwyn): Thank you, Madam Chair. Just speaking to Part 1 of this bill. Last time I spoke on this, I was interrupted by the dinner break, so the Minister didn’t get an opportunity to answer my questions. So I thought, Minister, I’ll give you another shot if you don’t mind.

But the fundamental basis of my question is: how does one design a system that will cater to 1.2 million hectares of incredibly diverse environment and ecology, of extraordinary landscape, topography, weather systems? More importantly, when we drill down into that, what is the review mechanism looking like? What safeguards will we put in place to address failures of the system; failures that this legislation will inevitably turn up? How does one resolve issues within a one-size-fits-all approach?

When we think about it even more, the cumulative impact of these various different regulations that are being bestowed upon the high country farming sector, what will that cumulative impact be that will ensure we do not work against the objective of this bill? We’ve heard a number of concerns raised by leaseholders, particularly the High Country Accord, that this piece of legislation is going to add layers and layers and layers of complexity and bureaucracy, and that this will largely duplicate regulation that’s already been foreshadowed in the likes of the national policy statement (NPS) on freshwater, the NPS on indigenous biodiversity. So I would like to know from the Minister a further question: what cross-referencing has been done, or what work has been done, by officials to identify any of these double ups or crossovers? What efforts will be made to ensure that these double ups are actually alleviated to prevent further burden on these lessees?

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. To the Minister: this is 150 years of farming these high-country stations, and they stretch from my region of Southland all the way up to Marlborough. My colleague Stuart Smith and my colleague Nicola Grigg have high-country stations in their parts of the South Island. They vary in topography, they vary in altitude ranges, rainfall, soil type, vegetation types, and level of development. A one-size-fits-all approach in regulation will not deliver the best and most enduring of outcomes for their management.

I note here that Part 1 talks about the outcomes for decision makers, and talks about maintaining or enhancing the inherent values across the Crown pastoral estate for present and future generations while providing for ongoing pastoral farming of pastoral land. I just ask whether the Minister has taken into account submissions—for example, from young Jess Cocks, 11 years old, who lives at Mount Nicholas Station, across the Wakatipu Lake from where I live in Queenstown—

Hon Member: It was a very good submission.

JOSEPH MOONEY: —and I’m hearing it was a very good, very powerful submission. This station has been in the family for over 45 years, and she talked about loving living there—many great places to explore, camp. I’m talking about the connection to the land. Sometimes she goes spraying with her dad to kill bad weeds like gorse and nodding thistles. She catches lots of possums with her brother. This helps her, she said, to look after our native birds and forest, and also gives them pocket money—so it’s a win-win.

What I’m talking about here is the connection of these families, over generations, with the land. They’ve taken something that, back in 1948, the Government tried to fix—a lot of this land was unfarmable, it was unworkable, it was overrun with rabbits, and it was overrun with noxious weeds. The Land Act 1948 created the pastoral lease—so we’re talking about some 73 years ago. That Act gave a right of freehold to farmers already leasing Crown land on permanent leases—the underlying principle being that a secure tenure at the basis of farming progress. It gave farmers confidence to invest in the property, invest throughout their lifetime, and, in fact, through generations.

Look, I’ve been to a number of stations all over the South Island. For example, I went to the Muller Station with some of my colleagues and we saw the work that they’ve done there since 1965. There’s basically not a noxious weed to be seen, they’ve made sure the deer are under control, and the possums and the rabbits are under control. Then we saw next door Molesworth Station, which is Crown owned—and wilding pines everywhere. It’s a very different approach taken by farmers when they have that sense of ownership—which they have; ownership of the improvements on the farm, which last for generations.

My question to you, Minister, is how are you going to maintain that sense of ownership for these farming families so they can continue to invest with confidence in their properties and ensure that they secure the benefits for all of us New Zealanders in these incredible places in the high country, without the Crown taking away that confidence—there’s this contractual relationship that’s been there for some 73 years with these farmers—and ensure that young Jess Cocks will have the confidence, when she grows up, to actually continue farming at the station, to continue looking after this land for her family and for all New Zealanders?

Hon DAMIEN O’CONNOR (Minister for Land Information): Thank you very much, and, indeed, it is a pleasure to have this bill back in the Chamber. It has been hanging around for a while. I couldn’t quite remember the last question the member asked from so long ago, but, anyway, I’ll try to go through and answer a few of the things.

A little bit of background, just at the fact that the bill’s come back in, I guess. We go back to the reality: this is Crown-owned land. There was the tragedy of the commons going way back, prior to 70 years, and, of course, the Crown realised that, actually, the land wasn’t being looked after because there wasn’t some vested interest. So they set up these Crown leases, which didn’t give ownership of the land—that remained with the Crown—but gave the lessees the right to pasturage. It didn’t give them the right to soil, but pasturage in perpetual renewal, which gave them certainty and quiet enjoyment—those were quaint kinds of things when you look back at them now. But none the less, we recognise the questions around the purpose; we recognise and respect those legal rights, and we’re not trying to take them away.

It was the National Government in 1997, actually, which set up the tenure review process, which was new. The view was that there were areas that could be freeholded, and some would go back to the Crown for conservation purposes, and, indeed, that proceeded, and most of the easy ones were done, whether there was clear delineation between high conservation values and commercial opportunities. For the last probably 10 years, it’s got really hard and really messy and really sticky, and it’s consumed huge amounts of time and effort from both the Crown, as the owner of the land, and the lessees, who have considered whether they should go through a tenure review process—half of them have gone halfway through and pulled out; it’s got really messy. So this bill tries to clarify the rights, and, in fact, many of the lease holders that I have spoken to are quite comfortable—they want to get on and have the security to farm the land. They won’t own the land because we’ll end the tenure review, and, indeed, they just want to be able to farm it and enjoy the rights and the benefits of it.

So without going into the technical details of it, there will be conditions that will be laid down through closer engagement between the Crown and the lessees—that’s what they asked of us. They want more regular visits, they want to be able to talk to the landlord—

Barbara Kuriger: No, they don’t.

Hon DAMIEN O’CONNOR: Yes, they do, and, indeed, the cheap politicking that we see from the other side fails to address what is an opportunity to give some certainty to those high-country lessees, and many are in the process now; some will be concluded, and others won’t. In fact, I’ve been on many, many properties myself as well, and they are all different, and we’re trying to accommodate that through the new provisions around normal farming practices just being accepted, and they can get on and do those things.

In theory, under the National Government’s legislation, because they changed it, every one of those activities required a consent—every one of them. What the commissioner did is he said, “Well, I’ll write over; I’ll delegate that, and they won’t have to apply every time they need a consent to dig a post hole or do other things.”, but it was actually in the National Government legislation. What we’re attempting to do here is to clarify what were really petty things and petty requirements into normal farm practice, and when there are some practices on-farm that might need to be considered by the landowner on behalf of all New Zealanders, then they’ll work through that process. I’ve committed to the lessees and to all the high country farmers that we’ll work through that with the proper resources and the connection that we need to have with those lease holders, and there are some things that should not occur in those sensitive areas.

So that’s what we’re putting in place. Yes, there’ll always be some controversy, but I think we’ve pretty much worked through all the issues. We had a last-minute submission from the High Country Accord asking for a few changes that they thought might add to the bill. Look, I’ve looked at them really carefully, but in the end, most of them have been covered through the process of consideration, and, at this stage, we won’t be making any changes to the legislation. I think we had a really good attempt to sit down and talk right up to the last minute to agree with both the principles, with the certain provisions and the conditions that we’ll require consents for, and ultimately, the process of engagement, and I think we got it about right.

Hon EUGENIE SAGE (Green): Kia ora, Madam Chair. Thank you very much. I guess I am surprised by some of the comments coming from the National Opposition because they seem not to recognise the difference between the Crown Pastoral Land Act, the Resource Management Act, and the number of submissions that the select committee heard that the Acts have a different purpose. The Crown Pastoral Land Act is about managing the Crown pastoral estate to protect the Crown’s interests. That’s why it’s not duplication, as some members of the Opposition are suggesting, to have two regimes.

I was pleased that the Minister highlighted the considerable liaison that had gone on with leaseholders in the development of this legislation, and would remind the Opposition that there was a discussion document and public meetings which were well attended by leaseholders, and that contributed to the development of the bill. There was a regulatory impact statement that also contributed to the development of the bill, which highlighted, as National members seem to overlook, that there has been quite considerable change in the high country from burning, from overgrazing, and from cultivation that has led to the destruction and loss of inherent values.

What this regime in this bill does is modernises the Crown Pastoral Land Act regime. With the large schedule of permitted activities, as the Minister noted, it means that there won’t be a need for consent. Those activities were discussed with the High Country Accord, with the High Country Committee of Federated Farmers. They were developed in the bill with that input and there have been a number of changes made through a very thorough select committee process which sought to take on board the submissions that were made that sought to improve the purpose of the bill and to actually change some of the definitions. Those changes mean that we’ve got a robust bill, and you have this bill and a regime, which Land Information New Zealand and the Commissioner of Crown Lands have adopted, of having much more regular engagement with leaseholders, and visits and engagement on the land—that’s been affected by COVID.

But this is about a regime which continues pastoral farming on Crown pastoral lease land, seeks to protect the Crown interest in those lands, and ends tenure review because the bulk of the properties that wanted to go through tenure review have progressed through it and it’s the more difficult ones that are left now. People have had an opportunity since the mid-1990s to go through tenure review. It is time that process ended because there are a number of reports which showed that it wasn’t delivering good outcomes to the Crown, and the regime that the bill sets in place is a modern regime that protects the Crown interests, protects inherent values, but recognises and promotes a sustainable future for farming.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair—I think that was a very good decision. I was listening to Minister Damien O’Connor talk about his visits and discussions with high country farmers. I’d like to point out to the Minister: Molesworth Street is not Molesworth—it is a long way from Molesworth. And what I heard from him was something I think he might have heard on Molesworth Street; he would not have heard it anywhere near Molesworth Station, I can assure him of that.

I’d like to actually go back to my colleague who discussed young Jess Cocks, and she made a huge impression on Joseph Mooney; myself; you, Madam Chair; and the Hon Scott Simpson. We were all there that afternoon—did I forget anyone else? I think that was the lot of us. What a wonderful day we had there. And what it really brought home—and what I picked up from the Minister is he completely does not understand the management of these properties is completely different. The bracken will take over on the Cocks’ property, whereas we went to Minaret Station—completely different circumstances. Leaving that property alone for a short time, it regenerates right back into fern and into its native state. The fact is, most of the pastoral lease properties in New Zealand are a highly modified environment because they were burnt many years ago—by the moa hunters, I suspect—and so it changed the whole environment. We now have to manage that anyway; we can’t just let it revert. Because what we saw up the Awatere Valley on the Muller Station, the wilding pines are being managed by Merino wethers, actually, and the seedlings that aren’t controlled by the Merino wethers are able to either be sprayed by a drone or by a helicopter. Very few of them—it’s a much easier job. In contrast, when you look at the Molesworth, admittedly it’s different soil types, but in the Molesworth it has a real significant wilding pine issue because they run cattle and they can’t control it.

Unfortunately, what we’ve got here is an ideological issue that the Labour Party and the Green Party hate farmers. Particularly, they hate pastoral farmers, and these guys are right in their sights; it’s very clear. This bill is just a load of nonsense. A whole lot of stuff here about all of the consents they have to get on a high country farm to disturb soil—something that is done reluctantly because of the wind erosion and all those sorts of things. But occasionally you have to fix a fence, and that means re-routing it around a slip or something, or re-routing a track—they want those farmers to go through a consent process. It’s marvellous for bureaucracy—I think there’s 14,000 more bureaucrats in Wellington. It’s just a waste of time, a waste of energy—it’s sand in the gears of the economy. What they don’t understand is every layer of bureaucracy that they add in, it goes right across the economy and slows it down. This bill is sand in those gears.

This is meant to be about a pastoral lease protecting the Crown—and that’s all of our assets, not just the current Government of the day. The Government of the day is only merely there for a brief period to look after it in perpetuity for us. Right? That’s what it’s all about. And these people who have the lease as their proxy, effectively, looking after that land. This bill does nothing to help that; in fact, it makes it worse. You’ll get a—not you, Madam Chair, but we will get perverse outcomes from that bill. So I’d like to know from the Minister: did he actually get off Molesworth Street and on to the Molesworth?

Hon DAVID BENNETT (National): Thank you, Madam Chair. It’s good to be able to speak after the Minister, Damien O’Connor, because when we had the Minister he talked about the quaint lifestyle of hill country farmers. That’s that Molesworth Street attitude to that farming and to farmers in general. And my colleague is completely right: this is an asset land grab, taking away the power of people that have, for generations, thought they had a right in that land—and they actually do have a right in that land, because it’s a perpetual lease. It is not a lease for 100 years; it is a perpetual lease. The Labour Party are using a small group of farmers, about 100 farmers, to take away the rights to use that land. That is, effectively, what is happening here, and all the farmers in New Zealand, all asset holders in New Zealand, should be backing these people today, because this is the start of what the Labour Party wants to do. This isn’t just about those farmers there. This is taking away the rights to farm your farm. Basically, they believe that they should tell you how to farm, and what you can farm, and how to do it. This is a precursor to their agenda.

Now, the Minister has been very careful to paint this as some picture of “Look at the saviour of the Labour and Green parties. Aren’t you so lucky that we’re going to iron out any problems here?” That is completely at odds with anybody that’s in that sector. Those hill country farmers, when you go to their houses, they are, effectively, crying at the dinner table. Their life work is going out the window. Their kids will not come home and be part of the next generation of farmers that we need as a country. And it is not that these are the hard cases. This is the Department of Conservation that has made it so hard for some of these deals to be done. The reality is that if these deals could be done, they would be done by those farmers. But they found that they have been hamstrung in their negotiations.

I say to the Minister: don’t treat farmers like fools. Don’t try and come in here and mollycoddle us and tell us how great you are, trying to save us. The reality is we see through your agenda. We know what you’re doing.

CHAIRPERSON (Hon Jacqui Dean): Order! Order! [Interruption] Order! The member will not bring the Chair into the debate.

Hon DAVID BENNETT: Yes, Madam Chair. It’s not cheap politicking. It is the reality of an agenda that needs to be stopped. I want the Minister to stand up now and give a commitment to every other farmer in New Zealand that they won’t be told how to use their farm. Can he do that? I don’t think he can. He won’t tell anybody that, because he knows that’s their agenda. He looks all around the room, won’t look straight, won’t tell you the answer, because he knows that’s the agenda of the Labour Party. All farmers need to be aware of that and learn from this legislation tonight. This is the start of what Labour and the Greens want to do to our agricultural sector, and it should be stopped now.

SIMON COURT (ACT): Thank you, Madam Chair, and thank you to my colleagues on this side of the House for having described the problem with this legislation so clearly. I just want to articulate a little bit further, in relation to Part 1 of the Crown Pastoral Land Reform Bill, what the problem is.

What is the problem? Well, it’s an environmental problem. It’s a problem where the Government and the Minister and the Minister before him have articulated that they don’t trust the farmers who farm the Crown pastoral land under perpetual leases, whose families have lived on the land for generations, who have given up so much to live in remote rural places that people like myself from Auckland would think, “Crikey, that’s cold. How could you live there?” That very, very difficult place to farm. It’s inaccessible. Some of these places are only accessible by boat or by air. And yet these families have lived there for generations because they love the land, they love the environment, and they love New Zealand. That’s where this Government, this Minister, and the former Minister have got this totally wrong.

But I want to read to you what the aspiration is for this Crown pastoral land: “A sustainable management system for Crown Pastoral Land will be one that recognises and balances the different values this land holds for people across Aotearoa, a system that fairly and efficiently allocates costs and benefits,”—Minister—“and a dynamic system that recognises the constant evolution of the land and our relationships with it.” That wasn’t written by your officials, Minister. That was not written by any other political party, that’s not a manifesto. That, in fact, is the words of the submission from Jonathan Wallis from Minaret Station, a vision of a sustainable management system for Crown pastoral land. That is what the lessees are advocating for. In fact, what they told the committee and what we saw with our own eyes, including the chair of the committee—the Hon Eugenie Sage, a former Minister who chairs the Environment Committee—and the members of the Labour Party on the committee, and, of course, MPs from ACT and National who visited these high country farms, was there’d been a progression from that time when New Zealand was first colonised, and we can only imagine what that must have been like, over 1,000 years ago, for the people who first came to New Zealand to cast their eyes on the Southern Alps.

But for those who came more recently, in particular during the time of European settlement of the South Island and the gold rush, that is when the large-scale environmental degradation of this part of New Zealand occurred. That was when not only were areas burned in anticipation that they could be sown and then grazed, but much worse. With huge pumps, the hoses and the sluicing that occurred during the goldmining era when literally the hillsides were washed away with giant hoses and cascades of water. Now, when you go there today and you see the photographs of that time, you see the images of a devastated countryside. And in fact, that’s what every country has done to its environment in the early days of industrial exploitation, and New Zealand’s no different, Minister.

But what the farmers, the families who live on these Crown pastoral leases—in fact, who have a property right to live there in perpetuity under these Crown pastoral leases—have done is got with the new ways of farming. They’ve adopted farm management plans. They’ve taken land out of production that is steep and hard to manage. And what they have done, in fact, is restored the natural environment so that now their farming systems are complementary with this very unique environment. That is why they’ve asked the Government, they’ve asked the Minister, and they asked the Environment Committee, “Please do not proceed with this bill. It’s completely unnecessary. We already have all of the tools, all of the latest methodology to farm and operate in this unique and special place. And by the way, we have a property right, and imposing an additional set of regulations, and other people making decisions over how we do basic things like dig a ditch and put in a culvert on our land is completely unnecessary.” That’s why, Minister, ACT would repeal this law and that’s why we’re asking the Government not to proceed with it, because by the time you—[Time expired]

KIERAN McANULTY (Chief Whip—Labour): Point of order. Thank you, Madam Chair. At the start of each committee stage, you remind the committee that this is an opportunity to ask questions. Now—

CHAIRPERSON (Hon Jacqui Dean): OK. Thank you. I’m going to thank you for your point of order. You’ve gotten in just ahead of me, because I wish to say the following things to the committee. Part 1 of this bill has now been running for half an hour. There are a number of Supplementary Order Papers which are on the Table and that I have here. I need the committee of the whole House to start focusing on Part 1 of the bill more closely. It’s sounding more like a third reading debate—this is not what we are considering tonight; we are in the committee of the whole House stage. So I invite the members, if they wish to keep this debate lively and focused, they will do just that.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. I listened to the Minister’s gratuitously insulting comments about what he called “quaint, old-fashioned ideas” relating to important principles of property rights in New Zealand in relation to land tenure. Yes, a leasehold is not a freehold—that’s understood by everybody involved. But it was gratuitously insulting for the Minister to imply that the property right contained in the lease in perpetuity of these of these 170-something high country leaseholders is somehow a quaint, old concept or idea that needs modernising. That is entirely inappropriate, and I would have thought better of the Minister.

I want to continue where I left off on my last contribution in relation to the definition, now, of inherent value. So when I was last speaking on this, I made the point that the inherent value that the purpose of the bill seeks to establish makes no comment or recognition of the enhancement and inherent value of the leaseholders, yet it does call for a greater understanding and closer supporting relationship with Māori, for instance, but no mention of the leaseholders.

Well, in the definition part of the section, inherent value is actually attempted to be defined. It says that inherent value “means a value that arises from an ecological, a landscape, a cultural, a heritage, or a scientific attribute or characteristic of a natural resource that—” and then it goes on. Then, further on, it says it “relates to a historic place on or forming part of the land”, and then the absolute final insult is that in subclause (b), it says, “does not include any value that relates to or is associated with farming activity a pastoral farming activity”. So a pastoral farming activity is specifically excluded from being considered an inherent value.

Well, that’s just ideological claptrap; that is insulting; that is a slur upon the hard work of generations of high country farmers who have done so much to enhance, protect, and maintain the high country of New Zealand that is so loved and cherished by all New Zealanders. These people have done it season in and season out over generations. To specifically exclude from the definition of inherent value, pastoral farming activity is just plain wrong.

Now, it’s important that people listening to this debate understand the genesis and the history of it, because it actually started in the last Parliament when the then Land Information New Zealand Minister was shepherding this piece of legislation through the Parliament and staff started it off. It was based on ideological agendas rather more than practical application in any regard to the land or the people that make their lives and their livings and raise their families there and have done for generations.

This is a piece of Green Party ideological envy politics, actually. That’s really what it’s about, but it’s being supported by the full Labour Party caucus—65 of them. The sad thing for those 65 is that even though they will be whipped into supporting this piece of legislation, most of them will not be in this Parliament when we repeal it next. Most of them will not be here. So it must be utterly frustrating for them, because they know in their heart of hearts that to specifically exclude from a definition of inherent value in this legislation, the work and the history and the effort and the blood, sweat, and tears that amounts to pastoral farming activity is fundamentally wrong.

I want to just, in the short time—in fact, I’m going to ask the Minister why pastoral farming is excluded in their definition of inherent value, and then I’ll make a further contribution later on.

PENNY SIMMONDS (National—Invercargill): Thank you very much, Madam Chair. I would like to ask the Minister: how does this Part 1 of the bill recognise the contribution of the approximately 170 high country farmers and their families and the contribution that they have made to agriculture in New Zealand; their contribution to the history of high country farming; the contribution made financially, environmentally, conservationally, emotionally; the investments that they have made over several generations? How does this part of the legislation recognise the trust that was involved in a voluntary process—the tenure review? How does it give some value to the 1.2 million hectares of our national landscape—something close to 5 percent of New Zealand’s total land area that has been administered, managed carefully, and prudently cared for by these families over generations? How does it show any respect for the relationships that have been there over generations? I would note the lack of respect that was shown from the other side of the Chamber when my colleague mentioned that there were families in tears at the kitchen table and the response from the other side was scoffing. So how does this introduction show some respect for those farmers?

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Chair. My colleague Penny Simmonds just talked about a lack of respect for the farmers—and the genesis of this bill is that the current Government and the previous coalition Government had no trust of the farmers. My colleague Scott Simpson talked before about the genesis of this bill where, in the last Parliament, the previous Minister got up and made a speech, and when I heard the current Minister get up and make his speech, I felt like there were two different agendas going on. The concept of the current Minister is “It’ll be all right; we’re not doing very much. We’re actually going to let these people get on and have their quiet enjoyment of their leasehold properties.” Well, let me just suggest that the Government has come in and probably actually caused a massive upheaval to the quiet enjoyment of these leasehold properties.

So I have an amendment in line with that and this is about how the process of applications is done to undertake activities on the land with the commissioner and around the commissioner’s decision. And if we go to clause 8, “Part 1 replaced”, I want to propose a new section 11(3)(b). I want to delete the proposed section 11(3)(b), which actually currently says, “may consider relevant Government policy decided by Cabinet, in particular policy that relates to national directions (such as national policy statements and national environment standards);”.

Now, the reason I want to change this is I think the words “decided by Cabinet, in particular policy” are totally unnecessary. We have generational farms down in the South Island who know far better than any member of the Cabinet. And we’ve seen what happens when Cabinet sticks their fingers into decisions. You know, we’ve seen the “Let’s get rid of the gas and burn a heap of Indonesian coal.” scenario. Cabinet’s sticking their fingers into generational and multigenerational farming, which are showcase farms. They are farms that prior to COVID had tourists coming down. They’re exemplar farms around pest control, they’re exemplar farms around weed control, and they bring people in to showcase New Zealand. If we look at a lot of photos overseas and we see the tourists coming in, the activities on these farms—nobody likes more than seeing a picture of New Zealand with wonderful merino sheep in it. It’s an absolute showcase and an absolute exemplar. So I think Cabinet should keep its nose out of these high country farms and let the farmers get on with it.

I would like my amendment—to remove the provision that’s in there and say “may consider relevant”—this is to do with the commissioner—“may consider relevant Government policy that relates to nationally applicable environmental matters” and then “(such as national policy standards and national environment standards”. These people know what they’re doing. They don’t need an overbearing Cabinet coming in, interfering with their lives, upsetting their multigenerational families, and actually taking control over something that was working perfectly—perfectly—before this actually happened. So thank you, Madam Chair.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. I’d like to turn to new section 8 in clause 8 in Part 1, where it lays out in subsection (2)(a), “may undertake the pastoral activity, or cause it to be undertaken, if the activity is classified as a permitted pastoral activity in Part 1 of Schedule 1AB:”. Well, when I turn to new Schedule 1AB in Schedule 2, under subclause (1)(c) in particular, it says, “the invasive exotic pest plants comprise no less than 90% of vegetation cover;”.

It has other qualifications in that as well, but on that 90 percent I have a question. Does that mean that if the pastoral farmer has a few wilding pines that he’s going past and he pulls them out of the ground, he should have had a consent for that? But if they’re as thick as the hairs on a dog’s back, then he can go for it—he can do what he likes. But if there’s only one or two, which would be good practice—it would be good practice to get ahead of the problem by hitting it when it’s very early stages, and that’s what good farmers do. They do this sort of thing all the time. But to me, it looks like they’d have to get a consent. I’d really like the Minister, firstly, to clarify that particular section.

There are a number of others, like where the by-kill must not exceed 200 metres square in the hectare, or the area involved doesn’t exceed 25 hectares in any five-year period. When we’re talking about small areas, we could have quite a thick patch, but, no, we’re covering 90 percent of the area, so how do you interpret that? Are we talking 90 percent of a small area, or 90 percent of a specific paddock, 90 percent of the whole pastoral lease—it doesn’t say that there.

So perhaps the Minister could get on his feet and tell us the specifics of what that particular clause in the schedule means—that is Schedule 1AB(1)(c) in particular. Thank you.

JOSEPH MOONEY (National—Southland): Thank you very much, Madam Chair. I’ve got two questions arising from the Minister’s earlier comments. The first one: was he referring to the right of exclusive possession and quiet enjoyment as quaint concepts and indicating that these are no longer relevant? I mean, this will be a huge shock to property lawyers and anyone who owns property or has property rights in the entirety of New Zealand. The right of exclusive possession and the right to quiet enjoyment are crucial parts of our legal framework in terms of land.

Hon Scott Simpson: Cornerstone of property law.

JOSEPH MOONEY: It’s a crucial part of property law. I mean, has the Minister taken any advice on that? I’d really, seriously, like to know that. I think New Zealanders would like to know that because this could undermine the right to property ownership in New Zealand.

Hon Scott Simpson: First they came for the high country farmers.

JOSEPH MOONEY: First they came for the high country farmers, as my colleague the Hon Scott Simpson said.

The second one is the Minister talked about high country farmers looking forward to having lots of visits. I do wonder whether he read or listened to or talked to Federated Farmers, for example, who said in their submission, the bill “fundamentally changes the nature of the relationship between the Crown as lessor, and the leaseholder. The existing contractual relationship based on trust and reciprocity, would be replaced by an approach of regulation [policing] and enforcement … [This diminishes] the future constructiveness and openness of relationships … It reduces the certainty of leases and the incentivisation to continue to invest and enhance environmental outcomes given no accompanying or reciprocal ability to address changing pastoral needs as provided for.”

I also wonder if the Minister listened to or talked to the High Country Accord, who also said “We are strongly of the view that the Bill’s proposal to change the nature of the contractual relationship between Crown and lessee to a regulatory one underpinned by offence provisions is a considerable strategic mistake and overlooks the predictable changes in lessee and LINZ official behaviour. Like it or not, a visit from LINZ will be characterised in the future as a visit from the Police. Under threat of allegations of having committed an offence under the Act, LINZ cannot expect that their visits will be welcomed. That is not to say that LINZ will be treated with anything but courtesy,”—which is what we always we get from our high country farmers—“but there will be a natural trepidation and fear that comes with any Police investigatory visit. The strength of the current relationships between lessees, LINZ and its contractors will be immediately weakened.” Those are irreconcilable with those comments, Minister, that were made earlier. Both Federated Farmers and the High Country Accord are very clearly saying that they will not be welcoming visits and repeated visits in a regulatory framework that is treating them—they are feeling as criminals.

My colleague Barbara Kuriger spoke about an incredible ambassador role that the high country farmers provide for people coming to our country. I’ve got a cut from Matangi Station who’s a station up behind the clock tower on Alexandra—Central Otago, part of my electorate. I mean, they hosted Crankworx, one of the world’s biggest mountain biking events. And, you know, and I went to the opening event, which was at the shearing shed in Matangi Station, and they’ve got these rams that their bloodlines go back about 150 years, sort of indicating how long this has been going, you know, this relationship to the land and the animals on this property. The mountain bikers from across the world, the best mountain bikers in the world, were blown away by the experience they received there. How is the Minister going to ensure that these incredible people who look after this land and provide an incredible ambassador role for our country, feel that they are not being treated as criminals and that there’s that relationship of trust that is based on a 73-year-old contractual arrangement that we currently have in place?

Hon DAMIEN O’CONNOR (Minister for Land Information): Thank you very much, Madam Chair, and I’ll try and answer a few of the things. Regarding the exclusive possession, I absolutely uphold that and the bill upholds their exclusive possession.

What I referred to about quiet enjoyment, I guess, was the reality that many in their homes in central Auckland would enjoy that as well, as we would anywhere. It’s a bit of an ideal, really, in today’s world, be it of mobility and people coming in and around and on to these properties, and, of course, I respect that.

But this idea that all these high country farmers are the same is a little bit idealistic as well. Every single property is different, as is every single farmer. There are some spectacular farmers there and there are a few who haven’t always adhered to the laws and the conditions of the lease.

One of the issues that we’re trying to sort out is, I guess, all of the good work of the vast majority of those lessees is not undermined by, I guess, the failure of a few and the inability of Land Information New Zealand (LINZ) in a clear way, other than—actually, the only real threat they had was to take the lease, because there were not infringement notices, there weren’t minor offences that could be imposed if there was a minor offence carried out.

When we talk about minor consents—and there are a whole lot of things—you see, the National Party legislation of 1998 required a consent for digging postholes, required a consent for digging an offal pit, required a consent for removing tree stumps, and required a consent for the ongoing maintenance of tracks on these properties. That was National Party legislation. What we’re wanting to do here is to offer more certainty and remove. Now, what happened is a letter—a letter, just like a letter you can write to your friends and family—went out from the commissioner to say that, actually, all those minor consent issues are approved. But it was only a letter. No legal standing at all; just a letter that could be withdrawn with another letter. What we’re hoping to do is to ensure the people who will continue.

I don’t like to single out anyone, but I know Jonathan Wallis’ submission was quoted. I want to thank him for his participation through the accord and the leadership role that he’s played and making that submission. Indeed, I think that the property there will continue under a leasehold arrangement. What he seeks is some certainty. This legislation will offer him certainty, where the boundaries are will give more regular connection with LINZ, the landowner, and, I think, will allow Jonathan and his kids and grandkids, to carry on at Minaret Station and look after it in a spectacular way.

But to imply that nothing has changed over a hundred years is, again, both wrong and naïve and romantic. Many of the farmers have, mostly in a way that is in keeping with the environment, intensified and developed their properties—centre-pivot irrigation, different crops, things that are quite alien to the high country environment. Now, some have done it really well and protected the inherent values—but they are not, themselves, the inherent values of the land; they are new developments that are owned by the lessees, and we respect that. We simply want to be able to work with them to ensure that the enthusiasm of perhaps a new lessee coming in, seeing an opportunity, doesn’t push the boundaries on environmental management or doesn’t undermine the inherent values that other New Zealanders see in the high country.

So this legislation is designed to offer certainty to remove the threat that under the National Party’s legislation, a letter could’ve been sent from the commissioner to the lessee, saying, “You have to apply for a consent for every single posthole that you need.” How ridiculous. That was National Party legislation. This will mean that that never has to occur. The maintenance of tracks can be an approved and permitted activity. So we’ve moved through to “if you want to put in a centre pivot and develop an area on some of the flat area, well, you should sit down with the landowner and work through the mitigations and the intensification.”, because the landowner—

Hon David Bennett: There’s no chance in hell you’re gonna let that happen.

Hon DAMIEN O’CONNOR: Mr Bennett there, I think he might be the landowner of a farm somewhere, and I don’t think—

Hon Member: Several.

Hon DAMIEN O’CONNOR: —probably a couple of farms—he would allow a sharemilker to come on and change what happens in a drastic way on his property, without at least talking to them. That’s what we’re asking for here, that the Crown is the owner of the land, respecting all of the rights and the investment and the heritage of those good people on the land, just to say, “Let’s have a more productive and ongoing relationship.” That’s all we’re asking. I think the 167, I think it is, lessees will be able to continue with certainty, with perpetual right to renewal, with knowing where the boundaries are, and being able to sit down and talk with an agency that is better resourced, that is better engaged, and that actually wants a genuine partnership; not one of hands-off disconnection, and when something goes wrong or a lessee does something that is not in keeping with good management and most of the other lessees know it’s not in keeping with good management, there wasn’t an ability for LINZ as the guardian on behalf of us all to step in and say, “Look, that’s wrong. There should be some kind of penalty or some incentive not to do it again.” The only penalty was “We’ll take the lease from you.”, which was clearly ridiculous.

So we’re just trying to find the right balance here in a whole lot of different ways, respecting the right, not wanting to remove those rights, but making sure that there is a good balance there.

CHAIRPERSON (Hon Jacqui Dean): Before I take the next call, and thanks to the members who are calling, we are now 55 minutes into Part 1. There are five Supplementary Order Papers (SOPs) which have been lodged for Part 1 of the bill. I am looking for targeted contributions, and members seeking the call to speak on SOPs to keep Part 1 alive.

NICOLA GRIGG (National—Selwyn): Thank you, Madam Chair; you read my mind. I was just wanting to jump up to speak to a Supplementary Order Paper, so thank you for the opportunity.

I think the quote of the night would have to go to the Minister, in his first contribution, where he said, “We won’t be making any changes to this bill.”, which I think speaks volumes of this Government and indeed this Minister. Time and time and time again, submitters, experts in the field, leaseholders, and high country run holders who have been working in this industry and on this land for centuries have tried to persuade this Government to revisit this daft idea. And, actually, so much of this sheets back to the fact this Government has been led by the nose by the Greens on this particular bill.

Many submitters this evening have talked about the changing nature of the relationship between the Crown and the leaseholder. So I would like to turn the Minister’s mind to the amendment in my name, where we talk about Schedule 2 of the bill and the proposed new Schedule 1AB, Part 1, where we talk about activities: permitted, discretionary, prohibited. I would like to ask the Minister: considering he said he won’t be making any changes to this bill, what consultation was carried out with leaseholders as to what permitted, discretionary, and prohibited activities might look like? Because the way I read it, so much of this is already business as usual: pine control, gorse control, broom control, crack willows, grey willows, you name it. One of the speakers earlier on this side of the Chamber referred to the debacle that is going on up in the Marlborough region when one looks at the Muller Station versus St James, one very clearly well looked after, the other left in Crown hands and looks like an absolute disgrace. So to the Minister: what consultation was carried out, particularly around these activities? What consideration was given to business as usual?

The Minister also mentioned in his contribution just a short while ago that we were pushing boundaries of environmental management. So that leads me to ask the Minister my next question: what consideration has been given to legally binding farm environment plans to prevent the pushing of boundaries of environmental management? Because this has even been raised in the regulatory impact statement that the Minister or indeed the Crown should consider those recommendations to work with lessees on the likes of farm environment plans. I would like an answer to that, Minister, thank you.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Chair. In light of the explanation that the Minister, the Hon Damien O’Connor, just has given around a letter that he thought was a bit weak in terms of whether people could dig in post holes and other relatively minor things, I’ve actually got two questions in relation to what he said. One of those is: why did they not just actually put that in a regulation, to say that was a permitted activity, instead of saying that someone could actually just withdraw the letter at some point in time?

The second thing is: when the Minister gave his explanation around Land Information New Zealand (LINZ) not being able to go into those farms or being able to have certain authority over those farms, why, then, does this bill then relate a clause, which I’m trying to take out and replace, that brings Cabinet into the decision? How many other decisions that Government agencies take do Cabinet Ministers go and put their fingers into? Why will the amendment I’ve got here not be taken up and put into this bill as a change? Why does Cabinet need to have a role in doing this, when, as the Minister describes, it’s something that he expects that LINZ will be able to do? Thank you.

Hon EUGENIE SAGE (Green): Thank you, Madam Chair. Speaking to the amendment in the name of Barbara Kuriger, could the Minister confirm that the Environment Committee considered quite carefully this whole issue around what constituted Government policy? One of the reasons that this clause in the bill refers specifically to national environmental standards and policy statements is that the select committee desired that there was a degree of clarity around exactly what national policy the Commissioner of Crown Lands would refer to, and the fact that it was a national environmental standard that had been signed off by Cabinet in the same way that the National Environmental Standards for Freshwater have been would give certainty to the commissioner when he or she was making decisions around discretionary consent and had to bring national policy to bear. What exactly was that Government policy—and the clause was intended to make that clear.

The other thing that I wondered if the Minister could elaborate on was that the Opposition has repeatedly given the suggestion that all pastoral lessees are family operations that have been on the land for generations. Could the Minister confirm that there are a number of overseas residents—absentee owners—and companies who own pastoral leases, and that it is not all this image we have of generations of one family owning the lease?

Further, could the Minister, in terms of the partnership relationship that he talked about—that the bill, through the regulatory regime that it implements, is all about ensuring that things like pests are controlled. Could he elaborate on the significant Government investment that this Government has made in things like wilding pine control and wallaby control, and on Land Information New Zealand’s involvement in rolling out that pest management work?

MARK CAMERON (ACT): Thank you very much, Madam Chair. Very quickly, this speaks to the amendment in the name of Scott Simpson and I think it’s a good amendment, and I want some clarity on behalf of the Minister. I think this House deserves it and I am going to read it verbatim: “For the purpose of deciding whether the activity is necessary to enable the lessee or licensee to exercise their rights and obligations under the lease or licence, the Commissioner may consider the extent to which granting consent enables the lessee or licensee to maintain the historical financial performance of the pastoral farming enterprise.” For that express purpose, I go back to my previous question, which was talking about inherent value. Minister, can you please, for the sake of everyone in this Chamber and those that would choose to be listening at home, explain what “inherent value” means?

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

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. Well, look, I want to pick up where the member Mark Cameron left off in speaking about the amendment in my name, labelled (C) on the Table. This relates to clause 8 of the bill and the proposed new section 12(3), and my amendment would delete the proposed new section 12(3) and replace it with clause 12(3) in the words that Mark Cameron read out. So I’m not going to repeat them for the benefit of the committee, but they are there on the tabled amendment.

What’s really at the nub of this amendment is uncovering the deeply cynical sinking-lid policy that this Government and particularly the Green Party, who were the genesis of this piece of legislation, want to impose on the lessees of high-country pastoral Crown leases. And it’s to do with this, Madam Chair: the bill as drafted operates as a sinking lid on these lease operations, and, over time, the plan buried deep in this section is to actually undermine the viability of the very farming operation that the leases provide the leaseholders with. So the results of this bill, by precluding the commissioner from considering the economics of farming, except to the extent that the benefits relate to the ongoing financial viability of the farming enterprise—what that really means is that the farm actually has to be going broke or bust before the economics of the farm can even be considered.

Now, that’s the secret hidden agenda of this legislation. The Greens, in particular, supported by the Labour Party in this Parliament, who have an absolute majority, actually don’t want these leaseholders on the Crown pastoral-lease land; they want them gone. They want them gone, and the real time bomb in this legislation is within that clause, because that’s the sinking lid. So in order for the considerations to be undertaken by the commissioner, it’s very apparent that the economics of the farming operation have to be so dire, so bad, and so concerning that they must be literally on their last legs before the economics of the farm can be considered. And that’s just absolutely an abomination.

So all the fine words that the Minister has put into his contribution actually belie what is buried deep in the fine print of this legislation. And so my question to the Minister is: why can’t the economics of the farming operation be taken into account at an earlier stage, and why is it that this sinking-lid policy has been hidden—buried—in the fine detail of this legislation, hoping that nobody would discover it until it was far too late?

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. I want to ask the Minister, the Hon Damien O’Connor, about the amendment in my name which would propose to amend the amendments section 2 in clause 6 regarding inherent values. In the current amendments to section 2, “inherent value” means “a value that arises from an ecological, a landscape, a cultural, a heritage, or a scientific attribute or characteristic of a natural resource that—(i) is in or forms part of the land or exists by virtue of the natural character of the land; or (ii) relates to a historic place on or forming part of the land;” but, as one of my colleagues earlier said, strangely “does not include a pastoral farming activity”.

The amendment in my name would amend the definition of “improvements” by inserting, after “includes”, “the managed regeneration of indigenous vegetation”. This would insert a new defined term, in its appropriate alphabetic order: “managed regeneration of indigenous vegetation means regeneration resulting from active”—

CHAIRPERSON (Hon Jacqui Dean): We are still considering Part 1 of the bill. The amendment the member is speaking to is contained in Part 2.

SIMON COURT (ACT): Thank you, Madam Chair. Speaking to Part 1 and speaking to Barbara Kuriger’s amendment, which amends clause 8 of the bill, and it relates to Government policy that relates to nationally applicable environmental standards, Minister, such as national policy standards and national environmental standards. Now, this comes back to the heart of decision making at the centre of the bill, Minister. So, Minister, I have two questions for you as I realise we’re getting to the point of the debate where it’s important that there’s absolute clarity for those watching and for those who’ll be affected by the legislation.

So the first question is, Minister, do you consider that Land Information New Zealand (LINZ) officials and the Commissioner of Crown Lands are better equipped to make decisions about how to manage ecosystems under Crown pastoral lease than the farmers who manage that land and depend on that land to actually produce a living for their families? That’s question one. Do you believe that LINZ and the Commissioner of Crown Lands are better equipped to make decisions about environmental management than the people who actually live on the land?

The second question is around clause 5, around decision making. It says that the Crown “must recognise and provide for the [interests] of Māori” when it is making decisions about discretionary consents for pastoral activities, commercial recreation permits, any easements, or operation of stock. That is of great concern to many people in New Zealand at this time—that unelected iwi Māori interests will also have decision making over resource consents for farming activities. It’s explicit in the bill, Minister. It’s explicit in the bill. So, Minister, my second question is, will you rule out that iwi Māori groups will not have decision making over consenting for Crown pastoral land consent applications? Because, Minister, if you won’t rule it out, then that’s another can of worms that your Government has ripped open. You’re going to have to explain not just to the farmers on Crown pastoral leases, you’re going to have to explain to all the farmers of New Zealand what’s coming for them next. Should they expect this to be a part of the Natural and Built Environments Bill that your Minister, David Parker, is bringing to this House this week?

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

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. I would like to address the amendment in the name of my colleague Nicola Grigg—

Nicola Grigg: Cool—that’ll be good.

Hon SCOTT SIMPSON: —yes, it’s a very good amendment—and it relates to clause 8 of the bill and new section 11(3)(aa). The amendment proposes to delete paragraph (aa) and replace it with a new paragraph (aa), which reads: “may consider any offsetting proposed as a way of counterbalancing adverse effects on inherent values, when determining the level of adverse effects on inherent values;”.

This is designed specifically so that environmental offsetting done on the pastoral lease property can actually be taken into account when the commissioner considers decisions relating to the mitigation of any adverse effects from a proposed discretionary activity. Now, it seems to me to be utterly logical that if in cornerstone legislation such as the zero carbon legislation and other climate pieces of legislation and, indeed, other environmental pieces of legislation, offsetting is permitted—indeed, encouraged—then why would it be excluded from this piece of legislation other than simply to further reinforce the narrative that this is a Government that actually does not want these farmers to succeed in any possible way, because the practical effect of this position is to ensure that farmers do not undertake any discretionary activity which will produce a net benefit to the inherent values of the pastoral lease.

Surely that kind of activity, that kind of environmental offsetting—for instance, it might be the development or the maintenance or the enhancement of a wetland area on the property. Now, why wouldn’t that restoration programme of a wetland area, which would by definition perhaps inherently involve earth disturbance requiring the commissioner’s consent—why would not that good environmental work be allowed for and provided for?

So I’m keen to know why the Minister has excluded that possibility and why he’s already indicated that his party, using their absolute majority in this current Parliament, will not accept the provisions of the very sensible amendment that Nicola Grigg has put before this committee for its consideration.

CHAIRPERSON (Hon Jenny Salesa): I call—

Chris Penk: Simon Court.

CHAIRPERSON (Hon Jenny Salesa): —Simon Court.

SIMON COURT (ACT): Thank you, Madam Chair, I do appreciate the call and the challenge with so many Simons in this 53rd Parliament—and the challenge that brings everybody.

Minister, I put two questions to you before. They’re serious questions. They’re questions that are not just for the people affected by this bill, the lessees, and those who assist them with preparing for and applying for resource management consents—which they are already required to do under the Resource Management Act. I’m talking about those farm consultants, those legal advisers, those technical experts in soil science who have to put applications for resource consents together, who will now actually be tapped out having to put consent applications on behalf of lessees to Land Information New Zealand (LINZ) and the Commissioner of Crown Lands.

So my question to you, Minister, is: look, do you think any of this is actually necessary? And do you think that if it is necessary to have a parallel consenting regime, of course, as the landowner, the Crown, of course, should have final decision-making over what goes on on their land if it is going to seriously devalue or damage the land? That should be the right of every property owner, and any property owner engaging in a commercial leasing arrangement—which is what this is—would of course have those clauses in the lease which set out their decision making. But, Minister, the level of decision making that LINZ and the Commissioner of Crown Lands are required to undertake under this bill is quite extraordinary, and it essentially mirrors the type of consent, consideration, and processing under the Resource Management Act which these farmers and operators are already required to undertake.

So, Minister, my two questions are: is this necessary; do LINZ and the Commissioner of Crown Lands have any more capability to make a decision about environmental management than the farmers who run the land and their expert advisers? And secondly, does this legislation give decision making to unelected iwi Māori groups, which it appears to say, under Māori interests in clause 5(1)(a), “recognise and provide for”? Minister, that’s an important question. I would appreciate it if you answer it for the benefit of the committee tonight. Thank you.

Hon DAMIEN O’CONNOR (Minister for Land Information): No, it doesn’t. In order to clarify the member’s second question, of course we have to pay respect to tangata whenua—for the most part, it’s Ngāi Tahu in the South Island but Te Tau Ihu, in the top of the South Island, also has interests in some of these Crown pastoral leases. We have moved on—if that member hasn’t recognised—to acknowledge the Treaty of Waitangi and Māori across all areas of our country. If he doesn’t respect that, he shouldn’t be here. What I say is that—

Simon Court: Point of order, Madam Chair. I’d just like to remind the Minister that we are all elected members and we all have a right to be here. Thank you.

CHAIRPERSON (Hon Jenny Salesa): And I’d like to just remind the member that, in terms of monitoring what happens in this Chamber, it is up to me to make that call.

Hon DAMIEN O’CONNOR: Thank you. And I have the right to an opinion on the values of people who should be here. Can I just say that we must recognise and provide for the relationship; it does not mean that Māori have oversight of every single decision, and it’s important to clarify that.

If we come back to the question of who knows the land best, I acknowledge absolutely that those who have lived on the land know it really well. They’ll also, in discussions with many of them—and I’d put to you that I’ve been on more high-country leases than just about everyone in this House over the last 12 months, and I’ll give you a list of them if you like. Can I say that, as we understand across other areas of the farming sectors, there’s a lot that we don’t know as well.

Barbara Kuriger: Yeah, right! On your bike.

Hon DAMIEN O’CONNOR: And science is understanding—well, water quality. I can guarantee that the member over there doesn’t know as much as she should about the water quality in and around her many farms. Perhaps if we all did, we’d have better management practices.

Barbara Kuriger: I raise a point of order, Madam Chair. About less than two weeks ago, that Minister was in one of my catchment groups and we were both there, together, where one of our farms is—so just button off.

CHAIRPERSON (Hon Jenny Salesa): Can we please just keep the temperature down and let’s not throw insults at each other across the Chamber.

Hon Scott Simpson: I raise a point of order, Madam Chair. Madam Chair, you’ve made a ruling. But, under intense provocation from the Minister—uncalled for provocation from the Minister—my colleague Barbara Kuriger responded, as she is entitled to do, and I don’t think she should be called out for it. But the Minister should be encouraged not to be unnecessarily provocative in a debate that shouldn’t be taking place in the manner in which it is, led by him at the moment.

CHAIRPERSON (Hon Jenny Salesa): That was what I was trying to encourage by saying let’s not throw insults at each other across the Chamber. And that actually goes to both sides. Can we just calm down, thank you.

Hon DAMIEN O’CONNOR: Absolutely. What goes around comes around and I’d rather keep it on the straight. But I think it’s important not to throw out accusations around this place—that people on this side don’t understand farming and people on that side do. There’s a lot that we have to learn. When it comes to the question, from the member over there, about who knows best, it’s a partnership arrangement between Land Information New Zealand, who have a lot of very knowledgeable and passionate people, about managing—as guardians and custodians, and owner of the lands—the rights of New Zealanders to ensure that those rights are enduring and that we don’t cause unnecessary damage. The people on the land do know a lot—absolutely.

So as we move forward, as we have done in this legislation, this has very much been part of a consultation discussion—robust, some of it—to get to a place where I think we’ve got the balance about right. That is, some would wish us to continue with tenure review—yes, I understand that—but some actually just want certainty and to get on and to farm the land as their ancestors and others have done. That’s what we’re offering here through this legislation. Yes, there will be people who disagree with parts of it. But on all the contentious issues, I have had active, robust discussion with the High Country Accord, with many of the members in the lessees, and I’ve tried to make the adjustments to get the balance right between the landowner, the people of New Zealand, and the lessees who have a perpetual right of renewal and the right to pasturage—but not to soils, and not to some things that have been claimed in the committee. But, actually, as technology and as new opportunities, as innovations roll forward, we want to leave the door open for engagement and partnership arrangements that allow that innovation to be carried out on high-country leases. Indeed, that’s what we will do.

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. Minister, I want to ask you about a point raised by the High Country Accord in their submissions regarding new section 100, where they said it’s inherently discriminatory and contrary to the principle that all are equal before the law. They made the point that the fact that the offence provisions in new section 100 apply to just 150 properties and families is egregious. All New Zealanders should be equal before the law. The criminal law should be of general application and should not single out a group purely on account of their contractual relationship with the Crown.

And they made the point that the fact that the lessee can be issued with an offence notice for removal for a wilding pine without consent, while his freehold neighbour cannot, or that the Department of Conservation as a neighbour simply chooses not to do so and is not accountable for the spread of the resulting seed, is submitted to be contrary to accepted principle of law. They made the point they’re not aware of any other example of the Crown choosing to impose offence provisions upon those with whom it is in a contractual relationship for matters arising from that contract.

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

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

Ayes 75

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Motion agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 129 be agreed to.

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

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Amendments agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Nicola Grigg’s tabled amendment to clause 8 to replace new section 11(3)(aa) be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Barbara Kuriger’s tabled amendment to clause 8 to replace new section 11(3)(b) be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Hon Scott Simpson’s tabled amendment to clause 8 to replace new section 12(3) be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

A party vote was called for on the question, That the Part 1 as amended be agreed to.

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Part 1 as amended agreed to.

Part 2 Amendments to Land Act 1948

CHAIRPERSON (Hon Jenny Salesa): Members, we now come to Part 2. This is the debate on clauses 17 to 22, which are amendments to the Land Act 1948. The question is that Part 2 stand part.

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. Minister, I wish to speak to the amendment in my name, which would be to add new clause 17A to amend section 2. And that would “(1) Amend the definition of ‘improvements’ by inserting after ‘includes’:” the words: “‘the managed regeneration of indigenous vegetation’.” And section 2 would be amended to “Insert a new defined term in its appropriate alphabetical order: managed regeneration of indigenous vegetation means regeneration resulting from active farm management decisions to promote the regeneration of indigenous vegetation whether by way of covenant, fencing, stock management practices, or otherwise”.

Now, I note, Minister, that one of the goals of this, as has been articulated, is to improve the environmental outcomes on farms. And although I note that the Minister has acknowledged that this is done by many, if not most—and I would say all that I’ve certainly come across—if that is the goal then the Minister should support this, because this amendment would address the potential of Crown pastoral land to contribute to New Zealand’s commitment to the reduction of greenhouse gas emissions; something that this Government has made a lot of noise about. In fact, it’s likely to be making announcements next week that it’s spending significant money in the Budget to encourage that. So if it’s going to encourage it there, why not encourage it here on these huge estates—this huge area of the South Island? The scale of the Crown pastoral land is approximately 1.2 million hectares. It provides the potential for lessees under this amendment to adopt farm management practices which would contribute to both greenhouse gas emissions and positive indigenous biodiversity outcomes, both things that I can only imagine that this Government must surely support, given all the noise it has made about its commitment to a reduction of carbon in our atmosphere.

The importance of indigenous biodiversity, which I think is something that this Government is contemplating considering—why not address it here? This amendment would actually provide an opportunity for the Crown pastoral lessees to get some benefit out of actually actively managing positive indigenous biodiversity on the farms and by doing that actually provide a significant benefit to the country. This would require managed regeneration of indigenous vegetation to be recognised as a lessee-owned improvement. This proposed amendment would provide for that outcome. I note this Government is allowing others into the country to buy up farmland to encourage the planting of more forestry. So they’ve encouraged carbon sequestration. Here we have many high country farms owned by generations of New Zealanders. Why not provide a mechanism for them to be able to take some benefit to actually achieving these same outcomes?

Hon DAMIEN O’CONNOR (Minister for Land Information): I’ll just speak to that because, on the face of it, it seems a reasonably sensible proposal. It’s one that I’m prepared to look at as we go forward but the High Country Accord has also put a similar proposal. It goes beyond, of course, pasturage; I guess it’s restoration of indigenous. It’s not planting exotic pines or exotic vegetation so it’s in the middle there somewhere and I think that there needs to be more discussion in this area. I’m not opposed to that, but I think there are far-reaching consequences of just including it here and how it might apply across other Crown land.

So the member has raised, as the accord has, a legitimate question as we go forward, as we’re looking at sequestration, as we’re looking at utilisation of all land across New Zealand—Māori-owned land, Crown land, private land of course—to have more indigenous vegetation and exotics. So I commit to the member that this is an ongoing issue that will be considered, but I don’t consider it appropriate to just insert it in the bill at this time without considering the far-reaching consequences.

NICOLA GRIGG (National—Selwyn): Thank you, Madam Chair. Sorry, I’ll just rearrange everything in front of me. I would like to speak to an amendment under my name seeking to amend clause 21A, and I’d like to turn the Minister’s mind to subsection (2A) and, if you wouldn’t mind, just to clarify for him: “If the land under the lease or licence is pastoral land, the Commissioner must not consent to the transfer, sublease, or other disposal unless satisfied that the applicant has made reasonable endeavours to enhance public access to the land.” It must be terribly embarrassing for the Government every now and then when private enterprise seeks to do its work for it, and in this case, the lessees have hired private lawyers to do the work for the Government, because here we have an apparent statutory conflict. So I’d ask the Minister: what is the legislation that the leaseholder is required to prioritise here? Is it this bill or is it the health and safety Act? Which legislation has precedence, and what would you say, Minister, to a leaseholder who has to allow public access to gain or retain consent for an activity but, at the same time, is liable for any accidents that might happen on that property to someone who gains access?

Hon DAMIEN O’CONNOR (Minister for Land Information): The health and safety legislation is pretty clear around all farmland, and the landowners have to do all they reasonably can, of course, to alert people to potential dangers, and I don’t see that there’s any more danger here than for other farmland, where a large a number of farmers provide public access. The issue raised here was one of contention. It went back a number of years where a foreign landowner, effectively, blocked access to the high country through his particular property, and it raised the reality that the values of New Zealand farm owners and high country lessees and the values of foreigners were not always aligned. And so, God help us if the National Party ever get back into power again; they are most likely to consider the sale of New Zealand land to anyone, and that would be a real risk, and they then would open up the realities of that conflict of values.

And because these are large blocks of land and because sometimes they do block access into other high country recreational areas—it’s not often, and I have to acknowledge the vast majority, if not practically all of the high country lessees have provided public access over the years, with a few exceptions. And so the question was, “Well, should we intervene and demand public access?” No, that was going a little too far. We said, “Well, at the point of sale, then the public access, if it has been blocked, should be considered by the commissioner prior to approving the transfer.” I think it’s a reasonable proposition. I don’t think there will be many situations like this at all in the future, but it’s clear to know that there is a provision should public access be blocked through a property to the public estate at the back—often it’s the high country—that, if that’s blocked when it’s transferred, then there’s an opportunity to have a look at that situation. That’s what this is about.

Hon EUGENIE SAGE (Green): Thank you, Madam Chair. I would also like to just comment and ask the Minister a question about clause 21A, amending section 89, and the changes there. In the bill as it was reported back from select committee, the commissioner must not consent to the transfer of a pastoral lease unless they were satisfied that the applicant had made reasonable endeavours to enhance public access. In the Minister’s Supplementary Order Paper 129, the burden has been changed and now it’s the commissioner must consider whether requests for public access have been unreasonably refused by the lessee or licensee in the past. So there’s a higher threshold around public access which actually benefits the leaseholder. Can I ask the Minister why this change was made from what was reported back from select committee? And was it the result of consultation with the High Country Accord or Federated Farmers or leaseholders?

Hon DAMIEN O’CONNOR (Minister for Land Information): Yes, all of the above. It was through thorough consultation with all the parties. Some exaggerated the dilemmas, and there weren’t that many blocked access situations at all. There was a longstanding one; I’m not going to go into the details of that. But actually the vast majority of lessees do provide that public access. That goodwill should be maintained, and I did not want to have overreach in this piece of legislation implying that every lessee was blocking access. That would be unfair, it’s inaccurate, and I think the goodwill that has been established across almost all the leases should be maintained, and that’s what we’re trying to do here.

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. Minister, I just wanted to speak to the tabled amendment in the name of my colleague Nicola Grigg, marked “G” on the Table. This would amend the bill, namely paragraphs 1 and 2 of Schedule 2, under Part 1 of proposed new Schedule 1AB, permitted activities, which were fundamentally “incapable of practical application. They will result in one or more of the following outcomes: Deterrence of sensible farm management practices being undertaken because of the cost and delay of an application process [and/or] Deferment of such applications and (in the case of weed control with consequential adverse effects) [and/or] Increased cost and delay in undertaking sensible farming practices [and/or] Undermined relationship between farmer and front-line officials. By way of example, the current Bill requires consent for the clearance of exotic weeds (e.g. gorse, broom, wilding pines)—which are a significant issue across the South Island—unless: The exotic pest plants comprises ‘no less than 90% of the vegetation cover’ and The Lessee has not controlled more than 25 hectares of exotic pest plants in the past 5 years. The obvious issues [with this] are: What is the 100% against which the 90% is to be measured. A single wilding pine or gorse bush in a paddock would seem not to comprise 90% of the vegetation cover of that paddock and therefore cannot be removed without an application for consent”. So we’re sort of seeing some of the confusion that can arise very, very quickly in adverse effects.

Another question is, “Is the 90% to be measured by area or by species”? Another question is: “If you have a property of 10,000 hectares, a farmer is limited to controlling 25 hectares for pest plants in any five-year period (about 0.25% of the farm) whereas most farmers want to have an ongoing pest plant control programme”. Another issue is: “Leaseholders are under an obligation by the terms of the lease; local and regional plans; and the Biosecurity Act 1993 to control pest plants”. So there’s an inherent conflict there. Another issue is that “The proposed law requires leaseholders to obtain consent to perform what other law obliges them to do”. So these proposed changes in this tabled amendment, Minister, would introduce some common sense to the bill and would make it understandable, and certainly ensure that we have the outcomes we want to see, which is pest plants being removed. We don’t want to see another situation like up in the top of the North Island where wilding pines are out of control, and certainly other parts in my region and Central Otago, parts of Southland, with wilding pines have really got away. We want our high country farmers to have the tools to remove those quickly before they become a problem.

So this tabled amendment would “anticipate the use by the Commissioner of farm plans to provide a more efficient mechanism for management oversight, and a practical framework for the management of specific pest plants.”

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. I would like to refer to the tabled amendment in my name, labelled “E” on the Table. It relates to a fairly fine point, but an important one none the less. So the tabled amendment seeks to, in Schedule 1 of the bill, propose a new Schedule 1AA 3(4), on page 40 of the bill. What this tabled amendment seeks to do is to replace the proposed clause 3(4) and replace it with the following words: “Nothing in this clause limits or affects the right of judicial review that a person may have in respect of the proposal or related review [of] a Court’s ability to order that a tenure review [process] shall … as if this Act had not been passed or [made] other such orders as the Court sees fit.” Now, that might sound a little complicated, so let me just take a minute or two to explain to the committee what is at issue here.

The issue, really, is that the bill as introduced extinguished the rights of lessees to tenure review and to apply to the High Court to review the decision-making process of the commissioner and, where relevant, if necessary, the Minister, as well. So, by ending tenure review, that process of providing an opportunity for a judicial review has been removed. So the bill as reported back from select committee actually responded to submissions on that very point. The bill now provides for review, but—and it’s a big but—it provides no effective remedy to the review. So a successful High Court application could result in a finding that the Crown had acted unlawfully, but with the repeal of a tenure review, the court then would be unable to actually grant any practical remedy upon their finding.

So this tabled amendment in my name addresses that deficiency and it ensures that where legal rights can be established, then a remedy—an effective remedy, an appropriate remedy—can indeed be ordered. I think that’s just a bit of an error on behalf of the wordsmiths that did a little bit of drafting; I don’t think there was any intent, in a sinister way, to remove that right to provide an effective remedy. But my tabled amendment provides for a remedy to be ordered when it is appropriate to do so by the court.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Chair. It’s probably the right time to follow on from Scott Simpson with his tabled amendment with another one here, which is the amendment labelled “F” on the Table. On page 41, it talks about no compensation being payable, so no compensation. It says under clause 6(1) of the bill, “No compensation is payable by the Crown”—

Dr Duncan Webb: I raise a point of order, Madam Chair. My understanding is that schedules are to be debated at the same time as the part to which they relate. Schedule 1 of the bill relates to Part 1 of the Crown Pastoral Land Act, which is, indeed, Part 1 of this bill, and this debate should have been held earlier.

Stuart Smith: A point of order.

CHAIRPERSON (Hon Jenny Salesa): Just wait one second. I’ll just get some advice on this.

Stuart Smith: A point of order.

CHAIRPERSON (Hon Jenny Salesa): Let me deal with the first point of order. So Dr Duncan Webb is indeed right. Schedule 1 should have been debated with Part 1.

Stuart Smith: Madam Chair, that’s not the advice that we had when we started on this. In fact, the previous Chair said the number of tabled amendments that were included; it was five, as I recall, and in fact, she said that. So we followed that advice, and I think it would be most improper to not continue in that way, because I’ve got a tabled amendment here I want to debate and we haven’t spoken to those. I know the members are very uncomfortable on the other side, but that doesn’t mean things shouldn’t be done properly here.

Joseph Mooney: A point of order, Madam Chair. I actually had the same reading as my colleague across the House earlier in the debate in Part 1, and I went to speak to a tabled amendment under my name, and I had a ruling from the then Chair that I would have until Part 2 to do so. So we have proceeded on the basis of that, and, as my colleague Stuart Smith just said before, it would be inherently unfair if we were then unable to speak to these tabled amendments, given the advice we were given previously that we could not speak to them under Part 1.

CHAIRPERSON (Hon Jenny Salesa): I will allow for now for you to speak to the tabled amendments now, but the Clerk is going to go out and check with the previous Chair what her ruling was. But for now, I’ll let you go ahead.

BARBARA KURIGER: Thank you. So I was actually speaking to the tabled amendment of Scott Simpson, which refers to clause 6 on page 41 of the bill, which says no compensation is payable. In clause 6(1), “No compensation is payable by the Crown for any loss or damage, or any adverse effect … or under any lease or … right [of] interest, arising from the enactment or operation of [this] amendment Act.” Clause 6(2) says “If there is any inconsistency between this clause and any other enactment or rule of law, this clause prevails”.

Now, my colleague Scott Simpson has suggested on his amendment, and I agree with this, that compensation may be payable, and clause 6 should say, “Nothing in this Act precludes a court ordering that the Crown is liable to pay compensation in connection with a judicial review in respect of a proposal or related review, or for any loss or damage, or any adverse effect … or under any lease or other right of interest arising from the enactment or operation of the amendment Act.” Now, if you’re in a long-term—and this has been a very long-term legal relationship with the Crown, and the Crown comes along and then changes the rules on the farmer and the farmer goes for a judicial review and the Crown is found to be incorrect, would it just not make good moral judgment for compensation to be able to be payable? So I’d like the Minister to make a comment on that, please.

STUART SMITH (National—Kaikōura): Well thank you, Madam Chair. It is a pleasure to get to speak on my amendment which is labelled “I” on the table. It is to amend Schedule 2 of the Crown Pastoral Land Reform Bill; a proposed new section 16 on page 43. It would strike out that one and have, “Maintaining: a. existing consented roads, paths, or tracks (including laying local gravel); or b. roads, tracks, or paths for which no record of a consent having been issued is held by the Commissioner, but which was formed prior to 1990 and the Commissioner has not notified the lessee or licensee that the formation of that road, path or track required consent; and c. any such a road, path, or track by way of any necessary realignment following a weather, fire, or seismic event not involving more than 400m of formation of replacement road, track, or path.”

Now, the reason for this is quite simple. These places, and some have been farmed for 160 years—they didn’t have consents 160 years ago, and Land Information New Zealand might not have records for all of those tracks and almost certainly do not. It’s just the way things are done. And yet this is sneaking something in, and an unintended consequence of this is that there are going to be a lot of activities that would have been normally carried out on a property that were not considered necessary to have consents in this bill—because it’s already in there—but for this omission of these tracks that don’t have consents. And what’s more, if the Crown was concerned about that, the commissioner should have actually notified the property owner that those tracks, paths, etc., don’t have consents, and they could have done something about it, but they haven’t done that.

So I think it’s inherently unfair—this is what we’ve heard several times through this debate tonight—and I’m sure it’s just an omission, just like the 90 percent is an omission as I alluded to before in new section 1(c), set out in Schedule 2: the invasive exotic pest plants comprise no less than 90 percent of vegetation cover. You see, you don’t need a consent only if the ground is covered by 90 percent or more by an exotic pest. That is just, again, poor drafting. It’s just a rushed bill, rushed through. The hearing of the submissions that came in—well, they weren’t really paid much attention to, I don’t think. I think there could have been far more interaction between the Government members and some of the submitters but that just didn’t happen. And you know, look, we can say why, but I think it’s pretty obvious and I don’t think there’s any need to do that.

But you’ve got an opportunity now, Minister, to sort this out, and certainly in my case to support this amendment—a very good one. Minister Damien O’Connor, I know that you do have a fair streak running through you, and this is very fair, and I think that you should vote for this. I think you should also answer the question I asked you before, about 90 percent, where you didn’t come back to that—we need to hear that. Thank you.

Hon DAMIEN O’CONNOR (Minister for Land Information): It’s a bit late for that member. This bill went from the House into select committee, where I and other members were open to proper discussion and consideration of these kinds of issues. No, the Opposition chose to just oppose the bill in its entirety rather than work through to improve the bill where things like this might have been considered properly.

One of the issues raised by the members over there; and it’s something I’ve looked at, the one of permitted, discretionary, and banned. These are extensive lists. I’ve made the point before about, actually, the National Government’s legislation mean they all had to be discretionary. But I come back to a very small list of prohibited activities. I won’t dwell on those, but can I come back to the one of controlling invasive, exotic plant pests—the area involved does not exceed 25 hectares in any five-year period. That issue has not been brought to my attention before. Indeed, by submitters—and I’ve talked to the accord on a number of occasions and Land Information New Zealand have been listening—and indeed the select committee could have made a recommendation on that and it could very well have been changed. But no, the Opposition just chose to belligerently oppose this bill and not do what it should do on behalf of the lessees and to make the adjustments necessary. I was open to any of them.

Can I say that all the Opposition did is came back and said, “We oppose the bill.” Can I say that at the heart of the progression here will be the implementation of farm plans. That, I think, is something that the high country farmers are welcoming. It’s an opportunity to work through—many of them will have extensive farm plans in place. Some won’t. But it’s an opportunity to work through all these issues, and where there might be a situation where more than 25 hectares of control is required, then I would expect the commissioner working through that farm plan to approve that—if it’s sensible, with the proper mitigations or whatever. This is the kind of sensible approach that we will take moving forward to working in partnership with those high country farmers.

CHAIRPERSON (Hon Jenny Salesa): I would like to make a ruling in terms of Part 1 and Part 2 and the amendments. The previous Chair did allow calls to be made on Schedules 1 and 2 during her time on the Chair with the debate on Part 1. I did follow it a little bit from my room. There was probably about up to an hour and a half spent on Part 1, and I do recall one of the things that the Chair at the time said was that she encouraged members to take calls on the amendments, because it had been nearly an hour and the amendments had not actually been discussed. I’ve given members some leeway to take calls on the schedules during Part 2, but I’m now ruling that this debate will only be on Part 2 and the amendments to it from this point.

The question is that the Minister’s amendments to Part 2 set out on Supplementary Order Paper 129 be agreed to.

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

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Amendments agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Joseph Mooney’s tabled amendment to insert a new clause 17A be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

CHAIRPERSON (Hon Jenny Salesa): Nicola Grigg’s tabled amendment to delete clause 21A(3) is out of order as being inconsistent with a previous decision of the committee.

A party vote was called for on the question, That Part 2 as amended be agreed to.

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Part 2 as amended agreed to.

The result corrected after originally being announced as Ayes 77, Noes 43.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Minister’s amendment to Schedule 1 set out on Supplementary Order Paper 129 be agreed to.

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

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Amendment agreed to.

The result corrected after originally being announced as Ayes 77, Noes 43.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Hon Scott Simpson’s tabled amendment to Schedule 1, new Schedule 1AA, to replace clause 3(4) be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Hon Scott Simpson’s tabled amendment to Schedule 1, new Schedule 1AA, to replace clause 6 be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

A party vote was called for on the question, That Schedule 1 as amended be agreed to.

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Schedule 1 as amended agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Minister’s amendments to Schedule 2 set out on Supplementary Order Paper 129 be agreed to.

A party vote was called for on the question, That the amendments to Schedule 2 be agreed to.

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Amendments agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Nicola Grigg’s tabled amendment to Schedule 2, new Schedule 1AB, to replace items 1 and 2 with new items 1 and 2(c) be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Hon Scott Simpson’s tabled amendment to Schedule 2, new Schedule 1AB, to replace item 14 be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Stuart Smith’s tabled amendment to Schedule 2, new Schedule 1AB, to replace item 16 be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 75

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

Amendment not agreed to.

A party vote was called for on the question, That Schedule 2 as amended be agreed to.

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Schedule 2 as amended agreed to.

A party vote was called for on the question, That Schedule 3 be agreed to.

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Schedule 3 agreed to.

Clauses 1 and 2

CHAIRPERSON (Hon Jenny Salesa): Members, we now come to our final debate. This is the debate on clauses 1 and 2, the title and commencement debate.

STUART SMITH (National—Kaikōura): Well, I think the name of this bill should be changed to the “Crown Pastoral Land Reform (No Need to Have a Committee Stage) Bill”. It was quite clear from the Minister’s speech before—they’re rattled, aren’t they? They’re rattled. I don’t know what’s happened there. Maybe they got a bad poll, I don’t know, but they’re all a bit prickly tonight. But the Minister’s spent quite a bit of time saying there was no need to have a committee stage—no need; it comes out of the select committee and it doesn’t need to have a committee stage. And then he has the audacity to have a Supplementary Order Paper himself. Well, I know he’s not a new member, but I don’t know, do they still run those classes for new members? Perhaps we can get him a bit of a refresher so he can understand how this works. And then poor old Duncan Webb, doing the voting, getting up [Member speaks with tired voice]: “65 votes in favour.” The poor guy, he needs a bloody Red Bull to vim him up a bit, you know. I think their attitude today says it all. It’s a poor bill. It’s got a poor name, and it needs to change.

MARK CAMERON (ACT): Madam Chair, thanks very much. I would like to add to that, actually, in talking about debating the name of the bill, I think an appropriate name would be “To Remove the Inherent Value From All New Zealand Farmers Bill” because this speaks to the very thing that has eroded 150 years of trust in rural New Zealand. It’s an absolute disgrace. I think it’s an apt name for it.

CHAIRPERSON (Hon Jenny Salesa): The question is that clause 1 stand part. All those in favour say Aye, to the contrary No. The Ayes have it. A party vote has been called for. The Clerk will conduct a party vote. [Interruption]

Hon DAVID PARKER (Minister for the Environment): Point of order, Madam Chairperson. There is a prescribed way of voting in this House and I hope that’s going to be taken into account in the vote count.

CHAIRPERSON (Hon Jenny Salesa): Thank you for pointing that out, the Hon David Parker.

A party vote was called for on the question, That clause 1 be agreed to.

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Clause 1 agreed to.

A party vote was called for on the question, That clause 2 be agreed to.

Ayes 77

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

Noes 42

New Zealand National 32; ACT New Zealand 10.

Clause 2 agreed to.

Bill to be reported with amendment.

Bills

Maritime Powers Bill

In Committee

CHAIRPERSON (Hon Jenny Salesa): Members, we come now to the Maritime Powers Bill. I remind members that they are able to participate remotely. If you’re on the Zoom and want to make a call, please type “call” into the chat. You should also use the chat if you’d like to raise a point of order.

If we receive new tabled amendments, I’ll advise members so that they can refresh the House papers page to see the new amendment.

Finally, it’d be helpful for members to ask multiple questions if they have them. The members are in charge of the call. The Ministers are here to answer your questions.

Dr DUNCAN WEBB (Junior Whip—Labour): Point of order, Madam Chair. Madam Chair, I have discussed with the other whips and I seek leave that this bill be considered as one part.

CHAIRPERSON (Hon Jenny Salesa): Leave is sought for that purpose. I take it that that has been agreed to. We shall discuss this bill as one.

Parts 1 to 3, Schedules 1 and 2, and clauses 1 and 2

CHAIRPERSON (Hon Jenny Salesa): The question is that Parts 1 to 3, Schedules 1 and 2, and clauses 1and 2 stand part.

I call on the Hon Gerry Brownlee.

Hon Gerry Brownlee: Oh, sorry. You’ve got the Minister first I think.

CHAIRPERSON (Hon Jenny Salesa): I call on the Hon Minister Nanaia Mahuta.

Hon NANAIA MAHUTA (Minister of Foreign Affairs): I want to thank the honourable member for allowing me to open up the committee stages of the Maritime Powers Bill. Can I just, by way of introduction to the committee stage, acknowledge and thank the select committee for their careful deliberations and also helpful suggestions to amend the bill, the officials in the Parliamentary Counsel Office also in their deliberations. The committee received seven written submissions on the bill from the New Zealand Port Company CEO Group, New Zealand Council for Civil Liberties, the Privacy Commissioner, and the New Zealand Law Society, and three individuals. It’s evident in many of the submissions and the way in which the select committee discussed elements of the bill that they took on board some of those recommendations and went further to ensure that we are achieving the intent and purpose of legislation that can extend enforcement powers into international waters.

When the bill was introduced to the House, it was clearly stated by the Government that there was a need to ensure that there was consistency in the way that our domestic laws were being applied in terms of enforcement powers into the international waters. I had to go over many of the initial comments made by members across the House to ensure that we were addressing many of the concerns that had been raised. Can I say that there was a number of issues that were raised by members in terms of the classes of enforcement officers. I note the member, the spokesperson for foreign affairs in the Opposition, the Hon Gerry Brownlee, raised the issue of whether or not Department of Conservation (DOC) officers should be considered as enforcement officers. But when we think about the range of activities that take place in relation to the trafficking of endangered species and the way in which both the Wildlife Act and also the trafficking of endangered species are undertaken not only on terrestrial spaces but in international waters—the extension of enforcement powers seems to be a natural progression.

However, I see from the range of advice that the committee was provided, there was a clear articulation of the range of powers and the subsequent acts that were being recognised in the bill. And I’m anticipating if there are questions of this area, it will be based on the advice that the select committee received. Also, in relation to the no need for warrants to be issued, this is consistent with the way in which search and seizure surveillance powers continue to exist. But again, that received a thorough, I understand, hearing and discussion in the select committee.

What I wanted to, I guess, assure members—certainly of the Green Party, because their position was well understood prior to the introduction of this bill—is that there was a thorough discussion around warrantless aspects of the enforcement provisions when the Search and Surveillance Bill was being put through the House. I recall, when we debated the Search and Surveillance Act, that this was and continues to remain an issue for the Greens. Again, I note it because it was a matter that was discussed.

Also, can I just say at a practical level—and I have to put my practical hat on, because the proof of the way in which enforcement powers are intended to exist are based on its application. And it would never be the case in international waters that these powers would exist in isolation. So by that I mean is that the range of enforcement officers, Customs officers, the police, DOC rangers and the like, they would be working together and in concert in terms of making a pre-assessment of utilising the powers that are in this particular Act to enable the collection of evidence, to undertake stopping a vessel, searching a vessel, and collecting evidence for the purposes of the prosecution.

The other point I would raise is that I understand that the committee fully exhausted the discussion around the criminal nature of the offence, and that in itself is a high threshold by which to invoke the powers. Again, I thank the committee for their effort and their helpful recommendations to improve the bill.

Hon GERRY BROWNLEE (National): Can I thank the Minister for beginning a discussion on the issue of who may exercise the powers under this bill. It is the one area that the National Party has some concern about. It won’t stop us supporting the bill through the balance of its House stages but I think, given that courts these days will often derive some of their determinations around the law from what is said in Parliament, then I think there needs to be a greater articulation by the Minister of exactly what the limits are on the powers of non-sworn officers of the Crown—in other words, on Customs officers, on the Department of Conservation (DOC) rangers, and any others who might be included in that body of enforcement officers that the broad term “enforcement officer” is used for here in the bill.

While we would have some concern about the power being extended to people who are outside of the usual range of what we might consider policing, just imagine if one of those officers did engage in what might be an arrest situation, something that leads to a charge being laid, but a question was raised about the jurisdictional rights of that officer to undertake the enforcement they had. Would that be a good thing or not? It would be a bad thing in my opinion, so I think the Minister needs to articulate a little bit further exactly what the constraints are and what the extensions are of powers that will be or could be undertaken by those enforcement officers.

I’d say it’s also a little bit odd, I think, that DOC officers are considered to be—or DOC rangers can be considered as having these powers when, in fact, it would be expected that, firstly, the surveillance system in New Zealand would have identified a ship that might be engaged in some kind of criminal activity or might be the harbinger of criminal activity and therefore when a pursuit took place that there would be appropriately capable police on board regardless of whether there was Defence involved. But then the reality for New Zealand is that in a pursuit like that Defence will always be involved. So I don’t quite understand why there needs to be the extension to DOC officers, to DOC rangers, as proposed in the bill. I have to say that, notwithstanding the excellent work done by the Ministry of Foreign Affairs and Trade lawyers, what has been provided to us was more about the fact of what might happen rather than a specific reason for it.

So with those comments, I’d ask the Minister to just expand for the Hansard record, for a place that the court might refer to should there be a question about jurisdictional rights for enforcement officers, to get some clear steer on what certainly the Government believes is the situation but also to elaborate or to make it clear exactly what the Parliament is going to express at the point that the third reading of this bill passes. I’ll leave it for the Minister to comment there. I have a number of other questions that I’d like to put to the Minister.

Hon NANAIA MAHUTA (Minister of Foreign Affairs): Thank you for the helpful, I guess, clarification of the extent of the concern. Can I firstly make a comment in relation to the role of the New Zealand Defence Force—more than likely, highly probable, highly likely that it will be a defence vessel that will be undertaking the activity to pursue an identified vessel that will be of interest for a specific set of reasons.

In terms of the ongoing comments around the suitability of Department of Conservation (DOC) rangers, I think we have to keep in mind that the relevant expertise of each class of enforcement officers is a high consideration. So I am aware that the select committee received a table of advice setting out the comparable powers of each class of enforcement officers and what they are able to do. So, for example, DOC warranted officers and rangers have comparable powers under the Wildlife Act 1953, which enabled them to stop any vehicle or boat, enter or board it, search it, seize evidential material, detain a person, and arrest a person. Similarly, DOC endangered species officers, who have powers under the Trade in Endangered Species Act 1989, have powers to stop a vehicle, which includes a ship, enter or board it, search it, seize evidence, detain a person, and arrest a person. And so it goes through the relevant class of enforcement officers including Customs and the relevant Act, the New Zealand Defence Force and the relevant Act, and, in this case, the Fisheries Act and the Crown Minerals Act, also the Wildlife Act and the Maritime Crimes Act, and also the Police, who have comparable powers under the Search and Surveillance Act. It sets out very clearly the range of Acts that provide those identified enforcement officers with the subsequent powers that they can exercise into national waters.

Can I also go back and say, specifically with regards to DOC rangers and their particular powers, they have expertise in terms of their knowledge of the Wildlife Act and the Trade in Endangered Species Act. And that is as you would expect; they have expertise under those particular Acts. The New Zealand Police Force have expertise under their subsequent Acts, and so do Customs officers. So, for that reason, it’s going to be important that they act—as I said previously—in concert to undertake a pre-assessment of the nature of their concern with a particular vessel; it could be in relation to human trafficking, wildlife and endangered species trafficking, drug trafficking. But in concert and as a collective, they will undertake an assessment and, then, collectively exercise the full level of responsibilities that they have as enforcement officers.

Hon GERRY BROWNLEE (National): Well, look, that’s sort of helpful. But can I ask a very specific question, then: are the powers of people, other than the New Zealand Police, limited to the Act under which they are able to already exercise enforcement powers?

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. I’ve been enjoying the discussion between Minister Nanaia Mahuta and the Hon Gerry Brownlee. I think, as Mr Brownlee has articulated, this is a really key area for the committee itself to understand, with the implication, of course, that courts might be called upon in the future—and, in fact, inevitably will be—to consider the question. So to have some clarity provided through this process would I think be helpful indeed.

I note that the Minister is diligently taking some advice on that particular exchange, so I’ll take the opportunity of raising perhaps a couple of separate questions. They might be less important, but nevertheless they’re important to me. So I’ll just put them out into the ether in any case, and we’ll see what we get back, which may or may not be, of course, tonight.

My question was actually in regard to the role that the Attorney-General will play in relation to possible prosecutions. I note that the Attorney-General himself—the current version thereof—is in the Chamber, and I prefaced my remarks by saying, of course, that I don’t cast aspersions on any person who holds that office. The intention merely is to understand the way that those powers would be exercised, and particularly that kind of chicken-and-egg scenario that we’ve got whereby, as the select committee articulated, the Attorney-General’s consent is needed for proceedings for trial and punishment of a person—to use their phrase—but nevertheless certain actions leading up to that can take place in the meantime and perhaps in anticipation of such consent, notwithstanding that such consent hadn’t at that time been sought, let alone given. I presume that the reason for that is because it might be out on the high seas or in these various areas in the water delineated by the exclusive economic zone, the territorial sea, and so forth, and that it’s not practical to reach out to the Attorney-General and gain his or her—as the case may be—consent to those proceedings.

But I do think it is an important question, given that as the Minister herself has acknowledged, search and seizure can take place without a warrant. Of course, again, it wouldn’t be reasonable for me to suggest that the ordinary course of events on New Zealand land would take place such as a justice of the peace, or a judge or the like, would give consent, for example, to a search. So, again, I don’t wish to make comments that could be regarded as a suggestion that’s not practicable on the waters, but nevertheless I did think it would be helpful to have some explanation from the Minister on that.

I note that she appears ready, willing, and able to comment perhaps in response to the exchange that she and the Hon Gerry Brownlee have had, so to allow time for that this evening, I’ll hold fire on any further questions or comments I might have, Madam Chair.

Hon GERRY BROWNLEE (National): I’m sure the Minister will respond to questions asked in a few minutes. Look, the other thing that is a little bit interesting is the issue of permission from flag States. So I’d like the Minister just to explain how that regime works, because, as you read the bill, we are saying that we want to have powers to prevent or to take enforcement action against anybody committing any illegal activity on a ship inside New Zealand’s territorial seas, and then for any event that occurs in that space to extend the jurisdiction out into international waters, as well. The question then becomes: is the bill contradicting itself by requiring that the permission to take an action against anybody on a ship requires the permission of the flag State for the vessel? Now, if the reading of this legislation actually gives a contraposition, then I’d like the Minister to make that clear if that’s at all possible.

The other question that I think has just been answered—or, really, perhaps not has been answered but will be answered by the Minister in relation to the continuation of powers, which my colleague just raised, which is the issue of: where does the stop and start occur on all of this?

The bill itself has been amended, and it would be good for the Minister to just explain exactly how that amendment gives effect to the proposal which means that if a pursuit is started in international waters or inside New Zealand’s territorial sea, then the powers of arrest, containment, etc., exist right up to the time that it is berthed inside a New Zealand port. The question is: what happens at that point? Are those charges then, effectively, laid before the courts in New Zealand? Who actually makes the arrest? Is the arrest made by the officer in the first place? Is there a handover to Corrections or is there a handover to the New Zealand Police? Exactly how that works is a question that it would be useful for the Minister to answer. As I’ve said before, this is a bill that is necessary. New Zealand is an island nation. We are surrounded by one of the biggest territorial seas of any nation in the world. For us to have this sort of provision is important.

The other thing that would be useful for the Minister to explain would be the reference to aircraft inside a maritime bill. It might be very obvious to some of us who’ve been through that. We all know that the use of drones, etc., is going to become more and more prominent as time goes on, but the explanation about how it fits into a maritime bill would also be quite a useful thing, I think, for the public record as we move forward.

CHAIRPERSON (Hon Jenny Salesa): The time has come for me to report progress.

House resumed.

Report of Committee of the whole House

Report of Committee of the whole House

CHAIRPERSON (Hon Jenny Salesa): Madam Speaker, the committee has considered the Retail Payment System Bill and reports it without amendment. The committee has also considered the Crown Pastoral Land Reform Bill and reports it with amendment. The committee has also considered the Maritime Powers Bill and reports progress. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Voting

Correction—Plant Variety Rights Bill

ASSISTANT SPEAKER (Hon Jacqui Dean): Members, before we adjourn for the day, during the vote on the second reading of the Plant Variety Rights Bill, the vote for the Ayes was incorrectly recorded as 108 votes. The correct vote was 107 in favour. The record will be corrected. The House stands adjourned until 2 p.m. tomorrow.

The House adjourned at 9.58 p.m.