Tuesday, 23 August 2022

TUESDAY, 23 AUGUST 2022

TUESDAY, 23 AUGUST 2022

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

ADRIAN RURAWHE (Deputy Speaker): E te Atua kaha rawa, ka tuku whakamoemiti atu mātou, mō ngā karakia kua waihotia mai ki runga i a mātou. Ka waiho i ō mātou pānga whaiaro katoa ki te taha. Ka mihi ki te Kuīni, me te inoi atu mō te ārahitanga i roto i ō mātou whakaaroarohanga, kia mōhio ai, kia whakaiti ai tā mātou whakahaere i ngā take o te Whare nei, mō te oranga, te maungārongo, me te aroha o Aotearoa. Āmene.

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

Speaker’s Statements

Dr Gaurav Sharma—Change of Parliamentary Membership

SPEAKER: Members, under Standing Order 36(1)(c), I have been advised by the senior Government whip that the Labour Party’s parliamentary membership has changed and that Dr Gaurav Sharma is no longer a member of the Labour Party for parliamentary purposes. Accordingly, under Standing Order 35(5), Dr Sharma is from 23 August 2022 regarded as an Independent member for parliamentary purposes.

Visitors

United States of America—Council of Young Political Leaders Exchange

SPEAKER: I’m sure members would wish to welcome delegates on the American Council of Young Political Leaders Exchange, who are present in the gallery.

Obituaries

Sir Toby Curtis

TĀMATI COFFEY (Labour): I seek leave to move a motion without notice to recognise the passing of Sir Toby Curtis.

SPEAKER: Is there any objection to that course of action being taken? There appears to be none.

TĀMATI COFFEY: I move, That this House note with sadness the passing of Sir Toby Curtis of the Arawa people, a good man who loved his people and who will be beautifully remembered in the hearts of many.

At his tangi, it was noted the work that he’d done in recognising the impact of colonisation on Māori. At his tangi, they also spoke of his beginnings in broadcasting and his work on getting the 1989 Broadcasting Act passed, as well as many other influences he had in politics and improving education for Māori. Also noted at his tangi was his determination for co-governance, for Māori education, and his work for the health of our water. Tā Toby called out cowards who did not understand the need for equity via co-governance.

E Tā, menemene mai i te pō, haere, haere, haere atu rā.

[To you, Sir, smiling on us from the place of departed spirits, may you rest in peace.]

Dr SHANE RETI (National): E te rangatira Tā Toby, kei te tangi te ngākau i tō wehenga atu i te pō. Moe mai ki roto i tō moenga roa. Takoto okioki ki roto i te aro i te Ariki, haere, haere, haere rā.

[To the chief, to Sir Toby, my heart grieves at your passing to the place of departed spirits. Sleep the long sleep. Lay in rest before the Lord, may you rest in peace.]

The National Party sends their thoughts and aroha to the family of Tā Toby Curtis, who have lost a father, a husband, and a mentor, from we who remain, who have lost a guide, a leader, and a friend. We acknowledge and thank him for his contribution to education, being highly educated himself, with a doctorate, and the fervent belief he had in the importance of education and being educated. The National Party recognises and thanks him for his contributions to the party’s function in times that have passed. Toby’s leadership to Māori media was pervasive and, for Te Māngai Pāho, his chairmanship and leadership was critical in the early days of its inception, and that leadership endures today. He shared a love for the Māori language and simply had a love for people. He will be missed.

Nō reira, e te rangatira, moe mai, moe mai, moe mai rā.

[Therefore, my chief, rest in peace.]

Hon MARAMA DAVIDSON (Co-Leader—Green): It’s an honour and a privilege to farewell kaumātua Tā Noble Thomson “Toby” Curtis of Te Arawa, Ngāti Pikiao, and Ngāti Rongomai. Ko tana mate he mate nui mō Te Ao Māori, he mate nui mō te ao katoa.

[His passing is not only a significant one for the Māori world, but the whole world.]

A leader, orator, academic, and activist, he was humble, ki ōna whakaaro waiho mā te tangata e mihi [he believed in humility], never straying ever from wanting a better Aotearoa where Māori and Pākehā aspirations could be achieved through cultural understanding, and he fought for those values right through to the very end.

It was an honour to attend his tangi in Rotorua on Friday with Labour MPs and Ministers, and part of that was because he held us to account as the Crown. He challenged us to uphold our obligations under Te Tiriti, and he fought for education by Māori and for Māori that was steeped in Te Ao Māori.

Nō reira, e te rangatira, whāia ko te mātauranga hei whītiki mō te iwi me ngā uri kia toa ai.

[Therefore, oh chief, seek from the fountain of knowledge, as a girdle for the people and descendants so they may be victorious.]

Kia ora.

DAVID SEYMOUR (Leader—ACT): On behalf of ACT, I would like to join with other speakers in farewelling a mighty rangatira. A man who had the most extraordinary economy of words, he was able to say so much using so few words, and I think he was able to do it because everybody knew that he had such a deep and good heart down within him. I was lucky to spend the most wonderful evening with him just over two months ago, and it seemed it was impossible that he would ever be gone. He was such a man of timeless heart and goodness.

I had the enormous privilege of working with him extensively on the previous Government’s policy of partnership schools kura hourua, and I think that showed the heart of the man—that he had values that were far deeper than any particular partisan cause or any particular political stripe. He knew where he stood, where he came from, and where this country could best go.

To one of the truly great rangatira, one of the great men, and the greatest hearts of this country, farewell Sir Toby.

RAWIRI WAITITI (Co-Leader—Te Paati Māori) (remote): Tēnā tātou, e hika mā, tēnā koe e te Pīka, otirā tēnā tātou i te Whare. I tēnei ra te tangi atu ki tā tātou pāpā ki Tā Toby, ko ia tērā kua riro tītapu ki te pō. Tēnei rā te tautoko i ngā mihi ki tērā a tāua pāpā, tērā a tātou pāpā, kua riro nei.

Nō reira e te pāpā, e Toby, ka roa koe e whawhai nei mō tō iwi Māori. E kore koe e mataku ki te kōrero i ngā kōrero, e makere mai ō kupu mai i ō ngutu ki ngā hāmenetanga a te Kāwanatanga ki ngā hāmenetanga a Pākehā ki a Ngāi Tātou i roto i ngā tau maha kua hipa atu. Ko koe tērā e tū rangatira nei mō tō tātou reo mō te oranga o te iwi Māori, ehara ko te iwi o roto o Te Arawa noa iho, engari ko tō iwi Māori te hao o tō ngākau. Nō reira, kei te tangi tonu te ngākau ki a koe.

Taku waimarie, i whakaeke i te taha o te Kīngi Māori whai muri ake i tōna koroneihana ki roto o Waikato, arā ki te tangi atu ki a koe. Nō reira, Ngāti Pikiao, Ngāti Rongomai, nei rā te mihi atu ki a koutou, i whakakanohi nei i tō iwi i te tangihanga, i te ūhunga tō tātou pāpā, a Toby.

Nō reira, nei rā te tangi e te rangitira. Whoatu rā koe i runga i te ara kōrero kua parangia e te tini e te mano, haere, haere, whakangaro atu rā.

Hoki atu ki a mātou ngā mahuetanga iho o ngā tua iho, tēnā koutou, tēnā koutou, kia ora koutou katoa.

[Greetings everyone, greetings to the Speaker, and greetings to all of us in the House. Today we mourn the loss of Sir Toby Curtis who has recently passed away. I support the acknowledgments made to our uncle who has been taken.

Therefore, Sir Toby, you have long fought for the Māori people. For many years, you have never been afraid to speak up, responding effusively about the transgressions of Government and of Pākehā towards us. You have nobly stood up for our language and for the health of the Māori people, not just for Te Arawa but also for Māori as a whole, that was your heart’s desire. And my heart still mourns for you.

I was fortunate to attend with the Māori King, following his coronation celebrations in Waikato, to grieve at your funeral. Therefore, to Ngāti Pikiao and Ngāti Rongomai, I acknowledge how you represented your tribe at the funeral and the laying to rest of our uncle Toby.

And so, our chief, we mourn you. Go forth upon the storied pathway forged by the myriads, may you rest in peace.

To return to us, to those of us who have been left behind, greetings, greetings, be well one and all.]

Motion agreed to.

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

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

SPEAKER: No bills have been introduced. A petition has been delivered to the Clerk for presentation.

CLERK: Petition of Shannon Quinn requesting that the House remove GST on fruits and vegetables.

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

CLERK:

New Zealand Post statement of corporate intent 2022-25

Te Tumu Paeroa, Māori Trustee, annual report 2022

Tourism New Zealand statement of performance expectations 2022-23

Framework Agreement Between the Government of New Zealand and the Government of America on Cooperation in Aeronautics and the Exploration and Use of Airspace and Outer Space for Peaceful Purposes, together with the Associated National Interest Analysis

Te Ara Ahunga Ora Retirement Commission:

annual report 2021

statement of performance expectation 2022-23.

SPEAKER: I present the report of the Eighth Appropriation Review Committee entitled Eighth Triennial Appropriation Review. Those papers are published under the authority of the House. Select committee reports have been delivered for presentation.

CLERK:

Report of the Governance and Administration Committee on the Plain Language Bill

report of the Health Committee on the petition of Don Wilson and Kirsty Watt

reports of the Petitions Committee on the petitions of

Charlotte Abrial

Jenna Matchett

John Dennison and

Stuart Prossor

reports of the Regulations Review Committee on

complaint about the Cadastral Survey Rules 2021

examination of COVID-19 order presented 31 May 2022, and

examination of COVID-19 orders presented between 13 and 20 June 2022.

SPEAKER: The bill is set down for second reading. The reports of the Regulations Review Committee are set down for consideration.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does she have confidence in all of her Ministers?

Rt Hon JACINDA ARDERN (Prime Minister): Mr Speaker, I should start by warning you that the answer will be a little longer than usual. Yes, I am proud of Ministers’ efforts to support New Zealanders through global economic uncertainty and disruption and extreme weather events while continuing to tackle New Zealand’s long-term challenges. Education Ministers celebrated two years of the Government’s Healthy School Lunches programme; 220,000 kids at 950 schools receive 1 million lunches a week. The Minister for Emergency Management, the Hon Kieran McAnulty; and Minister for Rural Communities, the Hon Damien O’Connor, have been overseeing our response to flooding in the West Coast, Nelson, Tasman, and Marlborough regions. The Minister of Foreign Affairs, the Hon Nanaia Mahuta; and Minister of Defence, the Hon Peeni Henare, announced significant deployments of 120 New Zealand Defence Force personnel to the United Kingdom to help train Ukraine soldiers as part of an international effort to help Ukraine to continue to defend itself against Russia’s illegal—

Hon Member: What about the outcomes? What about the outcomes?

Rt Hon JACINDA ARDERN: I hear the Opposition member calling for outcomes; unfortunately, we have not yet been able to end the war by Russia, but we continue to do our part. The Minister of Finance has ensured Kiwibank remains 100 percent Kiwi-owned. The Minister of Immigration announced further measures to help relieve workforce shortages. The Hon Peeni Henare spoke for the Government at Koroneihana, outlining our commitment to Māori and our strong progress on health, on education, and on housing. The Minister of Agriculture celebrated a record year for food and fibre sectors. New Zealand is in a strong position to support households and businesses. Unemployment is low, exports are growing, and Government debt is substantially below other nations. We remain focused on supporting New Zealanders through these challenging times.

Christopher Luxon: How can she have confidence in her finance Minister when inflation is at its highest rate in three decades and more than two years have passed since wages last rose faster than inflation?

Rt Hon JACINDA ARDERN: I retain confidence in the Minister of Finance because he has navigated us through one of the most significant economic crises of a generation, and he has done so with record-low unemployment. I directly attribute that to interventions like the wage subsidy, which I note the Opposition, at the time, supported. I also have confidence in him because of the interventions he made to ensure that businesses were able to remain open throughout the pandemic and continue to keep people connected to work. I have confidence because he has kept debt low; relative to other countries within the OECD, we have come out with much lower rates of debt than those we would compare ourselves to. I have confidence that even though we are seeing inflation increase as a result of many of the global issues around us, even then, relative to other countries, we have not seen the levels that others have reached. I am proud of this Minister of Finance, and I know many other New Zealanders are too.

Christopher Luxon: How can she have confidence in her housing Minister when both the State house waitlist and the number of children living in cars have quadrupled?

Rt Hon JACINDA ARDERN: Of the State houses we now have in New Zealand, in total, 10 percent were built by this Government. No other Government since the 1970s has built as many houses as this Government. If you want to talk about shame, the shame sits with the previous Government, on the Opposition benches, who not only did not grow housing but sold them. Had they built at the rate that we are building now, we would have almost cleared the waiting lists we have. That is shameful.

Christopher Luxon: Is she aware that 100,000 Kiwi school kids are chronically truant, and, if so, when will she be calling the Minister of Education into her office for a performance review?

Rt Hon JACINDA ARDERN: I’m not going to performance review a Minister over COVID-19 and the impact that it has had on attendance, nor will I performance review an education Minister on changes to truancy services in 2015 that have led to an ongoing decline in attendance—or at least contributed to it. We do have an issue in New Zealand; I should also add that one of those issues has been exacerbated by illness, but even then we are doing work to make sure that we rebuild those truancy services and turn around attendance. I have great faith in our education Ministers to do that.

Christopher Luxon: How can she have any confidence in her justice Minister when violent crime is up 21 percent and gang membership is up over 40 percent?

Rt Hon JACINDA ARDERN: I have confidence in that Minister because, across our justice portfolios, we have, for instance, seen an increase in the number of front-line police officers. We have dedicated retail units; organised crime units. Three significant operations leading to multiple—hundreds—of charges, arrests, and confiscation of firearms. I would also challenge some of the member’s numbers. Of course, for us, on this side, though, the reason we don’t get into the numbers debate is because we don’t want any victims in this country—even if that member’s numbers are wrong.

Christopher Luxon: Does she have confidence in her environment Minister when New Zealand imported a record 1.8 million tonnes of coal last year, nearly four times more than in 2017?

Rt Hon JACINDA ARDERN: I see that the member that he refers to is a man of great intellect, but even he can’t make it rain. Even though New Zealand has one of the highest levels of renewable electricity generation, in roughly 85 percent, if we have a dry hydrological year, it will have an impact on fossil fuels. One of the reasons I maintain absolute confidence in this Cabinet is, unlike on that side where no work was done to find how we can substitute the gap, on this side of the House, we have set the target of getting to 100 percent renewable, and we have business case studies under way to see how we can get there.

Christopher Luxon: Is she confident her revenue Minister won’t send any more taxpayer money to French backpackers, expats in London, or dead people?

Rt Hon JACINDA ARDERN: What I can guarantee you that our revenue Minister will not do is give a tax cut to those on $180,000 or more, thus growing inequality in this country and going against the will of the majority of New Zealanders, who do not believe that that is a good use of revenue.

Question No. 2—Housing

2. SHANAN HALBERT (Labour—Northcote) to the Minister of Housing: What action is the Government taking to increase the supply of affordable rental housing?

Hon Dr MEGAN WOODS (Minister of Housing): The Government is encouraging more long-term rental options by giving Build to Rent developers an exemption on the interest deductibility limitations. We are exempting Build to Rent developments from interest limitation in perpetuity. This will attract new sources of forms of stable, long-term investments such as iwi or superannuation funds. As we know, Build to Rent projects often need a longer time frame of 50-plus years to realise returns. These exemptions will be available for any Build to Rent development for as long as the homes are held as long-term rentals. They also need to offer tenants leases of at least 10 years and have additional personalisation policies beyond the minimum requirements of the Residential Tenancy Act. This is something we’ve been working on with the sector since February 2021. We recognise that Build to Rent can help to continue the current momentum of new supply and improve the quality of rental housing with new, warm, dry, secure homes.

Shanan Halbert: What responses has she heard from the sector?

Hon Dr MEGAN WOODS: This exemption has been well received by the sector, including the Property Council of New Zealand who said, “Today’s announcement is one of the best levers to unlocking the potential of Build to Rent … We support the Government’s desire to enable Build to Rent in order to provide warm, dry rental homes that offer Kiwis long-term security of tenure.” The Property Council has also said their research indicates that members are poised to deliver around 25,000 Build to Rent homes in the next decade. I also saw positive responses from developers, including Mark Todd of Ockham Residential who said, “I’m pleased the interest deductibility is dependent on build to rent operators offering their residents a minimum 10-year tenancy. That is fair, that is right: that is a step towards giving these residents the security they need to make the home they pay for truly theirs, not a tenuous arrangement dependent on the grace and favour of landlords.”

Shanan Halbert: How will this exemption benefit tenants?

Hon Dr MEGAN WOODS: We believe security of tenure is critical for people who are renting. That is why, to qualify for the exemption, developers will need to offer tenants leases of at least 10 years that tenants are able to break with a 56-day notice period. Tenants can ask for shorter agreements if they wish, and the developer will still qualify for the exemption. This requirement will enable people to settle and personalise their homes, reduce how often they must find a new place to live and all those associated moving costs. It will also allow families to start their kids at school and know that they won’t have to move. In comparison to the median tenure in the private market of only 16 months, the Government agreed 10 years to be a suitable minimum period as it reflects the importance of long-term housing stability on people’s lives.

Question No. 3—Finance

3. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he agree with the statement by the Reserve Bank in its August Monetary Policy Statement that “domestic inflationary pressures had increased since May”, and what role, if any, does he think Government policy has played in that?

Hon GRANT ROBERTSON (Minister of Finance): In response to the first part of the question, yes. New Zealand’s inflation rate has increased to an annual rate of 7.3 percent in the June quarter 2022. The domestic labour market is clearly the tightest it has been in a generation. However, the fact that both the Reserve Bank and a wide range of observers are suggesting that the annual inflation rate has peaked is an encouraging sign and indicates that the steps that the Reserve Bank has taken so far to contain inflation are working. With regard to the second part of the question, over the period the member is referring to, the Government has enacted temporary reductions in fuel excise duty and road-user charges to soften the impact of high petrol prices and introduced half-price public transport, which have in fact put downwards pressure on the Consumers Price Index (CPI).

Nicola Willis: Does he agree with the Reserve Bank that the very tight labour market is adding to high CPI inflation, and does he concede that the Government’s restrictive immigration settings have contributed to that?

Hon GRANT ROBERTSON: As I said in my answer to the primary question, indeed we do have one of the tightest labour markets we’ve seen for a generation. In the period that the member is referring to in her primary question, the Government began enacting its immigration reset and the borders reopened in order to help address those issues.

Nicola Willis: Does he think that’s been very successful?

Hon GRANT ROBERTSON: I think actually that the opening of the borders has been extremely successful. We’re seeing tourists come in. We’re seeing more people apply. We’re seeing the accredited work visa system come into being. On this side of the House, we’re extremely proud of the fact that during the period of COVID, we have seen unemployment fall to the lowest level on record. The member might want to see unemployment increase; on this side of the House, we don’t.

Nicola Willis: Does he stand by his statement that the cost of living payment is targeted, and, if so, why did the Government target the payment to overseas nationals who declared taxable income for their investment properties?

Hon GRANT ROBERTSON: I reject that part of the member’s question. The cost of living payment was far more targeted than the policy the member advocates of giving tax cuts to the highest income earners. I’m surprised we haven’t heard the U-turn on that after the polling about it, but the member’s sticking with it. New Zealanders don’t want it and it’s the wrong thing to do.

Nicola Willis: Does the Minister reject the fact that clients in China who don’t live in New Zealand but have investment properties in New Zealand have declared taxable income here and received the cost of living payment, and if he does deny that, will he join my call for the Auditor-General to look into these serious claims?

Hon GRANT ROBERTSON: What I am saying is that the criteria that the Government set for the payment is extremely clear.

Nicola Willis: Point of order, Mr Speaker. I seek leave to table a document.

SPEAKER: What is the document?

Nicola Willis: The document is a message I have received on Facebook from someone about clients in China receiving the cost of living payment while not living in New Zealand.

SPEAKER: Just a question—is it a Facebook Messenger message?

Nicola Willis: Yes.

SPEAKER: Is there any objection to that document being tabled? There appears to be none.

Document, by leave, laid on the Table of the House. [Interruption]

Nicola Willis: Well, you don’t care. It’s only taxpayers’ money after all.

SPEAKER: Order! Order! The member will stand withdraw and apologise.

Nicola Willis: I withdraw and apologise.

Question No. 4—Arts, Culture and Heritage

4. NAISI CHEN (Labour) to the Minister for Arts, Culture and Heritage: What announcements has she made about artists’ resale royalties?

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): Last week, I announced that the Government is establishing an artists’ resale royalty scheme. The Artist Resale Royalty Scheme will support and recognise the work of our visual artists by ensuring that a royalty is collected when their work is sold on the resale market. The scheme will be a flat rate of 5 percent before any additions, deductions, or any other charges, ensuring it does not place too large a burden on buyers, sellers, and art market professionals.

Naisi Chen: Why is this announcement important?

Hon CARMEL SEPULONI: This announcement is important for a number of reasons, and has been over 15 years in the making. It’s about fairness and underlines our Government’s commitment to honouring the tremendous artistic skill and creativity of so many of our visual artists. It is part of our free-trade agreement with the UK and the EU, and places Aotearoa New Zealand alongside more than 80 other countries who now have resale royalty schemes, aligning with common international practice. My thanks go to all the proponents who have pushed for this and those who have started the journey toward where we are today, including the former Minister for Arts, Culture and Heritage and the Associate Minister for Arts, Culture and Heritage, the Rt Hon Helen Clark and the Hon Judith Tizard.

Naisi Chen: What feedback has she seen on this announcement?

Hon CARMEL SEPULONI: I note Wairau Māori Art Gallery Chair, Elizabeth Ellis, said, upon sharing our announcement with a range of Māori arts practitioners, friends, colleagues, and associates, “Without fail, they all sent enthusiastic, excited replies supporting the Scheme. Voices of the arts practitioners, young and old, from the Creative Sector, called out from studios, marae, galleries, wānanga, universities, and museums. Their words echoed in every reply to my email, ‘Tautoko’, ‘Support’, ‘Endorse’, ‘Tautoko te Kaupapa Nui’, ‘Long Overdue’.” And artist Judy Darragh said, “this decision truly is a gamechanger for artists around Aotearoa.”

Question No. 5—Prime Minister

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

Rt Hon JACINDA ARDERN (Prime Minister): Yes.

David Seymour: Does she believe the Government’s actions are reducing the frequency of ram raids, and, if so, what evidence can she present to show those numbers are falling?

Rt Hon JACINDA ARDERN: Whilst we have disputed the suggestion that overall we have a proliferation of criminal acts by young people, because there has not been evidence to suggest that, we have acknowledged that we have had a spate of ram raids in particular areas—Tāmaki-makau-rau and also in the Waikato. It’s one of the reasons, of course, that we’ve announced specific funding in the same way that we’ve worked very hard with retailers on armed hold-ups, particularly targeting those who sold cigarettes, to enable a wider roll-out of fog cannons. We have instituted a similar regime to help prevent ram raids for those retailers that may be susceptible to them. We expect that there could be upwards of 500 that would be supported through that fund.

David Seymour: Does the Prime Minister’s Government have any way of measuring this spate of ram raids, and, if not, how will they know if any of their actions are succeeding?

Rt Hon JACINDA ARDERN: Yes. Police do keep a tally of ram raids in different regions. And to the member, again, I have asked on previous occasions, and I would appreciate, that if you wish me to bring numbers to the House, I will gladly do so, but it would be useful to have a question on notice.

David Seymour: Does she stand by her appointment of Kiritapu Allan as Minister of Justice, responsible for reviewing the Official Information Act (OIA), when Kiritapu Allan had previously told Labour MPs that, “Things unfolding through [the] OIA … [is] less than desirable.”

Rt Hon JACINDA ARDERN: I absolutely do. Secondly, the member, of course, knows that the Official Information Act covers a raft of communication. What Minister Allan—and we take our obligations very seriously there—

Hon Members: Ha, ha!

SPEAKER: Order!

Simon O’Connor: Andrea Vance doesn’t agree.

Rt Hon JACINDA ARDERN: Which is why—

SPEAKER: Order! Sorry; I apologise. Look, when I call “Order!” and people are required to be quiet, they are required to continue—no, take the mask off again, Mr O’Connor, because you’re going to stand up, withdraw, and apologise.

Simon O’Connor: I withdraw and apologise.

Rt Hon JACINDA ARDERN: Which is why, despite OIA volumes more than doubling since 2016, 97.3 percent were completed on time; 0.15 percent of all OIA responses result in a finding of deficiency by the Ombudsman’s office. We proactively release Cabinet Papers, diaries. This is physical evidence and outcomes of how we treat the OIA.

David Seymour: Does she stand by her Government’s decision announced yesterday to purchase the ACC and NZ super fund’s shares of Kiwi Group Holdings, and, if so, is she happy with Kiwibank’s market share of around 5 percent; if not, how much taxpayer money will her Government inject so that Kiwibank can grow its market share in a competitive environment?

SPEAKER: Any one of the three questions.

Rt Hon JACINDA ARDERN: To answer the first question, yes.

David Seymour: Does she agree with New Zealand super fund manager Matt Whineray, who said, “we sought the flexibility to introduce private sector capital and governance capabilities into the business, and wanted out of the business because her Government would not agree to these terms.”; if she does not agree, how will the Government inject expertise and capital into Kiwibank?

Rt Hon JACINDA ARDERN: In answer to the first part of the question, it is correct that we wanted Kiwibank to remain 100 percent Kiwi owned. And to refer to, again, the member’s reference to the market share: of the million, roughly, New Zealanders who bank with Kiwibank, for many of them the reason they do will be because it’s New Zealand - owned and that the revenue remains in New Zealand.

David Seymour: Does she stand by Minister Willie Jackson’s statement that “‘one person one vote’ is but one value within … [democracy], not the only value.”, and, if so, what does she say to Victoria University professor of political science Jack Vowles, who wrote in reply to Minister Jackson that “everyone having a vote or votes of equal weight to elect those who represent them is not just one value [of democracy], it is a foundational principle. As such, it is recognised in the Bill of Rights”?

Rt Hon JACINDA ARDERN: I would say that I would support the regional representative bodies that are being proposed as part of the three waters and as have been supported by the local government representatives who themselves suggested that this is the right way to move forward for the entities. I would back that over the member’s own proposition, which is essentially the ability for foreign-owned corporate boards.

David Seymour: Does she stand by Michael Wood’s statement on Newstalk ZB that, “Not every teacher is going to have to be fluent in te reo Māori.” or does she agree with education council CEO Lesley Hoskin, who told RNZ that, “The reality is … at some point, we’re going to have to say … [you can] no longer …have a certificate to teach in Aotearoa New Zealand without that competence.”?

Rt Hon JACINDA ARDERN: I would have thought the member’s background in education previously, within past Governments, would have meant that he’d know the Teachers Council is independent. It is not Government policy to make te reo Māori compulsory for teacher employment in New Zealand. However, of course I would have thought, given the member just acknowledged Tā Toby, he would want to encourage greater understanding and learning of te reo in this country.

Question No. 6—Education (School Operations)

6. ANGELA ROBERTS (Labour) to the Associate Minister of Education (School Operations): What action is the Government taking to lift school attendance?

Hon JAN TINETTI (Associate Minister of Education (School Operations)): Yesterday, I joined students, teachers, parents, and principals to launch our nationwide school attendance campaign, Every School Day is a Big Day. The campaign supports practical measures to encourage attendance already under way by schools around the country. The advertising for the campaign was filmed in nine schools all over New Zealand just over two weeks ago, capturing a day in the life of our tamariki in their kura across the country. It showcases how every day at school is a big day for our kids. Every day, schools offer rich, educational learning and also social, cultural, and emotional learning, too. This nationwide campaign is one of the actions in the Government’s Attendance and Engagement Strategy, which sets ambitious targets and clear actions to turn around years of declining attendance rates.

Angela Roberts: Why was a nationwide campaign on this issue needed?

Hon JAN TINETTI: School attendance is a long-term challenge, gradually declining across the board since 2015—a trend that has been further accelerated by COVID-19. Only three in five kids attend regularly 90 percent of the time, but I’m deeply concerned about the views of adults on this: only 5 percent of Kiwis considered attendance a top-of-mind issue. I know the members in this House—well, I think that all members in this House understand the importance of regular school attendance, so it’s now up to all of us to get this message out to parents and whānau. Going to school regularly is how our kids learn. It means they are better able to pass exams and get qualifications—

SPEAKER: Order! Order! The member’s answer has been too long.

Angela Roberts: How does—[Interruption]

SPEAKER: Order! Someone else had the call and the member interjected. I mean, I’m just trying to work out why—you know, is there a good reason for injecting when the member was asking a supplementary?

Matt Doocey: Are you talking to me?

SPEAKER: Absolutely.

Matt Doocey: I didn’t say a thing.

SPEAKER: Well, the member’s mask flapped fairly heavily.

Angela Roberts: How does this fit into wider work to—[Interruption]

SPEAKER: Order! Out.

Matt Doocey withdrew from the Chamber.

Angela Roberts: How does this fit into wider work to lift school attendance?

Hon JAN TINETTI: This campaign is part of the Government’s comprehensive strategy to lift attendance. It’s supported by evidence-based solutions that are developed by those who know their school communities best and can respond to their needs, and it’s backed by $88 million worth of investment from Budget 2022. We’re also removing barriers to attending school by providing access to free period products, providing the free and healthy school lunches programme, taking away whānau pressures from school donations, and providing a curriculum with strong grounding in students’ own identity, language, and culture, to name a few.

SPEAKER: Question No. 9, Ricardo Menéndez March.

Dr Shane Reti: Point of order—

SPEAKER: Oh, sorry—I apologise. Question No. 7, Dr Shane Reti—it just feels like it’s been that long.

Question No. 7—Health

7. Dr SHANE RETI (National) to the Minister of Health: How many people, if any, waited longer than 24 hours in an emergency department over the past month?

Hon ANDREW LITTLE (Minister of Health): I’m advised by health officials that the latest available data is for June 2022. I can confirm that 540 people waited longer than 24 hours in an emergency department (ED) in the month of June 2022. I’m further advised that two of those 540 self-discharged after 24 hours. I note that this winter has seen extraordinary pressure on hospitals, caused by a combination of the ongoing incidence of the COVID-19 virus, the worst cluster flu season in many years, and elevated levels of staff absenteeism.

Dr Shane Reti: What does he say to the Whangārei person who is reported today as waiting more than 30 hours in the emergency department?

Hon ANDREW LITTLE: I think the important thing is that people who presented to an emergency department are assessed for their acuity and then eventually get the treatment that they need, and that is happening around ED departments around the country and has been all these months.

Dr Shane Reti: How many people then, if any, have left an emergency department recently without being seen, when he wrote to me that in May alone nearly 1,000 people left Middlemore ED without being seen?

Hon ANDREW LITTLE: I can’t confirm the number of those who say they haven’t been seen. What the hospitals do gather data on is those who present and are assessed, and the time that they wait to either be treated or discharged or admitted is recorded.

Dr Shane Reti: What responsibility does he take for the notification today that, from next Monday, Rāwene Hospital—one of the most remote hospitals in the country—will not be providing after-hours emergency department services, which means people will have to travel great distances from the Hokianga to either Kaitāia or Kawakawa?

Hon ANDREW LITTLE: It was previously the responsibility of the Northland District Health Board and now the responsibility of Te Whatu Ora Health New Zealand to ensure that primary care in their particular regions is supported—that doesn’t just include primary care but aged residential care. We know that some primary care clinics, such as the one in the Hokianga, have been struggling in terms of staff complement, but I am satisfied that all possible support that can be provided by Te Whatu Ora Health New Zealand is being provided.

Dr Shane Reti: How many hospitals, if any, have had emergency department patients wait in tents in the carpark, and have any children been made to wait in a tent outside a hospital ED in the past month?

Hon ANDREW LITTLE: I’m not aware of any hospital that has seen a patient waiting in the carpark.

Dr Shane Reti: You told me Tauranga, Middlemore, Starship.

Hon ANDREW LITTLE: There was an erroneous report from a so-called anonymous source for Middlemore who was wrong, but I also know that some EDs have established marquee arrangements to triage patients for COVID before they are then formally entered into the ED for assessment, or for treatment, discharge or admission.

Question No. 8—Immigration

8. MARJA LUBECK (Labour) to the Minister of Immigration: What work is the Government undertaking to tackle skill shortages and help Kiwi businesses fill job vacancies?

Hon MICHAEL WOOD (Minister of Immigration): The Government is taking steps through the immigration rebalance to respond to the global shortage of labour and skills that many Kiwi businesses are facing. We’ve listened to concerns from key sectors and worked with them to develop practical solutions to relieve some of these workforce pressures. That’s why, on Sunday, I announced that the Government is, firstly, implementing agreements with key sectors, including meat processing, aged care, seafood, construction, and adventure tourism, to allow time-limited exemptions for the new median wage requirements for businesses hiring skilled migrant workers as they transition to new settings. We’ve also doubled the cap on working holiday schemes, to allow an extra 12,000 working holidaymakers to come to New Zealand over the next 12 months, and extended the visas of onshore working holidaymakers by six months. These changes to the immigration system that the Government is delivering will ensure that we help to lift wages and conditions for workers while also supporting businesses as the world recovers from COVID-19.

Marja Lubeck: What reactions has he seen from industry to the Government’s work to address skill shortages?

Hon MICHAEL WOOD: A very positive response. I was joined by Tourism Industry Aotearoa chief executive Rebecca Ingram for the announcement. She said they are “very positive news for the tourism industry” and “They are hopeful that this will help to relieve some of the immediate pressure on employers.” Chief executive of Hospitality New Zealand Julie White said that the changes to the working holiday scheme would “make a big difference to hospitality businesses struggling with enough staff” and “The changes will kick in in time for the upcoming summer season.” Our Government is very pleased to have worked closely with stakeholders to make these changes within our immigration rebalance, and I thank them for their support.

Marja Lubeck: What is the purpose of the sector agreements?

Hon MICHAEL WOOD: Sector agreements are time-limited agreements with particular sectors, within the context of the immigration rebalance. The immigration rebalance recognises that we need to send the right signals to lift pay and conditions across our economy before migrant workers are recruited, but we recognise that some sectors will need some time to apply the median wage threshold within the Accredited Employer Work Visa. So, over a two- or three-year period, there’ll be transitional wage arrangements, which still lift wages for workers in those sectors, but also requirements and expectations to improve skills, training, and workforce development. These will be good for the businesses concerned and good for the workforces concerned.

Marja Lubeck: What other actions is the Government taking to address skill shortages?

Hon MICHAEL WOOD: Beyond the suite of measures announced on Sunday, the Government is getting on with the job of addressing skill shortages. As I said, we’ve opened the borders, allowing working holidaymakers and other workers to return to our shores; we’ve implemented the new Accredited Employer Work Visa, allowing businesses to hire skilled migrants; and we’ve made changes to investor visa settings to ensure that investors who want to come here are actively supporting the New Zealand economy. Our immigration rebalance is supporting New Zealand to get the skills that it needs, but is also supporting better pay and conditions for workers and ensuring that we develop domestic workforces to support sustainable businesses in the future.

Question No. 9—Social Development and Employment

9. RICARDO MENÉNDEZ MARCH (Green) to the Minister for Social Development and Employment: Does she support sanctioning disabled people and people with health conditions who receive jobseeker benefits for “failing to prepare for work”?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): I support our current approach to the use of sanctions, which is to work with a client to ensure they meet their obligations and adhere to the advice of medical professionals about what obligations a client has. Instead of primarily penalising our sick and disabled people, the Government is focused on supporting them into work, if they are able, and helping them achieve their aspirations, by doings things like rolling out our Disability Employment Action Plan and targeted employment support programmes, and we are seeing results. In the year to June 2022, 17,295 job seekers with health conditions or disability exited into work—almost double the number in the year to June 2017. Our approach is working and we stand by it.

Ricardo Menéndez March: What is the impact on children in households where a disabled caregiver loses 50 percent of their income because of a benefit sanction for “failing to prepare for work”?

Hon CARMEL SEPULONI: We have seen an 87 percent reduction in the number of sanctions applied to households where there are children. This is a reflection of our approach in the culture change that we initiated with the Ministry of Social Development (MSD) on the front line. I’ve been very clear in this House that excessive use of sanctions and a punitive approach can have detrimental effects. However, there is evidence to suggest that a balanced approach in using them as a last resort can be helpful in some instances.

Ricardo Menéndez March: Does she agree with Labour MP for Nelson, Rachel Boyack, who tweeted, “Just to be very, very clear, people who are unwell or have disabilities and aren’t able to work or are having difficulty finding work shouldn’t be sanctioned!”; if so, will she end sanctions towards disabled people on the jobseeker benefit?

Hon CARMEL SEPULONI: I do agree with the member for Nelson, Rachel Boyack, and she made it very clear: those that aren’t able to work. But there are a number of people that may have a health condition or disability who are able to prepare for work, who are perhaps able to take up some work, like part-time work, and it’s really important that we have the support in place, the programmes in place, to be able to support them to meet their aspirations, as well.

Ricardo Menéndez March: Does she agree with the findings of the Welfare Expert Advisory Group report, including at page 81, that “We do not support the continued use of the financial sanctioning regime.”, and, if so, will she commit to repealing sanctions, including for disabled people on the jobseeker benefit?

Hon CARMEL SEPULONI: We were very clear, I think in our policy manifesto, that we would move to get rid of excessive sanctions. We’ve done that with removing section 192 in the subsequent child policy. The Welfare Expert Advisory Group also pointed out the importance of mutual obligations, obligations on MSD’s end to make sure that they treat clients with dignity and they provide them with the supportive environment that they need, but there are also obligations on the other end. Sanctions are there to be used as a last resort. I think, in terms of the massive reduction that we’ve seen, that clearly that is what is happening.

Ricardo Menéndez March: What would she say to Daisy Bell, who used to receive jobseeker health and disability, who said she was “disappointed to see Labour sanctioning people who are sick like she used to be.”, and “I’m willing to bet it’s a tool that is not being appropriately used … people are being treated unfairly and in a really unkind way.”?

Hon CARMEL SEPULONI: I absolutely empathise with what Daisy Bell has said publicly. However, we have to keep it in perspective. There are about 70,000 people that are on jobseeker health condition and disability; in the last quarter, I think 156 received a sanction. It is about clear communication with our clients. It is about ensuring that MSD is looking at the medical advice, rather than making determinations of their own that are purely punitive. As I’ve said, they are a last resort. We don’t want to use them. There is an opportunity, also, to re-comply for those clients. I think that we have to remember that, also, people with health conditions and disabilities often have aspirations to work, as well.

Ricardo Menéndez March: In what instances does she think it is not punitive or excessive to sanction disabled people for “failing to prepare for work”, when the jobseeker payment is the only way for them to put food on the table and keep a roof over their head week to week?

Hon CARMEL SEPULONI: I think the point made by the member is that quite often the expectation is preparation for work; it’s not necessarily that they must take up employment. The decisions around that are based on the medical advice that comes through. It’s really important that we work with our clients to be able to meet their aspirations. They have an opportunity to re-comply. It goes back to what I said earlier; there are mutual obligations in the welfare system. But we certainly don’t take a punitive approach to our clients.

Question No. 10—Justice

Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. My question is to the Minister of Justice: is it still the Government’s intention to be “the most open, most transparent Government that New Zealand has ever had”; [Interruption] if so, is she confident the Official Information Act 1982 is fit for purpose?

SPEAKER: Right, no. The member will wait. I’m going to ask Mr Goldsmith to ask it again, without the accompanying noise from Mr Bishop.

10. Hon PAUL GOLDSMITH (National) to the Minister of Justice: Is it still the Government’s intention to be “the most open, most transparent Government that New Zealand has ever had”; if so, is she confident the Official Information Act 1982 is fit for purpose?

Hon KIRITAPU ALLAN (Minister of Justice): Upholding our legal obligations under the Official Information Act (OIA) is fundamental to the principle of accessibility. This Government has worked to improve the release and transparency of official information. This includes, and is not limited to, instituting the proactive release of Cabinet papers; instituting the monthly proactive release of ministerial diaries; answering 113,000 written parliamentary questions in the last parliamentary term, compared to 41,500 by National in the previous term; legislating to require the Public Service to foster a culture of open government; supporting improved parliamentary practices to enhance ministerial accountability, including a new question and answer process during the committee stage in the House, and following ministerial statements in the House. On the Official Information Act itself, yes, I do believe it’s generally fit for purpose. For example, since 2016, when the Public Service Commission started collecting OIA data, there has been an overall improvement in OIA requests being completed on time despite a 110 percent increase in the volume of requests during that same period. In June 2016, 91.1 percent of OIAs were completed on time, compared with 97.3 percent today. And just 0.15 percent of all OIA responses result in a finding of deficiency by the Ombudsman.

Hon Paul Goldsmith: Point of order, Mr Speaker. This was a question on notice. The simple question: is the Government’s intention to be, blah-blah-blah. The Minister gave a long list of things that the Government has done, but she did not answer that question.

Hon KIRITAPU ALLAN: Correct. We’ve done those things.

SPEAKER: Well, if the member wants an extended answer, the member can have another go.

Hon Paul Goldsmith: Point of order, Mr Speaker. I just note she was talking during my point of order, but I asked a specific question. The question is: is it still the Government’s intention to be the most honest and transparent Government we’ve ever had?

SPEAKER: I sort of took the answer to the first part to be affirmative, but if the member wants it clarified we’ll ask the Minister to do it.

Hon KIRITAPU ALLAN: I’d be happy to respond to the member. This side of the House, this Government, has absolutely taken our responsibilities under the OIA to enhance and ensure the transparency and that principle of accessibility, which we find is fundamental and critical. As I was saying, 113,000 written parliamentary questions—

SPEAKER: I think, well, I’ll just say to the member, there are some things which she’s responsible for, and there’s some things which I am. Taking credit for questions being answered is not something to do with the OIA, while it might be something to do with transparency.

Chris Bishop: Point of order.

Hon KIRITAPU ALLAN: Point of order, sir.

SPEAKER: No, no. I’ll take Mr Bishop first.

Chris Bishop: This is a serious point. Twice now the Minister has not sought to answer a direct primary question on notice that she’s had three or four hours’ notice of. The context for this is the quote, “the most open, transparent Government”, which was the quote from the initial Associate Minister of public services—I think the open brackets title was “(Open Government)”, the Hon Clare Curran, right at the start of the Government’s time in office—

SPEAKER: Sorry, can the member come to a point of order?

Chris Bishop: The point of order is the Minister has had a primary question on notice that she has not addressed.

SPEAKER: Well, that is clearly—

Hon KIRITAPU ALLAN: Responding to the point of order—

SPEAKER: No, the member will resume her seat. That’s clearly incorrect.

Hon Paul Goldsmith: Has she asked the former Minister of Conservation to clarify what she’d need when she messaged colleagues on the subject of the OIA, “All correspondence is OIA-able, and if we are being lobbied on issues by colleagues, especially when we haven’t had a yarn, things unfolding through OIA process, less than desirable.”?

SPEAKER: Order! Can I just absolutely check that the member has sourced that comment as a comment from the Minister of Conservation?

Hon Paul Goldsmith: Yes. Well, it’s—

SPEAKER: In that portfolio?

Hon Paul Goldsmith: No. It’s from the Minister Kiri Allan. It’s from Kiri Allan at a time when she was the Minister of Conservation.

SPEAKER: Right—well, get that right.

Hon Chris Hipkins: Point of order, Mr Speaker. The message that the member refers to is a message exchanged between two Labour members of Parliament. That is a matter of public record.

David Seymour: Point of order.

SPEAKER: David Seymour, did you have something additional?

David Seymour: Yes, only to say that very clearly the person writing that message was speaking as a Minister and giving guidance to how MPs should deal with a Minister’s office.

SPEAKER: No, I think we’ll go right back to the point, and that is that this could have been interpreted as a Minister making a statement. It was a statement made by a Minister via an app and therefore I think the member can be questioned on it.

Hon KIRITAPU ALLAN: Thank you, Mr Speaker. I’m pleased to be able to respond to that question. The former Minister of Conservation, and prior to then, the former whip; and prior to then, she was a lawyer and advised a lot of people on official information issues. One of the issues that I have here is a message to clearly explain to colleagues that don’t come into this House and don’t have a lot of knowledge on these issues. I think it’s incumbent on colleagues, and actually any member of this House is absolutely entitled to be able to seek advice about what they can and absolutely are obliged to do under the Official Information Act. I can say that I was simply offering the opportunity to colleagues to discuss the process to ensure that they were aware of it.

Hon Paul Goldsmith: Point of order, Mr Speaker. I seek leave to table a document, a message from Kiri Allan—

SPEAKER: No. That’s something which is already in the public arena.

Hon Paul Goldsmith: Did the former Minister of Conservation explain to her exactly why things unfolding through the OIA process is less than desirable?

Hon KIRITAPU ALLAN: I will agree with the comments that I think have been made by many colleagues on both sides of this House and indeed by your deputy leader, Nicola Willis, this morning. She said, and I repeat, that it’s been the practice over successive Governments that backbenchers and colleagues use all range of methods to communicate with their ministerial colleagues. As that member will be aware as a previous Minister in his former Government, we wear different hats. It’s important to ensure that members of Parliament who don’t have the same responsibilities as ministerial colleagues are clear on their roles, their rights, and their responsibilities. So to that end, I agree with your deputy leader, Nicola Willis, and the comment that she made on Morning Report this morning.

Hon Paul Goldsmith: Has she seen the published comments of a leading Stuff journalist regarding media attempts to use the Official Information Act under this Government, “In my 20-plus years as a journalist, this Government is one of the most thin-skinned and secretive I have experienced. Many of my colleagues say the same.”, and, if so, does she think that reflects poorly on the legislation or on her colleagues?

Hon KIRITAPU ALLAN: I haven’t seen that particular article but I did have the opportunity to review an article by a well-known former reporter of the parliamentary gallery—Hamish Rutherford. He wrote in Stuff in October 2015 in response to the then trade Minister losing a High Court series of cases with respect to the OIA that it emerged that, for example, “previous Ministers in previous Governments”—this one, Mr Groser—“had not reviewed his documents. He refused to release documents, a blanket refusal on information that was provided—”

SPEAKER: Order! I probably should have ruled it out earlier in the answer. The Minister’s responsible neither for Mr Rutherford nor the former Minister of overseas trade.

Hon Paul Goldsmith: Has she written to the Chief Ombudsman to give him the assurances he sought about the training given to Labour MPs on dealing with the OIA, or did she feel it was safer just to ring him?

Hon KIRITAPU ALLAN: I have not been requested, nor have I responded to any requests for information from the Ombudsman. But I will just respond briefly in terms of former Prime Ministers of this House. In the National Business Review of October 2015, Prime Minister John Key—

SPEAKER: Order! Order! The member will resume her seat. The member is not responsible for that.

Hon KIRITAPU ALLAN: I know. But he asked me.

SPEAKER: And she will now withdraw and apologise for interjecting while I was on my feet.

Hon KIRITAPU ALLAN: I withdraw and apologise.

SPEAKER: Further supplementary, Paul Goldsmith?

Hon Paul Goldsmith: Is that an additional one?

SPEAKER: Yes.

Hon Paul Goldsmith: Thank you very much. Is it in her view open and transparent for Ministers to request messages to be passed on verbally rather than through letters because the latter is presumably more OIA-able?

Hon KIRITAPU ALLAN: I do think it’s appropriate that all members of this Parliament know that there is a range of different ways that they can advocate and lobby for their communities and in turn their constituents, and that they understand the rights and responsibilities that each of those avenues takes. But whilst I’m on my feet—I do know that in 2017 the transport Minister, then Simon Bridges, was noted for blocking official information requests.

SPEAKER: Order!

Hon KIRITAPU ALLAN: In October2015—

SPEAKER: Order! Order! I’ll make a baby cry if I have to do that again. Can I remind the member for the third time and the last time—

Hon KIRITAPU ALLAN: Sorry, sir.

SPEAKER: The member will withdraw and apologise.

Hon KIRITAPU ALLAN: I withdraw and apologise.

SPEAKER: And—yeah; she’s pretty lucky to still be here.

Hon Paul Goldsmith: Supplementary?

SPEAKER: Yes, the member can have another one.

Hon Paul Goldsmith: Thank you, Mr Speaker. Is she aware that the Prime Minister said in the Speech from the Throne in 2017 that her Government “will strengthen transparency around official information”, and, if so, how does she think Ministers encouraging people to talk to them directly rather than send letters that may be OIA-able strengthens transparency around official information?

Hon KIRITAPU ALLAN: For all the reasons set out in my first answer, I believe that this side of the House and this Government has strengthened transparency with respect to the official undertakings that we’re required to do as the Government.

Question No. 11—Emergency Management

11. RACHEL BOYACK (Labour—Nelson) to the Minister for Emergency Management: How is the Government supporting Nelson and Marlborough through recent severe weather events and flooding?

Hon KIERAN McANULTY (Minister for Emergency Management): Thank you very much, Mr Speaker. I know this House will join me in acknowledging the communities in the top of the South Island who have been affected by severe weather, flooding, and slips. This past week has been really tough for them, with a long and challenging recovery ahead. Emergency management professionals and volunteers are working hard on the ground and continue to support people in need of help. The local mayors have been in regular contact, and I have met with them in the affected areas to get a firsthand understanding of what support is required from the Government. So far, we’ve provided initial contributions of $400,000 to the mayoral relief funds across Nelson-Tasman and Marlborough to support these communities as they assess the full extent of the damage and begin the clean-up. The mayoral fund is a discretionary fund to get the money out to communities immediately. Having seen the impact of the severe weather firsthand, I know more support will be required, and we stand ready to assist.

Rachel Boyack: How has the National Emergency Management Agency (NEMA) responded to this emergency?

Hon KIERAN McANULTY: When the forecasts of incoming severe weather were received, NEMA activated its national coordination centre to respond to these emergencies and to support the activities of local civil defence groups. NEMA has also deployed staff and emergency management assistance teams and personnel to the hard-hit region. Regional emergency management advisers from NEMA have been deployed to Nelson-Tasman and Marlborough and are assisting with the ongoing response and assessing the transition to recovery. Both regions are assessing damage, and Government officials are in location to assist. These efforts are led by regional civil defence and emergency management (CDEM) groups, with NEMA in position to assist where required with personnel and expertise. I want to thank everyone who has moved quickly to respond to this event—and those in Northland, Taranaki, and the West Coast—the regional CDEM groups, local iwi, volunteers, first responders, and civil defence personnel from across the country, who have stepped up to keep people safe.

Rachel Boyack: What is the Government doing to better prepare New Zealanders for these kinds of emergencies?

Hon KIERAN McANULTY: Since 2020, the Government has invested $217 million in 55 flood-protection projects across New Zealand. This is in addition to the payments the Government makes to councils to repair damaged stopbanks through their emergency management system. The national adaptation plan launched at the start of the month will ensure that communities have the information and support they need to prepare for the impacts of climate change, including more frequent and severe flood events. The national adaptation plan brings together more than 120 actions that, together, provide a blueprint for more resilient communities where everything, from our homes to the way we grow our food, is protected from the worst effects of climate change. The national adaptation plan will outline the steps the Government will take over the next six years to respond to these risks. The National Emergency Management Agency has recently rolled out two flooding life-safety public education campaigns: “Flood Waters Are Deep Trouble” and “Get The Flood Out”.

Question No. 12—Immigration

12. ERICA STANFORD (National—East Coast Bays) to the Minister of Immigration: Does he stand by his statements and actions?

Hon MICHAEL WOOD (Minister of Immigration): Yes, I do. In particular, I stand by the Government’s decision to increase the refugee resettlement quota for the 2022–23 year to 1,500 people, and to double the family support category from 300 to 600 as a part of that. While, quite rightly, much of our focus in the immigration policy is on short-term work visa issues at the moment, it’s important to remember that as we reconnect with the world, there is an important role for humanitarian policy in our immigration settings as well.

Erica Stanford: How well does he think the new Accredited Employer Work Visa (AEWV) is working for attracting nurses, when only 14 new offshore nurses applied in the first 5½ weeks, compared to an average of 57 new offshore nurses each month this year under the old visa?

Hon MICHAEL WOOD: The evidence in terms of the numbers and reports that I have received is that there is very strong interest amongst nurses and across the health workforce in respect of the Accredited Employer Work Visa. I’m advised that a relatively large number of applications have now come through the Job Check process in the health sector: 7,033 applications for people to work in the health sector have been approved by Immigration New Zealand in that Job Check process, bearing in mind that is a process that, effectively, commenced last month, in July. The next step, then, is for employers to recruit and for those people to apply for work visas. We are now beginning to see those come through—54 have been approved and 48 are in-country. In the meantime, nurses and health workers do continue to come in through the critical purpose visa, including 67 last week.

Erica Stanford: Is he satisfied that only three new offshore aged-care nurses applied for an AEWV visa in nearly six weeks, when the aged-care sector has been forced to close a thousand beds in the last six months due to shortages of 1,200 nurses?

Hon MICHAEL WOOD: As I have explained in my primary answer, the evidence that we see is that very strong numbers across the health workforce, including in aged care, have been approved in the Job Check stage of the Accredited Employer Work Visa. That is a process that has kicked in relatively recently. Employers now have the ability, once they receive those approvals and those tickets, to then be able to go and recruit offshore, and we expect those numbers to be coming through. Again, I note that workers continue to come into New Zealand through other visa categories that are still active.

Erica Stanford: Does the Minister understand that the Job Check process has been open since 20 June, AEWVs have been able to be applied for for the last 6½ weeks, and only 14 nurses have applied?

Hon MICHAEL WOOD: I would have to confirm the member’s numbers, because as we have heard in this House previously, she doesn’t always get them right. As I have outlined, the process is in flow. We have had 7,033 health workers who have been approved by Immigration New Zealand under the Job Check stage of the Accredited Employer Work Visa scheme, and those completed applications across the AEWV have been completed on an average of 11 days’ processing time, which is a pretty good performance for a scheme in its first one to two months of operation. We now expect to see work visa applications ramp up in the coming weeks.

Erica Stanford: Does the Minister remember signing off a question to me, saying that only 14 offshore new nurses—

SPEAKER: Order! The member might want to start again—maybe he signed off an answer?

Erica Stanford: Oh, sorry. Does the Minister remember signing off an answer to a question from me stating that only 14 new offshore nurses had applied for an AEWV up to 10 August, which is the first 5½ weeks of the visa being open?

Hon MICHAEL WOOD: Yes, but I note that that answer would have been received nearly two weeks ago.

Motions

General Debate—Leave Declined

CHRIS BISHOP (National): Point of order. I seek leave, in light of other events, for the House to hold a general debate after the dinner break this evening—following the normal Wednesday speaking schedule for the Wednesday tomorrow—from 7 p.m. tonight for an hour.

SPEAKER: Is there any objection to that course of action? There is.

Oral Questions—Leave Declined

CHRIS BISHOP (National): Point of order. Again, I seek leave for the House to hold a second question time after the ordinary questions for oral answer on this Thursday, in light of other events this week.

SPEAKER: Is there any objection to that? There is.

Urgent Debates Declined

Kiwibank—Public Ownership

SPEAKER: I’ve received a letter from David Seymour seeking to debate under Standing Order 399 the Government’s decision to acquire 100 percent of Kiwibank’s parent company. This is a particular case of recent occurrence for which there is ministerial responsibility. What is not clear from the application is the element of urgency requiring the business of the House to be set aside today. The application is declined.

Sittings of the House

Sittings of the House

Hon CHRIS HIPKINS (Leader of the House): I move, That the sitting of the House today be extended into tomorrow morning for the third reading of the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill and Government notice of motion No. 1, the interrupted debate on the second reading of the Screen Industry Workers Bill, the second reading of the Construction Contracts (Retention Money) Amendment Bill, consideration in committee of the Electricity Industry Amendment Bill and the Animal Welfare Amendment Bill, and the second reading of the Remuneration Authority Legislation Bill.

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

Ayes 75

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10; Sharma.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Motion agreed to.

SPEAKER: I declare the House in committee for consideration of the Appropriation (2022/23 Estimates) Bill.

Estimates Debate

In Committee

Debate resumed from 10 August on the Appropriation (2022/23 Estimates) Bill.

CHAIRPERSON (Ian McKelvie): Members, the House is in committee for further consideration of the Appropriation (2022/23 Estimates) Bill. The Standing Orders provide for 11 hours of debate on the Estimates. There are eight hours and 12 minutes remaining in the debate.

The Business Committee has determined to organise the debate by portfolio, so there’ll be no sector-specific debates. All votes are available for debate, but only specific Ministers will be available each day to speak to the indicated portfolios only. The Government has indicated that the Minister of Justice, the Minister of Local Government, the Minister of Police, and the Minister of Revenue will be available today. Each debate will be led by a call from the chairperson, or a member, of the committee that considered the Estimates most closely related to the Minister’s portfolios.

This debate expires after 11 hours, at which point questions will be put that the votes stand part of the schedules and on the provisions of the Appropriation (2022/23 Estimates) Bill. The time for the debate has been allocated to parties on a proportional basis and may be taken as parties see fit during the debate. New Zealand Labour has four hours and 18 minutes remaining, New Zealand National has two hours and 30 minutes remaining, the Green Party of Aotearoa New Zealand has 39 minutes remaining, ACT New Zealand has 41 minutes remaining, and Te Paati Māori has 11 minutes remaining.

The Estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. A compendium of the reports of select committees on the votes is available on the Table. The question being debated is that the votes contained in the Estimates of Appropriations for 2022-23 stand part of the schedules.

Members, we start with the Minister of Justice. The Minister is available from—well, it won’t be from 3 to 4; it’ll be from 3.15 to 4.15.

Justice

Hon KIRITAPU ALLAN (Minister of Justice): Mr Chair, thank you. This year, the Labour Government has underpinned its commitment to building a robust and fair justice system accessible to all. To achieve long-term reform of the justice system, we need coordinated change consistent with New Zealand values and aspirations across the criminal justice system and connected to the social sector. This will involve improving the justice system’s response to victims and others who have been harmed, forming new and stronger partnerships with community and Māori, improving our current services across the justice sector, and providing a strategic pathway for future investment in the system.

Justice sector agencies are working together to ensure there is an agreement about the outcomes that are required for an improved justice system. Whilst further work is required to define success, we know it will include reduction in offending and reoffending, through both prevention and rehabilitation means; victims receiving cohesive and responsive support; early intervention for people at risk of offending or reoffending; and efficient and culturally appropriate justice processes to ensure people are not further harmed by their interactions with the justice system.

This year, for the first time, justice sector agencies came together to take a multi-year view of priorities across the sector, taking their already solid collaborative approach to another level. Budget 2022 showed the benefits of this cluster approach with a significant and potentially transformative investment in the justice system across a whole suite of initiatives. I’ll briefly outline some of those now.

The legal aid system has been under strain with settings largely unchanged since 2011 and the number of people eligible for legal aid decreasing. This year, we responded in Budget 2022, which contained an investment of over $148.7 million across four years to strengthen the legal aid system and ensure continued access to justice for New Zealanders who cannot afford legal advice. In short, the changes mean an additional 93,000 more people will be eligible for legal aid from January 2023. Ministry officials will help monitor the effect the changes have once they have been implemented—this will include provider monitoring to see whether the remuneration increases are having an impact on the retention of legal aid lawyers and the volume of legal aid cases that they take. In addition, the Ministry of Justice will also be starting engagement with the profession on provider coverage.

COVID-19 has meant that the ministry, the judiciary, and the legal profession have worked together to ensure the courts adapted through each of the COVID-19 waves, which has enabled more court events to proceed and more cases to be resolved. For example, in the District Court, during the first COVID-19 alert level 4 period in 2020, only 32 percent of normal court events were able to be completed; during the Delta alert level 4 period last year in August, this increased to 40 percent; and during the Omicron red setting this year, this increased to above 90 percent. I want to acknowledge the efforts of the courts, and note that the impacts of these delays have very real-life consequences for every single one of those court participants.

There is a considerable effort being invested into reducing court delays on a number of fronts. In addition, the courts have responded to the pressures the courts have been under, as a result of COVID-19, by funding over $76 million from recent Budgets to provide additional resources. Meanwhile, collaboration, as I’ve noted, between the judiciary, legal profession, and court staff, in terms of scheduling, has ensued to assist with cases progressing without unnecessary delay.

The Criminal Process Improvement Programme—or CPIP as it’s described—is led by the Chief District Court Judge. It’s a sector-wide effort to improve access to justice. This will be done by establishing best-practice in-court processes and reducing delay. Over time, this will reduce the amount of time defendants spend on remand. The CPIP objectives are to reduce the average time, days to disposal; reduce the number of events that do not proceed on any particular day; reduce the average number of events for a case from start to end; and reduce the number of days the accused spends in custody waiting for an outcome. CPIP received $11.1 million across the justice sector over four years in Budget 2022.

In addition, critical court and justice services received an investment of $59.5 million over four years, through Budget 2022, to help retain a stable and resilient workforce to support the court and prevent delays. It will fund—[Time expired]

Hon PAUL GOLDSMITH (National): Thank you, Mr Chair. This is an opportunity for the committee to question the Minister on the matters in relation to the areas that she is responsible for, so I am glad to have the opportunity to ask some basic questions. And if we start off with the question—

Ginny Andersen: Point of order, Mr Chair. As you explained in your introductory notes, it’s customary in this committee that, when we’re starting off into the Estimates, the chair of the committee is required to make some introductory remarks around the findings of the committee.

CHAIRPERSON (Ian McKelvie): In the first instance, the chair didn’t seek the call. The chair didn’t seek the call in the second instance either. So I’ll stand with the call I’ve given. I’ll get back to you next.

Hon PAUL GOLDSMITH: Thank you, Mr Chair. So we’re dealing with the issues around the justice sector. I look at the very significant sums in this Budget, in the Estimates—$17.6 million for crime prevention and community safety programmes, for example—and the question that I obviously have is: why are they not working more effectively, these investments? Because what we see, and what all New Zealanders see around the country, is a sharp increase in, first, violent crime, a 20 percent increase in violent crime over the last few years, and what the Prime Minister referred to today as a spate of ram raids and smash-and-grab crime in Auckland.

I don’t know what a “spate” is, particularly, other than to say that it was a 518 percent increase in the first six months of 2022. That is a big spate. It is a double spate or even a dozen spates, if that’s what the explanation was. There’s a lot and there’s been a huge increase, and the people who own the stores that are being ram raided in Auckland are in a terrible way and in a terrible plight. Just overnight, there were seven additional—in Auckland, a ram raid that smashed up people. First they steal a car, then they smash that stolen car into the shop, causing tens of thousands of dollars of damage to the shop as well as the car. Then, of course, they steal a second car in order to make their getaway and not to be chased by the police, under the current rules. And so a lot of damage is caused in that equation.

The Government’s response so far has been to say, “Oh well, they probably need to focus more on bollards or some kind of protection.”, as if it’s the victim’s fault in this case—it’s the victim’s fault that they are getting attacked and they should have better bollards! But the problem is, of course, that most of the councils won’t let them put the bollards in and they can’t get a resource consent to put the bollards in. Meantime, any fund that’s made available is very slow. And so the question I have to the Minister is why on earth she feels confident that the money being invested by the Budget to prevent crime is going to be put to better use than it has been in the past, given the Government’s very poor showing on that.

Also, related to that, the Government’s main response to the increase in violent crime that we’ve seen over the last little while, in the increased ram raids, has been to say, “Well, when we look at the justice sector as a whole, where do we see the priorities? Well, what do we see as the big issues? Well, it seems that the big issue is that we’re too tough on the worst repeat serious offenders. Therefore, we need to shorten the sentences for them by repealing the three-strikes bill.”! It’s a very convoluted, strange logic that nobody can quite understand. And I wonder why the Minister came to that point of view.

Now, also, in relation to the 40 percent increase in gang membership under this Government, I’d be interested to know from the Minister of Justice whether any of the $17 million in crime prevention and community safety programmes has gone to gangs, because we know that they’ve been funding some drug rehabilitation work. Part of the problem with this Government is that they have sent mixed messages about the role of gangs in our country. We see a very difficult and a dark contribution by many gang members in terms of violent crime in this community, but this Government has funded them in many ways. And I just want to get some clarity from the Minister: how much, if any, of the crime prevention and community safety programmes have been paid out to gangs and gang members, and how much support and assistance provided to the victim support and victims of crime has gone to gang members? Because that would be an interesting thing as well.

The final question in relation to youth offending, because many people are worried, in the context of ram raiding, that what we see is this catch-and-release approach. Nobody wants to see young people thrown into prison and us throwing away the key. And at the other end of the spectrum of potential responses is a group conference, a family conference, some sort of get-together where the young person, the 13-year-olds, the 12-year-olds, the 14-year-olds who are driving the cars that are doing the ram-raiding—and there’s no doubt that that is the case. These kids are patted on the head and told, “Well, naughty, and we’ll see you again next week when you do the same thing again.”, and repeat and repeat and repeat. I was talking to a shop owner who had had his shop smashed up and discovered that the young person involved had done numerous shops before. So I’m very keen to hear from the Minister as to what progress—what actual plans she has to reduce the number of youth offending.

GINNY ANDERSEN (Chairperson of the Justice Committee): Thank you, Mr Chair. It’s a pleasure to give a brief summary on the Appropriation (2022/23 Estimates) Bill for Vote Justice and what the Justice Committee heard during that period. The four main areas that were touched on were: access to justice, outcomes for victims of crime, family violence and a new Government joined-up approach in that space, and, also, we looked at the effect of COVID-19 on the justice system.

In terms of access to justice, there are two main parts under this. The first is Te Ao Mārama, the new system that’s going through our court processes, and, secondly, the contribution and the expansion of funding made to legal aid and the legal aid system in New Zealand. The Minister told us that access to justice is a priority for this Government. In select committee, we heard about specific initiatives to that extent.

The Minister told us that Te Ao Mārama was a response to requests to reform the justice system over many decades. We heard that Te Ao Mārama will be first implemented in Hamilton and Gisborne and will be expanded to all courts over time. Budget 2022 provides funding of $47.4 million over four years for Te Ao Mārama. Part of this funding will enable the ministry to continue their engagement with iwi and communities to design and deliver services that reflect the needs of each community.

In terms of legal aid, it was warmly welcomed—the fact that Budget 2022 had $148.7 million that was specifically dedicated over four years for legal aid. The Minister told us that the ministry will also remove barriers for people who are registering as legal aid practitioners. We heard that a decrease to legal aid funding in 2008 and the subsequent reforms did result in a decrease in the number of legal aid lawyers and that, hopefully, this additional funding will boost those numbers.

Number two, in terms of supporting better outcomes for victims of crime, Budget 2022 provides $45.7 million over four years for a sector-wide strategy to improve the outcomes for victims of crime. Funding for this initiative is held within Vote Justice and also in Vote Corrections as part of that cluster. This funding is used to establish a new Victims Operating Model, and we were told by the Minister that the Government’s priority is to analyse the gaps in the justice system; for victims of crime and their whānau to identify how the sector can change to meet the needs of victims.

I’ll briefly touch on the work being done with Te Aorerekura. I’d like to acknowledge that within Vote Justice, the Minister for Prevention of Family and Sexual Violence is responsible for the appropriation for elimination of family violence and sexual violence. Te Aorerekura is a new way of doing things, the committee was told, that really empowers our communities to start taking control and making more decisions in their own areas.

One of the main aims of Te Aorerekura is to help develop a skilled, culturally competent, and sustainable workforce. Budget 2022 provides almost $7.4 million over four years for the initiative of building workforce-capability to ensure the right response every time. We heard that the executive board believes that developing a skilled and culturally competent workforce is an important part of building the foundation for the work in the elimination of family and sexual violence.

There was some good work done. It was great to have all committee members engaged and talking about some of the initiatives that this Government is driving to provide better outcomes for not only victims of crime but our entire justice system. Thank you.

Hon PAUL GOLDSMITH (National): Thank you, Mr Chair. Some more questions for the Minister, and I hope she will take the time to answer some of them. Following up on the matter around electoral law, one of the things in the Budget—dates back to the Supplementary Estimates—is the decision that Cabinet came to to increase the Vote Justice appropriation for justice policy advice.

Now, what was this about? Well, in the Budget, there was $39 million allocated for policy advice, because all Governments have to prioritise what they’re going to work on in terms of legislation. As I’ve said, one of the Government’s priorities this year—absolute priorities—was repealing the three-strikes legislation, because they thought that our main problem was that we were too tough on our worst repeat offenders and therefore we had to shorten the sentences for them, which is an odd priority, but there you go. They came along earlier this year and decided that electoral funding was a big issue—and they have an external review looking into it, but they wanted to get some legislation into the House before the election—and had to go to Cabinet and ask for $3.4 million extra, and another $3 million the year after, and another million, so about $10 million, in order to, what we on this side consider, skew the rules in favour of their particular party, which we think is poor form. I’d like the Minister to explain why she thinks that extra $10 million of taxpayers’ money should be spent in a way that doesn’t have broad, widespread support across the House, to change electoral laws in a rush before the election.

Then, on the matter of electoral law, I’d also be interested to know what confidence she has in the competence of the policy advisers in the Ministry of Justice that we allocate $39 million for in terms of policy response—and it may be another category that this comes from. But, in terms of policy advice, over a couple of pieces of legislation in relation to the New Zealand Bill of Rights Act review—two local bills introduced to this House, one relating to Rotorua and one relating to Christchurch, both of which moved away from the principle that we’ve had for a very long time in this country, which is equal voting rights for all New Zealanders. We’ve had Māori seats introduced, but they’ve been based on a proportional basis, on the number of people voting in a particular ward being the same, so that every New Zealander’s vote has the same weight at an election. Two bills were introduced, one on Rotorua, which was set to change that so that for those on the Māori roll their votes would have greater weight and lead to more people on the council than everybody else. The Ministry of Justice advice on that was that it breached the New Zealand Bill of Rights Act because it treated people differently on the basis of race, and therefore the Government actually did decide to withdraw that.

I first want to be reassured that the Government is not going to try to bring that back in some different way, but the question I have is that a second bill then came along, doing the same thing in a slightly different way in Canterbury, moving away from equal voting rights, because everyone gets a vote for the 14 councillors but Ngāi Tahu get to appoint two more, therefore altering equality for all the votes. But, on this occasion, the Ministry of Justice said, “Well, yes, it does breach the Human Rights Act, because it treats people differently on the basis of race, but it’s OK because the Treaty demands it.” So those two different pieces of advice were rather contradictory and hard to fathom—how one was not OK and one was OK. So I’d be interested to get some reassurance from the Minister as to whether she has any confidence that this advice that we’re spending $39 million on is any good.

Finally, another question I have for the Minister relates to the whole question—and she mentioned it in her introductory speech—around victims getting support, but I do want to point out that, in previous Budgets, in Budget 2020, the Government announced with great fanfare a cross-agency initiative, including justice, around helping victims of non-fatal strangulation. It’s seven times more likely to be murdered people who have suffered from non-fatal strangulation. Everybody’s very concerned about it. The Government brought in all this extra money in 2020, promised to support 870 cases a year, but only 38 victims have been supported to date. This was introduced in Budget 2020 as a matter of great urgency, and then this Budget increases that by another $8.2 million. So what confidence, if any, can the public have that the extra money allocated this year will lead to any better results?

Hon KIRITAPU ALLAN (Minister of Justice): First, can I just thank the member for his wide-ranging questions. If I’ve got them right I think the focus is on increased youth crime, focused on ram raids; the crime prevention fund of $17 million; electoral law and law reform; and local democracy issues, in particular section 7 vets. If I’ve missed any, please just re-raise them and I’ll try and get through them as best I can.

In respect of the youth justice issues that have been raised, first I just want to echo the sentiments about the concern that we as a Government have around this current spike in youth offending. I can say that I think many of us have been well engaged with police and others within the community to discuss a range of different ways that we might be able to address the issues. In particular, I think the first and foremost issue that’s come up in most of the discussions I’ve had with ministerial colleagues when we’ve been talking particularly about the youth ram raids, and when we’ve been talking with the relevant agencies etc., is that with the uplift in over half a billion dollars to police to ensure there are more boots on the ground, which is currently being rolled out and implemented up and down the country, there is a great deal of confidence amongst police. And I think that’s reverberating through to particular areas of the community when they can see a higher and greater police presence to be able to deter those young people that are committing offences.

In addition, I think it’s fair to note that over the past 10 years we’ve seen a gradual decline and a continual decline in youth crime. That said, the most recent statistics do show in Auckland, in the central Auckland area and out in the south of Auckland region, that in contrast to the national youth offending rate, which is about 4 percent downward, in those two particular centres there’s an increase. In Auckland Central it’s about 16 percent, and—

Hon Mark Mitchell: Under-reporting is a big problem there.

Hon KIRITAPU ALLAN: Yeah, that’s what I’m trying to say. There’s been a 4 percent national decline, but actually in the Auckland area we’re seeing quite an increase of 16 percent. So that was the concerning part that I was just highlighting.

Hon Mark Mitchell: The problem is there’s a lot of under-reporting there.

Hon KIRITAPU ALLAN: Oh, under-reporting. Sorry, mate. I was trying to hear. I think what we’re trying to do is make sure that the policy settings are right by ensuring that we’ve got more boots on the ground. There’s a cross-agency approach that’s been taken between justice, police, and a range of other ministries to look at those drivers of crime. So we’ve been investing in initiatives, in those types of programmes that are aimed at bringing youth crime down. For example, we can see in this year’s youth justice indicators report, recently published by the Ministry of Justice, that a larger percentage of representation of young people that come through the courts identify as Māori, but in those aged between 14 and 16 who appeared in the Youth Court we’ve seen a reduction by 51 percent from 2016 and 2017 to 2020 and 2021. That aligns with other decreases we’ve seen in other ethnicities: 45 percent. Also one of the initiatives we announced in Budget 2022 was the funding from proceeds of crime to assist smaller retailers to implement crime prevention measures. Those have included but are not limited to things like fog cannons, physical barriers like bollards, and other things to help ensure that communities feel more protected.

Turning to the questions with respect to the crime prevention fund and in particular that $17 million, I understand from the advice that I’ve received that the large focus of that funding has been for restorative justice providers, family violence providers, victim entitlements, and Family Court programmes. Gang members are not funded and have not been funded from that $17 million.

In respect of the local democracy issues and the two bills that the member raised specifically, he’ll be aware that for the New Zealand Bill of Rights Act vets for both of those bills, the responsibility sits with the Attorney-General. So I’ll allow him to direct his questions to him.

Hon Paul Goldsmith: They’re done by the Ministry of Justice.

Hon KIRITAPU ALLAN: The New Zealand Bill of Rights Act vets are administered by the Attorney-General, so I’ll allow him to answer. [Interruption]

CHAIRPERSON (Ian McKelvie): Order! I remind members on both sides of the Chamber that you’ll all have an opportunity to take a call and ask questions at the appropriate time.

Hon KIRITAPU ALLAN: Well, look, as the Attorney-General oversees that particular aspect of this vote, I think it’s appropriate that he responds to those issues specifically.

Finally, on the electoral law reforms, I think the question was: what funds had been directly apportioned and where? Mr Goldsmith, do feel free to correct me if I’ve got that question wrong. There are a couple of things that we’re doing with respect to electoral reform and the independent review. As the member has mentioned, we’re looking at the changes to the donation rule, which I’ve already announced. We’re looking at the cost implications of the Māori electoral option and the eligibility of Māori voters and the impact of these changes to them. First, there was $1.64 million appropriated to Vote Justice for policy resource, public engagement, and specialist expertise to look at electoral changes before the 2023 general election. I can assure this committee that I’m confident in the work that has been done. I think that was the direct question of the member. I am confident with their work, and we’ve seen and will continue to see that work produced to the select committee and subsequently to the House.

We’ve also seen that the Electoral Commission has received $139.211 million of funding over the next four years from Budget 2022 for the delivery of next year’s general election and planning and preparation for the subsequent 2026 general election, and that does include delivery of the Māori electoral option changes. So that’s been incorporated into that bulk appropriation for both of those general elections. Mr Goldsmith, I’m happy to walk through this but I want to make sure I’m responding to your specific and actual questions. So please feel free to tell me if I’ve left some out. I’m happy to answer those as well.

NICOLE McKEE (ACT): Minister, I was looking at the Ministry of Justice’s Budget bid document, and they said in there that, if 100 percent of those eligible for grants under the Victim Assistance Scheme got one, it would cost between $60 million and $200 million. So does the Minister believe that setting aside $12.3 million over three years for the scheme is indicative of taking a victim-centric approach? And, further to that, does the Minister believe that $12.3 million over three years is enough to expand the Victim Assistance Scheme, given that the grants that are paid out, on average, are for only 4 percent of the 104,190 eligible victimisations reported to police every year? And, instead, would she support our newly announced policy of having the Crown pay for victims’ reparation, while the Crown also collects the debt that is owed?

Hon KIRITAPU ALLAN (Minister of Justice): I thank the member Nicole McKee for her question. I’m not in a position to announce any new party or Government policy direction today, but what I will say is that, with respect to the Victim Assistance Scheme financial grants, $12.3 million over three years has been—this is to enable an expansion of the current scheme. There are two other critical components, though, to funding that was provided to enable a victim-centric approach. The Victims Operating Model—this is one that has been widely the subject of numerous inquiry and has highlighted real deficiencies in the ability of the Crown to provide a victim-centric approach. That initiative there has received $45.7 million, the sole focus being to ensure that there is an upward provision of improving outcomes for victims of crime. It’s one thing to splash money at a problem you can’t really understand, and can’t necessarily see; it’s another thing to be able to do the work to identify the gaps which aren’t being addressed for victims, and this, indeed, is a large part of what will be done there.

In addition to that, there’s also the New Zealand Crime and Victims Survey. I understand that this has been one of the most formative pieces of information to help assist and guide policy. Another $8.6 million over four years has been provided to strengthen reporting and the analysis of reporting. It’s a key source of directly measuring rates of victimisation; so it includes not just reported crime but it also goes a lot broader than that, and includes population groups with a higher risk of victimisation in the system.

There are several initiatives that the ministry also already has which aim to provide more support towards victims of crime. So, in addition to, of course you’ll be aware, the court victim advisers—specialist court staff whose role is to help a victim throughout the court process—we’ve also included victim support workers, who assist and support victims at court trials and hearings. We’ve also included support workers—they’re trained to tailor support to the unique needs of victims and their families. And we’ve also ensured that the ministry is providing training seminars for lawyers to understand family violence dynamics and best-use practice techniques when dealing with vulnerable witnesses, such as sexual violence victims. You saw, last year, that we had the reforms to the sexual violence legislation, with, again, the focus there being on victims.

In addition, probably the least seen but most profound has been the way that currently—and with the backlogs as a consequence of COVID—the backlog of court cases has meant that there has been a substantive impact for victims of crime, and having their day in court, so to speak, and having their issues heard. This has been a direct focus of the ministry over the past year in particular, and I’ve noted already in my primary answer about the additional funding that we’ve provided to ensure that the processes are sped up and we can clear the backlog. In addition to that, I think, I announced the family court associates bill that’s been introduced to the House, which indeed, as well, will also aim and have a focus on reducing the amount of time that victims are left in limbo as a consequence of lengthy court procedures.

Hon PAUL GOLDSMITH (National): Thank you, Mr Chair, and thank you to the Minister for answering some of my questions. The one that she might just come back to is around the strangulation support, a cross-agency initiative of $20 million, which was supposed to support 870 cases a year and has so far supported only 38, but this Budget has given another $8 million. The question I had was: how on earth could we be confident that this would help deal with what is a very significant problem and help victims, but also help prosecution cases, and why is there not much more progress being made? On the electoral law, my basic question there was why she thinks it’s a good idea that taxpayers should put in an extra $10 million for policy advice for the Ministry of Justice on a bill that is a partisan bill in our view, which doesn’t have widespread support in the House in relation to electoral finance, given the fact that that applies to all parties and usual practice is to try to make some attempt to be more bipartisan when dealing with these issues.

Some extra questions that she might also consider in relation to victims of crime—my colleague from the ACT Party Nicole McKee referred to the Victim Assistance Scheme. The real concern I had was that this initiative, which in this Budget has $9.5 million provided by Victim Support and victims of crime—the information from the Ministry saying that “By deliberately under-promoting the scheme, the Ministry has worsened access to services to victims who already face other barriers”. And I don’t think I’d ever seen, in my time in Parliament, quite so baldly expressed notes from officials saying that we have a scheme that we know is no way large enough to cover all those victims of crime that could use it. Unfortunately, there are a hundred thousand victims of crimes, and, unfortunately, right here, right now, there are more victims of crime being created. The best thing we can do for them is to have effective justice and law and order policies that reduce the number of victims of crime. But when they are victims, to have a scheme set up and then to underfund it, and then to deliberately under-promote the scheme as Government policy—to deliberately under-promote the scheme—I thought was outrageous. I want to have an assurance from the Minister that she will change that approach forthwith, if she hasn’t already, and that she will come up with a more effective way of ensuring that people are aware of the support that is available to victims of crime.

Another final point that I wanted to make in relation to justice was that I was disappointed that, out of the $39 million allocated for policy advice, there doesn’t appear to be any towards any review or update of the Official Information Act 1982 (OIA). Given that the Prime Minister announced back in 2017 in the Speech from the Throne that she was interested in strengthening transparency around official information, and we’ve traversed this earlier in the House, I think it’s relevant, for the Minister, to ask whether she thinks it is appropriate use of the OIA for Ministers to be saying that written material sent to them can lead to undesirable outcomes under the OIA and it’s better to talk rather than write things down. And then we’ve had the Chief Ombudsman, who’s responsible for keeping an eye on these matters, being concerned about media reports there. So my question there is—I do want to have some kind of assurance from the Minister that she is confident that the legislation currently in place is appropriate, and, if it is, is it really just a matter of practice that is the issue? And we could come back to that.

Finally, I was a little bit concerned about her response to my question around the New Zealand Bill of Rights Act vetting processes for the two bills, the Rotorua bill and the Canterbury bill, which both had moved away from that basic democratic principle of equal voting rights for all New Zealanders. Part of our problem has been that the Government has refused to really front on the issue and explain it—they’ll put out Rino Tirikatene, and a fine man that he is, but he is not a Minister—and it is the Ministry of Justice that writes those vets, and so I’d like some answers from the Minister of Justice as to how good she thinks they are.

Hon KIRITAPU ALLAN (Minister of Justice): Yeah, thank you to the member again. Look, whilst he might not be satisfied with the way that the process works, it is a fact that the Attorney-General is responsible for New Zealand Bill of Rights Act vets; therefore, it’s appropriate that he responds to that question, and I’m sure you’ll have the opportunity to ask that of him, and I’m sure he will oblige.

The member also raised a series of questions. Turning first to the Official Information Act (OIA) issues, one of the things that the Prime Minister did say is that we would be ensuring that there are further and additional transparent processes by which the Government reports and ensures accessibility of information. I provided a range of different sums to the House during question time, which I won’t go over, that do show that there has been a substantive uplift in terms of responsiveness, and that, in terms of timeliness, I think it was in excess of 97 percent of questions that have been answered. Very few are coming back from the Ombudsman or have been found to be deficient. That’s been a real focus of this Government, and I went through a range of the different measures.

With respect to that question on whether it’s appropriate that a member of a parliamentary party who has dual roles, ministerial and member of Parliament, speaking with colleagues about how the OIA works—I consider that completely appropriate. There are times when members of Parliament, caucus colleagues, may not understand the delineation of ministerial and legislative roles. I don’t think that that’s an issue that’s confined to either this individual Minister, who is also a member of Parliament, who is also a caucus colleague. I don’t think that’s a different position than any other party takes. That was confirmed by Nicola Willis this morning, but I don’t think we need confirmation of those types of things.

I do think there is a genuine—from this side of the House, and, I think, from both sides of the House, but I know definitely from this side of the House, that principle of accessibility for people to access information is a very genuine responsibility that each of us undertakes to uphold. It’s certainly one that I’ve hoped that I’ve diligently upheld; it’s something that we ensure that we do very diligently across Government. So I would not like to think that there were any aspersions cast upon correspondence to colleagues saying “Come and have a yarn if you don’t understand how things work.” And I don’t think that is an issue to snigger at; I think that that’s an important—

Hon Michael Woodhouse: I’m not sniggering at it.

Hon KIRITAPU ALLAN: I’m just saying, I don’t think that that would be refuted in any political party. Come and have a yarn, let us help you understand how things work, because it’s a genuine fact: not everybody understands what to do. That is our role, as senior colleagues, to assist others.

With respect to—oh gosh, I think it was the question you raised; you’ve asked me lots of questions and I’m taking poor notes—the political issue, the $10 million for policy advice with respect to electoral law reform. One of the questions you asked was whether it was appropriate to allocate funds for electoral law reform where there wasn’t unanimous agreement within the House. This particular reform has been the subject of Electoral Commission advice over many, many years. We think it’s completely appropriate where constitutional issues have been found, where there has been a lack of any Government that’s been willing to address those issues of access and equity for the reform of these electoral laws. I think it’s a pity that the other side of the House aren’t supporting these particular reforms, because they do, and will, ensure that there is greater accessibility for people to participate in understanding the transparency of our political donations and those laws. And I would have thought, particularly on the back of the member’s questions about transparency of the way that we operate, that there would have been greater consensus and agreement on these issues.

NICOLE McKEE (ACT): Thank you, Mr Chair. My question again to the Minister: Minister, do you think that $45 million spent for advice and promotion services from the Human Rights Commission, Independent Police Conduct Authority, the Law Commission, and the protective judiciary service from the Public Trust are more deserving of funding, when 96 percent of those 104,190 eligible victimisations reported to police each year did not receive a grant? The Ministry of Justice’s own Budget bid document said—and I’m going to give the full quote that my colleague Mr Goldsmith gave earlier—“victims are being deliberately excluded from accessing support they are entitled to receive. If this is widely known, it would erode public confidence and undermine the stated ethos of access to justice.” Also, the Wellbeing Budget summary of initiatives states: “Financial grants are a simple and effective way of easing the burden of victimisation by paying for unexpected costs.” Does the Minister truly believe that they are simple and effective; and, if so, why do so few victims actually receive a grant? And, lastly, why do so few victims actually receive financial support, either through these organisations that have been set up to assist victims or through reparations from offenders? Thank you.

Hon KIRITAPU ALLAN (Minister of Justice): Thank you to the member, Nicole McKee. And I apologise, sorry, to the member Paul Goldsmith, because I did omit to answer this question and it is a really important one. The demand for the victims assistance scheme in 2015 and 2016 led to an overspend of the appropriation. I think that that’s been well documented. And, actually, I do also applaud the Ministry of Justice for what the member Paul Goldsmith described as baldness in their assessment. It was a very bald, and therefore bold, I think, assessment that in order to manage that overspend, they took decisions to decrease the information available for that victim support. That’s something, of course, that we, I think, collectively find to be abhorrent, which is why in Budget 2022 you saw a shift in the way that this Government approached that particular scheme and ensured that there was an uplift and a direct uplift. But I’ll be very clear that the demand for the victims advice assistance scheme—it was back in 2015 and 2016, which is when that policy to decrease the amount of discussion about that scheme was enacted, and therefore it was something that we’ve turned around on its head, making sure that victims do indeed have the support that they require. That’s something that I’ve always made very clear as the Minister of Justice: victims are first and foremost at the forefront of my mind.

I want to come back, though, because it does link back to that Victims Operating Model. That was where the lion’s share of the spend has gone, because we want to ensure that across the whole system—and the member is just as aware as I am; the whole system, really, in my view, and the way that we deal with victims is very ad hoc and there are a lot of holes. I don’t want to just chuck all of our money in the same thing that has worked sometimes but there’s also the feedback that we get that it misses a lot. We need to make sure that the system, from the day that that person has a harm incurred upon them and the day that they become a victim—that, at every stage of the process, there is support available, and the right support, which is why, again, that’s where that lion’s share of that Budget 2022 $45.7 million has gone. I think that that responds to all of the questions that I have before me at the moment.

CHAIRPERSON (Hon Jenny Salesa): I call on Chris Penk. And I understand that the agreement prior is that this session ends at 4.07 p.m., so just keep that in mind.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. I’ll speak as fast as I can—the Hansard folk won’t thank me for that, so I’ll try and make it a good time, if not a long time. I’m interested—

Hon Paul Goldsmith: Well, you’ve wasted about 20 seconds of it!

CHRIS PENK: I’ve wasted time talking about it—I wasted time talking about how little time I have. Oh dear.

Hon Paul Goldsmith: He still is wasting it!

CHRIS PENK: Madam Chair, Mr Goldsmith’s had his chance—I’m going to seek a point of order to get my own colleague to stop!

Access to justice is a massive problem in this country, as I think we’d all acknowledge—no doubt even the Minister would acknowledge that. Huge delays in our court system, but including not only the courts proper but also the Criminal Cases Review Commission, as set out by this Government, having been operating since July of 2020. And I understand, via written parliamentary questions answers from the Minister—or perhaps her predecessor, to be fair, but in any case, the Minister of Justice—that the average time taken to dispose of a case is 290 days. Two-nine-zero days, which seems to me an extraordinary period of time. In particular, when we note that one of the costs of the system is the fact that victims of crime are re-entered into this debate and engaging even without, for example, a reason for appeal—leave to appeal to be given by a court; that was one of the design flaws that we highlighted at the time. So I ask the Minister to respond to that fact—that acknowledged fact—about the huge amount of time it takes to dispose of a case, and ask: has a single case been referred to a senior court by the Criminal Cases Review Commission?

Hon KIRITAPU ALLAN (Minister of Justice): I thank the member for his question. Yeah, look, it’s been an interesting process to see how that review commission has unfolded over the last couple of years. They are a new entity; they were established, there were appointments, they’ve had to develop processes to ensure that they can get up and running and up off the ground. The biggest point—because I did ask this myself to them, and they’ve been in to see me a couple of times—is a huge oversubscription, and in terms of the work required to unravel the layers, I think that that the amount of work required has been voluminous. So I think that what we’ve seen now—yes, there have been a couple, I think. I’m sorry, I don’t have the number; I don’t think it’s in my books with me at the moment. But I think there have been a couple of referrals—it’s not many, but there have been a couple of referrals to the higher courts. I know that they’re watching with a close eye on how those will go in terms of the way that they might improve processes, etc., and as you rightly pointed out, there are many cases that have been referred to them that they are working their way through.

Local Government

CHAIRPERSON (Hon Jenny Salesa): Thank you, Minister. Members, we now have the Minister of Local Government. The Minister is available from 4.08 until 5.08 to respond to your questions.

RACHEL BOYACK (Deputy Chairperson of the Governance and Administration Committee): Thank you, Madam Chair. Look, it’s a pleasure to kick off the debate on the Estimates for Vote Internal Affairs and, specifically, looking at local government, as deputy chair of the Governance and Administration Committee. I just note that our committee is small but mighty, and I look forward to some excellent contributions from all sides of the committee of the whole House this evening regarding the work that we’ve been doing to examine the Estimates for the Budget.

So I just note that there are rather a number of ministerial roles and allocations within this particular vote, including some that are very relevant to local government but also others that have other interests that will be covered off at various points in this debate, including the digital economy and communications; diversity, inclusion and ethnic communities; and the ministry for racing—so the very important work of this committee. But, look, I’m going to focus my contribution—particularly because we have the Minister of Local Government here—with regard to some of the future work within the local government space, and I just note there is a significant amount of change occurring within local government. That change is critical to ensure that our local government is set up for communities.

I do want to indulge just for a moment and say that we’ve seen, in my electorate of Nelson in the last week, just how critical the role of local government is in our communities when we have the significant events like we’ve had. I just want to acknowledge the work of the Nelson mayor, Rachel Reese; the Tasman mayor, Tim King; and all of the staff from Nelson City Council and Tasman District Council, who have been doing an outstanding job, and our neighbours across in Marlborough also have been facing a very challenging situation.

We heard from the Minister and had a lot of discussion around the three waters reform. There were some specific discussions that I think would be really useful to hear about from the Minister around the better-off funding and how that will be released over the coming months, and around time frames.

One of the questions that came up during the Estimates hearing was around the transition—particularly around the use of technology—and I think that would probably be an area that the members of the committee of the whole House here may well find useful to hear about from the Minister. One of the areas we examined was the review into the future for local government, and I just want to note that this is actually a critical part of the work for local government going forward. We know that many of our councils are facing constrained funding environments, they’re facing increased complexity in the work that they’re doing, and they’re looking at how they can continue to be connecting with their communities as well as making the necessary investment in infrastructure that’s so important for housing, for adaptation around climate change, and for all of that work so that we are continuing to get the right people sitting around our council tables and so that councils are enabled to be able to do the work that they need to do with their communities.

I just also want to note that partnership between central government and local government, which is so critical, and this is one of the areas that we spoke about. Again, we’ve just seen that in the last week in my electorate—that critical relationship of the National Emergency Management Agency at the centre alongside local government to respond to the events that we’ve had.

Just a final note—before, I hope, that we’ll be able to hear from the Minister—around the importance of Māori representation in local government and what plans may be going forward. We’re about to have elections, where a number of our councils across the rohe have included Māori wards. If the Minister has got any plans around work to enable councils to bring our Māori voices to the table and also that work in partnership between our councils and iwi—any progress around that particular issue.

So we’ve had a detailed examination of the Estimates at select committee, and I look forward to the debate and look forward to hearing from the Minister. Thank you.

Hon NANAIA MAHUTA (Minister of Local Government): Can I thank the deputy chair of the Governance and Administration Committee for opening the debate and acknowledge the select committee for its consideration of what is a very dynamic and changing space in the area of local government. It is important to note that because local government affects the day-to-day wellbeing of our communities, the depth and range of issues that are confronted in local decision-making are significant, rapidly changing, and evolving to address not only the mainstay of what local government is about—which is democratic representation of community wellbeing across your social, economic, environmental, and cultural domains—but, increasingly, when we look at the natural disasters that are being addressed in the moment, local government also has to make a contribution in areas such as civil defence, natural disaster management, and, indeed, recovery, in a way that they haven’t experienced ever before. The point was made that, yes, we spent a lot of time discussing the three waters programme because it is a significant reform impacting on the sector, but we also discussed other aspects that local government want to see further evolved and that is in the area of future for local government. So I look forward to discussing both those areas in depth.

If I could point to the select committee report and their consideration of the Estimates, we spent a lot of time discussing aspects of the three waters reform, which I think should be further fleshed out in this debate. The better-off funding, for example, in our conversation around its intent, which was foreshadowed at the local government conference in July last year—in order to ensure that councils would be able to better participate in the reform programme, the better-off funding was intended to ensure that we could support local communities to transition to a sustainable and low emissions economy, including by building resilience to climate change and natural hazards. The funding could be used to enable housing development and growth, with a focus on brownfield and infill development opportunities, where those are available, and could support local place-making and improvements in community wellbeing.

I want to make really clear that the process for councils to participate was an open one. There’s no prescription on the way in which councils would be penalised—and I’ll characterise the use of the term very liberally—because of their stance on three waters. I made it really clear at select committee that the process would enable all councils to be able to access the better-off funding package for those purposes, as I’ve outlined in the debate.

In so far as the focus on the ICT component of the three waters reform programme—again, this is quite critical to the implementation of three waters reform. We discussed at length the business case that is currently being undertaken to set out what are the key components of a strategic shift in this area. And if I could just, I guess, make the point that where we have 67 councils currently delivering water services, what will be absolutely key to the strategic shift of moving water services into a different space will be the ICT capability. What we heard and what I responded to at select committee is that data and digital capability and system records functionality will form the core architecture of the business case that is being undertaken. I’m happy to respond to questions in that area. But when we think about the business case and what it will cover—a system of records, operational technology, modelling and reporting, corporate systems and systems of differentiation. If we look at models where there has been a system shift towards improved water service delivery—we might look north to Watercare and the components of that systems shift—you will find elements of that ICT functionality absolutely at the core of the service delivery improvement.

I do want to say that a lot of time was spent on costing in this area, and that is why it’s so necessary to undertake the business case so that we can get better modelling around cost. But, again, I make the point that this is an area where I anticipate that we will need to invest in for the long term. And I do want to make the point that, in the whole reform programme, we didn’t have a comprehensive data set of information from councils about the health of their water infrastructure network, about a range of data that would be necessary to do a thorough analysis around cost, existing costs, ongoing maintenance requirements, and new costs with a higher regime in place until we undertook this programme some four years ago.

We did spend a bit of time also—and that’s evidenced in the select committee report that there is uniform support for Taumata Arowai, which is the drinking-water regulator that is responsible for setting drinking-water standards and has oversight for waste water and stormwater. I think the most important point to highlight here is the role of Taumata Arowai as the dedicated drinking-water regulator, that, further on down the track, as higher drinking-water standards are being enforced unilaterally on the sector, there will be compliance costs. And, again, a lot of reports and research and information have gone into that aspect of the reform.

Can I now move briefly to the Review into the Future for Local Government. This is an exciting area, again supported by the local government sector, and it outlines a number of key pillars of expectation around what to expect in terms of the future fit aspect of local government continuing to contribute to our community. I just want to outline them as they’ve been highlighted in the report.

The panel have identified five key pillars: strengthening local democracy, which will be at the heart of ongoing system change for the sector; a stronger focus on wellbeing—and if I characterise how the sector talked about that, it is not just about roads, rates and rubbish; it is about people, it’s about place, and it’s about ensuring that place-making occurs in a way that helps to support regional growth and opportunity. It’s about authentic relationships with hapū, iwi, and Māori. In this regard, because Treaty settlements are now a growing reality of the fabric of our democracy, how they contribute to the broader wellbeing of communities becomes a conversation point, which is why local government, central government, and community alongside iwi talking about what the long-term investment into community wellbeing should look like is the conversation space we need to be in. Genuine partnerships between central and local government—and I take that feedback very seriously from the sector because it has been higgledy-piggledy in the past. What we know is that for an effective working relationship to occur so that local government can work effectively in the space that they are contributing to—that dynamic partnership between central and local government can continue to improve and that’s what we’ve been working on.

And then the big challenge for local government, which is an equitable source of funding for them to undertake the role that they’ve been tasked to do. Again, I’m really pleased that the Review into the Future for Local Government panel are looking into this space, off the back of the Productivity Commission’s recommendations, and, in terms of being in front of the issue, hearing other views from the local government sector about where further revenue could come from to enable councils to undertake the task that they are there to achieve on behalf of ratepayers.

Let me just briefly come to the issue of improving Māori representation in Government and actually acknowledge the work of Local Government New Zealand and the diversity strategy going into this next local body election. By the next local body elections this year, we will have 35 councils in total who will have the creation of Māori wards. That will see an increase of Māori representation around the table, and it will see a more dynamic representation and inclusion of issues that, for a long time, have been shut out of the local government space. I see this as an evolving area that will make a positive contribution to community wellbeing and ongoing investment, as I say, from Treaty settlements into the regional growth aspirations that exist across the whole of the country. Only good can come from that.

SIMON WATTS (National—North Shore): Thank you very much, Madam Chair, and thank you to the Minister for being here today to answer some questions in regards to local government. I want to start, firstly, by following on from the MP from Nelson, Rachel Boyack, to acknowledge the good work that local government have undertaken in Nelson, in Marlborough, and also in Tasman in regards to the response to the flooding and the natural disasters that have occurred there and, obviously, the broader team in regards to local government executive, but also civil defence and other first responders within those communities. I also acknowledge those in Northland and also in Taranaki who have also faced similar aspects. That really personifies, I think, the importance of our local communities and our local government in our country, and only those based locally can respond in the way in which we’ve seen in the past week to deal with local issues, and the importance of us making sure that we maintain and strengthen that is so very important.

Today, I’ve got a number of questions for the Minister, and I’ll run through in, hopefully, some groupings around that, and I’d be keen to get some good dialogue in regards to that. But the Minister articulated it in her opening statement in terms of the scale of reform that’s currently under way within the local government sector, and much of that we touched on when we went through the Estimates conversation in regards to three waters and other elements that have been touched on. But the scale of the reform in regards to the Resource Management Act; in regards to three waters; in regards to the future of local government, which was just articulated; in regards to civil defence; in regards to all elements—it’s all come at the same time. And it’s come off the back of COVID as well. So the implications, really, and what we’re hearing from local government across the country is that that is a significant weight of pressure on them, on their people, and they are now seeing concerns—or real reality—of high levels of turnover within their entities. I’d be interested, firstly, for the Minister to be able to articulate whether she is concerned in regards to the scale of turnover that the local government sector is, and has been, seeing in the past period, primarily due to the result of the scale of reform that is currently being undertaken by this Government, and what effect, if any, that has on the ability for local government to maintain a degree of continuity in terms of service delivery.

The second aspect, and probably the most fundamental aspect, of reform within local government—again, that we touched on in the Estimates conversation—was in regards to three waters, and I want to start, firstly, by really getting right back to the start of “What’s the problem we’re trying to fix?” I think it would be fair—and no major party is standing here saying that the current state is fit for purpose and perfect. I think everyone acknowledges that improvement is required in this space; the conversation is, really, how best to undertake that. But, if we get back to some of the key costs and benefits statistics that have been articulated, we’ve heard numbers bandied around of $120 billion to $180 billion of infrastructure cost. But I want the Minister to reflect in terms of that, because that was the basis in order to say why the scale of cost is required. When Castalia, who is one of the independent third-party assessment agencies, had a look at the financial data that was prepared by Scottish Water, or the Water Industry Commission for Scotland (WICS)—and I quote—“The reform scenario was based on faulty assumptions and flawed analysis.” Well, I can’t be much more categoric in terms of that statement, but that’s in regards, as I said, to that $120 billion to $180 billion fiscal number. Farrierswier, also another independent agency appointed in order to have a look at that financial modelling, said—and I quote—“WICS’ analysis cannot be used to definitively conclude that the amalgamation in and of itself will lead to material efficiency gains in New Zealand.” Those are both significant statements that underpin the fact that the whole basis of this fundamental reform in regards to three waters is based, and using Castalia’s words, on faulty assumptions and flawed analysis.

So, on that basis, I want to know from the Minister: how is she confident that we are embarking on such wide-scale reform and change in regards to three waters, when the underlying costs and benefits on which this whole reform process has been built is, as I’ve articulated, flawed? [Bell rung] I appreciate that was quite impactful! I will carry on for another period of time while we give the Minister a little bit of time to come up to that, because they are challenging questions, I acknowledge.

I also want to get on to—and it’s another element that we talked about as part of the Estimates process. It was in regards to the expenditure, particularly around consultants, on advertising. Again, the basis for this reform that was hammered home to Kiwi households across this country was a wide-ranging advertising campaign that was absolutely, as articulated, borderline in terms of what it was portraying in terms of the problem that exists in the country. Last week, as a process of select committee hearings in regards to the three waters reform, we heard time and time again: “Is your water broken in your district?”—“No.” “Do you have an issue with your toilets or your taps, all that?”—“No.” The issues that were raised in regards to challenges that communities and households across this country have are that, yes, at times there have been issues, but the overarching premise that our system is fundamentally broken and that we’ve got green slime coming out of our taps is absolutely materially flawed, and that analysis and that advertising is not accurate. So what I want to know from the Minister is, given the enormous problems that have recently been uncovered by the Auditor-General, does she feel that this money in regards to consultant spend and advertising spend on three waters reform was money well spent?

The second aspect—and it relates back to the comments I made in regards to the Scottish water commission, who were consulted extensively and at significant cost, I must also add, on three waters. Many councils have raised objections to those numbers. So what is the quality of assurance—and this is a question for the Minister—and independent review of those numbers that has been completed that gives her confidence that the underlying basis for this, one of most significant reforms in local government’s history—what assurance and independent review has she had that gives her assurance that what we’re undertaking is built on a strong platform of substantiated facts and costs and benefits? Because, as I articulated, I’ve given two independent examples which have been very clear in regards that this has not been the case.

And, lastly, in regards to the spend, does she believe that all the costings done by contractors on three waters—and there was a wide range of costings undertaken in regards to the reform—does she believe that those underlying costings undertaken by those consultants are accurate? And, if so, what scrutiny has she applied on those numbers to make sure that, when we’re hearing time after time after time from councillors saying, “The numbers that have been tabled are not materially accurate for my district”—and I don’t know, I lost count of how many times we heard that last week. I’ve told, and we’ve told, officials time and time again that these numbers are wrong; they’re inaccurate, they’re materially misstated, and words even stronger than that. What scrutiny has this Minister undertaken to make sure that the costings that have been undertaken by officials in regards to three waters are accurate? And how can she have any confidence that what the councils are saying when they’re arguing that these numbers are inaccurate—what confidence can she have in regards to that?

Hon NANAIA MAHUTA (Minister of Local Government): I’d like to just acknowledge the questions that have been asked, and given that the Finance and Expenditure Committee are currently considering the Water Services Entity Bill, I know that much of this information is being traversed at committee level, as well.

Firstly, to the broader question of the range of reform. I acknowledge that we are a progressive Government that have a number of priorities that we’re trying to address in a way that local government, in particular, will be feeling the burden and the weight of a range of reform expectations. But when we think about the challenge that we inherited— which was, effectively, for example, the lack of investment in social housing—and then trying to look at some of the challenges that we would need to address in order to ensure that councils, through the resource consent and planning process, could make that whole process better to enable housing, obviously the Resource Management Act reforms become the topic of focus. We know that the planning and consent system was very slow and needed to be improved to enable greater spatial planning and urban design to be able to be implemented for that purpose. It’s not an easy fix; I accept that.

Also, integrated investment in infrastructure becomes another core area of focus when we think about roading, we think about connectivity with rail, communications, and also water infrastructure to underpin what is going to be a necessary objective for New Zealand to unleash regional growth potential. We know that the system needs to be improved there.

So I’m not saying that any of the reform programme enables us to have an easy fix, but it’s a necessary set of objectives and challenges that the Government are confronting to better ensure that regional growth can take place, we can enable greater investment in housing, smart urban design, we can look at resilience factors, because we need to look at what’s happening with natural weather events—and, actually, when a natural weather event happens and stormwater, waste water seeps into your stormwater system and then into your rivers, streams, and oceans, that’s when you know that we don’t have a resilient network. These are the challenges that we’re trying to fix.

In terms of working with local government, that is the reason why I’ve established an oversight group to try and bring some of this reform into focus and look at those critical areas where we need greater alignment so that we can have the conversation with local government.

In terms of service delivery, I really want to focus on the three waters area and bring it all back to the Estimates debate. That is why we’ve invested funding to enable councils to engage with the transition support funding to help them work through some of the necessary aspects that will be critical to enable them to better ensure that standing up water reform in their favour is done in a way where they can assure themselves that their staff that their committing to working alongside the national transition unit are supported to help, in very practical ways, smaller councils, for example, being able to reap the benefits of the reform that we’re engaging in.

Now, the member asked—and he probably characterises a lot of what the public ask—“What is the problem that we’re trying to fix?” It’s simple: an unsustainable model of financing infrastructure. The situation that councils are dealing with right now is always having to make trade-offs between what they’re funding in their long-term plans. Often, because pipes under the ground aren’t as attractive as museums, as libraries, as community centres, and as pools, and the like, councils are always having to make a compromise in terms of what they’re funding. Quite frankly, the under-investment in infrastructure over a long period of time—over a long period of time; at least two or three decades—has led us to the point that we are at, which is: unless we find a financially sustainable way of investing in infrastructure, we are going to continue to under-invest in a way that will only mean more pipes bursting and busting in our communities, and I don’t want that to happen.

The other inefficiency of the current regime is that you’ve got 67 councils delivering water services, and, in and of itself, it’s not efficient, but, probably at a more granular level, not all councils can afford the types of experts that you would want for a high-performing system.

If we look at the reform that the Government is promoting, a high-performing system means that we can consolidate and professionalise the workforce in a way that everyone can have access—and by “everyone”, I mean the whole country can have access to professional peak bodies that are geared towards being able to enable a better focus on water infrastructure. Now, other countries do that but we can’t, because of the state of the current situation that we’re in.

The member also points to the figures of $120 billion to $185 billion required over the next 30 years to invest in water infrastructure, and that was a result, yes, of a study undertaken by the Water Industry Commission for Scotland (WICS). Now, this isn’t just any tinpot organisation; it is an organisation that has been looked to by European nations, many across the EU, many northern nations, certainly Ireland, and many countries, as an expert in their area. Now, when they put out the $120 billion, they also identified that this figure came from councils themselves and what information councils could offer up. That’s a really important point. You’ll recall, in my initial contribution, never before have we had a coherent, comprehensive set of information in relation to water infrastructure; now, I cannot say that we do now, but we know a hell of a lot more now than we did four years ago. Because we have got an international expert organisation helping us to better understand the state of our water infrastructure network, we can continue to do better in terms of the information that we gather, and the like. The $185 billion is if you factor in, for example, the unique features of our geography, the fact that we’re on a tectonic plate.

But some of the challenges—and it will be evident, as the member and members of the select committee investigate, those reports like farrierswier and GHD that peer-reviewed the WICS study, they will say that some of the shortcomings are, for example, in the area of climate change. How can you fully cost the impact of climate change in relation to a resilient water infrastructure network, when you’re starting from a very low baseline of information? That isn’t information you get. But we shouldn’t fear it; what we should so is say, “OK, if our long-term objective of going down the path of reform is to build a more resilient water infrastructure network for the whole of New Zealand, where everybody has the right to have clean, safe water, and then we’re improving our investment in our plants, our waste-water treatment plans, that will have a positive impact on our environment, our stormwater systems, smart urban design using the natural features that we have in the area, we can then continue to get more information around a resilient network.” That’s where I hope we get to.

I also want to come back to the question around consultancies, because there is an assumption that we have a range of consultants at our disposal in areas where, actually, we haven’t ventured into the level of system reform that other countries have had. So one of the things that we have to balance up—one, the public sector doesn’t have access to all of the requisite skills that are required to help us through the analysis, neither does local government, so we do, in some key areas, have to get consultants. I wish we didn’t; I wish we had a strong public service that includes central and local government where the experts are all there. That is not the reality. So we have had to go out to market in some critical areas to help us along the way.

The other question that the member raises is in relation to the public information campaign. I do note that assumptions have been made that the public knew about the state of their water system or perhaps had access to more information than in fact they did. A lot of people, to a large degree, don’t really know the health of their water system until they don’t have access to water or the water is brown or it tastes funny or there’s a leak outside of their house or when they turn the tap on, nothing’s happening and it’s not happening for a long time. That’s the extent of the public knowledge around their water and the health of their water infrastructure network. So we’re kind of faced with trying to ensure that we’ve got good communications going to people who, at a very surface level, that’s the extent of knowledge they have of their system. To elected representatives who we would believe would have greater knowledge, but, actually, around a lot of council tables, they contract out the decision making in this critical area to consultants. So even many of our elected representatives didn’t have the granular level of knowledge that we’re debating in this Chamber today. [Bell rings] Madam Chair?

CHAIRPERSON (Hon Jenny Salesa): I’ve already given you two calls; I will come back to you, Minister, after I give Simon Court a call. Thank you.

SIMON COURT (ACT): Thank you, Madam Chair. I have a number of lines of questions—firstly, this concept of Te Mana o te Wai statements. Te Mana o te Wai, for those who don’t know, is a concept that puts water as a spiritual entity, the value of water, above the needs of people and communities. That’s what it says if you go on to the Internal Affairs website and look up Te Mana o te Wai—water is a spiritual concept that is more important than the people and communities that it serves. I know, it’s amazing—2022, hundreds of years since the scientific enlightenment enabled us to grasp concepts such as the Earth going around the sun, not the other way around, and yet this is the spiritual nonsense which is being forced on New Zealanders and councils and communities rather than the obvious problems to solve, which is to fix water pipes, pump stations, and waste-water treatment plants.

So, Minister, I want to ask you, in relation to the Estimates: the Government has spent millions on engaging with Māori, with iwi, with hapū, with mana whenua groups, about three waters, and in the Estimates there’s even more budgeted. Now, with these Te Mana o te Wai statements, the way they will relate to the water services entities under the three waters reforms is that anyone of Māori descent will be able to submit a Te Mana o te Wai statement to a water services entity, these new corporations, giving their thoughts about the water, what it means to them—and clearly that’s a spiritual dimension, based on the testimony that we’ve heard at the select committee hearings—and these water entities will be required to not only engage with them but to respond to and give effect to these statements. In answers to written questions, Minister, you have confirmed that.

So, firstly, how much money is going to be spent by water services entities giving effect to spiritual, essentially, animist, religion-based Te Mana o te Wai statements? And will these water services entities give the same rights to communities and to councils who want to ask the water services entity, “Will you please fix the pipes in my local neighbourhood? Will you please stop the sewage pump station overflowing next to my boat ramp?”—which is what’s happening at Te Wai-o-Pareira / Henderson Creek, right next to the waka ama club and the multi-sports club. Waste water over flows on a regular basis. Will they be allowed to put in a statement to their water services entity asking them to fix it, or does this apply only to people who are of Māori ethnicity or descent, which is what it says in the bill, Minister? I think New Zealanders deserve to know whether that is true and, if it’s true, whether communities will be given an opportunity to ask their own questions.

The second thing I want to ask the Minister is about the $2.5 billion three-waters support package. It’s a slush fund that councils can apply for to bankroll all kinds of projects. They don’t need to include three waters; they could be for anything. They could be for a dog park or a set of swings. Treasury has warned the Minister against this slush fund. They said it was intended to increase local authority goodwill toward the reforms. Now, in any other country, that could be described in a very negative way, and I want to know why the Minister has decided—

Simon Watts: Sounds like a bribe.

SIMON COURT: Sorry, what was that? Did you say “a bribe”, Mr Watts?

Simon Watts: Sounds like a bribe.

SIMON COURT: It sounds like a bribe. I don’t know. Could the Minister, please, explain that, because, if the Minister has got $2.5 billion to use to fund swings and dog parks, and then apply $1.5 billion of that money, the debt, to the water service entities without building a single waste-water treatment plant or fixing a pipe, what is the justification for that, Minister? Aren’t we here to solve the problem of three waters—of waste-water over flows, sewage pump break downs? If that’s the case, why won’t the Minister simply apply the funding that is for swings and slides and dog parks, used to bribe councils, to actually fixing three-waters infrastructure?

So I would like to hear your response to my questions about Te Mana o te Wai statements. Why can’t communities and councils have the same rights as iwi, hapū, Māori, anyone of Māori descent? And why on earth, if there’s $2.5 billion the Minister thinks should be spent on making councils feel better about the reforms, couldn’t that $2.5 billion be spent on actually fixing three-waters assets, Minister?

CHAIRPERSON (Hon Jenny Salesa): Before I call on Simon Watts, I do want to warn both Simon Watts and Simon Court that we cannot make allegations of a bribe in this Chamber.

SIMON WATTS (National—North Shore): Thank you very much, Madam Chair. I want to pick up on my previous questions in regards to the Minister on three waters, and the Minister actually mentioned an interesting point in regards to the key problem that that is trying to be solved by three waters. She referred to unsustainable finance, which I read into being around the funding and financing mechanisms in regards to this infrastructure. That itself is actually quite a change in terms of the narrative because—if we go back to that advertising campaign of actually, you know, slime coming out of the taps—maybe it was just me, but I think the Government was saying that this is driven by a health issue and it’s actually driven by, maybe, the issues that happened with the campylobacter outbreak in Havelock North in 2016. But we’re now hearing from the Minister that actually, “No, no, actually, the issue is in regards to unsustainable finance.”

I think, on that basis, my questions for the Minister are quite simple: why did you, as a bottom line in regards to these reforms, dictate that there had to be four entities in regards to the way in which the three waters infrastructure, or the reform, would be structured? It was it was quite clearly stated that that needed to be a four-entity model. And the other bottom line that came in from Government was in regards to the 50:50 co-governance.

But I’m more interested, at this point, around the four entities, because if the issue and the problem statement is, as the Minister articulated, in regards to unsustainable finance, then why are we leading with a solution that we need to create four entities to solve that problem? Why do we not simply look at the underlying problem statement, as the Minister’s articulated, around unsustainable finance and deal with that? Because there’s multiple mechanisms, and ways in which, and alternative models that can deal with the way in which you fund and finance infrastructure over the long term.

I acknowledge, as with the Minister, that we as we need to do more in regards to how we fund and finance infrastructure over the long term: plan, commission, and actually, importantly, deliver that infrastructure. But if that is the problem, and if that is the one thing that we’re trying to fix, why are we going about creating these mega-entities—centralised bureaucracy, hiring of all name of things. Leading into that point that I articulated right at the start around the fact that that there’s huge levels of turnover at local government; central government entities, are, in effect, poaching staff out of local government at the moment, sometimes with 30 percent premium on salary. And so, therefore, those staff coming out of our local communities and local government is weakening our local government capability. So why did it have to be four entities and why was it dictated around that?

The second aspect around the financing mechanisms is: why are we not simply just utilising existing mechanisms for funding and financing of infrastructure that are already in play and in the Minister’s disposal today in regards to matching long-term assets with long term funding? Because when you look at Auckland specifically, part of the challenge there is that we’ve got assets that last, you know, maybe 50 years or so, yet the way in which they’re currently financed is maybe between three and five years. Well, I don’t know. I’ve got, you know, my nine-year-old son at home who probably could work out that—that sounds like a mismatch to me, right? So why are we simply not matching the duration of funding to the duration of the asset? Quite simple. Because if we did that, then we would be able to sustainably fund and finance this infrastructure. We don’t need to create—and maybe I’m being simplistic, but we don’t need to create a mega-entity model, mega-bureaucracy; try and centralise 67 councils into four big entities; create a governance model which means that within these entities there’s only seven seats at the table for 22 councils, and again, I didn’t do too well at maths, but I can work out that actually that means that two-thirds of the councils won’t have a voice. Why are those two elements bottom lines when we went into this process, which means now we’re dealing with a bill and a piece of legislation on the table, and all the costs that we talked about through the Estimates process that have been spent, and we’ve got hard-working taxpayer dollars out of the pockets of taxpayers in this country—why have we got to that point? Because of those underlying bottom lines.

Hon NANAIA MAHUTA (Minister of Local Government): Just a point of clarification, because I inaccurately referred to GHD, in terms of peer reviewing the Water Industry Commission of Scotland study, when it was in fact Beca Group and farrierswier so I just wanted to clarify that as a point.

If I go to the Estimates-related components of the questions that have been asked, can I just continue to highlight that the better-off component of the support package—which comprises of a $2 billion fund that territorial authorities will be able to use to support the three waters service delivery reform objectives and other local wellbeing outcomes in a manner consistent with the priorities of central and local government—is the case and it is in relation to the matters that I outlined earlier in terms of the criteria; that’s supporting communities to transition to a sustainable low-emissions economy, including by building resilience to climate change and natural hazards, delivery of infrastructure and/or services that enable housing development and growth, and support local place making and improvements to community wellbeing.

Now, the member from ACT asked, “Well then why don’t we instead spend the $2.5 billion of the incentive directly on three waters infrastructures?” Because there is a burgeoning cost to three waters. The $2.5 billion—and if we look to the figures that we have identified as the ballooning cost required to invest in infrastructure, it is between $120 billion to $185 billion over the next 30 years. This would be just a drop in the bucket.

Can I say that many of the questions that members have pointed to are issues that will be dealt with by the Finance and Expenditure Committee as the Water Services Entities Bill progresses through its stages at select committee. But there are a few inaccuracies that I really do want to highlight.

There is some perception that has been promoted by the member that Te Mana o te Wai is just a spiritual aspiration. In fact, when Māori talk about water, it’s the whole complete cycle of water. And perhaps that’s the challenge that we have when we think about our board objectives of protecting source water to be able to drink so that everyone can drink good water. When we’re thinking about returning water into its receiving environment and the health of how we treat water, to be able to go back into the receiving environment to do no more harm, actually a Te Mana o te Wai whole-of-cycle perspective around the treatment of water would do us great good. The reason why I say that is because many of the examples in the past about how three waters have been responded to is about pipes under the ground. But when we look to natural solutions and using our wetlands; using the contours of land, which is so critical when we think about stormwater solutions and the like; and Te Mana o te Wai in an applied sense, then we will come up with really smart—in my mind—urban design solutions that are not just about pipes under the ground. It is about ensuring that the whole cycle and life of water can better work to both the health and the environmental benefits of communities.

In terms of sustainable financing and the challenge that we’re facing—and again, I raised this with the select committee when I sat in front of them to outline the reason and the proposition for reform during the Estimates—it is not one singular ambition that the Government is trying to ensure that it meets. If we look across a broad range of objectives of the Government in the three waters reform programme, which I spoke to at select committee, it is about sustainable financing, it is about—through scale and aggregation, but that’s not the only benefit. It’s about ensuring that there is ultimately a model that ensures affordability for ratepayers. It’s about ensuring that in terms of both health and environmental standards, the looming costs by meeting a burning platform of higher standards can be met in a sustainable way. It’s about ensuring that the Crown is able to uphold its Treaty of Waitangi obligations, because substantially when we think about the whole-of-cycle system and we think about the way in which Treaty of Waitangi settlements have a number of provisions which touch on the natural resource area in relation to water. Those are all the elements that are featured within the system reform that we’re promoting.

What I regret is that much of the myth-making that has occurred within this committee continues to distract from the broader benefits that communities will get from the three waters reform programme.

SIMON COURT (ACT): Thank you, Madam Chair, and thank you, Minister. I do appreciate the forthrightness of your response, and I know we’re debating something that’s very important to all New Zealanders.

I just want to come back to your proposal that the costs of improving the three waters infrastructure will be between $120 billion and $180 billion. Last week, the Finance and Expenditure Committee went to Hawke’s Bay—a majority of Labour members on the committee and a couple of Opposition members—and we heard from mana whenua groups, from rūnanga, from iwi, and we also heard from the Hawke’s Bay councils who were at the epicentre of the Havelock North water quality issue, which is supposed to have led to many people becoming ill and potentially some people dying. So this is very important to them. This is what they told us: after that event, they got together with Government, and Government said, “Could you form a regional alliance to work out where the weaknesses are in your water system, and then come up with a plan to fix them, and we’ll fund it.” And that’s what they did. They engaged with mana whenua, with iwi, and hapū, and they worked out exactly what were the values to the community, including to Māori communities, to individual marae, and they’ve addressed their water quality issues to address community needs as a whole.

What they told us was they’ve spent $85 million already, and Hastings District Council staff took us—including Labour members on that committee—to look at the new reservoirs and water treatment system that have been built to address just those risks, Minister. For $85 million, they’ve built all the baseline infrastructure, and they’ve got plans to spend up to $200 million in total over 10 years on asset renewals and allowing for growth. Yet under the Minister’s reform package, they’ve been told they need to spend $2 billion over 30 years—that’s $600 million, or three times as much as they need to allow for growth and fixing the network in Hawke’s Bay.

So how can New Zealanders have any confidence in a three waters reform proposal when even the councils at the epicentre of the Havelock North water quality issue—where Labour members were happy to show us the good work going on in their district; that the problem’s fixed. How can New Zealanders have any confidence, Minister, that this reform proposal, based on these enormous and outlandish costs—tripling the spend on three waters infrastructure over 30 years—firstly, that they could be achieved; secondly, that they’re value for money? Because what they told us was they don’t need the money, Minister. They don’t need co-governance imposed. They’ve already got good relationships with mana whenua in Hawke’s Bay. What they want is their communities to thrive and their local economy to grow without central government interference. Minister, I’d appreciate if you’d answer that question.

Hon NANAIA MAHUTA (Minister of Local Government): I’ll take the opportunity, just in case the debate closes. Look, I’m sure, as they told you about their regional study, they would have also informed you that the Government helped pay for that regional study, and that part of the rationale for paying for a regional study at the early stages of our analysis as to what would be the best model to achieve the broader overall outcomes that the Government was seeking is to see whether or not a regional approach could work. What we found along the way—and it was a helpful study that the region undertook—is that there would be regional variance in terms of the benefits of going to a regional model. That would then mean that the Government in some shape or form would have to contribute. That then meant we had to ask the question around scale and aggregation and the separation of balance sheets, because if we separated balance sheets it would create more headroom around the way in which we could better fund—albeit at a multi-regional level—into the infrastructure space. I’m sure you heard all of that.

What you might not have heard is one of the difficulties with a regional model was the internal challenge that councils were having amongst themselves around cross-subsidisation. So you had Wairoa, for example, in that region, and the extent to which Napier ratepayers would cross-subsidise benefits to the Wairoa community became an underlying challenge within a regional model—it became an underlying challenge within the regional model. So I’m not dismissing that we needed to investigate the merits of a regional model, but it also came with a number of challenges: cross-subsidisation within a region, and across regions the level of variance and therefore the level of contribution that a Government would have to make.

Then the other challenge became whether or not we would get equity of outcome for ratepayers in the more vulnerable parts of those regional areas. So I’m sure, as you investigate those elements of considerations with officials, you will get a flavour for why a regional model—and I think at the time when Hawke’s Bay was undertaking that particular study, the considerations were regions aligned to their regional council groupings; 16 or 12 regions, I think, was the domain of the regional consideration—you should also ask what level of Government contribution would have been required. Again, the issues of cross-subsidisation: very real challenges. And then it would have been the impact in terms of affordability and the variance across regions. I’m sure that that will provide you with the other part of the challenge that has been responded to in the Government’s plans going forward for three waters reform.

So I want to make one final comment. I know this is really difficult, and I acknowledge that there’s a lot not only for the Finance and Expenditure Committee to get their heads around but also New Zealanders. But from a ratepayer perspective, I must be really frank about this: one of the overriding drivers for me was to think about the system change that is absolutely necessary to be able to assure ourselves that the most vulnerable or those on fixed incomes in our society don’t miss out because of those who are well-heeled and say, “We’re going OK here; it’s the other folk over there.” We can’t get inequity as an outcome of the system reform that we’re trying to steward through, because everyone needs clean drinking water and affordable services. Everyone needs the assurance that we’re going to do better for the environment than what we’re doing now. I think our kids want us to absolutely make the kinds of decisions that will see livable cities that look for natural solutions as well as smart design solutions, but actually that we put that long-term aspiration in front of our minds when we think about a way forward. And that’s why I continue to believe, unless there’s an alternative that’s been put up by the Opposition, we should continue along this path, hard as it is.

CHAIRPERSON (Adrian Rurawhe): Are we ready to move on to Police, or do you want to? [Interruption] OK. I’m asking the committee. If the member would like to take a call, he may—Simon Watts.

SIMON WATTS (National—North Shore): Thank you very much. Yeah, I think we’ve got about 2 minutes, per my clock. So I thought we’d just come in with a final closing point. The Minister articulated a statement around myth-making just here in the committee now. And it’s interesting she makes that statement, because it was only a couple of weeks ago when the acting Minister of Local Government used the statement of “mischief making” in the House, which was basically directed at anyone that was coming up with critique around these reforms. I guess, as I go back to that statement of what Castalia said in regards to the underpinning costs and benefits of these reforms: “The reform scenario is based on faulty assumptions and flawed analysis.” That is a third-party, external agency reviewing data that the Government have used to base these reforms, and they make statements like that. Yet the response from the Minister back to those on the other side is myth-making and other responses from other people around mischief making. So I really, really ask—and, I guess, off the back of the fact that overwhelming numbers of Kiwis oppose this reform, over 32 councils have continually said they oppose this reform before this Government had not listened, you can just categorically see it right now, that the Minister continues to use the same old lines to attack those that are trying to be constructive in regards to how we create sustainable water and three waters infrastructure in this country. I’d like the Minister to reflect on those statements and make sure that she still stands behind them.

Police

CHAIRPERSON (Adrian Rurawhe): Members, we now have the Minister of Police.

GINNY ANDERSEN (Chairperson of the Justice Committee): Thank you, Mr Chair. Look, as chair of the Justice Committee, I’d like to take a brief call to outline the work that was done with the Justice Committee in terms of the Estimates for 2022-23 for Vote Police and Vote Serious Fraud.

As part of this year’s Budget, the approach intends to increase collaboration across the public service agencies and improve value for money for New Zealanders. The justice cluster includes Police, Justice, Corrections, the Crown Law Office, and the Serious Fraud Office. Ministers within that group identified key priority areas, and those include better outcomes for victims, improved access to justice and addressing issues with remand, and, finally, better-enabled organisations and workforce.

In terms of Police, we heard first and foremost about organised crime. In May 2022, the Government announced a joint initiative between the Ministry of Justice, New Zealand Police, and the Department of Corrections to address gang crime and the violence associated with gang crime. The appropriation for preventing harm from organised crime through the cross-agency approach has $94 million over four years to fund this initiative. The bulk of this funding goes to New Zealand Police, with $87.3 million. The appropriation funds work to combat organised crime and programmes to prevent harm caused by drugs, firearms, violence, and serious criminal offences. Part of that work, we heard at the committee, was also in the seizure of illicit drugs such as methamphetamine. In June 2022, Police seized almost $60,000 worth of methamphetamine and more than $11,000 in cash. That particular operation was in the Bay of Plenty. The Commissioner of Police told us that police will continue to do work in this area.

We heard that the National Organised Crime Group and district police stations aim to identify methamphetamine supply paths and hold those suppliers to account. The police commissioner also told us that waste-water testing provides information that is very useful to track down and find where methamphetamine is being used. The police have access to 75 percent of the waste-water network. The police commissioner said that police saw in increase in methamphetamine during COVID-19 lockdowns, which aligns with their understanding of levels of stress, and police have subsequently focused on addressing the demand for methamphetamine and what attracts people to use drugs.

We’ve also heard of some other initiatives in terms of where work is being done to prevent crime or address the underlying causes of crime, and Te Pae Oranga was an example provided to the committee. Budget 2022 proposes funding $81.85 million over four years for initiatives relating to Te Pae Oranga Iwi Community Panels. This initiative aims to address the underlying causes of low-level offending. It started back in 2013 with Iwi Community Panels just in the Hutt Valley, Gisborne, and Manukau. This has subsequently been expanded to substantially more sites.

The police commissioner told us that the formal criminal process is not always effective in addressing the underlying causes of offending, and we have heard that police have seen a 22 percent reduction in harm from reoffending when people have participated in Te Pae Oranga. There are Iwi Community Panels in 20 locations around the country, but the police plan on establishing Iwi Community Panels in 10 more locations soon.

The last point I’ll touch on is the improvement in diversity in the New Zealand Police service. The Minister told us that one of the biggest areas where crime is under-reported is sexual offending. He told us that he hopes that increasing the diversity in the police will help to address this issue. The Minister said that the increasing number of women joining the police service over the past five years is worthy of acknowledgment and celebration, particularly because women are disproportionately affected by sexual offending. The police commissioner told us that communities that experience issues such as family harm more than others—he said that people need to feel comfortable cooperating with the police when the police service reflects the diversity of our communities, and they will continue to strive to meet marks in those areas.

I’d like to conclude by saying that the Justice Committee was well-engaged and had a good time asking the range of questions we did. It was a good report back in terms of the progress being made overall in the areas of Vote Police and Vote Serious Fraud.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Mr Chair. I have to say that I’ve been looking forward to this Estimates debate and having the Minister in the House because I heard on the grapevine that he was gloating in Copperfield’s, saying that I hadn’t been asking him questions so I hadn’t been putting the pressure on him. So now I get my chance to ask the Minister some questions.

I have to say that I thought that I’d give him a bit of time to get his feet under the desk, because he came in promising big things and, last night, what did we have? Seven ram raids. We had seven ram raids last night, and, by the way, when I took over the police portfolio nine months ago, we were told that these rain raids were a spike and that they were going to diminish. Well, that’s a very long spike—a nine-month spike—in ram raids, and what it actually does—

Hon Member: A spate—it’s a spate.

Hon MARK MITCHELL: —is it actually just underlines—yeah, a spate. Exactly—define a spate. Maybe the Minister can get up and do that: define for us what a spike or a spate is.

The sad reality of it is this Government has poured a lot of money into our police service. They promised 1,800 police officers. They’re two years behind on that, and they’re still not clear. The Minister, in fact, is confused in terms of when those numbers are going to be delivered, and the sad reality is, like usual, they’ve actually delivered worse outcomes. We’ve had an over 20 percent increase in serious violent crime. We’ve had a massive increase in gang members. They are recruiting quicker than we can actually recruit and train our police service.

The first question that I’d like to Minister to answer—and this relates directly to ram raids, because I’ve heard the Minister and I’ve heard the Prime Minister both get up and say that the Government or the police’s response to the ram raids was the formation of the dedicated retail crime unit. The dedicated retail crime unit is a joint venture put together by Retail NZ—and I acknowledge them and the work that they’ve done in supporting their members. But it was, quite simply, a small unit. I think it has two sworn officers and three non-sworn.

But maybe the Minister could stand and tell us exactly how many numbers the retail crime unit has that’s been set up to respond to and get under control the serious violent offending that we see with these ram raids and aggravated robberies—I’ve had a ram raid and an aggravated robbery in my own patch in the last month—and explain to us exactly how this dedicated retail crime unit is actually dealing with that issue, because, Minister, if you actually look at the numbers, there doesn’t seem to be any impact at all, and, by the way, if you were to go and talk to Police National Headquarters or the commissioner and ask them and say, “Was the retail crime unit set up to deal with ram raids?”, they’d be very clear about the fact that it was not set up to deal with ram raids. It was set up and announced with Retail New Zealand to deal with shoplifting and loss prevention and as a coordinated response to those types of issues. So I’d like the Minister to actually stand, tell us exactly how many people are inside the retail crime unit, exactly what they have done to start to get control of these ram raids and this violent retail crime, and actually maybe inject a little bit of honesty into it.

I’m going to go back to Operation Tauwhiro, where we saw exactly the same pattern emerge with this Government, where they’d get up and they’d say, “Our response to the gang violence and the drive-by shootings is Operation Tauwhiro.” Operation Tauwhiro was never established to deal with gang violence; it was established to gather information. Day after day, you had a Minister standing in this House touting Operation Tauwhiro as being the response to the gang violence, and I had front-line police every day coming to me and saying, “What a complete sham, and they’re deceiving the public. We’ve been asked through our normal duties to record any gang contact, any firearms taken, or any warrants against Operation Tauwhiro. We don’t have any extra staff. There’s no extra funding.”, and yet it was put out there as a strong response to the gangs.

So I’d like the Minister to stand and actually explain to the committee exactly what the retail crime unit is, how many staff are in it, and exactly what they’re doing to deal with a continuation of what we see in violent ram raids.

Hon CHRIS HIPKINS (Minister of Police): Can I begin by acknowledging the New Zealand Police and their contribution here at Parliament today, another difficult day—a day I think New Zealand Police were nervous about. I for one, as a member of Parliament, welcome back protesters to the forecourt of Parliament. I think it is healthy for democracy that we once again have protesters assembling on the front lawn. I also congratulate the New Zealand Police for a very well-executed operation that saw those protesters able to exercise their democratic right to protest and leave again, and I hope that we will see more of it because I think it is important that people are able to protest out the front of Parliament.

The police did New Zealand proud today in their response. There were no issues there. I congratulate the organisers of the protest as well—I want to acknowledge that—but also the police, who I had the opportunity to thank for their contribution, because I do, in my first remarks in this Estimates debate, want to acknowledge the difficult circumstance they found themselves in earlier this year with Operation Convoy and the images that we all saw on TV that evening. Some of us saw them a little bit closer than that when that operation was unfolding. I think it is good that we have had a protest at Parliament today where those scenes were not repeated, and I hope that that is a sign of things to come.

In terms of the 1,800 extra police that the member Mark Mitchell mentioned, I can say that we have made a clear commitment that we will hit the 1,800 by the middle of next year, and, in fact, we may well hit that, if not by the end of this year, then very early next year. So we’re sitting at having over 1,500 of those extra police on the job now. There are about 240 due to graduate from the Police College who are at the Police College right now, training to be police. That will get us very, very close to that 1,800, but it may well be that we achieve it by the end of this year, or, more likely, probably very early next year, we’ll see that extra 1,800, ahead of schedule.

In terms of ram raids, I don’t agree with the member’s assertion that the police are responsible for ram raids. The young people doing the ram-raiding are the people responsible for ram raids. Police will never be able to be outside every business or standing beside every car to make sure young people don’t hijack them and use them for ram raids, but what the police are doing is exactly what we would expect of them, which is that they’re following up each and every one of those incidents.

There are consequences of that offending for those young people, and so I’ll give the member some numbers: 768 prosecutions for a wide range of offences relating to ram raids are under way or have been under way, 324 youth referrals, and 69 incidents are still under investigation. I went through with him the number of charges and the number of individuals that have been followed up on across Auckland and across the Waikato, in particular, in question time recently.

I think the police are doing the right thing in following up to make sure that they are identifying those individuals. Sometimes it does take some time for them to identify the individuals concerned, and then they follow up with appropriate action. They are also following up with the local businesses as well—particularly those businesses that have been repeatedly victimised—to make sure that they are getting the support that they need. In some cases there isn’t a lot of additional support that those businesses are asking for and in other cases they’re asking for some significant extra support, and the police are working through those with them.

There are consequences for young people involved in ram-raid activities. But the solution ultimately rests beyond just the police and it looks at all of the other things that we are doing to make sure those young people are positively engaged, because, at the end of the day, the police can respond to events and they can respond to offending, but, actually, the entirety of the community has the responsibility to make sure that we’re doing everything we can to prevent that offending in the first place. In terms of those young people, I have some sympathy for the challenges that the police are faced with, particularly with some of those repeat offenders.

NICOLE McKEE (ACT): Thank you, Mr Chair. Minister, I was looking at the key performance indicators (KPIs) in the Budget and they focus on what I would call business as usual (BAU), including when we look at those statistics to be captured for pistol shooters, or what I would call dealer BAU. It has extended licensing processing, which was originally at 30 days. In the last Budget, it was increased to 60 days, and it’s now gone through to 90 days. Another assessment goal is on following up expired licences, giving that a time frame of 60 days—and for those at home, that’s when a firearms licence has expired and the holder has not yet contacted police. The police actually need to go and check on them—actively find them—and check on the status of them and any potentially illegally held firearms that they may now have.

This is really important. If we recall 13 years ago, we had the Jan Molenaar incident, where he was not checked upon and was in possession of illegally held firearms which he then used against Constable Len Snee, wounding three others as well as taking the life of Constable Snee. No one had checked up on him, so I can see this—but this is BAU stuff. This is stuff that had been identified 13 years ago as needing to be checked up on.

We have an increase of $208 million going into firearms and yet no KPIs whatsoever on how we are going to assess that particular spend, what we are assessing it against, or how we’re going to have any way that we can make sure that the firearm owners are feeling that that $208 million is actually going to address illegal firearm use by gang members and by those whose licences have expired. Instead, we’re looking at KPIs for just BAU, or business as usual. Could you talk to the communities about why there are no KPIs for that spend?

Hon CHRIS HIPKINS (Minister of Police): I thank the member for her very reasonable questions. I know that this is an issue that she cares a lot about, and it is an issue that I have been looking very closely at. The member will be familiar with the fact that we have a challenge in the way firearms licensing operates in New Zealand as a result of a decision by Government several decades ago to move from lifetime firearms licences to licences that need to be renewed every 10 years. The result of that is that every 10 years, we get a spike in the number of people applying to have their firearms licences renewed, and whilst the age profile of that particular group, that particular cohort, is suggesting that eventually that would dissipate, the reality is there’s still probably several decades more if we don’t do something to flatten the curve and smooth that out.

I think the way things operate now, where the police have to resource up every 10 years for that spike and then, potentially, resource down, isn’t really a sustainable model. We do want to reach the point where we actually have a relatively flat line in terms of the number of firearms licence renewals that occur every year, because then the police can resource that appropriately. All of the systems and processes that are in place can be robust, and I think that there is a better way for us to get to that point than what we’re doing at the moment.

So I am looking very closely at that—to acknowledge the member’s previous questions. I do think that that’s likely to involve some legislative intervention in order to be able to achieve that, because there are a number of issues that we need to grapple with. One is we need to find a way of flattening out that curve.

The second is we need to make sure that those who have applied for their firearms licence to be renewed don’t become non-compliant during the period of time it takes for them to have their licence renewed. That is something I am acutely aware of, and I am acutely aware that that problem will increase exponentially if we don’t do something in the next sort of 12 months or so as we head into that next peak, and I absolutely accept the offer from the member—and, I think, from the National Opposition as well—that we need to work together as a Parliament to make sure that we find a pragmatic solution to that relatively quickly to give those firearms owners certainty, including on things like them not having to transport their firearms because they are technically outside of their licence period, and so on.

So I think there are some pragmatic solutions that we can find to that. Obviously there’s a Cabinet process to go through before I can set out the details of how I think that will look, but I’m relatively confident we can find a solution that’s pragmatic, sensible, and protects our legal, licensed firearms – owning community.

In terms of the KPIs, obviously processing and KPIs around processing will be easier to have in place once we flatten that demand curve out so that there’s a more even level of demand. It’s very difficult for the police when every 10 years they have to go through this peak, so if we can, as a Parliament, find a solution that stops them having to deal with that, then, actually, I think the KPIs around that and around the practical enforcement measures that go with that—for example, people whose licences are not renewed or, for whatever reason, their licences are taken away—then, actually, the KPIs that will flow from that, I think, will be much easier to define.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Mr Chair. I just wanted to pick up on the Minister’s comment in terms of acknowledging our New Zealand Police service, and I’m glad that he did that. But I’d remind the Minister that it’s not just on events like we see today, with protests out in front of Parliament. Our New Zealand police officers are out there doing an outstanding job every day and every night, protecting and looking after their communities, and I’d like to see the Minister—and he made a very good point. He said that the police aren’t responsible for the ram raids, and they’re absolutely not. They’re not responsible for the ram raids. In fact, I’ll tell you what: the police are not responsible for most of the social issues that this country faces. However, more often than not, the blame is laid at their feet, and I’d like to see the Minister—even in the last week, when our police service was accused of being racist—actually come out and defend them and say “No.”

We have one of the best police services in the world. They don’t get to choose what they deal with. They just have to deal with what’s put in front of them, and I think, Minister, that you’ve hit the nail on the head yourself by saying that they don’t get to choose who’s actually doing the ram raids. They don’t get to choose who’s joining the gangs. They don’t get to choose who’s perpetrating domestic violence. They don’t get to choose what groups decide to do that, in numbers. What they do do is they have to pick up the pieces and respond to it and do the best that they can to actually keep our communities safe.

So it would be very nice for the Minister to come out and be very clear and refute and push back on criticisms of our police service. I’m not saying that they shouldn’t be regulated—they are. We have the Independent Police Conduct Authority, and in my experience any rotten apples in the police are identified and drummed out very quickly, because most members of the police understand that they’re joining a massive legacy of the people that served before them and they want to protect that and they want to maintain the highest possible standards and serve our country without fear or favour.

I want to come back to the police numbers, and I do want to seek clarity from the Minister on this because, actually, numbers do matter in a service like the police. The front line have become a bit fatigued with the debate around this and the moving of the goalposts.

In the pre-Budget announcement, the Government announced that they would deliver the 1,800 police target by December 2022. That was the new number we were given. The Minister came to the House and was very clear about the fact that the numbers—the 1,800 net new police officers—would be on the street, serving their communities, by the end of this year. But then the incoming Minister, Chris Hipkins, in answer to a written question, said that “Actually, the target is going to be June 2023.”, and now he’s stood in the House and he’s given an even more confused sort of answer: “Oh, we’re not too sure. You know, it might be the beginning of the year, maybe the middle of the year—you know, I really don’t know.”

It doesn’t give a high level of confidence, Minister, that you’re across your portfolio on something as critically important as the numbers. Well, the other members across the House think it’s funny. I can tell you right now—I can tell you right now—that the officers that are out there working night shift don’t think it’s funny. They’d actually like to see some numbers. They’d actually like to see some additional support.

The other question that I have for you, Minister, that I’d like you to answer is that in Budget 2018, the targets for the median response to emergency traffic events were: urban, seven to eight minutes; and rural, 11 to 13 minutes. In Budget 2021-22, the targets have been increased: for urban, 10 to 11 minutes; and rural, 15 to 16 minutes. You’re increasing the response time. In my view, a modern police service should be decreasing response times. Response times should be getting better, not worse. So I’d like the Minister to stand and actually respond to both those issues that have been raised. Thank you.

CHRIS BAILLIE (ACT): Thank you, Mr Chair. Thanks, Minister. I’d just like to agree with you in saying thank you to the police out there for today and for other protests in the past. I understand you’d have some sympathy for the protesters. I was a policeman here in 1997 during a student protest, and I—

Hon Chris Hipkins: I know nothing about it.

CHRIS BAILLIE: You’ve hardly changed a bit.

I’ve just got a quick question regarding burglary clearance rates. Given that the average statistic that is agreed upon is that a burglar is caught for one in every 15 to 20 burglaries that they commit, with a 12 percent clearance rate, and the aim for next year is 12 percent as well—between 11 and 15 percent—would you support legislation aimed to deter these burglars, or offenders committing these burglaries, and, if not, I wonder what you’ve got in mind?

NICOLE McKEE (ACT): Thank you, Mr Chair. Minister, can you assure our communities that you are addressing the seriousness of gang interference in our neighbourhood safety and livelihoods when the word “gang” is only mentioned once in the entire Vote Police budget? Where it is mentioned, it’s in relation to $155 million expected to come in from the proceeds of crime. I’m just wondering what we can tell our communities about—more than just taking money from the gangs, but what we’re actually going to do to combat the gangs by putting more budget into a spend that will help keep our communities safer.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Mr Chair. I just draw Minister Hipkins’ attention to the fact that on the retail crime unit, I still haven’t heard an answer on that. Either he doesn’t know how many people staff it or their work output or exactly what they’re meant to do, or he does know and he’s just too embarrassed to tell the committee. I want to acknowledge them because they’ve been set up for a specific job—and I’m sure they’re doing a good job—but they certainly were not set up to deal with ram raids.

I’d like to ask the Minister a question around mental health. Mental health in this country, unfortunately, as we all know, is heading in the wrong direction, and there’s lots of different drivers for that. One thing our police service has done for a long, long time, and that is being the first responder and the ambulance at the bottom of the cliff in terms of having to deal with people with, often, serious mental health issues, but just because they have a serious mental health issue doesn’t always mean that the police need to be involved. They’re actually far better off, in my view, being treated and helped by a properly trained mental health expert or medical expert.

The police currently, with the spike in mental health issues in this country, are dealing with over 122 mental health - related cases a day. In my view, other Government agencies have to step up, because the problem with the police service—and this is just my own opinion—is they’re an agency that, number one, they attract, I feel, the best people in the country, and the New Zealand Defence Force is another one. They always problem-solve and they always set themselves the target of finding and achieving what’s put in front of them, but what that means is that other agencies—Government agencies—that aren’t as motivated end up passing more responsibility and the police end up absorbing that and taking that on board. So what it means is you can end up with a police officer, or even two of them, tied up for an entire shift babysitting or looking after someone with a serious mental health issue or mental health issue, and that’s a very, very poor use of their time. They have very specialised training, they have powers that no one else has in this country, and to have them sitting around and having to care for and babysit someone with a mental health issue—they’re not trained to be able to triage or work out what that person needs. That has to be done by the health system.

So I’d like the Minister to be able to stand and tell the committee, inside the Budget, what the plan and how he intends to support his agency in being able to make sure that they actually have got support from other agencies to step in and relieve that pressure. Of course, there’s always going to be some cases that the police have to be involved in because, sadly, sometimes, when people have got serious mental health issues, they’re also violent, and they can hurt themselves and they can hurt members of the public. So of course that is going to require a police response. But a large number of the cases don’t, and absolutely the wrong place to have those people is sat in a police cell or in a police station, being guarded by police officers.

Hon CHRIS HIPKINS (Minister of Police): Thank you, Mr Chair. Look, I welcome the opportunity to respond to a number of the issues. Mark Mitchell asked me to be more specific about the number of extra police on the beat, so I will: As at 31 July, 1,526 of the extra 1,800 police have been delivered. I can tell the member, for contrast, that that’s 1,526 more police—extra—than were delivered under last National Government, who, of course, delivered no extra police.

To put that into a very real context, as at June 2017, when the National Party was last in Government, there was one full-time equivalent constable for 545 New Zealanders. As of 15 August this year, there was one constable, full-time equivalent, for 495 New Zealanders, and that number continues to improve. In fact, in this year’s Budget, we made sure that that number won’t go up again, by making sure that the Police’s funding will increase in line with the population so that they can continue with at least that ratio, unlike under the National Government, where the police were run down.

So I want to acknowledge the police for the sterling work that they did, despite the fact that they previously had a Government that wasn’t willing to back their tough talk with extra resources for the front-line police. If the National Party really does value the front-line police to the extent that they say they do when they’re in Opposition, perhaps when they were in Government they might have backed that up with some actual cash and some extra resource, rather than leaving them out there on their own without it.

To run through a few other points that members have raised, I believe in the notion that justice should be blind in the sense that it shouldn’t matter what your gender is or what your ethnicity is—you should all be treated as equal before the law. I absolutely support the work that the police are doing to make sure that there isn’t any bias in any of their systems and processes, and I think that all New Zealanders should welcome that effort.

That doesn’t mean that anyone is saying that the police are racist; it does mean that, as with every other institution in the country, we should be looking to make sure that the systems and processes that are in place are not biased against one group of people or another, or do not privilege one group of people or another. Unlike the member opposite, Mark Mitchell, I don’t think that talking about the increased diversity in the New Zealand Police force undermines confidence in them one bit, which is the claim that he has previously made. I think it is fantastic that a quarter of our cops are now women. In fact, I look forward to the police making further progress in that regard, and I welcome the fact that our police are more ethnically diverse now than they have ever been in the past. I can look forward to that trend continuing, and, unlike Mark Mitchell, I don’t think that saying that publicly is in any way undermining confidence in the New Zealand Police.

In terms of the other issues that were raised, Nicole McKee raised the issue around whether gangs should be mentioned more in the Budget documentation, and I’d have a couple of points with regards to that. First of all, the gang activity work often falls under the heading of “organised crime”. The word “gang” might not be used, but the words “organised crime” certainly are used quite a lot, and there is quite a lot in the Budget that’s focused specifically on organised crime. So it’s just a question of terminology in the Budget documents, but I would point out to her that all offending matters, whether it’s done by a gang member or anyone else. Actually, the police have got a difficult job to do, and we are backing them to do that very difficult job that they have.

Mark Mitchell raised some good points about the issues around mental health. Police are often on the front line of having to respond to mental health. They are often the first responders, and under our Government, we have been supporting the police in a co-response model, which is producing some very, very welcome results. We know that where there is a co-response, where the police are working alongside trained mental-health professionals to respond to those types of call-out, actually, it’s better for the health system, because fewer people end up in the emergency department and fewer people end up needing more intensive support, and so I welcome the fact that some of our previous district health boards supported that, but I note that some were not. I think it’s a fantastic thing that we now have a national health service so that we can get a bit more consistency in the way that the health system is working with police in order to reduce some of the pressure that they currently face, because I do think the health system could play a bigger role as first responders when it comes to mental health, and that will help to ease some of the pressure on police.

In terms of the questions around burglaries, I do acknowledge concern around burglaries. It’s very unpleasant for anyone who is involved. It can lead to people feeling unsafe. I do note that in most settings, the rate of burglary is continuing to decline. There is a challenge in retail, where we’ve seen those numbers going up quite modestly, but, actually, for home burglaries, for example, the trend number is down. Schools, education areas—the trend line continues to go down. That is a welcome thing, and I really support the police’s proactive work in that area.

Hon MARK MITCHELL (National—Whangaparāoa): Firstly, because, as usual, the Minister gets up and mischaracterises things that I’ve said, let me be very clear about diversity. Diversity in the police force has been important to them for decades, Minister—not just the last five years; for decades—and I can say that I was very proud when I served that we wanted our police service to reflect the community that they serve and we were well down the track in achieving that. So diversity is extremely important, not just in our police service but in every agency, and I celebrate that.

But the point that I was making to you, Minister, was quite simply this: at that time, there were 25 drive-by shootings. I lost young Constable Matthew Hunt from my own patch. He was gunned down in broad daylight. There are important issues that, as the Minister of Police, you should be razor-focused on. So celebrate policies that have been around for a long time and celebrate the police and the great work that they’re doing in that, but, as Minister—especially as an incoming Minister—acknowledge the fact that, unlike the previous Minister, who that said there’s no increase in gang numbers and there’s no gang increase in gang violence, in our country at the moment, there are levels of lawlessness and there are levels of violence and gun violence that need to be addressed. That was the point that I was making, Minister, and I stand by that point.

The Minister has not responded to my question around response times in urban and rural areas for serious motor vehicle accidents or motor vehicle accidents, so I hope that he will get up to respond to that. He hasn’t responded to my question about the retail crime unit. He got up again and just talked about recruiting numbers. He still hasn’t responded to that, and I’ll ask him this question on serious crime. There are supposed to be 700 serious crime officers in place; there’s 340. There’s 340, Minister. The Prime Minister, on three occasions, and the Minister of Police have misled the country, again, by saying that we have 700 serious crime officers in place. We don’t—there are 340. Where are the rest coming from, because by my calculations, you’d have to have every officer that’s going to be trained from now through to the middle of next year put straight into a crime control unit or a serious crime control unit.

So I’d like to hear from the Minister: at a time when organised crime, when gangs and gang-related crime is increasing daily, why is that crime control unit not got the 700 officers that it was promised, and why is it operating at 50 percent of the staffing that it’s actually meant to have? Thank you, Mr Chair.

NICOLE McKEE (ACT): Thank you, Mr Chair. Minister, I’m going to ask some questions about the Vincent Street loss of firearm owners’ data that occurred back in May. I wonder whether or not you can assure firearm owners that their information under the new registration system that will be paid for out of this Budget will be secure and that no breaches will occur of their personal data to third parties, either in digital or in print formats, and whether there is a portion of money within that Budget put aside to help some of the victims of that data breach with security?

Hon CHRIS HIPKINS (Minister of Police): Thank you, Mr Chair. In terms of the organised crime unit that Mark Mitchell raised: yes, the member is correct that we’re about halfway there to the target of additional organised crime staff. One of the things that he’ll be aware of is that you don’t typically recruit people directly into those organised crime roles; you’re actually taking them off other front-line roles, and it’s important that we make sure that we’re training enough police to backfill those roles.

Of course, all of this would have been much easier if the last Government hadn’t neglected the police so much. We have a lot of catching up to do. I do find it somewhat ironic the member’s coming to the House on a regular basis, tub-thumping and, effectively, saying why is it taking so long to clean up all of the mess that they left behind when they didn’t invest and support the New Zealand Police to the extent that they should do.

In terms of the national retail investigation support unit that the member has asked about, of course it is not the only part of the police that’s working on retail investigation. Of course, it is part of the day-to-day work of the front line, but in terms of that specific unit, I can confirm that they have identified 43 offenders and arrested them and have charged them with 307 different charges. As I indicated, though, that is just the work of that unit, and there is a lot else happening across the police’s front line to deal with those particular issues.

In terms of the traffic situation that the member has raised, that is something that I don’t have the information to hand on, and it is something that I will look at.

NICOLE McKEE (ACT): Just a short question for you, Minister: will there be any incentive to return police training to 26 weeks instead of the reduced 16 weeks, and why was it reduced? Was it to make up the 1,800 numbers quickly, or is it for some other reason why it was reduced from 26 to 16 weeks?

Hon CHRIS HIPKINS (Minister of Police): That was a decision, obviously, made before I became the Minister of Police, so it’s not something that I can give the member an instant answer to, but I’m happy to look further at that. Obviously, we are very focused on getting as many police on to the beat as quickly as we can.

Hon MARK MITCHELL (National—Whangaparāoa): In relation to numbers, Minister, what is his commitment and what is his view—and I understand that he’s just been on a road trip around the country, as I have. There are proposals currently under way in some districts to reduce numbers in outstations, and I think that one of the most effective policing models is to have police in their communities.

In fact, if it was up to me, we’d be going back to basics and we’d be seeing a lot more beat constables out there in retail areas, building relationships with shop owners, gathering intelligence, and actually having that trusted relationship. Unfortunately, at the moment they’re almost stretched to breaking point because of all the crime and all the social issues that they are swamped with and having to deal with. But it would be a huge retrograde step, Minister, to start to see staff pulled out of rural or smaller stations.

Has he had any information on that, and what is his commitment, as the Minister, in this Budget to ensuring that our smaller outstations continue to be manned at their present levels? In fact, in my view, they should be doing a review in terms of increasing police officers.

Hon CHRIS HIPKINS (Minister of Police): I thank the member for the patsy question, because I have seen some data on that, in fact, that shows the number of outstations and smallest police stations that were closed, predominantly during the tenure of the last National Government, as a cost-cutting measure because Police’s funding was not keeping up with the increasing pressure that police were facing. I have several of them in my own electorate that were closed during the tenure of the last Government.

Now, I looked closely at that, and one of the arguments that the police have made—it was an operational decision from the police to close those outstations—is that they would actually rather have the police out and about than sitting in a small, isolated area, often by themselves. It’s better to have the police out on the road in a car than sitting in what is, effectively, an office waiting for people to come to them. I actually think that, operationally, that’s a good decision for the police to take.

Similar debates are happening around the country when it comes to police station opening hours. Now, police can wait at the police station for people to come to them, or they can go out and they can actually respond to callouts. They can go find bad guys, and that’s actually what I think the police should be doing. So where the police have done analysis that shows that they were getting very, very few people walking in during certain hours and have made the decision to adjust their police station hours accordingly in order to free up extra police resource to get them out on to the beat, I actually think that that is a welcome process that police have been engaged with, and rather than attacking the police for that, I think we should welcome the fact that they are making sure that they are getting the most productivity out of the police staff. But when I talk to police, the last thing they want to be doing is spending unnecessary amounts of time sitting somewhere in an office or in a police station when they can be out and about doing the job that they are passionate about.

Hon MARK MITCHELL (National—Whangaparāoa): I don’t think the Minister fully understands the concept of it: just because you have, for example, a rural station that might have three police officers stationed there, it doesn’t mean that they’re sitting in the station all day. They’re actually out working—they’re actually out in the community. I asked the Minister very clearly: are there any plans to reduce numbers around the country at those outstations and pull them back into a central station in a central role—because, fundamentally, I agree with them. I know that there were stations closed and a lot of them were kiosks, and there was a review done around that. Fundamentally, my core belief is that you should have as many police out in the community as you can.

So I’m asking the Minister—and I’d like him to respond, because I’ve also been out and about and I have had information come back to me that I don’t think is good. We are going to be heading in the wrong direction and there’s going to be a reduction in numbers at outstations. So could he please stand and give this committee—he’s just made a big speech about how important it is to have these stations and he lost the ones in his own area. Stand up now as the police Minister and make that commitment and say that at least the current staffing numbers at the moment in these stations will remain and that they will not be reduced.

Hon CHRIS HIPKINS (Minister of Police): What I can give the member an absolute commitment on is that this Government will continue to increase resources to the police so that they don’t have to reduce the number of kiosks and outstations, as they had to do under the last Government in order to make ends meet, effectively. What the police do in terms of reviewing where they position people is an operational matter for the commissioner and for the people who work under the commissioner, and I’m not going to interfere in that. But I am absolutely confident that the processes the police have in place in terms of deciding where to deploy additional resource are robust ones.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Mr Chair. The Minister can’t get up and have a bob each way. He can’t say, “Under the last Government, they closed kiosks and stations.”, and then stand up and say, “Well, you know, that’s an operational decision for the police.” Either the Government is responsible for it—he seems to say that the previous Government was responsible for that—but now, under his leadership, he’s saying, “You know what? That’s actually an operational decision; that’s the police’s decision.”

So on the record—because there are actually quite a few policemen and policewomen around the country that work and man these outstations that’ll be watching to see. There are some plans afoot, and the Minister would know that, so it’s very interesting that he actually won’t stand in the House and say, “Under the last National Government, they closed stations. We wouldn’t do that under Labour.”, but then he gets up and goes, “But that’s an operational decision for the police.”

Are they going to maintain their numbers, are they going to be able to stay in their communities, or is there going to be a reduction? It’s a pretty simple question. If the Minister—as he seems to have told the committee that the Government has got control over that and the Government can have a say on where the stations are and how many people are in them then stand up and make a commitment.

Hon CHRIS HIPKINS (Minister of Police): I’ll go through it slowly for the member: under the last Government, the newspaper headlines were very clear that the police were cutting the number of kiosks and outstations that they were operating because they didn’t have enough money to keep them going. That was an operational decision that the police made, so it was a decision by the police, and they made it because the last Government choked off their budget so that they didn’t have enough money to do the job that the last Government were asking them to do.

That hasn’t happened under this Government. We’ve been continuing to increase the funding so that they don’t have to make those kind of decisions.

CHAIRPERSON (Adrian Rurawhe): Members, it has come time for me to leave the Chair for the dinner break. The committee will resume at 7 p.m.

Sitting suspended from 5.56 p.m. to 7 p.m.

CHAIRPERSON (Ian McKelvie): Members, the time has come for us to resume the debate. Before the dinner break, we had the Minister of Police in the chair, and we have five more minutes.

SIMON O’CONNOR (National—Tāmaki): Actually, Minister, you won’t have to reply to this one because I’ve only just written and sent a letter to you today, but it’s a relevant one because I’ve written multiple times before. It’s around what are you doing or, rather, what is the Government doing to address, or, rather, to provide support to the various business owners affected by all of these various ram raids and stuff? I’ve written—granted, to your predecessor—and I’ve asked for more support, particularly out of the proceeds of crime side of things. It said, “Oh well, we’ll have a fog cannon.”, which is a somewhat good start. But I was wondering, quite openly, is there a way that Government can provide more support, from more secure doors, roller doors, bollards, and so forth, and I hope it’s not putting some of our police that I engage with on the spot, but they’ve been very clear that these would be very prudent measures.

Anyway, I’m not here to chew up your time unexpectedly, but what more can be done to support our local businesses?

Hon CHRIS HIPKINS (Minister of Police): Thank you, Mr Chair. I’m happy to provide a very brief response to that. The police are focused on making sure that they are providing additional support to small-business owners, particularly those who have been repeatedly victimised by ram-raiders and so on. So that includes things like bollards and fog cannons. Fog cannons have proven to be very effective in small-business settings, particularly in shops like dairies for example. I think that’s given the shop owners a great deal of comfort. We’re looking pretty closely how that’s working and what more can be done. There is more funding available there to do more of that, and so we’ll continue to look at that.

There was one question from Nicole McKee from before dinner that I didn’t have the chance to answer, and that was just around the Vincent Street incident, where some firearms records—hard-copy firearms records—were stolen from a police station that was no longer in use. The member’s question related specifically to what reassurances we can give about the new firearms register and safety and security of that information. The point that I would make to her is that the register will be a digital register rather than a hard-copy paper register, and, as a result, there will be very rigorous testing to make sure that peoples’ records are kept very securely. I’d liken it a little bit to the difference between having your money in the bank and having your money in a safe in the wall at home: you might feel that the safe at home is quite secure, but, actually, the bank—even though it’s accessible over the internet—is still probably going to be a more secure place to store your cash. With the firearms registry, a similar principle might apply. A very secure locked cabinets is one way that you can store information, but, actually, digitally online—as long as all the safeguards are there—is a very, very secure way of storing information.

SIMON O’CONNOR (National—Tāmaki): A very curt response. What is cash? Sorry—I’m only kidding.

Look, just to acknowledge the Minister’s comment on fog cannons, I’ve certainly seen in my own electorate that they have deployed well and have been really very effective. The Minister may be aware, but last evening, for the eighth time, one of my liquor stores got ram-raided. The dairy beside it in Ōrākei has been hit four times. So I suppose this is as much a remonstration and a request, as it escalates, for him to follow up—as he has said, yep, there are fog cannons. But as more and more of these events occur of how obviously police, but through his support that—yeah, that other options are made available.

SIMON WATTS (National—North Shore): Just building on that: obviously, in my electorate of the North Shore, the statistic that worries us—and this is what I’d be interested in the Minister’s comments on—is that, actually, 60 percent of the people undertaking these ram-raid incidents are not identified. A lot of the narrative in the media has been around the 40 percent that have been identified—of which are young people—but the concern and the statistic that my communities are more worried about is the fact that six out of 10 of these incidents aren’t being identified, aren’t being captured, and aren’t feeling the consequences of the law. When we’re seeing brazen attacks on Michael Hill Jeweller on Hurstmere Road in Takapuna and we’re seeing—as my colleague has mentioned—dairies continually being rammed, not once, not twice, but three times, this is a concern, and I think it’s a broader concern. I’m interested in the Minister’s perspective around what we are doing about the people that aren’t being captured.

Hon CHRIS HIPKINS (Minister of Police): Thank you, Mr Chair. I think that’s a fair point, and in terms of the identification, I’d be wary of the statistics just on the sense that they are often a snapshot in time and the fact that an offender is not immediately identified doesn’t mean that police stop investigating and stop trying to identify them. So there are a number of cases where they have photographic evidence of people, but they haven’t quite yet figured out who those people are, but that doesn’t mean that they have stopped looking for them. So I just would make that point.

I certainly understand the point about repeat victimisation and the need to make sure that we’re focusing additional support on those who have been the subject of several offences, and in terms of the youth offending side of ram-raiding—which is a very dominant part of it at the moment—the conversations I’ve had with police at a local level is that while they might not be able to identify every one of the offenders, they often know who the ringleaders are. So by targeting those people who are kind of commonly involved, they can often start to break some of that down and disperse some of that activity. So that, I know, is a focus for the front-line police who I’ve been speaking to about that.

Revenue

CHAIRPERSON (Ian McKelvie): Members, the time has come for us to relieve the Minister of Police of his seat and replace him with the Minister of Revenue.

INGRID LEARY (DeputyChairperson of the Finance and Expenditure Committee): Thank you, Mr Chair. Look, it’s a real privilege to stand and introduce these thoughts and on behalf of our Finance and Expenditure Committee chair, Barbara Edmonds.

Our committee turned our minds, with Vote Revenue, to how the Government’s refresh of fiscal strategy would promote a stable economy and also sustainable debt levels. It was also important for us to know how the approach of Vote Revenue is consistent or not with the operating balance. We note in our report that nominal GDP is climbing and tax relief measures are continuing to decline. Therefore, tax revenue for the 2024-25 forecast will grow significantly from $105 billion to $123 billion. And I would note that that actually gets us back into surplus in the 2024 fiscal year, which is about a year quicker than National did after the global financial crisis.

Now, the Minister spoke to us about a busy ministry. It was busy dealing with COVID-19 and support for small business, including the cash-flow scheme—$2.27 billion was paid out to 128,000 customers and $455 million of that has been repaid so far. The Minister also told us about the IRD’s own Business Transformation Programme and we wanted to know whether it was meeting its objectives of modernisation and simplification. We heard that in May this year, the IRD annual run of income tax assessments went through 2.5 million automatic assessments and that $613 million was refunded, which was an enormous change compared with what used to be possible under the old technology.

Another thing keeping the ministry busy has been changes to policy. So we heard about increased disclosures for domestic trusts to support the integrity of the new top tax rate; ongoing work on the new interest limitation for residential property; a big deal of work on the cost of living payments—$350 per week for earners up to $70,000 who weren’t eligible for the winter energy payment; the new child support policy change that will impact 41,500 sole parent families next year; but also work on getting more data on the wealthiest households—so understanding what the effective tax rate being paid is. We heard that New Zealand has some of the best data in the world on wages and salaries, but poor information on irregular capital income. And we do note that the Minister said categorically the ministry was doing no work nor had plans to do work on any new taxes.

We interrogated questions around bracket creep and heard that data on irregular capital income is likely to be more useful in terms of Government income and also equity, and the four principles were discussed—horizontal and vertical equity, efficiency for the Government and taxpayers, and that whatever is done should minimise distortions. We heard that automatically adjusting for bracket creep during a pandemic would make responding more clumsy and that the Tax Working Group had not recommended such changes because of the unpredictable nature of external events, exactly like we’ve seen with COVID and then the war in Ukraine. The Minister also mentioned that the drivers are correct as they are. For example, unemployment is at a record 3.3 percent against expectations that it could reach above 10 percent. So he offered that as an explanation for saying that bracket creep was something that was already being managed correctly with the right drivers.

We also heard that the temporary loss carry-back scheme for business during COVID would have big fiscal implications, but that could be considered in the event of another significant shock. When it came to the cost of living payment, there were questions asked around the bureaucracy that was involved to administer those. The Minister made the point that the 300 short-term staff employed in the short term needs to be considered in the context of staff levels being at 6,000, five years ago, to 4,000 IRD staff currently. And we also heard that the payment is a short, immediate response and, therefore, looking at bringing it into the long term was not something that was being considered—that the cost of living issues were happening now. In considering this, the committee considered also the context of the COVID pandemic, the overseas pressures such as the war in Ukraine, and that debt levels coming out of that for New Zealand are projected to be half that of Australia and a third of that in the UK.

And the final comment really was that the Minister gave very sincere thanks to the IRD and the Ministry of Social Development and spoke at length about how they’d worked hard together to be able to get money out the door to New Zealanders at a time of crisis. I think that’s a sentiment that is shared by our committee, and so we would like to add our thanks to that of the Minister. Thank you.

DAVID SEYMOUR (Leader—ACT): Well, thank you very much, Mr Chair. My question is very simple. Does the Minister accept that removing mortgage interest deductibility from landlords will increase their tax bill, and in a tight rental market that extra tax cost will, at least in part, be passed on to tenants?

Hon DAVID PARKER (Minister of Revenue): Thank you to the member for that question. The link between effective interest rates and rents is by no means an arithmetic one, as evidenced by the fact that when interest rates in recent years declined markedly as world interest rates declined, rents didn’t drop.

DAVID SEYMOUR (Leader—ACT): Is the Minister saying he doesn’t believe that increasing the taxes on landlords will increase tenants’ rents?

Hon DAVID PARKER (Minister of Revenue): I’m saying that the idea that the member promotes that there is a direct relationship between the two is not made out.

DAVID SEYMOUR (Leader—ACT): Can he tell tenants that they will not see their rents increase because their landlords are now paying more tax due to the loss of mortgage interest deductibility?

Hon DAVID PARKER (Minister of Revenue): Well, there’s no universal truths that run throughout the country in the same place, at the same rate, and in all places. But the answer to control of rents is the supply of new dwellings. New-dwelling builds in Auckland are, of course, double what they were when we took Government. As a consequence of the increases in supply—I might be out by a fraction of 1 percent—I think rent increases in the last year for which we have data, in Auckland, were two-point-something percent—I forget the point, whatever it is—which proves, in my view, that rents are more often related to the marginal cost of new supply, and the marginal cost of new supply is, of course, generally in new builds, and the effective cost of those new builds is not going up, because they still have interest deductibility.

DAVID SEYMOUR (Leader—ACT): Is he satisfied with the administration of the first tranche of cost of living payments on 1 August, and, if not, can he detail for the committee what improvements he has made to the administration of cost of living payments since 1 August and what results those improvements will have for the people receiving the payments and for the taxpayers who are paying for the whole thing?

Hon DAVID PARKER (Minister of Revenue): As has already been well traversed in question time over a number of days in this House, the Government faced a choice. Given that we wanted to give some extra support to people who were facing cost of living pressures—bearing in mind that we were already assisting with decreases in road-user charges and excise duty on petrol as well as our halving of public transport fares—we thought something additional was necessary. One of the criticisms that’s been made by Opposition parties is that most of the support that the Government has offered through the likes of the winter energy payment has gone to households in receipt of Government transfers. We thought there was something in that, and we wanted to give some income support to modest to middle income earners who weren’t in receipt of Government assistance.

So we proposed a payment that was paid in three tranches each of about $116, and we were then faced with a choice as to what process we ran around that. Would we run an application process, or would we pay on the basis of set criteria? We were advised and accepted the advice from Inland Revenue that you couldn’t run an application process within that period, and also that an application process would cost a lot of money relative to the amount that was being paid out and it would also result in a lower rate of uptake because some of the people who were entitled to it wouldn’t know that and wouldn’t apply. So we chose instead to use a system based on pre-set criteria—which have been traversed previously and I won’t detail that and take up too much time—and have paid out on the basis of those.

I have said previously that I think that will be, roughly, 99 percent accurate and that the cost of using a more accurate system which relied upon applications and assessment on a case by case basis would have both not met the requirements of getting the money out the door but would have cost more money than has been saved. Am I satisfied that the outcome of that has been as we intended? Yes. Have there been instances that we would prefer not to have occurred? Yes, but the only alternative to that was an application scheme.

DAVID SEYMOUR (Leader—ACT): Can the Minister rule out the Government’s extending the cost of living payment beyond the first three months of payment on the first day of August, September, and October, or will this policy be extended, just as the discounts on road-user charges, fuel excise tax, and public transport have already been extended twice?

Hon DAVID PARKER (Minister of Revenue): We have no current intention of extending it. I have no policy—

David Seymour: Can he rule it out?

Hon DAVID PARKER: Well, you can never prove a negative. So there is no positive intention to extend it, we have no work under way to extend it, and I am not party to any discussions with any Minister for it to be extended, and were there contemplation of that, I would expect that those discussions would have commenced by now. So I can pretty much give the member the affirmation that he wants.

SIMON WATTS (National—North Shore): Staying on the same topic, and I don’t mean to ruin the party, but I must say, you know, the observation is that this cost of living payment has been a spectacular failure by this Government. I guess the reference that I want to quote as context before I get into my questions in regards to this payment is that the Treasury recommended caution with progressing such a significant policy in accelerated time frames as there are significant risks associated with designing this proposal at speed. And they went to on to say that “This payment, in terms of being broad-based, is not going to be able to provide the benefit or support to those that are struggling the most.”

My questions to the Minister are quite simple—and we’ve traversed this throughout the Chamber, that various people overseas have received this payment. We know British lawyers and dead people and people in China who have not lived in New Zealand for over 22 years have also got the payment. But my question to the Minister is quite simple: isn’t this an embarrassing example of either poor execution from IRD or poor policy design by this Government? So I’d be interested in his perspective on that.

Secondly, in regards to that, despite this payment being there—I remember the night when we stood here pushing and ramming through that legislation under urgency, and raising these questions in the committee of the whole House stage and just, you know, getting the smile but no answers of substance. Despite promising to pay over 2 million Kiwis this payment, around 800,000 people have not received it. So my question, quite simply, to the Minister is: is this fair?

The last question I want to ask is: does he stand by their statement that there is nothing to investigate, when this policy, as he’s just quoted, has led to over 1 percent of ineligible people receiving that $350 payment?

Hon DAVID PARKER (Minister of Revenue): Well, responding to the member’s assertion that the Treasury was saying that support would be better given to people who need it more, in Government we believe that we have done the best by people on low incomes. We’ve increased benefits twice. We have also pegged benefit increases to the higher of inflation or wage growth so that they don’t fall back as a proportion of working people’s incomes, which they have for many years in New Zealand. We’ve introduced the winter energy payment—superannuitants get that, as well as all main beneficiary-class categories. So we thought that we were already doing the right thing by those people, together with the transport-related initiatives that I’ve already traversed. So, in our opinion, we actually disagreed with the Opposition, and sometimes with the Treasury, as to whether there should be some targeted assistance that was short term in the low to middle income grouping, people earning up to $70,000 in the year ended 31 March 2022.

Now, we know that not everyone agrees with that prescription and that other people, such as that member’s party, have preferred tax policies which would give huge tax cuts of many thousands of dollars a year and, indeed, to a highly paid CEO earning more than $200,000 a year, by reducing the tax rate on their incomes over $180,000 from 39c to 33c. I also know that you would restore interest deductibility for landlords in a way that would benefit overseas landlords and effectively reduce the tax they pay in a way that puts the occasional payment under our cost of living payment well into context.

DAVID SEYMOUR (Leader—ACT): How much revenue did the 39c tax rate raise over and above what would have been raised by a top tax rate of 33c in the last financial year?

SIMON WATTS (National—North Shore): I’m interested now to move to a conversation around IRD’s annual report in 2021, around tax debt—specifically, the increase in tax debt in the region of 41 percent. We’ve seen an increase from $3.1 billion in 2018 to nearly $4.4 billion now, and the number of people receiving remissions or write-offs from tax debtors has soared: nearly a fourfold increase in the year ended to June 2021, an increase from 26,000 people to nearly 112,000. And that number, while it stabilised this year, is still around 43 percent higher than it was, higher than in 2020. The other statistic that we can see, looking at the Estimates, is that there’s over 400,000 Kiwis now that are carrying tax debt, and that, I guess, as a percentage is equivalent to nearly 10 percent of the working-age population.

My question for the Minister of Revenue, quite simply, in regards to that significant burden of growing debt within our tax system, is: in his view, doesn’t this undermine the integrity of our overall tax system? And what is the Minister doing in order to refocus tax resources in regards to ensuring tax compliance and debt management, to protect the integrity of the system? Because off the back of the conversation we’ve just had around the cost of living payment, where the Minister in effect has deployed nearly 800 IRD resources to work on the cost of living payment, which I think by all accounts we have seen has been ineffective in regards to dealing with the issue at hand—what is he doing around actually managing the overall tax system, which this country is reliant on?

Hon DAVID PARKER (Minister of Revenue): Well, I think in the context of COVID, the Government can be very proud of the achievements by the Inland Revenue Department in respect of tax debt. You know, other countries experience tax debt which is around between 7 and 17 percent of their taxation. They carry—

Simon Watts: I can read that on the BBC.

Hon DAVID PARKER: You say you can read that.

Simon Watts: I’m asking for New Zealand.

Hon DAVID PARKER: Well, I’m about to give you that, but I’m putting it in context. The data for New Zealand in 1919, 1920 was that overdue debt as a percentage of tax revenue, compared with overseas, was 5.3 percent—much better than those overseas comparisons. But the news gets even better than that. Notwithstanding that, in the last two years under COVID, overdue debt as a percentage of tax revenue has decreased further: it went down to 4.5 percent in 2020, 2021 and then changed marginally to 4.6 percent in the 2021-22 year. And you might ask yourself: how can those incredibly good results have been achieved in the middle of the complexity for businesses and taxpayers that’s been caused by COVID? And the answer is: because the administration of the tax system under this Government has improved. How has it improved? Well, we have a lot more automatic assessments, so that people don’t—

David Seymour: You got better at taking people’s money.

Hon DAVID PARKER: Oh, he says we’ve got better at taking people’s money. No, we’ve actually got better at helping people neither pay too much tax or less than they owe. And people appreciate that. They like the fact that they have automated systems that better calculate their payments of tax during the year, so that at the end of the year there’s no wash-up payment necessary for them. Working for Families payments are generally more accurate than they used to be. People can get a personalised tax code now, rather than paying secondary tax and pay too much tax during the year or perhaps too little and have to either pay more at the end of the year or get a refund. Now, they can get a personalised tax number that better reflects their incomes. So, for all of those reasons, I’m pleased to assure the committee that rather than tax debt being a problem, we’ve got the remarkable circumstance that not only are we lower than those international averages, we are further lower compared with them than was the case pre-COVID, when most other countries are going the other direction.

Final point I would make is that one of the reasons why that is the case is that businesses in New Zealand are sound. Unemployment is very, very low, at about 3.5 percent. Very, very low, so people can afford to pay their bills. They can afford to employ people, obviously, because unemployment is so low. And they’re not racking up lots of tax debt, because their finances are good enough for them to be paying their taxes as they fall due—I think something that, I’m sure on this side of the Chamber, we celebrate.

CHLÖE SWARBRICK (Green—Auckland Central): In defence of the Minister from the heckling just before, even the National Party’s own voters aren’t in support of their tax cuts for the wealthiest.

So, just referring to this Estimates Hansard that I have in front of me—this is a bit of a niche question for the Minister, but I’m hoping that he can provide a response—on page 4 of the Hansard document, it is me asking him a question about the research and the pre-hearing questions that he had provided to the Finance and Expenditure Committee, with regard to research on GST and effective overall GST rates being paid. He had indicated in those pre-hearing questions that he was planning to release the methodology in the interim, prior to September. Minister, we are a week out from September and we still don’t have that publicly released information. So I’m wondering if you could, please, shed some light on that.

Hon DAVID PARKER (Minister of Revenue): Just before I do that, I now have the information that the leader of the ACT Party requested on the—

David Seymour: What took so long?

Hon DAVID PARKER: Well, I wanted to get the accurate figure for him because I’m so known for my accuracy. I didn’t want to spoil my reputation in the House, nor sully that member with second-rate information. The revenue increase from the new 39c rate is $540 million per annum.

DAVID SEYMOUR (Leader—ACT): What is $540 million per annum as a percentage of Government spending last year?

Hon DAVID PARKER (Minister of Revenue): Less than 1 percent.

DAVID SEYMOUR (Leader—ACT): Can the Minister confirm it’s less than 0.5 percent of what the Government spent last year?

Hon DAVID PARKER (Minister of Revenue): Not off the top of my head. But if the member’s done the calculation, I’m happy to accept it.

DAVID SEYMOUR (Leader—ACT): I did it off the top of my head and he probably should. I ask the Minister—[Interruption] I know Anna Lorck is astonished, because they’re not so proud of her mental arithmetic there in Tukituki.

I just want to ask the Minister about the high-wealth individual project. Of the 400 people that were identified for this—frankly—inquisition, how many have completed the first, second, and third rounds of information requested from them, and is he satisfied with that rate of progress?

Hon DAVID PARKER (Minister of Revenue): Thank you for that question. Yeah, I’m pleased to report that the vast majority of high-wealth individuals that are within the ambit of that statistical gathering exercise are cooperating—as they must, obviously, in order to comply with the law. But they’re doing so willingly, and compliance rates are in excess of 90 percent.

In respect of the question from Chlöe Swarbrick on the date of release of that GST methodology paper, I’ll look into that and try and make sure I make the end-of-August date that I promised. I’m not over the detail of that, as we speak.

DAVID SEYMOUR (Leader—ACT): I can confirm for the Minister that the revenue from the 39c tax rate is 0.42 percent of what the Government spent last year, but we don’t boast here.

Hon David Parker: You said it was 0.1 percent.

DAVID SEYMOUR: Well, everyone’s got to stand for something. Does the Minister believe, in light of his answer regarding the high-wealth individual project, that he will still get the information he sought in time to release how much money a certain sector of New Zealand has, right before an election campaign, as originally scheduled for June 2023, when the project was launched?

Hon DAVID PARKER (Minister of Revenue): Yes, I—it’s not especially related to the election date.

David Seymour: Really?

Simon Watts: Not especially related.

Hon DAVID PARKER: No, well, it’s not related to that at all; in fact, this was one of the projects that I made clear to the Prime Minister, when I sought the revenue portfolio, that I wanted to do some work around, because I do think that there is a big gap in the understanding that we have in this Parliament and in our society as to what effective tax rate is paid by different sectors of society. We know that very well for wage and salary earners, for people that earn their income through interest in the bank. We know the distribution of that across society. We know that low and middle income people spend about, roughly, two-thirds of their income on GST-inclusive goods and services, and the bottom eight to nine deciles—the mix of the third that is not on GST-inclusive goods and services changes within those deciles for lower-income people. They’re spending about a third of their income on rent, which doesn’t attract GST. For middle-income people, it’s on their mortgage, and higher-income people it’s phasing out of mortgages and going into savings. But, generally, in those bottom 80 percent or 90 percent, roughly two-thirds of people’s income is spent on GST-inclusive goods and services, which means that the effective GST rate for all those people is roughly about 9 percent of their income, in addition to their income tax. Why I’m sure Chlöe Swarbrick is interested in those issues is that you have to have an understanding of the distribution of GST payments across society in order to have a real understanding as to what is the distribution of overall taxes by decile. So that’s one of the reasons we’re giving that information.

Now, to do that, we had to change the law, because the law didn’t allow clearly—it was arguable whether the commissioner was entitled to gather that information for policy purposes as opposed to tax administration purposes, and the risk that Revenue faces, when they ask for that sort of information, is that taxpayers can say, “I’m paying all my taxes; this is a fishing exercise. You’re not entitled to this for policy purposes. Go away.” We thought that wasn’t right to have that gap in information and, in order to do that, we had to change the legislation. We actually did that very quickly in the first Budget following the election. We passed it under urgency. Some parties criticised us using urgency. If we hadn’t done that, we wouldn’t be able to do this information gathering during this triennium, which we thought should be within the power of Government to do. So we passed that amending legislation, which then enabled the revenue department to gather that information. We set up the rules based on their advice as to how we do it. We’ve got an advisory group as to how that information should be gathered and analysed, which includes public and private sector experts in tax matters. That information is currently being gathered and, as soon as it is gathered, it will be analysed and, as soon as it is analysed, that information will be released publicly.

CHLÖE SWARBRICK (Green—Auckland Central): Just on exactly that research that the Minister’s alluding to, we have an Official Information Act (OIA) of Treasury advice from early 2021 which points to 42 percent of high-wealth individuals paying less than 10 percent of their total income in tax. Can I ask the Minister if his research is showing that the picture is better or worse than that initial research?

Hon DAVID PARKER (Minister of Revenue): I don’t yet know the answer to that question. I’m in the dark, as others are. I have my suspicions that the rate of tax paid by the highest-income people in New Zealand is lower than the middle class, but this data-gathering issue should prove it one way or the other.

Dr DUNCAN WEBB (Chief Whip—Labour): I move, That the committee report progress.

Motion agreed to.

House resumed.

CHAIRPERSON (Ian McKelvie): Madam Speaker, the committee has considered the Appropriation (2022/23 Estimates) Bill and reports progress. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Bills

Oversight of Oranga Tamariki System Bill

Children and Young People’s Commission Bill

Discharge—Leave Declined

JAN LOGIE (Musterer—Green): Point of order, Madam Speaker. I move, That the orders of the day for the third readings of the Oversight of Oranga Tamariki System Bill and Children and Young People’s Commission Bill be discharged and the bills referred to the Social Services and Community Committee for consideration.

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

Ayes 55

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

Noes 64

New Zealand Labour 64.

Motion not agreed to.

Third Readings

Hon PRIYANCA RADHAKRISHNAN (Associate Minister for Social Development and Employment) on behalf of the Minister for Social Development and Employment: I move, That the Oversight of Oranga Tamariki System Bill and the Children and Young People’s Commission Bill be now read a third time.

This speech was written by the Hon Carmel Sepuloni who, unfortunately, cannot be here today, so I am delivering it on her behalf.

It’s been a long journey to get us here, but today we are finally able to put in legislation a stronger, more effective system of oversight to protect our children and young people. I want to start by thanking all of the children and young people who have provided input into this throughout the process. I want to thank our stakeholders for their strong advocacy and for working together to make changes that have improved the bills. To our officials, for working over several years to develop this legislation, thank you all. To our select committee, I want to thank them for their time and hard work on this legislation.

This journey started back in 2017 and really kicked off after the Beatie report in 2018 highlighted how inadequate our system of oversight really was. There wasn’t enough accountability. Our children and young people didn’t know where to go for help, and it needed fixing. Since then, we sought advice from stakeholders and from across Government. A number of huis were held across the country and we heard from children, young people, and whānau what the issues were and what they needed in an oversight system. As a Government, we traversed a significant number of options. Some of the proposals in the bills are different to what we have now and some are different to what stakeholders want. But what I do know is that we are all working towards the same goal. We all want our children and young people to be safe and well and cared for, and these bills will help us achieve that.

In order for us to have an effective oversight system, there are several things we need. Firstly, we need a loud and strong advocate not afraid to call out Government and the systems we have in place; an advocate that will have the flexibility, diversity, and mana to genuinely speak for our children and young people. The Children and Young People’s Commission Bill makes this happen by establishing the Children and Young People’s Commission. Some stakeholders have raised concerns about this and that it could diminish the power of the Children’s Commissioner, but this is simply not the case. This bill adds to the power of the Children’s Commissioner so that they have more voices at the table. The commission will be required to have input from a kaupapa Māori perspective and there will be the opportunity for other voices to have a seat at the table, like Pacific and disabilities, as well as care-experienced young people themselves. However, we heard the sector when they said that we needed to retain a Chief Children’s Commissioner, and that’s what we’ve done. This bill further adds to their power by increasing the information-access powers they have in order to inquire into system-wide issues. I am looking forward to seeing a more diverse and empowered Children and Young People’s Commission.

The second component of an effective oversight system is an accessible and dynamic complaints system. We heard from children and young people that they didn’t know where to take their complaints. The Oversight of Oranga Tamariki System Bill places a requirement on the Ombudsman to ensure that complaints processes are visible and accessible for children and young people and their families, whānau, hapū, and iwi. On top of that, children and young people also said the complaints process needs to be timely and action-oriented for children and young people to have confidence and trust in them and to use them. This bill enables the Ombudsman to undertake preliminary inquiries to ensure that matters are able to be resolved at the earliest opportunity possible as a means of supporting timely processes for children and young people.

Finally, we need an independent monitor to oversee the system and ensure that the horrors of abuse that occurred in our history never happen again. This bill makes it a legal requirement for the monitor to act independently and makes it unlawful for the Government or anyone else to interfere with their monitoring. We know some stakeholders want the monitoring to be in a Crown entity, and, in particular, to be with the Children’s Commissioner. However, we heard during hui across the country concerns about monitoring sitting in conflict with advocacy. The monitor will provide objective and impartial information to Parliament, the public, and to Ministers on the performance of the system to support decisions that improve performance of the Oranga Tamariki system; whereas the role of the advocate is to question whether the settings are right in the first place. In response to consultation on the long-term home of the monitor, the Office of the Children’s Commission even stated—and I quote—“We do however agree that the advocacy function may conflict with the policy intent as currently stated to be an adviser to the Minister.”

Underpinning these three elements, we need a foundation of upholding Te Tiriti and the wellbeing and inputs of our tamariki and a rangatahi. The bills’ Treaty provisions were carefully crafted with advice from Te Kāhui, who supported the Ministry of Social Development’s consultation with Māori across the country. The bills create obligations on the oversight bodies to uphold Te Tiriti o Waitangi. The specific clauses in the bills directly emerged from key Māori stakeholders who called for specific obligations to be placed on the oversight bodies, rather than broad Treaty of Waitangi clauses that can be open to interpretation and run the risk of diluting the obligations on agencies.

The rights and voices of children and young people have underscored the development of the bills. Not only have the insights of children and young people shaped specific policies, giving practical effect to these concepts has been an objective in the development of the bills.

Through our Supplementary Order Paper (SOP), we included even more specific, more explicit provisions, following discussions with stakeholders, by providing for the best interests in participation of children and young people. We also supported the change put forward by the Greens in their SOP to ensure the voices of children and young people are a part of the work of the independent monitor, and I want to thank them for putting the suggestion forward.

On top of that, we also heard from our young people. I want to explicitly thank VOYCE for their contribution here that waiting five years before a review is required to start is a long time in the life of a child, and that’s why we reduced this three years, so that we can review the system and make changes, if needed, sooner.

I know that those on the other side of the House don’t support these bills, but I want to say to them that our children and young people shouldn’t have to wait any longer for a proper oversight system. These bills will put in place a system that will help ensure that we can avoid the errors of the past and make a positive difference for our children and young people.

Point of order, Mr Speaker. I seek leave to table this legislative statement.

ASSISTANT SPEAKER (Ian McKelvie): Leave is requested for that purpose. Is there any objection? There is none.

Harete Hipango: Mr Speaker?

ASSISTANT SPEAKER (Ian McKelvie): Just you’d need to present the legislative statement. Can the Minister just—thank you. You just need to request—“I present a legislative statement on the two bills.” Then it’s done properly.

Hon PRIYANCA RADHAKRISHNAN: I present this legislative statement.

ASSISTANT SPEAKER (Ian McKelvie): On? Can you just do the whole thing; sorry.

Hon PRIYANCA RADHAKRISHNAN: For the third reading of the—

ASSISTANT SPEAKER (Ian McKelvie): On the Oversight of the Oranga—

Hon PRIYANCA RADHAKRISHNAN: —on the Oversight of Oranga Tamariki System Bill and the Children and Young People’s Commission Bill.

ASSISTANT SPEAKER (Ian McKelvie): Thank you. Those legislative statements are published under the authority of the House and can be found on the Parliament website. The question is that the motion be agreed to.

HARETE HIPANGO (National): I take this call on behalf of the National Party and as spokesperson for children in Oranga Tamariki and also as a voice representative of the very children who have lived in abused care, have experience of the very submitters in this child-care and welfare protection sector whose voices were lifted in volume at select committee and have been extinguished. I rise, I take this call, and I make this stand against this Government where a legislative statement has been delivered, where that statement and the expressions articulated on behalf of the Minister convey how disconnected, how detached, and how dysfunctional this Government is—extinguishing the voice, the faces, and the views of the people who’ve been most affected by the State welfare ill-care system. I take this call in dismay, in despair, and in disgust of this Government and how this Government has dispensed with the voices and the views of those who have lived in State-abused welfare care and have the experience that was shared with, and expressed to, this Government.

In speaking to the two bills now, originally presented as one, now divided, which is quite depictive and representative, actually, of the Government stance that has been taken in terms of the divisiveness that has been created by this bill now divided into two parts, the Oversight of Oranga Tamariki System Bill and the Children and Young People’s Commission Bill, I say that this depicts the fact that one bill divided into two is representative of how this Government has dismissed, dispensed with, and treated not only the submitters to the bill but public opinion. There’s a sense of divide, conquer, and this being a done deal, as I’ve always stated, where the Government went through the pretence and the facade of consulting and engaging with our public.

I heard the Minister speak to the written statement in saying that this has been a long journey since 2017. The Government’s dismissed, dispensed with the life-long journey of the victims and survivors, those abused in the State ill-care welfare system. There is a royal commission of inquiry that commenced in February 2018, is due to conclude in June 2023, and it was always stated at select committee by my colleagues in the National Party, my parliamentary colleagues in the Green and the ACT Party in opposition—and for the Minister, in reading the legislative statement to say that not just those on the other side of the House don’t support this bill or these two bills, I remind the Minister and the Government, actually, that the opposition comes from the New Zealand public who have been dismissed. There is so much to cover that time will not indulge and other members will address that, but it is important that I talk about this bill being divided into two.

What happened to the Government taking heed of what public opinion and voice is, which is called democracy? And so it is important—important to stress and emphasise that the Office of the Children’s Commission and the Commissioner made submissions to the select committee. Totally dispensed with and ignored. And I quote “That democracy, how can we trust our democratic process when people’s voices are ignored?” That is a quote from the Commissioner for Children, Judge Frances Eivers, the advocate, the face, the voice, the representation of New Zealand children’s State, in care, welfare experienced voices.

I also quote, as having been mentioned at the second reading, when I stood to say, “Take care of our children. Take care of what they hear, take care of what they see, take care of what they feel, for how the children grow, so what will be the shape of Aotearoa.”—Dame Whina Cooper. This Government has totally ignored the voice and the view of our children. And how disconnected, how misrepresented to say that this Government has engaged and listened to the voices of our children when the very advocacy group and representative voice for children, VOYCE - Whakarongo Mai, voices of young, in-care experienced, were not consulted with by this Government at the crucial stages. They lifted their voice and raised that at select committee and attempted to—to have that just quelled and extinguished.

What’s interesting also, again, is another quote from the Prime Minister, in the Speech from the Throne on 8 November 2017, a commitment: “This Government will put child poverty at the heart of Government policy development.” There’s a poverty of spirit from this Government to ignore and extinguish the voice and the views of our children, their interests, their concerns which have not been centred at the heart of these two bills. Again, I quote the Prime Minister: “To deliver genuine change for children, transparent mechanisms are needed to hold the Government to account”. Every effort from Opposition, importantly from our New Zealand public and those voicing the concerns of our New Zealand children and State welfare care, ill care, those who’ve been abused—transparent mechanisms? I think not. I quote again from the Prime Minister: “If we put child well-being at the heart of what we do, then the well-being of all New Zealanders will be lifted.”

Again, I reiterate that this Government has ignored the views of child representatives of the social child-care and protection sector, of specialist psychologists who work in child welfare, legal practitioners, former social workers who have left Oranga Tamariki because of the dismay, the despair, the disgust at what’s happening within the organisation and the fact that this Government thinks that this oversight, which totally overlooks the importance of those who are experienced in this specialised area of care and protection—lawyers, the New Zealand Family Law Society, legal academics, former police, youth justice, youth aid officers, social sector agencies, health practitioners, teachers. However, this Government knows better and best than anybody.

Democracy is meant to be about listening to the power and the voices of the people. New Zealanders, in particular those who have worked in this sector—the fact is that those very persons are giving evidence before the royal commission of inquiry, which this Government has totally dispensed with and said “It’s not relevant; we will pick up the pieces later.” Yesterday, the chief executive of Oranga Tamariki gave evidence, continued that today. There was a total of some 43 witnesses in this oversight, care and protection system, which this Government for some reason has turned a blind eye and a deep ear to, in listening to the power, the significance, the relevance, and the importance of their evidence to say to this Government: take heed, take heart.

The interesting factor is that the royal commission of inquiry is listening to and striving to make recommendations after hearing evidence for some three to four years based on the lived experience of survivors and victims. I turn to my parliamentary colleague, Karen Chhour. We spoke briefly before I gave this address to the House, and I sensed—[Time expired].

TERISA NGOBI (Labour—Ōtaki): Fakaalofa lahi atu, Mr Speaker. As always, it’s a privilege and an honour to take a call in this House of change, not only as the member of Parliament for the beautiful Ōtaki electorate but also as part of the Social Services and Community Committee who worked through this bill. But of course, first, I’d like to acknowledge again the submitters for being so raw and passionate, giving up their stories and experiences, which we know must have been really hard. I know I truly felt that, and I’m quite sure everyone in the Social Services and Community Committee felt that as well.

Changes from that select committee process, after hearing the submitters, also included—as the Minister spoke about before—a Chief Children’s Commissioner, who will also be the chair of the board of the commission. That is a change that this bill has made after listening to the submitters. Also, ensuring the commission can report to the Prime Minister, with or without request, on matters affecting the rights of tamariki. That is another thing we heard from submitters—that the Minister and our Government have heard and have made that change. Requiring the monitor to act quickly and independently when undertaking functions, and that is something else we’ve made sure that we’ve changed in this bill after listening to those submitters. Also of note, because I know Te Tiriti has come up in this kōrero, during the development of this bill, there were 22 hui, so engagement with Māori throughout Aotearoa, and working closely with the Māori advisory group, Te Kāhui, on this bill to ensure a practical commitment to Te Tiriti o Waitangi—that’s critical. One of the things that was clear from this hui is Māori asked us to ensure advocacy won’t be diluted by the monitoring function, and they worried about the conflict between the advocacy and the monitoring—that was clear. That was their words, not mine.

We heard these concerns and therefore this bill separates these two functions to ensure advocacy is strengthened and not constrained by monitoring requirements. We’ve heard the calls to pause this bill, to wait for the outcome of the royal commission into State care. We can’t wait any longer. It’s not about putting on plasters and trying to plug gaps; this is about being brave and making sure—we all know this system doesn’t work. And to keep making sure that we put more plasters on a system that does not work is irresponsible. We came in here with a clear goal to save our babies, and that is what this bill does. We are very, very clear: we can’t keep putting plasters on this. The whole of Oranga Tamariki needs an overhaul. We’ve been brave enough to do that. We care about our babies. There is a review built into this bill so that when the royal commission outcome does come out, we can look at reviewing it then. But right now, we can’t have one more kid—we can’t have one more baby—being harmed. We need to do something now. The longer you wait, the more our children suffer. That’s what this side of the House wants to do. That’s what we’ve done. We’ve listened to those submitters, we’re making real change, and like I said: not one more baby.

Hon LOUISE UPSTON (National—Taupō): There are not that many days that I rise in the House and struggle to—this bill is actually about children, and this is a bill that hasn’t been designed with them at the heart. That is the problem, and that is the fatal flaw with this piece of legislation. That is why every single party in this House except Labour vehemently and strongly opposes this piece of legislation: because, at the guts of it, it will not protect children. They are not at the heart of this bill. This is the submission from VOYCE - Whakarongo Mai, and the first thing they say is that their key concern is that tamariki are not at the heart of this bill. So I’m very deliberately bringing their voice today, because they are not represented. Their voice was not considered in the design of this bill, and this bill risks making it far worse for children in New Zealand.

I’ll tell you why: this bill creates a system that works for the system; it doesn’t work for the children, who should be at the heart of this. It’s more complicated. It’s more difficult for children to access. We now have three organisations instead of one. How does that serve children? It’s interesting because, in 2021, the new mental health commission was set up. Guess what? They decided they could do advocacy and monitoring and complaints. Why is it not good enough for our children? Why is it not good enough for children, who are the most vulnerable in New Zealand, to have a simple, easy-to-access system and an advocate and a contact and a person in the role of the Children’s Commissioner that they all know? But no, what have we done? We’ve made it incredibly complicated—well, they have; Labour has. They’ve made it incredibly complicated and separated out advocacy, monitoring, and complaints. And they think that’s going to solve the problem. But what does it actually do? It creates an even greater risk of children falling through the cracks. When we heard their voices in the select committee, it was harrowing—it was absolutely harrowing—and this bill does not serve them.

So the Minister thinks, well, she’s made a few changes. But then, when we tried to debate the changes in the committee of the whole House stage, “Oh, well, they’re not really changes. They’re not that substantial, and we didn’t need it to go back to the select committee to pore over it in more detail.”—which is what Opposition parties have called for. The Green motion on the floor today was to refer this bill back to the select committee, for the sake of our children, to get it right. There’s a willingness of every party in this House to do that. But, no, Labour knows best! They know better than the children that have experienced care! They know better than every single person who has fronted up to the royal commission into abuse in State care! They haven’t listened to them. They have not listened. I can’t believe the timing of it—that the chief executive of Oranga Tamariki was before the commission today and yesterday.

Harete Hipango: How ironic.

Hon LOUISE UPSTON: Absolutely ironic. Appalling. Revolting. Disgusting. Because this piece of legislation does not do what it should do. When you come to this place, you have a responsibility particularly to those who can’t speak for themselves, and the most vulnerable in New Zealand are our children. The Government’s own Child and Youth Wellbeing Strategy 2019—one of the six key areas that they prioritised was that tamariki and rangatahi are being involved and empowered, meaning that they have their voices, perspectives, and opinions listened to and taken into account. Well, it’s a terrible day, actually, standing in the House knowing that Labour is steamrolling over their interests, their voices, their concerns.

So what else did VOYCE say in their submission? The second part was that they felt, as most other submitters have said, that separating advocacy from monitoring and complaints risks children falling between the cracks. Now, I don’t really think there’s anyone in this House who wants to see any one baby, any one child fall between the cracks. This was a real opportunity to get it right once and for ever. But, instead, what we are here—whether it’s academics, public policy experts—talking about is the fact that, for example, the independent monitor isn’t really independent, and the risk of it creating a cycle where there can be increased levels of abuse and the potential for that abuse to be swept under the carpet. Isn’t that what the whole royal commission into abuse in State care is all about? We heard submitter after submitter say, “Why isn’t the Government waiting? Why is it that Labour thinks they know better and that they are pre-determining any findings from the commission that sits today?”

So this is a fatally flawed bill, and that’s the guts of it. We want to see a single Children’s Commissioner that every child in New Zealand knows, can access, who is a fierce, fierce, fierce advocate for every child, but who also understands and has visibility of the complaints and the monitoring of the Oranga Tamariki system, so they have the view of everything, they can see exactly what’s going on, and that is why it is a layer of protection that means children won’t fall through the cracks. But, instead, Labour has ignored—of the over 400 people who submitted, only eight were in support. We heard from children’s advocates like Child Matters, the Save the Children organisation, Social Justice Aotearoa, those working at the front line, teachers, social workers, iwi leaders, former police officers—even a former leader of the Labour Party wrote a submission opposed to this bill because of his grave concern about it. Lawyers, judges, academics, public policy experts, former staff of the Office of the Children’s Commissioner—you would have thought, with a list like that, Labour would listen, but have they? No, they haven’t.

So it’s not a great day in Parliament today, because the Government isn’t listening to the very children and young people that this bill is meant to be supporting.

Harete Hipango: It’s abuse of position.

Hon LOUISE UPSTON: It is. It’s an abuse of position instead of protecting children and young people.

I want to again use the words of VOYCE - Whakarongo Mai—they were set up when the original Ministry for Vulnerable Children, which is now Oranga Tamariki, was created. They were set up to make sure their voice, the voice of care-experienced young New Zealanders, was carried through so that we interrupt these years of abuse and mistreatment for those children. This is what they say: “Behold the breath of life. We ask all to listen and pay heed to the words of warning of the youth who strongly oppose the following bill, the Oversight of the Oranga Tamariki System and the Children and Young Persons Commission Bill.” That is the voice of VOYCE. They haven’t been listened to, they should have been, and this is a sad day for this Parliament.

ANAHILA KANONGATA’A-SUISUIKI (Labour): Kia ora, e te Mana Whakawā. It’s a huge honour for me, as a registered social worker, to make a brief contribution on the third reading of the Oversight of Oranga Tamariki System Bill and the Children and Young People’s Commission Bill. I would like to acknowledge the leadership of the Minister, Carmel Sepuloni, who shepherded these two bills which have been in the making since 2017. I want to acknowledge the children and young people, and their families, who have had negative experiences in this system. I want to further acknowledge those who chose to work in this system and will continue to do so.

I would like to acknowledge all the submitters who submitted on this bill. The Minister reminded us there was a need for loud voices to advocate, who are not afraid to call out the Government. This bill, the Children and Young People’s Commission Bill, makes this happen by establishing the Children and Young People’s Commission Bill. We heard at select committee from children and young people that they didn’t know where we are to take their complaints. The Oversight of Oranga Tamariki System Bill places a requirement on the Ombudsman to ensure the complaints process is visible and accessible for children and young people, and their family, whānau, hapū, and iwi.

I stand here to commend this bill to the House based on my 30 years’ experience in the system as a youth justice social worker, a senior practitioner, a social work supervisor, a youth justice manager, a site manager, a regional manager, and in my role in chairing the Auckland Pacific Islands Network, APIN at Oranga Tamariki, where the workers developed the Pacific practice framework which the Saunoamali’i later came in and completed it, and named it Va’aifetū. Va’aifetū is a practical guide for integrating Pacific cultures into practice in pursuit of best outcomes for Pacific children through the system. I mention this so that the commissioners, who will have this honour, will know that there is there is a practice for Pacific people in Oranga Tamariki. I’m particularly proud of Mo’ui Fakalata, which I wrote with contributions from Loisi Puleiku, Simione Haleli, Sepa Hausia-Schaumkel, Loseti Mahe, Maria Fariu, and Leota Tahaafe and the members of the Tongan collective at the Auckland Pacific Island Network, who wrote this and gifted it, Mo’ui Fakalata, to the system so that Pacific children are served better. I believe, as what I’ve just stated, I am sufficiently qualified to affirm that this legislation will enhance and add value to how the State serves our children and young people, and their families. Without hesitation, I commend the Oversight of Oranga Tamariki System Bill and the Children and Young People’s Commission Bill to the House. Malo ‘aupito.

JAN LOGIE (Green): Thank you, Mr Speaker. It’s with great disappointment I rise to again express the Green Party’s strong opposition to the Oversight of Oranga Tamariki System Bill and the Children and Young People’s Commission Bill at this, their third reading. At the first reading, I quoted from a report released that day, Hāhā-uri, Hāhā-tea - Māori Involvement in State Care 1950-1999. In my second reading speech, I started with quotes from the interim report from the royal commission. Today, I’d like to start with quotes from survivors responding to evidence from Government agencies presenting to the royal commission over the last couple of weeks. And these agencies have been the Police, Education, Oranga Tamariki, the Ministry of Social Development (MSD), and Health. In front of the commission, they have acknowledged, though not apologised for, the harm done to children in care, the institutional racism, and a failure to protect children across our system.

The response to that conversation, from survivors, has been: from Tupua Urlich, he said, “If you were sincerely sorry you would start listening to the voices of those who have been through your system that you have abused, who are wanting to make a solid contribution and positive changes to the system.” Margaret Priest said that despite a commitment from Government agencies not to repeat the errors of the past, she had little confidence there was effective monitoring, oversight and safeguarding mechanism to ensure the safety of disabled people. Jonathan Mosen: “I’m not convinced that we’re going to see real, genuine, systemic change. I think a lot of it is window dressing.” And Keith Wiffin reminded us: “Bear in mind some of these officials have turned a blind eye, they’ve been in denial, they’ve swept things under the carpet, and there’s been a lot of resistance.”

These quotes and these agency hearings are relevant because, sadly, much of the officials’ time, and now the royal commission, has been spent justifying this bill, which they tell us will improve oversight and monitoring of our child protection system. But the response from Keith Wiffin, a survivor, to that was: “That is hugely disrespectful to survivors, because we don’t think that’s the case.” He went on to say, “You could have at least acknowledged the serious reservations we have about that because what you’re doing is essentially retaining power and control over the processes and asking us to trust you.” So because of a decision made by the lovely Labour Government, precious time that should have been about honestly fronting up to the past in detail and committing to working with survivors to prevent future abuses was spent again telling survivors that their concerns don’t matter, that the Government knows better.

I want to specifically mention an interaction with the CEO of the Ministry of Social Development. I rarely single out officials, but this is relevant to this bill and is on the public record, where the CEO of MSD was questioned about the long history of complaints against staff members in child protection units and was then presented with a list of perpetrators of sexual, physical, and emotional abuse spanning decades. Thousands of allegations, hundreds of complaints over the years, covering staff at multiple institutions. Her response was that the ministry has better policies in place to tackle complaints now. Does that sound familiar to this conversation? However, she was then confronted with allegations of a man still working in a youth justice facility, with 26 allegations of abuse against him, the earliest from 2006, including three upheld complaints. She characterised this as hugely unfortunate, when asked whether it was a major failing of the system. In response to more detail, she said that it’s complex because it’s an employment issue.

Now, this is the kind of thing that triggers survivors and their families. For so long, this House and the country have had people raising concerns about the practices of our so-called child protection services, and the response we’ve had from officials has been assurances that, actually, there’s nothing to see here. This was an aberration, a one-off event! It is not systemic! All we’ve been told: yes, there may be some problems here, but we’re on to it! We’ve got the solution in place! It will all be different now! No more children! We hear it exactly copy-and-paste, 20 years on. We’ve had careful political responses from officials, protecting the institutions and not our children. And I’m not putting all of this on officials, because we have to acknowledge that this is not about them solely. This is about the interaction between the political decisions and the system.

Puao-te-ata-tu 1988, a report of the Ministerial Advisory Committee on a Māori Perspective for the Department of Social Welfare presented to Parliament, found “the heart of the issue [of the failure of our child protection service] is a profound misunderstanding or ignorance of the place of the child in Maori society and its relationship with whānau, hapū, iwi structures. … no exaggeration to say, as we do in our report that in many ways the picture we have received is one of crisis proportions. … We make recommendations for a comprehensive approach accordingly.”

The political decisions were to implement some of those recommendations, and not monitor them properly to ensure that they were enforced, but not do the whole job, which has led us to where we are now, where just last year the Waitangi Tribunal conducted an inquiry into Oranga Tamariki and found that “persistent and significant disparity can, in part, be attributed to the effects of alienation and dispossession. However, it also reflects the Crown’s failure to honour the guarantee to Māori of the right of cultural continuity embodied in the guarantee of tino rangatiratanga over their kāinga. As such, the report finds that disparities are a direct consequence of the Crown’s intrusion into the rangatira of Māori over their kāinga.”

We’ve heard from the Labour Party members that this bill is a response to that, that this is Te Tiriti compliant, that it’s responding to the needs and the consultation with Māori that happened before that Waitangi Tribunal report. There has been very strong legal analysis of that bill that says it is inconsistent with our obligations under Te Tiriti, and the submitters that were part of that consultation, when asked, said this bill reflects nothing that was part of that submission, that consultation process, at all. They do not support this, and they find this bill is a further incursion of Crown influence into Māori tino rangatiratanga over kāinga—exactly the opposite of what the Waitangi Tribunal has recommended. This bill does not deliver what is needed. It disrespects and undermines the trust of people who have been hurt by our institutions far too many times—

Terisa Ngobi: Then do something now.

JAN LOGIE: —and it does not get to the heart of what is needed. And I hear from that side that we have to do something. We have to do something. Now, what about more money for the Children’s Commissioner, to actually enable them to deliver on that monitoring role that they have said that they wanted more capacity to be able to deliver on? Actually, that had the support of all of those submitters, for them to do that work. What about that? Why can’t that be our action now, while we wait for the royal commission to report just next year, in less than a year’s time? Why not hold our trust with those people who we have hurt? Why not actually tell them, “We are listening to you. We care about this. We are not going to make the same mistakes again.”? It is a shame on Labour that at this time in our history, when we’ve got a chance—we are being called to do it differently—that, actually, this Government would choose to make the same mistakes that have been made again and again. And it’s going to be our children and our whānau and our communities who pay, and probably the Government in the next election.

ASSISTANT SPEAKER (Ian McKelvie): Members, just before I call Karen Chhour, it does seem an enigma to me that you take your mask off to sneeze in this place. Karen Chhour.

KAREN CHHOUR (ACT): Thank you, Mr Speaker. I rise on behalf of ACT to speak on the Children and Young People’s Commission Bill and the Oversight of Oranga Tamariki System Bill.

There are so many emotions that I’m feeling right now, from anger to disappointment to despair to just plain disgust at the Labour Party. I hear a member across the House heckling away, trying to prove their point, saying, “Do something now.” Five years you’ve worked on this, and this is all you can come up with?

The Labour Party says they care about our children; they want to make sure that not one more baby is lost. Why are we concentrating on a bill that puts the organisation before our children? This bill does not put children’s voices at the forefront; it puts the organisation at the forefront.

I would just like to read out some of the voices that we heard. From Manaaki Rangatahi, Aaron Hendry quotes: “It is gravely concerning that the voices of care-experienced rangatahi are being ignored. Moving forward with this bill in the face of opposition from those with lived experience sends a message to our young people that their voices do not matter. This decision risks retraumatising and silencing young people who have already suffered at the hands of our system that has historically acted without listening to young people, and in doing so is to harm them.”

VOYCE - Whakarongo Mai: “Oranga Tamariki needs oversight, but not in a way that it undermines the voice and protection of vulnerable tamariki and rangatahi in our care system,” says Mary-Lynn, vice-chair of VOYCE - Whakarongo Mai National Youth Council.

“The Government has not listened to a single recommendation from young people with lived experience on this bill. These young people have been effectively silenced, and the new systems outlined by this bill is designed to further muffle and weaken their voices,” Tracie Shipton, CEO of VOYCE. “We ask that the Government doesn’t bother with the select committee public consultation process. If it’s not going to have any influence on the outcome. Be brave enough to at least be honest. Know that the outcome is predetermined by those in power rather than those they are supposed to serve,”—Ms Shipton from VOYCE.

And one more: “If you do not bring the affected communities on the journey with you from the beginning, you will not make any meaningful change or progress. As a young, care-experienced Māori, I’m sick of seeing the communities I’m part of being displaced and systems that are supposed to be working on their behalf,” from Karah Mackie, chair of VOYCE National Youth Council. Once again, another young person’s voice that’s been shattered.

State care survivor Tupua Urlich is appalled by the bill and what he views has been an undemocratic process in its design. “The very people our members of Parliament are supposed to represent have been seriously misrepresented.”

I stand here today and I say to those youth and those organisations that came before our select committee, laid their souls out in front of us, told us their stories of how they’ve had to deal with this system for years and years and years, and always been told there’s nothing to see here, that I heard you; we heard you. And I’m sorry that this Government is so arrogant that they are not listening. We need to start listening. I sat at the royal commission review yesterday and listened to the response from our CEO of Oranga Tamariki answering to the submissions from the victims. There is pain, there is hurt, and that’s not going to go away. It’s only going to be made worse by this.

Our children need to know that they can voice their concerns; they can cry out for help and they will be heard. These are children that have been through such traumatic experiences that we need to make this process as simple as possible for them. Instead, we’ve complicated it into three separate organisations, creating more barriers for our most vulnerable youth to get help.

If we really, really cared about our young people’s future and wanted to make sure that not one more baby was lost, this would be the second part of the change that we would be doing. The first part would be making sure that they don’t get to this place in the first place—where they have to lay a complaint. Why have they got to the point where they’re having to go to the ombudsman, the Children’s Commissioner, or an independent children’s monitor? Because we are rescuing our babies from our system. Our children are going from one bad house to another bad house. And then when they try and voice that they’re not safe in a place that our system put them in, we’re creating more barriers with this complicated bill. How insulting.

I’ve heard members across the House talk about thanking the young people for coming before us, acknowledging the young people for coming before us. If you are really thankful and grateful, you would have listened to them. This bill talks about making sure we listen to young people’s voices; that these three separate organisations hear our young people’s voices. Well, if this Government has set the example for what listening is, God help our children.

I am disgusted that the people that sat in front of those submitters can sit here and genuinely say they are happy with this bill. I’ve heard there was lots of consultation round in the communities. Well, where were those people submitting saying, “We love this bill, great, push it through.”? Where were they? If your consultation was so wonderful, when they heard there was so much opposition to this, why didn’t they put their hands up and say, “Yes, Labour did come talk to us and we think this is a fantastic idea.”?

Instead, we had over 400 submissions, with the majority of the submissions saying, “Please don’t do this.” Begging you, “Please don’t do this. Our children will not be safe. Our children will be left in situations where they will be harmed, hurt, or worse. They will fall through the cracks.” But nobody’s listening once again. Their voices are worthless in the eyes of this Government. Because if you really did care about our young people’s voices, this bill would go back to select committee for a better process.

Who will be the next person sitting at a royal commission of inquiry in 20 years’ time apologising for the damage that this bill has done? We repeat history over and over and over again, and the excuse I keep hearing is, “You just don’t understand.” The very people that do understand are the people that sat before us in the select committee process and begged and pleaded with the Labour Government to listen.

Hon Member: The ones who lived it.

KAREN CHHOUR: The ones who lived it, the ones who are living it, and the ones that are going to live it. Because the focus should be on why they’re getting there in the first place—and if Labour really cared, they would have dealt with that first. I oppose this bill.

Dr LIZ CRAIG (Labour): Thank you, Madam Speaker. Wanting to ensure that all children and young people grow up and reach their full potential is one of the reasons I stood for Parliament. Unfortunately, for many children and young people, they need extra support to make sure that this can occur.

But the problem is that we’ve got to make sure that the systems we put in place to do that actually get monitored adequately. We also need to make sure that for children and young people receiving care and support, they know who to go to if they’ve got complaints about that care. I think it’s also really important that the voices of children and young people are heard at the highest level. As we’ve heard tonight across the House, this hasn’t always been the case.

So what this bill does is aims to address all of these three issues. What it looks at doing is strengthening the role of the Children’s Commissioner in advocacy, by putting in place the Children and Young Peoples’ Commission that’s got a broader range of skills and experience around the table and also ensuring that children and young people know where they can go to if they want to complain about the care by making sure that the ombudsman has got a very, very visible complaints process and that children and young people are supported in being able to access and make complaints. But it’s also important that we’ve got an independent monitor that can oversee the Oranga Tamariki system, because we really need to make sure that some of those things that have happened in the past never happen again.

I would like to thank all of those who made submissions on this bill, because it resulted in some really significant changes. This is an important bill, and I’m very happy to commend it to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on Penny Simmonds for five minutes.

PENNY SIMMONDS (National—Invercargill): Thank you, Madam Speaker. I take this short call to speak in opposition to the Oversight of Oranga Tamariki System and Children and Young People’s Commission Bill.

The objective of the bill is to promote and improve the Oranga Tamariki welfare system and improve outcomes for children and young people in New Zealand. I just can’t help wondering, having listened to this debate and having looked at the process that’s gone on, what sort of path of destruction this Government is on. To go against such a long list of knowledgeable people in this sector—people that are representing the voices of young people, a royal commission, an ex-leader of the Labour Party—what sort of path of destruction could this Government possibly be on to be going against all these voices that are speaking up against this bill?

If it is such a good bill, someone would be supporting it, but the Government should look around. There isn’t one party in this Parliament that is supporting it. There isn’t anyone in this sector that is supporting it. So why are they holding so steadfastly to this absolute obsession they have got to push something like this through when there is so much opposition to it?

I heard one of the Government MPs speak—and you had to be quick to hear them because they spoke for only a couple of minutes, so they obviously don’t have a lot to say about it. But one of them spoke of her experience in this sector. Now, I found it amazing that she could be so disconnected and so disengaged from this sector to be speaking in support of this bill when the sector have overwhelmingly spoken against it, and that member should be reflecting on how so quickly she got herself disengaged from this sector.

I listened to a colleague, Jan Logie from the Green Party, who quoted a submitter who said, “If you were truly sorry, you would listen.”, and actions speak so much louder than words. So to say that you’re sorry and then go and ignore the voices again and ram this through is not being sorry; it’s disrespectful of those voices.

I cannot understand why this Government wants to be so disrespectful to groups that come at this from such a point of expertise. VOYCE is the entity that stands for the voice of the young and care-experienced. There is nobody that knows better than this group and there is no one that is speaking more loudly on behalf of these young people than VOYCE, and to ignore them is just disrespectful and nothing short of unbelievable in the context of what has gone on in this sector.

It is very difficult to understand what is motivating the Government with this. Much has been said about the fact that it is only a very short time until the royal commission will be reporting back. Surely, surely, any Government making any decisions around something as important as the care and the safety and the wellbeing of our young people would want to be as well-informed as they possibly could. So it defies belief that this Government is ramming this bill through against so much opposition.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori) (remote): Tēnā koe e te Pīka. Tēnā tātou e te Whare. I too am struggling to speak. It is with huge sadness and resolve that I take this call on behalf of Te Paati Māori on the third reading of the Oversight of Oranga Tamariki System Bill and the Children and Young People’s Commission Bill. Sadness because I think of all our babies, our māmā, our whānau who will be negatively impacted by this legislation, who will struggle even harder to demand answers and transparency from the Crown. Resolve because I know that tangata whenua do not accept the passage of this legislation, do not consent, and that has been made clear to this Government time and time again. As such, we must stop at nothing to see these reforms overturned.

My first message is to everyone who has campaigned, advocated, passionately lobbied, submitted, and posted to try and stop what we are seeing happening before us this evening. Tēnā rawa atu koutou: thank you all. The Government may not have listened to you, but there are MPs in this House who have heard you; there are parties in this House that have heard you. Te Paati Māori has heard you and we will continue to work together to fight with you to protect the w‘akapapa of our mokopuna.

My second message is to the Labour Party. You had every opportunity to listen and respond to the concerns but have failed to do so at every stage. Of those who submitted to the select committee, only eight were in support of the bill, while 311 opposed the bill. Included in this were dozens and dozens of kaupapa Māori organisations and agencies representing the children’s sector. Labour, you have ignored those with lived experience, who know what it’s like to be stuck in a system, to feel unsafe and desperate. You’ve told them you know better. You say you cannot afford to wait for the Royal Commission of Inquiry into Abuse in State Care, despite taking since 2018 to get to this point.

After the committee stage, we saw a range of excellent Supplementary Order Papers from Jan Logie and Karen Chhour which were not supported by the Government. Just today, Labour have voted down a motion from Jan Logie to refer the bill back to select committee so that consideration of the deep and wide-ranging concerns can continue. On something as important as the oversight and monitoring of child protection agencies, Government should be seeking as broad support as possible, not just from parties in this House but, more importantly, from the advocate frontline workers who dedicate their lives to caring for and protecting w‘akapapa of tamariki and mokopuna.

Instead, what we have seen is Ministers belittling Māori and community organisations by implying that they don’t understand the bill. Instead, we’ve seen a refusal to engage with the most serious and gravest of the issues that have been raised by those with more expertise than anyone in the House. You are complimenting yourselves; no one else in the sector is. This is shameful behaviour. Bulldozing this bill speaks to the level of bullying arrogance that has crept into how this Government is operating. How many more babies do we have to bury before systemic change happens? You’re not in a position to talk about it. How long will it take for Government to step aside and devolve resources for Māori, by Māori? That’s a Treaty solution. That’s tino rangatiratanga.

And how can we expect full accountability and for whānau to demand answers when this very day the Labour Party is going to pass this bill, reducing the guarantees of their accountability, which will, in the words of Hāpai te Hauora, “perpetuate the harms and dysfunction of the current Oranga Tamariki system at disproportionate and irreparable rates”? Our systems of child protection were set up not to protect but to severe w‘akapapa. Let’s remember that—to attempt to disrupt and dismantle our traditional social units: whānau, hapū, and iwi. Well, the Crown failed in the attempt to “smooth the pillow of the dying race”; they did succeed in causing extreme and irreversible intergenerational trauma.

The pageant of these bills will be remembered as a shameful day in the history of the Labour Government. We will continue to fight, not one more child, to ensure the wellbeing of all our tamariki and mokopuna, our rangitahi, and support those who you refuse to listen to in Labour. We oppose this bill. Kia ora koutou.

GLEN BENNETT (Labour—New Plymouth): Kia ora, Madam Speaker, thank you, this evening. Obviously, it has been quite an evening. I’m glad—I’m glad—that there has been this amount of passion, this amount of concern, this amount of care for our tamariki, for our rangatahi.

This afternoon, it was a privilege to have one of my foster boys here in Parliament, showing him around—someone who has been through the system, who has come out the other side. We had a conversation around this legislation. For example, I asked him: did he know who the Children’s Commissioner was? He had no idea. Did you ever consider or understand who this was? And then, as I went through and listed off—because, in many ways, what I’ve heard this evening has been around this space with our Children’s Commissioner, that role that I value, but I see more value with this piece of legislation where it is this group of people with a lead Children’s Commissioner. But as I read through the list of Children’s Commissioners since 1989, when Labour established the Children’s Commission, I saw, as always, mostly men, mostly Pākehā men. So to see the diversity that we can bring with the Children’s Commission, when we can have a Commissioner that’s around disability, that’s around our Pasifika, that’s around Māori, that’s around other spaces and places within our society, I think that brings richness—that brings richness—into this space.

Now, this will be reviewed. And this is part of legislation that will be explored, because it will allow time, one, for it to be imbedded, but, secondly, it will allow time in terms of when the royal commission comes back in its finding and recommendations. As part of this legislation, it will be considered, it will be reflected on, and will then look to be incorporated into what is to come in this future piece of legislation.

I am in this House for our rangatahi and our tamariki. I would not be supporting this bill if I did not believe it was going to some way to the safety and the protection of our children and of our young people, and I am confident. We need to do something. I believe that this is a way forward, and I commend this bill to the House.

MAUREEN PUGH (National):Thank you very much, Madam Speaker. I too stand in opposition to the Oversight of Oranga Tamariki System Bill and Children and Young People’s Commission Bill in their third reading here tonight. And I stand alongside every party, and the members of those parties in this House—except for Labour—in opposition to this bill, which, sadly, will become law today because Labour is using its absolute majority to run roughshod over the process of legislative change. It’s ignoring the huge majority of submitters who are seriously concerned about the outcomes for our children, and that’s been articulated very well in the House tonight. Of the hundreds of written submissions, the 90 oral submissions that we heard, eight submitters were in support of this bill.

I say today, because I want to ensure it’s on the record, that the arrogance and the ignorance of the Government to the process and to the people was demonstrated with absolute clarity when the submissions were opened on 22 December and closed on 26 January, when most people were wrapping up their year to spend time with family and to enjoy a well-earned break, or to go on their holiday jobs. They were not intending to be reading a bill and preparing submissions on such an important issue, and there was absolutely no reason for the timing around that. It could have been extended. It could have been pushed out, because that would have ensured that those with an interest in this bill were well informed and could pool together for their submission process. But I do give credit to those who did make the time and who did present such passionate pleas to the Government to stop this bill and not proceed with this legislation. But here we are tonight.

Now, the Government’s not famous for its preparation for new policies, and if I can allude to the cost of living payment—it’s one such example where the Government, even against their own expert advice, went ahead with that distribution. But, in the case of this bill, the Government has gone to the absolute other extreme. Now, what they’ve done is they’ve had the ombudsman’s office working on the implementation of this bill for over a year. So the IT system is in place, the staff training is in place—and I think that also demonstrates the arrogance of this Government in establishing the form that a bureaucracy will take before the function has been agreed to by the community, through the submissions process to this bill.

As we’ve heard from many of the colleagues tonight, running parallel to the passage of this bill through Parliament is the royal commission of inquiry into the abuse of children in State care. As the commission itself states—and I quote—“This royal commission is bigger, broader, and has more powers than any other inquiry undertaken in New Zealand. It has the capacity to make recommendations that, if implemented, will transform the way we care for children, young people, and vulnerable adults in the future.” Now, waiting on the recommendations of that inquiry, based on the testimony of thousands of survivors, is worth the wait.

There will be recommendations on the Oranga Tamariki (OT) system and its failings, which will guide a new way of doing things and, if children were truly at the heart of any policy change, the best information would be used to guide that change, and the inquiry will provide the absolute best advice. So far in that inquiry, nearly 2,200 survivors have shared their experience. The inquiry team itself actually says it cannot make any findings, reach conclusions, or make recommendations without hearing the voices of those who have lived the experience of State or faith-based care. It is the same for this bill and, to do justice to those people who have the most invested in the change—our babies, our children, our young people—this legislation needs to stop. But, instead, what we found was Minister Sepuloni making last-minute changes to the Government’s own bill after the select committee had done its work, and that’s only because of the overwhelming pressure that was coming from the public and the Opposition.

So I make no excuse for being extremely cynical about the Government’s and the Minister’s last-minute inclusions, which are simply words like “the best interests of children and young people”, “more explicitly providing for the participation of children and young people”, or “more explicitly requiring the Monitor to have child protection responsibilities”. Now, these very issues were discussed in the select committee and were rejected in changes to the bill by the Government members. Only after the ongoing pressure did the Minister finally intervene and put those words into the bill. So, when it comes to this bill, putting in last-minute wording to appease public pressure will not translate into better outcomes for children.

This bill separates the advocacy and monitoring roles that are currently undertaken by the Office of the Children’s Commissioner, and one of the main concerns with moving the oversight into ERO—the Education Review Office, and does that sound like the greatest fit?—was the independence. That was raised over and over again through the process by submitters. It doesn’t matter how you look at it, ERO is a Government department, and the Minister can say all she likes but a Government department is still subject to ministerial control.

For those whose lives are affected, they need independence and a strong degree of trust. The Children’s Commissioner has that trust and independence, and it’s been built up over the 32 years that that office has been in place. It’s already where children and young people know to go for their advocacy. This was the overwhelming feedback from submitters to the select committee. If, as we’ve heard already tonight, there was a problem with the Children’s Commissioner’s office being able to deal with its workload, then simply resource that office better so that it can deal with the workload. It didn’t need this wholesale change at this point in time.

The Government did make a very big deal, and has done tonight in speeches from their members, about this need for separation between advocacy and monitoring, but there was no evidence presented at all to support that argument. I even recall one submitter suggesting that the bill should be renamed the “Oranga Tamariki System Oversight Bill” because that’s actually what it will do. It’s going to monitor the systems that are in place but not the outcomes for children. The Government doesn’t measure outcomes—and there’s reasons for that—because they can’t deliver. But, in this case, it’s the lives of our most precious young people who will be affected by the change in this legislation. You can be sure that every NGO, and every community group, and every person that has lived that care-experienced life will be watching to ensure and hold this Government to account that things don’t slide back any further than they already have.

I’m going to run out of time for all of my points that I wanted to make, but the last point I want to make is around this bill and how it’s not actually going to change any of the practices within Oranga Tamariki. It’s not going to help unwind the complexities within the OT system—in fact, it will make it worse—and it certainly isn’t going to help recruit more social workers. It’s adding more complexity. But I want to speak directly to Tupua Urlich from VOYCE - Whakarongo Mai: Tupua, keep speaking, because your voice matters. I’ll finish with a quote that I believe sums up this bill, which came from a group during the submissions—Mana Wāhine Kōrero: “This is more shuffling of the deckchairs on the Titanic, and the Government are the violinists.” Thank you.

TĀMATI COFFEY (Labour): Thank you, Madam Speaker. Child protection, especially in a New Zealand context, is always emotive. We’ve long-known that policy can be driven by moral panic, overdetermined by either the death or abuse of children while at home or while in care. So when speakers of this House stand and they speak authentically about this issue, it is a real issue. It’s an issue in all of our communities around the country.

The previous speaker spoke about how terrible this bill’s going to be, but, actually, it was her Government that sat on their hands for so long and did nothing to actually really address the root causes that were systemically wrong in our child protection agencies. So I thank the Minister for actually stepping up to the plate and choosing to do something that she believes is actually going to make a real difference for the future of our systems in New Zealand and the way that we look after our children.

But this journey isn’t a new thing. This journey started back in 2017. It was underpinned by our Government’s focus and commitment to overhauling Oranga Tamariki. That’s right, people have forgotten that; that, actually, we were the ones that stepped up to the plate in Government to say that we are going to reform this and we’re going to do it with prudence, as well.

So the 2018 Beatie report highlighted how inadequate our system of oversight really was, which is why we acted really quickly to ensure that that oversight was strengthened. And, yes, we’ve had a robust select committee process, but yes, we’ve also made some changes too. We’ve retained the Chief Children’s Commissioner. We’ve strengthened the independence of the monitor. We’ve reduced the review period from five years right the way down to three years. Because, you know what, it’s OK to admit that we’re trying to change the system that desperately needs changing. Being able to shorten that period in which a review takes place is, I’m sure, welcomed by many around this House.

This is a very necessary piece of legislation. I thank the Minister. I thank all of those people that have contributed to it. I look forward to the review in three years’ time so we can look over our shoulder and actually see how this has gone. If changes need to be made, let’s make those changes, but let’s not be afraid to actually push on and try to do as much as we can with the time that we’ve got for the benefit of our children, our tamariki, and our mokopuna yet to be born. I commend this bill to the House.

A party vote was called for on the question, That the Oversight of Oranga Tamariki System Bill be now read a third time.

Ayes 64

New Zealand Labour 64.

Noes 55

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

Motion agreed to.

Bill read a third time.

A party vote was called for on the question, That the Children and Young People’s Commission Bill be now read a third time.

Ayes 64

New Zealand Labour 64.

Noes 55

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

Motion agreed to.

Bill read a third time.

Bills

New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill

Third Reading

Standing Orders

Sessional

Hon DAVID PARKER (Attorney-General): I present a legislative statement on the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill.

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

Hon DAVID PARKER: I move, That the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill be now read a third time and, in accordance with a determination of the Business Committee, Government notice of motion No. 1 in the name of the Hon Chris Hipkins relating to a proposed sessional order regarding declarations of inconsistency be agreed to.

DECLARATIONS OF INCONSISTENCY

1 Purpose

The purpose of these rules is to provide for the House’s procedures in association with the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Act 2022.

2 Definitions

For the purposes of these rules,—

declaration of inconsistency means a declaration—

made by a court, and in respect of which section 7A(1) of the New Zealand Bill of Rights Act 1990 applies, or

made under section 92J of the Human Rights Act 1993, and in respect of which section 92WA(1) of that Act applies

Government’s response to a declaration of inconsistency means a report advising of the Government’s response to a declaration, which a Minister must present under—

section 7B of the New Zealand Bill of Rights Act 1990, or

section 92WB of the Human Rights Act 1993

notice means a notice that is presented by the Attorney-General in accordance with—

section 7A(2) of the New Zealand Bill of Rights Act 1990, or

section 92WA(2) of the Human Rights Act 1993.

3 Notice of declaration of inconsistency

A notice that is presented by the Attorney-General, bringing a declaration of inconsistency to the attention of the House, is published under the authority of the House.

4 Referral of declaration of inconsistency to select committee

(1) When the Attorney-General presents a notice, the declaration of inconsistency that the notice brings to the attention of the House stands referred to a select committee for consideration.

(2) The declaration of inconsistency is allocated by the Clerk to the most appropriate select committee.

5 Select committee consideration of declaration of inconsistency

(1) A select committee to which a declaration of inconsistency is referred considers the declaration and reports to the House.

(2) In its report on the declaration of inconsistency, the committee may—

make any recommendations to address the declaration, and

include any other recommendations as the committee sees fit.

6 Time for report on declaration of inconsistency

(1) The select committee considering a declaration of inconsistency must finally report to the House on it before the time for report set out in paragraph (2).

(2) The time for report is four months after the date on which the Attorney-General presented the notice relating to the declaration of inconsistency, unless the Business Committee determines a different time for report.

7 Select committee report on declaration of inconsistency

(1) A select committee report on a declaration of inconsistency is set down as a members’ order of the day under Standing Order 254(4), but is taken together with the debate on the declaration of inconsistency that is held under rule 10.

(2) Paragraph (1) applies despite Standing Orders 72 and 74(4).

(3) Standing Order 256(2) applies to a committee’s report on a declaration of inconsistency (no Government response is required under that Standing Order).

8 Variation of deadline for Government’s response to a declaration of inconsistency

The Business Committee may, for any reason, vary the usual six-month deadline for the Government’s response to a declaration of inconsistency by determining a different deadline (see section 7B(2)(b) of the New Zealand Bill of Rights Act 1990 or section 92WB(2)(b) of the Human Rights Act 1993, as applicable).

9 Government’s response to a declaration of inconsistency

(1) The Government’s response to a declaration of inconsistency is published under the authority of the House.

(2) When the Government’s response to a declaration of inconsistency is presented, a debate on that declaration of inconsistency is set down as a Government order of the day under rule 10.

10 Debate on declaration of inconsistency

(1) The debate on a declaration of inconsistency is the debate on—

(a) the declaration of inconsistency itself, and

(b) the select committee’s report on the declaration of inconsistency, and

(c) the Government’s response to the declaration of inconsistency.

(2) During the debate on a declaration of inconsistency,—

(a) a Minister moves a motion to take note of the declaration, and

(b) during their speeches, members may ask questions to the Minister, and the Minister may reply, in the same manner as comments and questions on a ministerial statement.

(3) The debate on a declaration of inconsistency must be held no more than six sitting days after the date on which the Government’s response to the declaration of inconsistency is presented, unless the Business Committee determines otherwise.

(4) Standing Order 74(1)(a) and (b) and (2) does not apply to the order of the day for the debate on a declaration of inconsistency.

Could I begin by saying thanks to a number of people. The responsibility for the protection and enhancement of civil liberties in New Zealand, when in Government, is shared between the Minister of Justice and the Attorney-General, and the Cabinet paper that kicked off this process was authored by both the Hon Andrew Little and myself, as Attorney-General. Now, of course, the Minister of Justice is the Hon Kiritapu Allan, and she kindly allowed me to make the first speech in this third reading and I appreciate that.

Can I also give my thanks to all of the other parties in the House that served on the select committee. We deliberated through that select committee—it was heard at the Privileges Committee—and allowed as much time as it took to reach, essentially, an accord around the committee that we were landing this in the right place. Those select committee deliberations took place over two parliaments. It started in the last Parliament and continued in this Parliament.

The first reading of this bill that we’re considering tonight was in May 2020, and members can see from the effluxion of time that we haven’t tried to push this through with haste. We’ve actually tried to take everyone with us.

This is the most significant change to the New Zealand Bill of Rights Act since the New Zealand Bill of Rights Act was passed in 1990. It’s certainly not as significant as that piece of legislation, but it’s probably the most significant constitutional change that I’ve been at least partially responsible for since I’ve arrived here, and I want to explain a bit of the history and why I believe this is a very important advance at this time.

When the New Zealand Bill of Rights Act 1990 was passed, earlier iterations of it proposed that we would confer on the courts the jurisdiction to strike down primary legislation. The Parliament of the time, in 1990, thought that that was wrong and that the conduct of the executive and other lower-level decision makers within the government apparatus should be able to have their decisions quashed by the courts in respect of decisions that infringed the New Zealand Bill of Rights Act but that primary legislation passed by this House should not be able to struck down by the courts. I think that Parliament was right back then to narrow the New Zealand Bill of Rights Act in that way, and that remains good in principle today.

I look around the world at the moment, and I see a lot of the challenges that are faced by democracies around the world trying to manage current events, and I think that the system of Government that we have in New Zealand is a very good one for us to have at the moment. I like the fact that we have a power that is pretty clearly ensconced within the elected Government of the day, who control, effectively, the votes in Parliament through the majorities that they generally put together through a coalition under MMP. That gives the responsibility of the Government—the Government’s got nowhere to hide if things are going wrong. They really do have the power and responsibility to change things up when they need to be, and then the people of New Zealand can get rid of us every three years. Now, I’m one of those people who think it should be every four years, but we can be cast aside every three years. A new crew can come in to fix up mistakes that we make or make things better according to their view of the world, if they’ve convinced the voters of New Zealand that it’s time for a change.

I also have become increasingly aware that our system is underpinned by very, very strong conventions that still hold sway in New Zealand. The conventions that we adhere to in this House through the Standing Orders, the way in which we relate to the fourth estate and the way in which they relate to us, the way we respect the independent role of the courts, the way in which we have other strong institutions like the Commerce Commission or the Law Commission—all of these ingredients feed into a very sophisticated democracy in New Zealand. The role of councils, regional councils, and district councils—we’ve got a very good system.

I think that if you compare it with other countries, like the United States, they don’t seem to be able to grapple with current challenges like gun control or abortion or controls on campaign financing, where their system is increasingly dominated by the private wealth interests of some very wealthy people who, effectively, spend billions of dollars at election time to distort election results. All of those issues have been worked through over the years in New Zealand by our Parliament under our system.

That said, the protections in the New Zealand Bill of Rights Act are very, very important, and perhaps they’re a bit too easy for us to ignore when Parliament gets it wrong, because there are times when Parliament passes legislation which we might think is consistent with the New Zealand Bill of Rights Act but, actually, on closer reflection, it isn’t, and sometimes it deliberately is passed when it is known to be inconsistent with the protections in the New Zealand Bill of Rights Act.

Hon Paul Goldsmith: It doesn’t mean that’s wrong.

Hon DAVID PARKER: It doesn’t mean that it’s always wrong—I agree. Sometimes it will be wrong, and sometimes we should reconsider that at the Parliament.

At the moment, there is no easy route back for Parliament to reconsider issues when the courts determine that we might have gone a bit far—or they think that we have gone too far—and that’s, essentially, what this bill is about. It’s about creating what is sometimes called a halfway house under the New Zealand Bill of Rights Act, where, although the court hasn’t got the right to overturn primary legislation, they can draw Parliament’s attention to the fact that they think that we’ve gone too far, and through the processes that are enabled by this bill and some related changes to the Standing Orders, it enables us to run a process to give further consideration to that.

At the end of that consideration, the Parliament will have a debate and the executive will have a say as well, and Parliament can, effectively, say, “Well, we think that we’re right and the courts are wrong. We’re elected. We take these decisions, and if people disagree with us, they can get rid of us and get a new Government, but we think the status quo is justified.” Perhaps what might more often happen is that the Parliament might say, “Well, maybe we could modify the arrangements a little in a way that make them rights-compliant.”, or, on other occasions, a new Parliament could say, “With the benefit of hindsight or in the light of the advice that we’ve had from the senior courts, we should repeal the legislation and deal with the issue that way.” So that’s what this bill does. It will change the way in which civil liberties are protected in New Zealand in what, in my opinion, is an important way.

This came to my attention following some of the constitutional reviews that we’ve had. I sat on a select committee chaired by a member whose name I forget. It was chaired some time ago in an earlier Parliament, and then there was the Constitutional Review Committee, which Michael Cullen and others served on, and this was an idea that came forward—that we look at this halfway house under the New Zealand Bill of Rights Act.

I’m going to say something about what I think this implies in respect of how far the New Zealand Bill of Rights Act itself should reach. I know there are some people who would say that we should put social rights like a right to housing, for example, or a right to an income level, or environmental rights like climate change, etc., into a bill of rights framework. I don’t believe we should, and I think we should remember that if we were to do that with this legislative framework in place and the courts were to make a declaration of non-compliance, we would be inviting them into an increasingly political space where there are value judgments to be made, including as to the allocation of resources and the tension between different issues that are perhaps better judged in this House than by the courts. So, for that reason, I’m not someone that wants to extend the New Zealand Bill of Rights Act to those issues. Though there may be other legislative instruments that can protect those issues in better ways than they currently are, I would not favour them being put into the New Zealand Bill of Rights Act, because it would invite the courts too far into our territory.

Can I thank Professor Janet McLean, who was the adviser to the select committee, and the many submitters, legal academics, and civil liberties specialists—the most eminent in the country—who came before us and provided their advice to us.

I won’t go through the detail of the changes that were made by select committee, which have improved the bill. Suffice it to say that the bill allied with the changes to the Standing Orders creates a process that when the courts make a declaration of inconsistency with the New Zealand Bill of Rights Act, the Attorney-General has to present that to the House, the Clerk of the House refers that to a select committee, and the select committee report back to the House is eventually debated, as is the response of the executive. So there is some response required from this place to what will be rare but important declarations of inconsistency by the higher courts. I commend the bill to the House.

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

Hon PAUL GOLDSMITH (National): Thank you, Madam Speaker, and it’s my pleasure to speak on behalf of the National Party on this legislation that we are supporting: the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill. First up, I agree with the Minister who has just spoken, David Parker, who said that going back into the history of this, when there was a proposal for the ability for senior courts in New Zealand to strike out legislation, as the US Supreme Court does, which breaches the constitution there and it would have breached the New Zealand Bill of Rights Act here, that would have been a step too far. I agree that no system is perfect. If you look around the world, there are many imperfections with our democracy, as there are with the British democracy and other places all around the world, but the politicisation of the courts, which is an inevitable consequence of that power, I don’t think would be helpful and would fundamentally change the nature of how things work in this country.

I agree with the Minister, it’s far better when you’re trying to balance various rights, because quite often rights can sometimes be conflicting, and to work your way through that—it’s appropriate for elected representatives to do that. As the Minister said, if they get the judgments wrong or the public doesn’t agree with them, they get thrown out and that’s how the system works. I for one think we should do that on a regular basis every three years, rather than four. And only because I just don’t think, in a system that doesn’t have so many checks and balances, doesn’t have an Upper House and other issues—I think there’s a good argument for reasonably regular opportunities for the population to have their say, but that’s another matter for another day.

So the proposal here is—my sense, and why we support it, is it just lifts up a notch the level of gravity and consequence for when Parliament decides that it will press ahead with legislation that may be close to the wind or arguably breach the New Zealand Bill of Rights Act, and Parliament does that on numerous occasions for good reasons. But if the court finds that it has, in its opinion, breached the New Zealand Bill of Rights Act, this sets up a mechanism where we have to take that seriously and actually come back to the House, not in any flippant way, and just say “Well, tough luck. That’s what we’re doing and good luck to you.” Instead, we set up a process and actually have to confront that. The Government of the day has to lay out a clear case as to why they think it is justified. And then if the court says it clearly breaches these rights and asks, “Is that breach justified?”, it may come to the conclusion that it doesn’t think it is justified, and the House might say, “Well, sorry, we do think it is justified.” Ultimately, I think that’s appropriate in the system that we have and if the people don’t agree, like I say, it will be thrown out. So I think that’s important.

I suppose the only point I would make in relation to the broad issue is that this is a contested area and these matters are contested. I can think of three recent examples where these issues have been raised—one has been with the three-strikes legislation, which the National Government passed and many people were not happy with elements of that and, in particular, with the disproportionate sentences that arose from it, and, from my point of view, that was the purpose of the legislation, that they would be disproportionate, but others certainly thought they were grossly disproportionate. So there was an argument where there was a difference of opinion there, and Parliament pressed ahead and now it has been repealed by another Government, and I suppose that’s how the system should work.

The other two examples have been in relation to local bills: the Rotorua bill and the Canterbury bill. The only point I’d make there is I just do hope that we’ll have, I suppose, some consistency in those areas. We’ve had the Ministry of Justice say the Rotorua bill—which moved away from the principle, and the Minister spoke of strong conventions in our democracy, and I think one of the strong conventions in our democracy is that every person should have an equal vote in the system and their vote should carry equal weight. This Government is moving away from that by supporting—it didn’t support the Rotorua bill, because the Ministry of Justice advised the Attorney-General that it did breach the New Zealand Bill of Rights Act and it wasn’t justified. But then, very strangely, when it came to the Canterbury bill, which does a similar thing at the Canterbury Regional Council, breaching the equal voting rights there, we got a very different view from the Ministry of Justice saying, “Well, yes it did breach the Human Rights Act, but it’s justified by the Treaty.”, and there was no strong or clear argument put forward. I have every confidence that the court, if it does start coming and making opinions here, that they’ll do a better job, frankly, than what we’ve seen from the Ministry of Justice in the last few months in relation to those two bills where the advice has been, on the surface, rather contrary.

But that aside, I still think the fundamental point of this bill—which is ensuring that Parliament, having kept for itself the ability to pass laws and not have them struck down by the courts in that relation, which is an assertion of parliamentary supremacy when it comes to lawmaking. Having done that, I don’t think it is unreasonable if the courts were to declare that it was inconsistent with the New Zealand Bill of Rights Act to go through a process, such as outlined in this bill, where the Parliament has to stand up, own it, justify it, or, if they’re of a mind to, change it. But they can’t just shrug it off and ignore it. I think that’s appropriate. On that basis, we support this bill.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Speaker. I don’t intend to speak too long after two very good speeches, if I can say that, from Mr Goldsmith and, of course, the Attorney-General, the most reasonable and thoughtful member in the House, to be sure. But can I say what a privilege it is to actually be speaking and be involved in this bill, which is really one of those pieces of legislation about how the limits of the constitution work with each other—and I do see that I have spoken for seven minutes already, according to the clock, but that’s all right. I must have been speaking very slowly indeed.

But, look, can I just say that this is a sophisticated answer to a very difficult problem, because if we look at some other constitutions, we have either the absolute sovereignty of Parliament or the absolute sovereignty of the courts, whereas this ameliorates that and, essentially, it says that through a series of steps, Parliament, the courts, and the executive have to have a conversation with each other. There may be a declaration of inconsistency, as Mr Goldsmith said. A decision of the court which does that will be very thoughtful and carefully worked through, and that is then notified to Parliament, and Parliament, through its select committee process, is expected to examine that and to further put the case, if you like, for whatever solution they respectfully might think of to the executive, who in turn is expected to respond. Now, that’s not going to be a quick process. The court process itself could take several years because it’s triggered by a final decision, which means the conclusion of any appeal rights.

But the fact of the matter is that unlike some of the situations where we’ve seen—and the three-strikes legislation has been discussed already. The kinds of difficulties that the court had with that legislation were because it was so repugnant to some of the rights held so dear, and those decisions are difficult to read on the words of the legislation as it then stood. But this kind of framework enables the courts to put their views in a way which demands a response. It isn’t simply saying, “We’re striking it down.” It’s saying, “We don’t see this the same way that Parliament has, and we want to hear from Parliament and the executive about that.”, and that’s a much more nuanced approach than the kind of approach we’ve seen in some other jurisdictions which are all or nothing.

So I think, as was said earlier, this shows that we are a mature democracy and also a unique democracy—a democracy that looks at different ways of doing things that suit our quite unique committee structure in Parliament—and the fact is that we’re a relatively small nation and we can do things in a very personal and almost intimate way, even though we’re dealing with matters of State. So I think that this is a real model. I hope it will be looked at as perhaps a way that we can have an ongoing conversation around the balance to be struck between rights and Government policy and between parliamentary sovereignty and judicial integrity, and I absolutely commend this bill to the House.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Speaker. The Attorney-General and I have a few things in common. We both hail from the most beautiful part of Aotearoa. In fact, I think the member was born in Roxburgh—is that right?—which was actually founded by a Woodhouse and his brother, my great-great-grandfather, who found gold in the Teviot River. We both love this place and have been here a wee while. We also like really complex policy challenges. I have been impressed with Mr Parker’s approach to that over the years. It was my privilege to be a member of the Privileges Committee in both the 52nd and 53rd parliaments, when this issue first arose. I must confess that I was probably a bit glib about it when it first came before the Privileges Committee and at the Attorney-General’s response to it, where he and the Minister of Justice had taken a Cabinet paper that I wondered whether, at that time, was necessary. In the ensuing two years, I became not only satisfied that it was but very pleased with the level of engagement and discussion that the committee embarked on through this bill process. As the Attorney-General has said, we heard from some very, very eminent jurisprudence scholars, and that very much helped our consideration of this bill.

The Attorney-General has talked a little bit about other jurisdictions, and I think it’s worth reflecting on that, because I think we have a very sound constitutional framework in this country, even if we don’t have a constitution, but it has some particular features in it. Other countries have different structures, namely a bicameral system, and I think, if we think of Westminster and the process of passing legislation through both the Commons and the House of Lords, it’s not unusual for various reasons for the Lords to send a bill back to the Commons and say, “We think you should have another look at these aspects of the bill.” That’s kind of a belts and braces approach that we don’t have, because of our unicameral system. The Minister mentioned the United States. He’s probably right about the outcome, but, actually, the process and the constitution that they have is a very important one also.

Hon David Parker: But impossible to change.

Hon MICHAEL WOODHOUSE: Yes, that’s right. And that’s why I don’t support a constitution. I think we have a good framework in place, because, actually, it’s a handbrake on executive power and congressional power, because it, basically, says, “The Government shall pass no laws that could do certain things.” And that’s the difficult discussions they’ve had about the First and Second Amendments, and the 14th Amendment over the last few years. But we have a proportional system that, with the exception of this Parliament, has actually acted as, I think, not the same kind of scrutiny, but I think perhaps a moderator of, in some cases, and perhaps an enabler in others—and I’ll come to the three-strikes stuff in a minute—but it actually enables this Parliament, together with the requirement of the Attorney-General, to provide a vet on the impact of legislation on the New Zealand Bill of Rights Act, for us as a Parliament to actually have those conversations before legislation is passed.

Now, the courts’ role in that after the event, and the Supreme Court ruling that’s, basically, been the catalyst for this legislation, is, I think, important, but it’s also really important that we remind ourselves that this place is sovereign. We have exclusive cognisance. We have the ability to pass laws even if, in the opinion of either the Attorney-General or subsequently the courts, there might be a finding that there is a breach potentially—or an inconsistency rather; not a breach—with the New Zealand Bill of Rights Act. This is really important because, in my experience, passing bills that are a bit edgy in respect of the New Zealand Bill of Rights Act generally carries with it a consideration of those issues as we pass the bill. I think the three-strikes legislation is an example of that. The legislation on prisoner voting rights that precipitated this process is also a good example of that. And, of course, the deprivation of liberty is indeed a prohibited thing under the New Zealand Bill of Rights Act unless it’s justified under section 5, I think it is, incarceration for convictions is the obvious one.

Now, when it comes to the prisoner voting rights issue, of course, previous to the member’s bill that was passed some years ago, and now that that’s been repealed, if someone is facing a sentence of three years and one day, they lose their right to vote, but if they have a sentence of two years and 364 days, they’re now going to retain the right to vote. I mean, that’s a finely balanced thing. I don’t think anybody reasonably could say that one is a deprivation of rights and the other isn’t, but Parliament has made a decision and Parliament should be sovereign.

Hon David Parker: But one’s more arbitrary than the other. That was the court’s point.

Hon MICHAEL WOODHOUSE: Yeah, well it is an arbitrary number, and people will always fall one side or the other on that.

Now, you’ve got to wonder—one wonders—whether the courts might, in their sentencing, obviously restricted by the Sentencing Act, consider some of the impacts of a harsher sentence vis-à-vis a lighter sentence.

I know, as former Minister of Immigration, that the courts wrongly—because Immigration New Zealand can still consider deportation, regardless of whether a conviction is entered—sets aside convictions because it believes that the punishment outside of the court sentence might not fit the crime. So courts do have a little bit of activism they can embark on, and I have no strong opinion on that one way or the other. But the point really is that this place does need to remain sovereign, and I think we’ve landed in a pretty good place both with the third reading of this bill, when it’s passed, and also the next order of the day, which the consideration of a sessional order which will lay out in Standing Orders what should happen when the courts do declare, in their view, an inconsistency with the New Zealand Bill of Rights Act. That was something that the Privileges Committee looked at in some detail with the assistance of the Standing Orders Committee to make sure that a convention that’s almost entirely, I think, being followed that legislation doesn’t set out what this place should do or how it should do it; that is rightly the domain of members of this House through the Standing Orders process. I think we’ve struck the right process for dealing with this.

Some of these things could be very complex, and we’ve set an arbitrary time limit on it for the Government to respond to declarations of inconsistency and report back to the House. I think it’s worth pointing out that for many of those that will be well within an appropriate time frame. But there could be some really complex situations that may require a longer period of time, and the process, the Standing Orders, I think, have allowed future Governments to report at the six-month point but then give the issue more time. I think that’s an entirely appropriate response.

Like the Attorney-General, I don’t think this is something that we’re going to be troubled by too terribly often, but when we do, we now have, I think, a sensible framework for being able to consider the declarations that the courts may make. I continue to aspire to, I suppose, the hope that this Parliament will also take the Attorney-General’s section 6 vets very seriously and consider them in our deliberations of future legislation, as I think we have, by and large, in the past. But I think the court’s intervention in this area has actually reinforced the need to take both, the Attorney-General’s opinion and the court’s judgments on these things, very seriously. I’m confident that we’ll be able to do that.

HELEN WHITE (Labour): It’s a privilege to take a call on a piece of legislation that is so well-thought-out and is a rather deep piece of work, and it’s something I’d like to acknowledge the speakers on both sides of the House for really revealing in their speeches tonight.

Parliamentary sovereignty is so important, and it is always something that there will be debate about but I fall firmly on the side of believing that it’s very important that we always protect it, even when we don’t necessarily like the consequences of that and we may see something that we think breaches and offends something fundamental to us, like a human right.

What this bill does is it creates a process where, if those things that are most enshrined as fundamental to us—and they have been brought into legislation like the Human Rights Act and the New Zealand Bill of Rights Act—they are actually things that we take very seriously. Not only do we do that but this is a beautifully crafted piece of legislation because we’re required to talk about it. We’re actually required—the Minister is required to answer questions about it. It’s a situation where there will be some thought given to the matter, perhaps after the heat and the passion of the debate has passed.

This piece of legislation came about partly because of a case about prisoner voting rights. People in that situation had very, very little alternative remedy other than to go to the courts and they gave a declaration. This is what will happen to the declarations now. This is a very good process and I’m thrilled to be part of a Parliament passing it. I commend the bill to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): I call on Golriz Ghahraman, who is connecting with us remotely.

GOLRIZ GHAHRAMAN (Green) (remote): Madam Speaker, the sound seems to have cut off, but I feel like you called my name. Is that right?

ASSISTANT SPEAKER (Hon Jenny Salesa): Yes I did. Golriz Ghahraman, go ahead.

GOLRIZ GHAHRAMAN: Ha, ha! Thank you, Madam Speaker. It’s a pleasure to speak on this bill: one of the significant pieces of constitutional law reform that this Parliament and Government have undertaken. And I do want to congratulate the Attorney-General for his courage and leadership in responding to the Supreme Court’s finding that gave the higher courts, essentially, the jurisdiction to do just this. But without Parliament and Government’s response, and setting out a process, we wouldn’t have been doing right by our responsibility, in terms of branches of Government, to take human rights and the New Zealand Bill of Rights Act seriously.

I want to acknowledge, as well, the work of the Privileges Committee. I think, as we see across the House tonight, there is consensus because we as members did come together and work really, really hard, sought consultation and advice from members of the public, from experts, and came together to agree here. But, of course, the great credit must go to those members of the Parliament, the legal experts, the human rights experts from the Human Rights Commission to the Office of Human Rights Proceedings to the very authors of the New Zealand Bill of Rights Act, Sir Geoffrey Palmer and Sir Kenneth Keith, who came to our committee and told us off. And I don’t think any of us will really forget that, when they urged us to make this bill something that would be effective in terms of enforcement of rights, in term of upholding the work and the significance of the judicial branch of Government, in terms of upholding the significance of New Zealand as having a bill of rights. And as Sir Geoffrey Palmer said, successive Governments and Parliaments had let him down in not taking action on this before now.

So I think the balance—and as others have said—is struck right with this bill, in honouring parliamentary sovereignty, which is significant and paramount in our system, because we are the elected representatives; upholding the responsibility and accountability of the executive branch of Government to respond to us as an elected body, but also to the independent word of the judiciary; and, of course, the work of our judicial system. It’s not a system that’s particularly accessible at the best of times, but when somebody does get there and brings a case, and they do decide that rights have been breached and they do decide that those rights have been breached by a legislature, that we actually do need to come back here, consult, and then actually make our decisions again and debate the issues. So that balance is struck in terms of being both reactive and still upholding democracy.

And I do want to note that the pieces of legislation that have triggered this debate tonight and this bill are about democracy, and the first being the legislation—the blanket ban of the previous National Party Government of prisoner voting, where the Supreme Court said, “Absolutely not. You can’t use the criminal justice system to start to erode fundamental rights.” And then the next one that’s actually potentially the very first issue that will come before this House, pursuant to this piece of legislation, is the right of 16- and 17-year-olds to vote, because the New Zealand Bill of Rights Act does uniquely say that they can’t be discriminated against based on their age in terms of any of their fundamental rights, including voting. That’s gone to the Court of Appeal, who found a breach, and the Supreme Court has, of course, already heard that issue, and we’re waiting with bated breath for that decision to see if we’re going to debate that. And those are issues that sit very close to my heart, being about the extension and the health of our democracy.

So this is a great bill. It’s a great day for human rights lawyers; it’s a great day for my colleagues out in the courts, where I lived in my previous life; and, I think, a great day for the Hon Marama Davidson, who I know is in the House, who used to work for the Human Rights Commission. And so I think we’re doing right by the people that we serve, and I certainly commend the bill to the House.

DAVID SEYMOUR (Leader—ACT): Well, I rise on behalf of ACT, and as a member of the Privileges Committee that considered this New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill to support the third reading and the passage of this bill and also to support the proposals that this House, which cannot be subject to legislation, should amend its own rules. Both of these courses of action are designed in order that the declarations of inconsistency which are sometimes made by the court have a place to go, have a process to receive them here in Parliament. Those declarations occur when a court decides or the Supreme Court finds that this Parliament in making a law, or this Government, has wandered away, has violated the New Zealand Bill of Rights Act, has done something that is not consistent with a free and democratic society, or at least not a tolerable breach of the New Zealand Bill of Rights Act in a free and democratic society. This all takes place in the context of a very young nation.

It strikes me that our country, if you take its foundation as 1840, is really only a couple of lifetimes old, not much more. It’s also a very small nation; 5 million people could fit into dozens, if not hundreds, of cities around the world. That has led us to have one of the most anaemic constitutional setups of any country on Earth. If you think about it, most countries have some combination of a written constitution, of an Upper House, of states or provinces, sub-national governments. We are alone in the world, almost, having a single Parliament, a unicameral House, just one layer, that if you have a majority, you can theoretically do anything. It’s a winner-takes-all approach to democracy that is an outlier in the world’s democratic systems.

Hon David Parker: Moderated by MMP.

DAVID SEYMOUR: Somebody muffled—can you say that again, David Parker?

Hon David Parker: Somewhat modified by MMP.

DAVID SEYMOUR: He said, “Somewhat modified by MMP.” Well, he’s right about that, but as his former colleague Gaurav Sharma might say, “I’m not sure if that’s working as well as intended tonight.”! I didn’t expect to get heckled on this particular bill, I have to say, but, you know, that’s how the member wants to play.

Look, this constitutional anaemia that we have means that we have some of the most erratic lawmaking. Our policy is generally good, on average, but it also changes more rapidly than we would expect than other parts of the world. That, I think, is a real problem for people who are trying to invest, who are trying to plan their futures, and who are trying to make the most of their lives because they can’t be sure when this Parliament that is so powerful and so unrestrained by any constitution or Upper House or sub-national government can change the rules of the game so rapidly. In that context, I think anything that develops some basic rights of citizens is a very welcome development. Of course, our young small nation is gradually evolving those restraints.

The case of Taylor v Attorney-General just four years ago found that, actually, yes, the Supreme Court can say to Parliament, “Sorry, you got it wrong.” The question is: once that happens, what happens next? That’s a question that needed to be resolved. I think our Attorney-General, David Parker, and before him, actually, Andrew Little, have done a really, really good job. They have shown Parliament how constitutional change and important legal stuff should be done, taking this bill around the House, taking it to select committee, and getting the kind of consensus that allows all people to put aside political differences and say, “Yes, this is how our constitutional arrangements should be in New Zealand.” So I commend the Minister for the way that he has gone about making these changes. I only wish he’d go and talk to Kiritapu Allan about her current electoral law changes and suggest a similar level of comity and consensus might be found around them, rather than put through under a shortened select committee process towards the end of this year.

I think the process that has been arrived at is absolutely the right one because it’s been arrived at with a very delicate navigation of parliamentary sovereignty, but also accepting the reality that the courts have a role to play, that Parliament doesn’t always get it right, and that there does have to be an acknowledgment and a process where Parliament itself can work through what some might view as its own mistakes. That procedure is very straightforward and, on the face of it, it’s not a particularly long bill. Sometimes the best bills are short. It’s the old saying: I was going to write you a short letter, but I didn’t have the time.

This piece of legislation says that if there is a declaration of inconsistency at the court, then the Government has to respond and it has six months to do so. But there’s a parallel process where the Attorney-General has to inform Parliament that the declaration has occurred. Having been informed by the Attorney-General, the set of rule changes that are not in the legislation, but are also being debated tonight, will be introduced to Parliament such that this Parliament must then send the declaration—not the Attorney-General’s report but the declaration from the court—to an appropriate select committee. And the Clerk, who sits just in front of the Speaker, must choose which select committee to go to. That select committee then has four months to consider this declaration. It can, of course, call witnesses. It’s the master of its own destiny. It can get advice, it can consult the public, it can debate amongst its members, but after those four months, it must come back to the House and the rules say that the House should have a debate on the declaration.

The net result of this is that we haven’t undermined in any way the sovereignty of Parliament. Parliament remains supreme. Parliament is quite entitled to ignore the declaration, have the debate and carry on as it was. But what we have done is ensured that when a court issues a declaration that Parliament has breached the New Zealand Bill of Rights Act, then there’s a proper, open democratic forum for that to be debated.

That is a wonderful addition to our constitutional framework. It means that people’s concerns get ventilated in a democratic fashion. But it also solves what could have been a growing constitutional problem of a stand-off between two branches of Government, because without this, we could have ended up with the courts frequently telling Parliament that they got it wrong and Parliament being completely aloof to the courts. I don’t like annoying judges, because you never know when you might end up before one. So I think it’s a very positive thing that we’ve found a way for Parliament to accept what judges and courts say, acknowledge it, give the public an opportunity to be part of ventilating an issue that’s arisen in the courts, and then, ultimately, as the people who are actually elected in a democracy, make a decision about what to do about that in a fulsome, open, and transparent way.

So for all those reasons, and the context of our small, young nation gradually finding its way from anaemic constitutional beginnings to something more sophisticated, more democratic, and that is better at upholding people’s basic rights and freedoms, I think that what’s happening tonight is an extremely positive development, and we should all be very proud to be supporting this. We should all be very thankful for the way that our current and previous Attorneys-General have worked to shepherd this through the House, and other members and those public submitters that came to the Privileges Committee have contributed too. Without any more from me, I commend this bill to the House. Thank you, Madam Speaker.

ASSISTANT SPEAKER (Hon Jenny Salesa): Members, the House is suspended until 9 a.m. tomorrow morning. Pō mārie.

Sitting suspended from 9.56 p.m. to 9 a.m. (Wednesday)

TUESDAY, 23 AUGUST 2022

(continued on Wednesday, 24 August 2022)

ASSISTANT SPEAKER (Hon Jenny Salesa): Mālō e lelei, members. We will continue with the third reading of the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill. The next call is a Labour Party call.

Bills

New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill

Third Reading

Standing Orders

Sessional

Debate resumed.

CAMILLA BELICH (Labour): Thank you, Madam Speaker. It’s a pleasure to take a call on this bill, the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill. It’s an unusual bill in the sense that it has support from across the House, but I want to reflect on how significant that is. We as legislators don’t often agree on things, but one thing we do agree on in relation to this bill is the fact that the fundamental human rights, as outlined in the New Zealand Bill of Rights Act and in the Human Rights Act, are something that need to be held in great importance. Also, when we fail to get the balance right between two different rights or when we make a mistake, we need to be held to account for that, and this entire Parliament is standing here today and saying to New Zealanders that when we get it wrong, we not only want to be told that we got it wrong but we want to be given the opportunity to do something about it, and I think that reflects really well on our democracy.

As we’ve heard from other speakers, this came about through legal action that was taken in Taylor v Attorney-General. But what we’re doing here today is not only recognising the fact that the judiciary have seen it as appropriate to make declarations of inconsistencies when there is an inconsistency between the New Zealand Bill of Rights Act and the Human Rights Act but, actually, that we accept that decision and we want to do something about it. The process has been outlined by a few speakers previous to me, but, essentially, it will be that the Attorney-General will make a statement in the House within six days and then it will go to a select committee and then Parliament will need to respond within six months.

Now, it doesn’t stipulate, as others have said, how we should respond, but it’s really important that we do have to respond as part of this legislation. I want to also reflect, just as I finish, on how significant this is in relation to our human rights framework, which forms part of our constitutional arrangements. We’ve heard the Attorney-General say it’s one of the most significant changes since these Acts came into effect, and I want to congratulate the House and also send a message to New Zealanders that we take your human rights seriously and when we get it wrong, we want to be held to account.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on Chris Penk—five minutes.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Speaker. As others have said, we regard this piece of legislation as helpful for our overall constitutional arrangements—the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill.

I was actually very taken with the debate last night. I think that on all sides of the House, thoughtful comments were made about the way that the legislation had been advanced through this House. The Attorney-General spoke about bringing other parties along in that journey, and I think that’s highly appropriate. In the Opposition, we do let the Government know very clearly when we think they haven’t done a good job of being consultative, and so on, but I think it’s fair to give credit where it’s due and say that, actually, that process—which has not been unduly rushed, which has gone through the Privileges Committee in relation to how the House then responds to any such declarations—has been admirable. So we acknowledge and thank the Government for that.

Others have mentioned the point about the institutions involved in the different branches of Government, and obviously it’s important that this place remains supreme in the sense of lawmaking, but in the response to lawmaking, where it is felt by the courts that there have been laws passed that are not consistent with the New Zealand Bill of Rights Act, it’s appropriate to have an opportunity for that dialogue to happen—or that conversation, as it was characterised by Dr Duncan Webb—and I think that’s a helpful way of looking at it, considering that there is a view that can be expressed, in the first instance, actually, by the Ministry of Justice giving advice to the Attorney-General and the Attorney-General advising Parliament, and Parliament is responding in the way that it sees fit, which might actually be, of course, to pass legislation notwithstanding that there’s inconsistency. And then, per this bill, we’re confirming that the courts have the ability to make such declarations and committing, as an institution, that we will respond in some way.

I did just want to offer some thoughts, in my brief time available, about the situation where Parliament decides that a law will be passed, notwithstanding that the Attorney-General, who is a legal officer advising that Government—so his or her own party, let us remember, who would have a Government-led majority, maybe with other parties, and any individual situation. I think it’s worth reflecting on the fact that a Government that decides to pass a law, notwithstanding that the Attorney-General has said that it is inconsistent with the New Zealand Bill of Rights Act, is, effectively, deciding that the matter isn’t inconsistent with the New Zealand Bill of Rights Act, because the Government in that situation is saying, “Well, notwithstanding the possible inconsistency, we think this matter is important enough that it should pass into law anyway.”, which is not dissimilar to making an argument about justified limitations, whereby we say, “Well, yes, the right is being abrogated in some way, but the policy justification is strong enough, the threat that we’re responding to”—whether it’s a pandemic or earthquake, to use a couple of examples—“is such that there is a proportional response, and we’re determined to do it anyway.”

So I feel less happy with the idea that this House should have to respond to a declaration of inconsistency by the courts, when this House acknowledged in the first place that the Attorney-General had said that there was an inconsistency. On the other hand, if it hasn’t been picked up by anyone in this place that there is a potential inconsistency and the court brings it to the attention of Parliament and the executive, then that seems to me a really clear case that there should be a second look. In any case, we’ve decided and agreed—and, I think, with good faith on all sides—and acknowledged that starting point that Parliament is, ultimately, the lawmaker in the statutory way, as opposed to a common law way, and so I think that’s helpful.

One note of caution, I suppose, that I should offer in terms of our system of justice, and, therefore, the rule of law generally, is that because access to justice is so threatened at the moment—and this has been, you know, a longstanding issues and I don’t mean to imply that it’s been merely in the realm of the current Government; it’s been a longstanding issue, to be clear—if we’re going to have access to lawmaking and agenda setting through the courts, acknowledging that that’s a highly expensive, involved process that privileges those who have access to those resources and are articulate, and so on, that should give us pause for thought. Nevertheless, the intent is good, I think we’ve landed in the right place in terms of that conversation, and so, like others on this side of the House, I commend the bill to the House.

ARENA WILLIAMS (Labour—Manurewa): Madam Speaker, it’s a pleasure to rise and take this call, which was a Māori Party call, on the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill. Just to make the point that I want to thank all of the members in this House who have been responsible for having these conversations around how we introduce and have the discussion, as Mr Penk said, about rights in this House. Whenever we go through these processes as a House of updating and of considering carefully in each Parliament the way that we have these rights-based conversations, we firm up our posture on the process of considering rights in our law. It’s good to have these conversations regularly. It’s good to be able to have these debates in the House, and I want to thank all of the members, particularly on the other side of the House, for being involved here.

WILLOW-JEAN PRIME (Labour—Northland): Thank you, Madam Speaker, for the opportunity to take this brief call on the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill. I want to recognise the Privileges Committee. I am not a member of that committee, but I have been following the debate both last night and this morning. As I understand it, this issue came out of the Supreme Court’s decision in 2018 and, through the great work of the Privileges Committee, they put forward several recommendations to improve the initial proposed legislation. The bill seeks to create a statutory mechanism for bringing declarations to the attention of the House of Representatives, with the aim of facilitating consideration of the judiciary’s declarations by the legislative and executive branches of Government. I do really want to commend the committee for the work that they did and their ability to come to a unanimous decision on those recommendations, and so I commend this bill to the House.

JOSEPH MOONEY (National—Southland): Thank you very much, Madam Speaker. I rise to speak on behalf of the National Party on the New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill at its third reading. I’m pleased to be able to support this bill. This bill provides a mechanism for the executive and the House of Representatives to consider and, if deemed necessary, respond to a declaration of inconsistency made under the New Zealand Bill of Rights Act 1990 or the Human Rights Act 1993.

This bill is a positive development for New Zealand democracy as it will increase the scrutiny of legislation enacted by Government, which affects fundamental human rights. It’s essential that we highlight any of the laws, and consider them, that may not be consistent with the New Zealand Bill of Rights Act and ensure that they are justified over the medium to long term. There have been a number of examples where bills have been passed into law where they have been identified as being inconsistent with the New Zealand Bill of Rights Act but the Attorney-General or the Government of the day has determined if they can fall under section 5 of the New Zealand Bill of Rights Act, which allows for justified limitations—i.e., it allows for reasonable limits to be justified by law—as are demonstrably justified in a free and democratic society. That is obviously a judgment call and one that can differ, and reasonable minds can differ, as to the inclusion of what is demonstrably justified in a free and democratic society, and certainly there have been examples over the last couple of years where there has been significant consternation and debate about what limitations are appropriate and what are not.

It is important that this House does have the right to make supreme law. When I say “supreme law”, it is with some checks and balances. The fundamental checks and balances that any Government is subject to, every three years, is the popular vote. That is the chance for all New Zealanders to vote on whether they think the Government has got it right or not. And, if they don’t, they have the option to vote for a different configuration of political parties to form the Government, to make that law. So there is always that constitutional safeguard, in that the Parliament is subject to the will of the people via the mechanism of voting. However, it is important that the other branch of Government, effectively—which is, in our constitutional framework, the courts—is able to examine any laws that Parliament passes, and that they do it against the framework of the New Zealand Bill of Rights Act.

I should just go very briefly into the background of the New Zealand Bill of Rights Act, which goes back to 1948. After the Second World War, the conscience of the world was somewhat shocked and horrified by things that had happened during the course of that war, and the impact on people—human rights—had certainly not been considered at all in many cases, let alone observed. The atrocities that were seen and discovered at the end of that war truly shocked the conscience of the world. It was deemed necessary to create a universal declaration that specified the rights of individuals so as to give effect to the Charter of the United Nations provisions on human rights, which led to the Universal Declaration of Human Rights, ratified in 1948. That has been a very significant piece of, effectively, international law of sorts, which has informed the development of human rights around the world, including in New Zealand, which in 1990, after significant debate and discussion in this country as to the constitutional nature of parliamentary supremacy, enacted the New Zealand Bill of Rights Act. That has formed the development of a jurisprudence by our courts in this country, and trying to get that balance right between the courts being able to observe and interpret the New Zealand Bill of Rights Act and any limitations on the rights of individuals and their rights and freedoms against laws passed by this Parliament.

There have been some cases where the courts have made some decisions which have led us to where we are today—for example, in 2015, I think it was, the High Court found, in the case brought by Arthur Taylor, who had been fighting to give prisoners the right to vote since the 2010 law took it away from all inmates, that this law was inconsistent with the New Zealand Bill of Rights Act and would lead to arbitrary outcomes. It is important that the courts can make those determinations. It is also important that Parliament is able to maintain sovereignty to make law, as it is ultimately responsible to the will of the people via voting in general elections, but it is important that Parliament considers seriously any decisions made by the courts. There is an issue that has become apparent: the senior courts of New Zealand could make rulings, and can make rulings, that any piece of law is inconsistent with the New Zealand Bill of Rights Act, but Parliament could ignore it. This bill that we’re considering here today for its third reading remedies that situation. It requires that any such decision by the senior courts when they make a declaration of inconsistency is referred to this Parliament and it must be considered. This bill also formally recognises the jurisdiction of the senior courts to make declarations of inconsistency with the New Zealand Bill of Rights Act. This new bill brings the reporting mechanism, also in the Human Rights Act, in line with amendments to the New Zealand Bill of Rights Act.

This bill follows international jurisprudence that the affirmation of rights may require substantive protection but also procedural protection, and this bill is particularly focused on procedural protection. The bill does not alter the law substantially with regard to the jurisdiction of the senior courts but brings New Zealand into line with many overseas jurisdictions of having a formal reporting mechanism to this House.

The bill will also, effectively, give the senior courts a louder voice when dealing with New Zealand Bill of Rights Act matters and will make it harder for Parliament to ignore any such declarations of inconsistency made by the senior courts. The bill will also increase scrutiny of legislation that the Government enacts that affects fundamental human rights, which is a positive development for New Zealand’s democracy and continues the work that, in effect, started back in 1990 with the enactment of the New Zealand Bill of Rights Act. The bill will also encourage the senior courts to consider older policy that may not be serving New Zealand’s current needs, and that is a positive development because New Zealand’s Parliament has been known as the fastest gun in the West, in terms of legislative development, having a unicameral system of Parliament—i.e., one legislative chamber without further checks and balances. So it can make law very, very rapidly.

I’ll just touch on briefly that New Zealand did become quite frustrated as a country with laws being made by Governments who had been elected with a first-past-the-post system and then proceeded to carry out a rapid change to the legal structure in the country, which they hadn’t necessarily gone to the population on at the election, which led to the development of the mixed-member proportional system, or “MMP”, and that was designed to try to balance those different competing interests in society and ensure that there wasn’t such rapid change of law, because people need consistency to be able to plan ahead to make decisions on how they develop their businesses, how they develop their lives, what they can rely on. There needs to be some confidence that they can rely on particularly the trajectory of where policy formulation is going into the future. Sometimes, however, that does not work out particularly well, and certainly it’s important that the senior courts are able to go back and look at older legislation that may not necessarily be fit for purpose and consistent with the New Zealand Bill of Rights Act. So it is good that this bill will encourage the senior courts to do that.

In New Zealand’s constitutional framework Parliament is sovereign, but it’s important to shine a light on laws that are not consistent with the New Zealand Bill of Rights Act 1990 and ensure that any such laws are justified in a free and democratic society. We support the rule of law, we support the rights and freedoms of New Zealanders, and we support the Government being held to account on laws that will impact on the rights of New Zealanders. This is a positive development, and I’m very pleased to recommend it to the House.

RACHEL BOYACK (Labour—Nelson): It’s a pleasure to take a short call, and the final call, on what is a very important and a very good piece of legislation that we are passing in the House today. As many previous speakers have already traversed, this bill responds to the Supreme Court decision in 2018 that found inconsistencies with the New Zealand Bill of Rights Act regarding prisoner voting. What this bill does is introduce a mechanism for the House and the executive to consider those inconsistencies when the Supreme Court finds that there has been an inconsistency. As previous speakers have noted, there are times when Parliament does make law that does have an inconsistency with the New Zealand Bill of Rights Act, and that is that, ultimately, Parliament is sovereign. But all speakers throughout the debate have noted that it’s important for us to have a mechanism to make that consideration when the courts do observe those inconsistencies.

So I want to congratulate the Privileges Committee, who have taken a good couple of years to consider this bill. I think we’ve seen a significant amount of analysis and robust debate in order to get to this point. It’s an excellent piece of legalisation. I congratulate the Minister and the committee, and I commend this bill to the House.

Motion agreed to.

Bill read a third time.

Sessional order agreed to.

Bills

Screen Industry Workers Bill

Second Reading

Debate resumed from 11 August.

CHRIS BAILLIE (ACT): Thank you, Madam Speaker. I rise on behalf of ACT in opposition to the Screen Industry Workers Bill. Unfortunately, I wasn’t there when the bill was introduced and went through the select committee process, but I do remember the debate that occurred around 2010, when the amendments were introduced. The change to the Employment Relations Act where the test for employee status for people doing film production work no longer applied to people doing film production work. Instead, unless employed under a written employment agreement, film production workers are contractors and cannot challenge their employment status in the courts.

I remember thinking back then that this industry runs on deadlines and time frames; surely the workforce had to be flexible. The Ministry of Business, Innovation and Employment (MBIE) report to Government in 2019 stated, “These amendments were controversial and polarising. Production companies and others in the film industry saw the changes as important to protect New Zealand’s ability to attract and retain international film production work. Many, including unions and academics, saw the change as a removal of fundament employment rights.”—unions and academics. It’s not a coincidence with this bill that 30 percent of the Labour Party are ex-unionists, so not too sure about the academic side of it.

What I do know: to get stuff done; to increase productivity; to be able to pay staff well; to be a thriving, exciting business, industry, and community, there must flexibility in the workforce, trust between all parties, and the understanding of a common goal.

The MBIE report also states that, “The inability to bargain collectively may contribute to poor outcomes for some workers in the industry. In the screen industry, workers tend to be engaged on a project basis. They experience peaks and troughs in their work and tend to work multiple jobs a year.” The “peaks and troughs”—that means the employers and the companies also go through these peaks and troughs, and they need a workforce that rolls with the same punches that they are going through, and also a workforce that accepts that the career path that they have chosen is not a 9 to 5, Monday to Friday, like a union leader or an academic.

The Film Industry Working Group has suggested four principles apply to all screen production work: (1) parties must act in good faith in their dealings with each other; (2) contractors doing screen production work must be protected from bullying, harassment of any kind, and discrimination; (3) people who engage contractors must act fairly and reasonably when terminating contracts; (4) contractors doing screen production work must receive a fair rate of pay in relation to their skills and the scale of production. On the face of it, all these principles seem fairly reasonable, but any employer who has had anything to do with the personal grievance process would be shaking their heads.

I spoke, last weekend, to the owner of a plastering and painting business. They employed a 34-year-old painter. In good faith, they had a formal contract, a high rate of pay, and a company van. It turned out, after a few months, he wasn’t up to the job. Of the 110 days he was employed, he was absent for 30. Sometimes he called in sick; most of the time he didn’t. He just didn’t turn up. After the required warnings were given, he was asked to leave. Seemed to be a great example of acting fair and reasonably when terminating a contract—sure enough, personal grievance. The employer overlooked the offer of a support person on the final warning; $12,000 later, legal fees for the business, and the employee set free to do the same to the next employer, who just wants to make a living, pay good, hard-working staff.

Labour and the Greens really don’t understand how difficult running a business is these days. The disdain for business owners is evident every day. I really think it shows you just what they would be like if they ever did take the plunge away from secure Government jobs—where your only worry is how much your KiwiSaver is increasing—and actually attempted to run a business.

The redressing the imbalance of power rhetoric in this bill is just not true and hasn’t been for many years. Unfortunately, this attitude is at the expense of greater productivity—a dirty word, I know—which means better pay and conditions for the employees.

There are other familiar statements in this bill like, “The Film Industry Working Group has recommended that industrial action not be allowed.” I’m really surprised that “race to the bottom” isn’t embedded in there somewhere.

Having listened to Minister Wood many times now trying to justify the need for fair pay agreements while acknowledging that not all industries and businesses need them, and that, actually, conditions have improved for employees since the introduction of employment contracts in 1991—especially pay and holidays. It must make people wonder what the motivation for this bill is. Then you remember “unions and academics”.

There are things in the bill that require explanations—for me, anyway—such as the statement from the select committee report which says, “We consider that the intention of the bill is to treat an individual as working for another person even if the individual is providing their services through a third party; for example, if the individual worked for a company that was contracted by the other person.” I don’t quite get it; it just seems unfair to me. Is it like hiring a builder to build your house? Builder gets a concrete truck to concrete the driveway, and it’s delivered to the wrong place; does that mean it’s my fault or my responsibility? I’m not sure, but I’m sure that will be addressed in the committee of the whole House stage.

ACT believes that most employers are good people who just want to run a profitable, productive business. We believe that most employees just want to work hard for the pay they receive. We think the best way to do that is for Government to leave them alone and treat them like adults, not children who need babysitting, in all aspects of their employment. ACT cannot support this bill.

CAMILLA BELICH (Labour): Thank you, Madam Speaker. It’s a pleasure to take a call on this Screen Industry Workers Bill. I want to say that the reason that we are here today is because of a shameful chapter in workers’ rights in New Zealand where the previous National Government removed the workers’ rights of an entire industry—an entire industry. Let’s go back to how we got here today.

In 2005, Bryson v Three Foot Six Ltd, a decision of a court in New Zealand, emphasised the real nature test, which determines whether a person is an employee or a contractor. Then, following that, after that was settled law and consistent with all other decisions, film workers decided to have the audacity to use their fundamental right of freedom of association to collectively bargain.

Now, that was seen as too much of a risk to this country, that it would be found to be unattractive to filming for overseas film companies. What did the National Government do then? Did they stand up for New Zealand workers? Absolutely not. They did not. They removed the workers’ rights from the film industry with no select committee process, under urgency; an absolutely shameful chapter New Zealand’s history. So I am proud to stand here today to reverse the damage that that previous Government did to this group of New Zealand workers. This bill brings back minimum standards to the film industry. This bill brings back the right to collectively bargain, and I am proud to be part of a Government that is bringing back fundamental rights unfairly taken away from New Zealand workers.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on Simon Watts—five minutes.

SIMON WATTS (National—North Shore): Well, thank you very much, Madam Speaker. It was very difficult to listen to the last speaker, Camilla Belich, of what can only be described as virtue seeking in regards to the reality of what role we did when we were in Government, which is ensuring that those people who wanted to work could work.

In regards to this bill, National will be opposing this bill. There’s a couple of reasons why for that. But I want to start with something reasonably relevant, and that is in regards to the elements that we do support within this aspect of the bill. These are the provisions to improve protection for workers against bullying and harassment, freedom of association protections, and setting clear standards for employment contracts. We do support those elements.

However, it is clear that this legislation will drive less flexibility, in terms of our labour markets, and will also, in part, strengthen the element and the power that the unions have. That is absolutely an issue for businesses across this country, businesses across this country which are working, day in, day out, to try and be productive and efficient under a huge burden of cost and regulation by a Labour Government that do not understand business—they would struggle to spell the word. That is the challenge that we have and the reality out there, as we go round our communities in rural and provincial New Zealand in particular.

This Government are out of touch. They do not understand what it means to run a business. They do not understand what it means in order to pay the bills. They do not understand around the issues in regards to protection around the worker elements, in regards to dealing with the bullying and harassment that this element will cover. They are simply virtue seeking in terms of supporting the elements around the unionisation of this labour force. While important in regards to the overall context of supporting businesses, we need to ensure that, first and foremost, we are supporting our business owners across this community and across this country to do what they need to do appropriately.

So this bill is another example of more legislation and more regulation by a Government that seems to just like to ram through this type of stuff, time and time again. The additional burden, in which this will create additional cost and additional aspects in regards to this, means only simply one thing for those businesses: more headache, more stress, when they should be focusing on how to make our country more productive and increase the economic growth.

I think the reality of these amendments, in terms of the film industry, which I think is important to recognise is, and has been, and continues to be—less so, probably, in the last three years or so—a hugely successful sector across our country, and an industry which brings into this country billions of dollars in revenue and creates tens of thousands of jobs. So the legislation that was put in place was to make sure that we are globally competitive in regards to this sector. It is a different sector in the way in which it operates, because of the use of differing staffing models etc.

But the reality is, New Zealand is an absolutely excellent place for the film industry to make films, to create that type of entertainment, and New Zealand should be a gateway and a destination for these companies to be able to operate here. The challenge on the table, once again, is this Government, who think they know better than all New Zealanders—and that’s been coming through clearly, in terms of where their narrative is at the moment—is that this type of legislation is going to make New Zealand less attractive in terms of a destination for this type of growth and industry. That will hit those provinces and those regions across this country probably harder than anywhere else. And that is a great shame in regards to this.

But, as we know, no matter what we say, this Government won’t listen. They’ll ram this through, as they do, because they know best—they know better than—

Shanan Halbert: North Shore’s a sunny place.

SIMON WATTS: —hard-working Kiwis across this country. And I can hear the colleague from Northcote over there blurting out something but lacking detail, as usual. But it is pretty clear that National will be opposing this bill, and that’s all we’ve got to say today.

HELEN WHITE (Labour): I wanted to speak on this bill because I have been an employment lawyer for 30 years, and because I was working as a barrister, I got people who were on contracts rather than employment come into my office, and what I saw was quite worrying. I saw a lot of exploitation. I saw people who were dismissed because they had had the audacity to date somebody that the boss didn’t agree that they should date. I saw all sorts of situations where work was so precarious that it was undermining the confidence of the people involved and undermining the wellbeing of their families.

So what I see here is a collaborative effort between the industry and the people involved, and I see the basics coming into play: fair treatment, good faith. These are things that we stand for in the Labour Party and that we stand for as a country, and I see their making a real difference to why we will go forward in the way we will.

My daughter did a film degree. She’s not working in the industry, because who would—who would? She’s a talented, bright, clever woman and she won’t work in this industry until we change it for the better, and this bill will do this. I commend this bill to the House.

SIMON O’CONNOR (National—Tāmaki): I don’t want to strictly bring family into the House; I’m just going to go general, but I can tell you now that with this bill, fewer family members are going to be working in the screen and film industry, because no one’s going to bring their productions here. In fact, you’re going to see more productions leave. If I could slightly personalise, I too have family who are interested in this space. They don’t work here. They live overseas, and one of the reasons is that there are opportunities overseas. Unfortunately, this bill by the Labour Government is not about the basics of employment, because it’s all about the unions—it’s all about the unions. It’s fulfilling, effectively, a promise, I would suggest, to the unions.

Look, as this bill passes—sorry. We’re only at second reading, but once we get through third reading—

Hon David Bennett: It’s not a promise; it’s payback.

SIMON O’CONNOR: I can’t strictly suggest that across the House, Mr Bennett. But it’s a promise to the union, and all we’re going to end up with is a whole lot of happy unionists, because they’ll be running around earning their little pay cheques on behalf of Kiwis who are no longer able to work within the screen industry.

Things are already tough in this space. Need I remind the other side of the House that we lost the contract with Amazon to do the latest Lord of the Rings series? Now, there’s a whole lot of reasons for that—there’s a whole lot of reasons for that and, let’s be really clear, that was before, of course, this legislation. But this legislation would make it even more certain that they would have gone quicker and it would make it even more difficult. One of the reasons these big screen industries leave is because things are just far, far too difficult in New Zealand.

The other side laugh because, of course, they don’t really know anything about this, because none of them, really, have run any businesses or anything. Most of them have been union hacks, and that’s fine. They’re welcome to own that. But none of them have actually run screen productions, and, to be fair, I haven’t either. I can see my colleague here Melissa Lee, who’s actually got tons of experience.

So, fundamentally, all this is doing is allowing the unions to go in and will negotiate massive substantial expensive contracts. They’ll feel virtuous. They’ll think they’ve done a great job. But the downside will be that we will not have a functioning screen industry.

Now, let’s also be clear: the corollary is also true. We don’t want a situation where particularly large screen production houses screw over New Zealanders. Let’s be really clear about that. This is not about a race to the bottom, and that’s a real challenge. We had that debate when we passed what we know as the “Hobbit laws”. I recall, actually, at the time, the Labour—they weren’t the Government then, thank God!—Party railing against the “Hobbit laws”. But wasn’t it funny to see them all on the red carpet at the premieres and so forth? There’s a word for that, which I’m not allowed to use in the House.

So, fundamentally, giving so much power to the unions is going to make things incredibly expensive and it’s not going to proceed. We’re not going to see a thriving film or screen industry. But, again, let’s be really clear for the record and have it on Hansard—it always helps—National is not supportive of a race to the bottom where our people in the screen and film industry are—you know, to use the parlance—screwed over by the screen industries. But there is a happy balance. I would argue that the status quo is in that space.

But it’s still tough, and that’s where I want to return to—it’s still tough. OK? We don’t have as many screen productions here. Let’s be clear, and the other side should be aware of this, it’s barely got to do with the wages. OK, that’s a factor. Of course we want to pay these people more. But it might—they’ve gone quiet all of a sudden; very dramatic—also behove the Government to reflect on its continuing rules—mandates, actually—which are screwing over the industry. If they went and talked to the Amazon executives and others, part of the reason they couldn’t get enough employees is they weren’t allowing people into the country, for God’s sake! All the rules around their masks and all their supposed science around COVID—all of that—and this is, again, the final irony: while they’re tinkering around for their union mates, they’re ignoring all the other factors which are slowing down our screen industry.

Again, one of them—and I’m just going to put the plea out there again—is to open the borders properly. I use that word “properly” because they’ve strictly opened the borders, but, as my colleague Erica Stanford pointed out, basically, no one’s been allowed in, regardless. The screen industries require hundreds and thousands of workers. It doesn’t matter if they’re directly in the screen industry, right through to security, they’re not allowed in. And yet here we are again, the Government tinkering on a bill for their union mates.

So look, obviously, National opposes it. I think, sadly, we’re going to see even fewer productions in this country, and—where I started—for all those parents and family members and those on the left who decry that their children and friends can’t get jobs, well, in the coming weeks and months, they’re going to be explaining to them more and more how the Labour Party has screwed them over and why their kids are still not getting jobs, as they then say farewell to their children as they head overseas to Australia and Canada and other countries to get the jobs that they want. Thank you very much.

ANGELA ROBERTS (Labour): Thank you, Madam Speaker. It’s a real privilege to stand and take a call on behalf of workers, because workers are on film sets and on TV sets. So why are we here? We’re here to restore collective bargaining rights to film production workers and right the wrongs of this “Hobbit law” we’ve heard about. I find it ironic. The Shire is meant to be the small, beautiful, idyllic, and fruitful land, and it’s meant to be a place for happy hobbits. Well, that did nothing for film production workers to ensure dignified work. Eighty-five percent of them are contractors. That’s the nature of the job, and that’s great, but that does not mean that they lose their right to collective bargaining.

I want to acknowledge the Film Industry Working Group, but they’re creators and so it’s not surprising that they’ve been able to collaborate and come up with something that will work. It is not about a title; it’s about a relationship. I support this bill and commend it to the House.

IBRAHIM OMER (Labour): Thank you, Madam Speaker. In 2010, in a move that was seen as unjust and anti-worker and was widely met with fierce opposition from the workers, the Employment Relations Act 2000 was amended to remove film production workers from its definition of an employee. That only happened under the National Party because they are always anti-worker. In doing so, they have taken the right of the workers to get paid minimum wage and the right to bargain collectively. This meant that this group of workers could not challenge their employment status in courts.

This bill creates a regime for contractors in the screen industry. It rights the wrongs. It’s a good day; it’s a good bill. I commend it to the House.

A party vote was called for on the question, That the amendments recommended by the Education and Workforce Committee by majority be agreed to.

Ayes 76

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Amendments agreed to.

A party vote was called for on the question, That the Screen Industry Workers Bill be now read a second time.

Ayes 76

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Motion agreed to.

Bill read a second time.

Bills

Construction Contracts (Retention Money) Amendment Bill

Second Reading

Hon Dr MEGAN WOODS (Minister for Building and Construction): I present a legislative statement on the Construction Contracts (Retention Money) Amendment Bill.

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

Hon Dr MEGAN WOODS: I move, That the Construction Contracts (Retention Money) Amendment Bill be now read a second time.

Firstly, I thank everybody that submitted on this bill at the select committee stage. The submissions that were received through the select committee have resulted in a number of changes that will further improve the workability of this piece of legislation. I’d like to thank the Transport and Infrastructure Committee for their careful deliberation of this bill while it was at their committee. The recommendations have improved the security of retention money and have made the outcomes better for both subcontractors and head contractors.

I would like to take the opportunity to thank my predecessor, the previous Minister for Building and Construction the Hon Poto Williams, for her work in bringing this bill to the House. The purpose of this bill is to strengthen and clarify the existing retention money regime in the Construction Contracts Act of 2002. Retention money is the money that is held back from a payment under a construction contract security to ensure a subcontractor’s performance. While choosing to hold retention money is voluntary, it is often used by head contractors to make sure that subcontractors do a good job. But I have heard about the fall of big construction companies like Arrow International (NZ), Ebert Construction, Stanley Group, and Tallwood Holdings. These head contractors mixed retention money with their other funds, and some of it was used as working capital. As a result, some subcontractors did not get paid what they were owed when these companies collapsed. By strengthening the trust requirement, the bill intends to mitigate the risks associated with the use of retention money as working capital.

I’m aware that the committee received 42 written submissions on the bill and heard seven oral submissions. I’m pleased that a wide variety of submitters engaged in the select committee process, from subcontractors through to head contractors and local government, as well as the professionals that helped to administer varying parts of the retention money regime. The majority of submitters supported the overall intention of the bill. Some submitters made suggestions to improve the bill, and I want to briefly discuss those points now.

There was a theme around improving the workability of the new requirements. Submitters wanted changes to improve the workability of the strengthened retention money requirements. This included clarifying the requirements for holding retention money to clarifying accounting and reporting requirements, and this is a critical aspect of the bill. Also, one of the things that came through in the committee really strongly is clarifying what happens when something goes wrong, and this is a piece of legislation that is put there to capture those moments when things do go wrong, and to offer the right protections. Submitters wanted to have a better idea, and more clarity, about what would happen when those scenarios did occur—for example, how insolvency provisions would operate, as well as making it clear how offences and penalties will apply to each breach under the legislation.

So the Transport and Infrastructure Committee heard these concerns and made some changes to the legislation. In response to these points, the committee recommended that the recommendations clarify when a retention money trust is created and ceases, as well as when retention money needs to be deposited into a retention money bank account.

There were also submissions from local government that were heard from the committee. Local government wanted an exemption for Government entities to the trust requirements. This was on the basis that they did not present an insolvency risk. The committee did not recommend any changes here, because the trust requirement is key to ensuring the retention money regime can achieve the purposes of the Act no matter how small the risk was, and I support the committee’s conclusion on this matter. The retention money system should apply equally to all who choose to use it.

Then there was the issue of applying offences and penalties to each breach. Many submitters wanted higher penalties for breaches under the Act. The committee clarified that the offences and penalties would apply to each breach, and that these penalties would be cumulative, and I think that was a really important clarification from the committee. That means that fines could be significant if a head contractor does not look after retention money properly.

Then there was the issue around clarifying how insolvency provisions will operate in relation to this Act. The committee recommended some changes to clarify what happens if party A goes into receivership or liquidation. This includes clarifying that the High Court can review the fees and costs charged by a new trustee if subcontractors request it, and I think this is an important point for the committee to look at.

There were also some technical improvements that were made to the bill. The committee also recommended ensuring that the language used in the bill is better aligned with other legislation and systems used by construction companies, and they recommended changes that the committee has made to the bill will make things more workable for the users of this regime. Submitters and members of the committee also wanted the bill to address who will enforce the offences and penalties in the retention money regime, and this is something I intend to address at the committee of the whole House stage.

So I would like to, once again, thank the committee members for their hard work on this bill. I think the bill will improve the outcomes for subcontractors in the construction industries. Subcontractors will have better oversight of their retention money and should feel more protected that their retention money will be paid out if the head contractor becomes insolvent, and these increased protections for the retention money regime support hard-working subcontractors, who are the cornerstone of the building and construction sector and deserve to be paid for the work that they have already done. On that basis, I commend the bill to the House.

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

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Speaker, and it is a pleasure to be talking on the Construction Contracts (Retention Money) Amendment Bill. I suppose the first thing I should say is that it has been too long waiting for this bill to come back into the House. This has been a very important issue and, for some reason, I do not understand why the Government has taken so long to introduce this bill back into the House.

It is absolutely crucial. We’ve got an industry that is in a very difficult situation. We’ve seen over a hundred receiverships of building construction companies since the start of this year, we’ve seen 200 last year, and I think we need to be very careful to make sure that we—and when I say “we”, I think the Government has a role to play in this in terms of supporting this incredibly important industry. It employs 295,000 people—295,000 hard-working men and women in New Zealand. It is a kahuna of a sector in New Zealand and it is one that, if we are to go into recession, potentially might take us there, and let’s hope we do not go there, because it will have such ramifications.

So why the delay in introducing this piece of legislation? Of course, we all understand the background of this piece of legislation, and the Hon Nick Smith was concerned about retentions and the way that they’re used. It’s a longstanding practice. Between 2 percent and 10 percent of money that’s a retainer on a contract—so, if it’s a large contract, that can be a significant amount of money that is set aside by the head contractor, against subcontractors, and can be held for up to a period of 12 months or a year to remedy any potential faults that can arise. Of course, what that means for the subcontractor is that that is money they do not get until that condition has been satisfied, so that burns into their cash flow, particularly at a time when there’s a downturn in the industry. Cash is king, of course, but for the head contractor, it has often been a way for them to fund projects if they’re going wrong.

There have been many examples, and I note the Minister talked about the Arrow and the Stanley construction companies—both companies I knew well—but, more recently, the Ebert case in Wellington. The court case determined more recently that there were issues with the design and the rules around retentions, so that was a timely reminder that Parliament needed to do more, and this was the result of the work of the transport committee. Again, I just note my amazement at the length of time that this bill has taken to come back into this House, so let’s hope it doesn’t get delayed further and that we don’t have more delay going through the committee of the whole House and through into the third reading.

The bill that was introduced back in 2015 and 2017 made it a requirement on contractors to set aside the money that they hold in retention, to be held in trust, and, of course, some people did it well. In many cases, it wasn’t done well, and when we’ve seen these events of receivership, it’s become evident that the money hasn’t been put aside. The money hasn’t been kept separate. Secondly, it hasn’t been put into a type of asset class that’s not easily convertible into cash, so that’s what’s given rise to a number of these issues. The third major issue with the retentions, of course, is the issue around who has jurisdiction over the money—the retentions held by the head contractor—in the event of failure.

I know the honourable speaker knows this area very, very well with her previous involvement, and I just will acknowledge her involvement while she’s in the House. But the big issue is how do you make sure that that money is available and kept separate when a default situation takes place. Of course, part of this arrangement now is that there is a trustee, the trustee has control of it. The trustee of the head contractor, if they go into default, becomes the trustee of the retention money. Their fee can be deducted from that retention money for administering that fund. But that is an important thing, first of all, that that is separately held and separately administered, because that money is, basically, held on behalf of the subcontractors who’ve done some work in the project.

The big question then becomes how that’s distributed, and that’s a question for the liquidator or the receiver, depending on the case, of how that gets paid out, ultimately, over time. But I think the work of the committee around defining what is the retention—and I note there’s four parts to that retention definition that’s covered in the bill that we’re going to be discussing at the committee of the whole House. Then, of course, I think the other thing is how that money is used by the head contractor, and the bill now makes a requirement that if a subcontractor proposes to use the retention money, that person or that entity must give at least 14 days’ notice under section 18D of the Act to say that they are going to use it so that there’s time to make sure that subcontractors can assess whether it’s been used for the right purposes, which, again, is a good thing, because we want to make sure that that money is supported and secure on the behalf of the subcontractors.

I would note that there are other ways of dealing with the asset class. Of course, everyone assumes it’s cash set aside. A contractor can also elect to take on a bill or a bond, which means that they will have to put up security against a bank, and a bank will issue them a bond. Particularly where we’ve got large building contractors who are doing multiple large jobs and they have to hold substantial sums of money, one way of doing that is to actually go and get a bond from the bank, but it does come at a cost. It’s quite a substantial interest rate. It’s like taking a loan out from the bank. So it does come at a cost, but it is another way of funding entities through these construction projects.

But I think these are good improvements. National will be supporting these amendments, but why so long? That’s just the question I keep asking: why so long when we’ve got a construction industry where the outlook is less than secure, partly because of some of the other changes that have been brought in by the Government?

The Credit Contracts and Consumer Finance Act (CCCFA) has probably had the most crippling effect on first-time buyers in New Zealand. I was with a group of banking people yesterday in Auckland who are involved in the construction sector and the impact of the CCCFA, which means that many people who are building—building companies, doing spec homes—now have little or less guarantee they’re going to be able to sell those projects. I went to a function the night before, and a large home-builder was telling me that they’ve had 50 contracts fall over because of the CCCFA.

I’m just worried that we’re going to see more building construction companies fall over partly because of the Government’s making but also partly because of what’s happening in the market with supply lines. It’s a good thing that there’s been some amendments made to the Gib arrangements, but we have got an industry that needs careful management, careful support by the Government, and this needs to go through the House as a matter of urgency. I hope the Government picks it up and runs with it, because it should have been doing it ages ago.

SHANAN HALBERT (Labour—Northcote): Thank you, Mr Speaker. It’s my privilege, this morning, to speak on the Construction Contracts (Retention Money) Amendment Bill. The purpose of this bill is to strengthen and clarify the existing retention money regime in the Construction Contracts Act 2002. I acknowledge the work of both Minister Woods, more recently, but also the Hon Poto Williams and the preparatory work that she did in her capacity as the Minister for Building and Construction.

I think, particularly as one of the Transport and Infrastructure Committee members, when we heard oral submissions and read the written submissions, and I go back to one particular organisation based in Wairau Valley, one of the largest subcontractors in New Zealand’s commercial construction sector—and both payees and payers of significant retentions—a local business on my side of the bridge in Wairau Valley, Thermosash, has shone some light on what this bill would mean in their business. I remember quite vividly a quote from their submission, that Thermosash has, over the years, lost large amounts of money due to main contractor failures, including the Ebert receivership, which had a significant impact on them. So there are some challenges there.

When I look over to Mr Bayly’s question that he asked the House—of why it has taken so long for this Government—he also acknowledges that the Hon Nick Smith had concerns back when they were the Government, nine years in waiting. But, you know, typical of National—no action National—particularly when it comes to infrastructure and building. So thank you, Mr Speaker, this is a great bill and I commend this bill to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Speaker. That was a remarkable comment at the end there from Shanan Halbert, the previous speaker. He was trying to suggest that the previous Government took no action. It’s understandable that he wouldn’t have listened, but we’ve had five years of failure. We’ve seen absolutely nothing infrastructure-wise delivered under this Government. It is absolutely outrageous for that member to stand up and try and suggest that this Government is doing better, when clearly they are not and they are failing across the board, time after time, on key infrastructure that really matters for New Zealanders.

It is a relief to see this bill, the Construction Contracts (Retention Money) Amendment Bill, now at its third reading. It is disappointing that it has taken so long; it needn’t have. I think it’s quite interesting, actually, when you consider the time it takes for the Government to put through a piece of legislation like this. It has some meaningful benefits for those that are impacted, yet, on the other hand, they’re prepared to rush through with urgency, without proper consultation or any meaningful consultation, other pieces of legislation that have less beneficial outcomes for Kiwis. It’s a bit of, I guess, an indictment on this Government because we’ve seen this a number of times, sadly.

But this particular piece of legislation is something that we’ve supported. We’ve been trying to make some improvements to it throughout the select committee process, initially, and coming right through now to its final reading here in the House. Unfortunately, we do see too many instances of builders or tradies being caught out when a lead contractor or some other entity that they are working as a subcontractor who ends up defaulting or going into liquidation or insolvency, or whatever it may be, and the issue is, of course, that those at the bottom of the chain often end up missing out.

Sadly, I’ve seen that in my own electorate of the Waikato, a strong, thriving, growing electorate. It could be doing better if it had a National Government, but, nevertheless, it’s doing OK. With a number of builders there, we’ve had some challenges. You always see these sorts of things, but no one goes into business expecting to fail or to have their business not work out, but, unfortunately, these things can happen. So it is critical that we have a clearer process around the retention money aspect and the flow-through of that money for contracts or services delivered, projects delivered, by those subcontractors across what can often be quite complex and multifaceted contracts or construction projects over a long period of time, and so it is important to ring-fence some of that from the perspective of helping to give some certainty to those further down the chain.

So requiring the retention money to be held in trust is not necessarily a new aspect. What this bill is really achieving is tightening up the understanding of how that process works, ensuring better accountability and monitoring of those funds so that they can’t simply be held in the general bank accounts of party A—or the lead contractor—for example, but must instead be held on trust in a separate account, noted as such, specifically for the purpose of retention money, making it quite clear that that is the requirement, because what we had seen previously, although there a requirement to keep the money on trust for the subcontractor, was that it could be and was in some instances part of general cash flow or, indeed, in some cases, part of work in progress or assets, or whatever it may have been. It didn’t create the distinction, and when the lead contractor, or party A in that party A - party B arrangement, then went insolvent, we saw the cash not being available for party B, the subcontractor. So, obviously, they get caught out and that can impact their businesses. In many cases, we saw the subcontracting businesses failing as a result of being unable to obtain the funds they were entitled to, having completed the work on behalf of party A but simply not receiving the proceeds for that.

So those sorts of things needed to be ironed out. The intent of the previous legislation was good but, unfortunately, it just wasn’t quite tight enough to ensure that money was being followed through and properly accounted for. So this gives a little bit more confidence, I would suggest, to the subcontractors, or party B, doing the work for the lead contractor, or party A. It gives them a bit more confidence that they can see the flow of funds. It has to be regularly reported to them, so that they can have confidence, because these contracts can be quite long. They can extend over significant periods of time, and so being able to see on a regular basis, a quarterly basis, at least that those funds are still held on trust, still set aside, and retained for the purpose of paying once their contract or their work is complete, will help to give a little bit more confidence.

We still have some issues, though, around examples where, aside from the retention aspect, a lead contractor has perhaps gone insolvent and the tools or assets of the subcontractor are still on site, on that location. So there are still some challenges to be ironed out, in my view, around giving greater confidence to those subcontractors that they can access their tools and any assets they may have bought for that project if the lead contractor is failing or there’s an insolvency issue or whatever it is with whomever they’re contracted to directly, and they should then be able to, of course, carry on their own business.

We’ve seen examples in the media, and members may be aware of that, where there have been situations where that hasn’t been able to happen and so the subcontractor has been unable to access the products they might have bought for that job, and, obviously, with that project not continuing, they want to limit their exposure as much as possible and get those assets back and they haven’t been able to, but also, in some extreme instances, they haven’t even been able to access the tools they had on the job, which then means they can’t take those tools to do work elsewhere whilst that unfortunate situation is being worked through. So that is an area that I’d like to see a stronger focus on in order to give a bit more confidence.

Of course, you can look at going down routes with the Personal Property Securities Register (PPSR) but that’s not what most tradies get into business for. They get into business because they’re competent in carrying out the function, delivering the practical work, of their trade rather than looking at the banking or security arrangements that they might consider in terms of providing themselves adequate protection. It gets a little complex if you start going there, the PMSI route—purchase money security interest—or the PPSR. It’s all a little beyond what most tradies would be wanting to put their business through in terms of a productive consideration.

But I think what we’ve achieved here under the Construction Contracts (Retention Money) Amendment Bill is a reasonable step. We had a good range of submissions. There were some concerns around exactly how that would flow, for example, with the third parties maybe being able to be involved in that, acting on behalf of party A, holding that retention of funds and managing that process, providing adequate reporting through party B, and then, of course, an independent third party potentially giving more confidence to party B as well. Ultimately, we have seen an increasing level of professionalisation, I would suggest in the industry around requiring this sort of reporting. To an extent that’s good, but there’s also a risk, as we have seen in a lot of areas, that we end up with more and more compliance and more and more red tape that makes it harder for people to get on and do business. So we have to minimise that wherever possible whilst, at the same time, getting the balance around giving some of those subcontractors a bit more confidence that they will indeed see that retention money flowing through at the completion of the contract, assuming, of course, that the standard of work they have delivered is as agreed and that there are no quality issues discovered or, I guess, objected to by party A, or the lead contractor in the contract, as it may be from case to case.

So the quality aspect aside, this is really focusing on ensuring that those people out there doing the hard work, at a time in the New Zealand economy when we desperately need more and more workers, can have a bit more confidence to get on and do the hard yards.

So, on that basis, we’re happy to support this bill. As I say, there are still a few extra steps that need to be taken to give a little bit more confidence around those assets held by party B, or subcontractor, on a particular construction site. But, aside from that, it’s a reasonable step. We were delighted to be able to participate in that, and I look forward to, hopefully, seeing some more work from the new Minister to try and tidy that up a bit more in what is an important part of our economy. Thank you, Mr Speaker.

TERISA NGOBI (Labour—Ōtaki): Talofa lava, Mr Speaker. And, as always, it’s an honour and a privilege to speak on this, the Construction Contracts (Retention Money) Amendment Bill, certainly as a member of the hard-working Transport and Infrastructure Committee.

I know it’s already been said that the purpose of this bill is to strengthen and clarify the existing retention money regime in the Construction Contracts Act 2002, and that the retention money is money that is held back from payment under a construction contract as security to ensure a solo contractor’s performance. We know that at the moment it is voluntary—well, that’s the current status. It is voluntary to retain the retention money and it is often used, we know, by some of our head contractors to make sure that subbies do a good job, and that’s not the purpose. We know that we’ve seen things like the fall of the construction company Stanley Group and what that looked like for our subbies not getting paid. So this is a good bill to make sure that we look after our subbies and, for that, I commend the bill to the House.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe; tēnā koutou e te Whare. This is a straight-up common-sense and well-scrutinised bill, so it may come as a shock to members of the Opposition but I will not be gunning to fill my 10 minutes of time in the Green contribution today.

I do, however, need to acknowledge the Minister and former Ministers who have contributed to this mahi to get this bill in front of us, as others have contributed in their statements this morning. I also want to acknowledge the Hon Julie Anne Genter, who actually originally had a member’s bill to address this issue.

And this issue, as others have gone to the core of—some in greater complexity and detail—is around retention money. Retention money is a security for performance of party B’s obligations under a contract held by party A. As others have well canvassed, there has historically been a number of issues where, for example, that retention money has been mixed into other money from that contractor, or those assets, and then unintentionally—or intentionally—spent, particularly in instances where party A has ended up becoming insolvent.

As, actually, members of the Opposition have put forward in their contributions this morning talking about some of the complexities around potentially contracts or litigation or otherwise, that those who may be involved in the trades or the construction sector might not necessarily want to get involved or busy themselves with just wanting to get on with that construction. That is the point of this legislation; it is to simplify the regime that applies to retention money.

So, to that effect, this bill strengthens and clarifies the regime for retention money to ensure that subcontractors get paid—that’s a good thing; it sounds as though every party in this House is in favour of it. I must say that, despite it being really simple at that high level, it is by no means necessarily simple in practice. So I want to applaud, as others have, the Transport and Infrastructure Committee for their thorough scrutiny of those criteria and some of the recommendations and changes that have been applied throughout that process.

So it sounds like everyone is in support of this legislation. It sounds like we don’t need to waste any more time in getting on with it, so the Greens are proud to support this legislation today.

BROOKE VAN VELDEN (Deputy Leader—ACT): Thank you, Mr Speaker. It is a pleasure to rise this morning on behalf of the ACT Party in support of the second reading of the Construction Contracts (Retention Money) Amendment Bill. Through the course of my speech, I’m hoping to go into a little detail about why we’ve ended up with this bill, the history behind why it’s important, and what’s come out of the submission process, a little bit about the costs and benefits and balancing those, and what ACT’s hope is to go forward.

But firstly, though, I just want to start by saying thank you to all the committee staff, all of the submitters, and my colleague Dr James McDowall, who sits on the committee that oversaw this piece of legislation. There’s been an awful lot of work, and it doesn’t really happen without all of those people behind the scenes, putting in all of that effort and, importantly, having submitters from the public with their industry knowledge giving us their submissions. So thank you very much for submitting on this bill.

Every day, up and down New Zealand, people get up and they go to work on construction, and ACT wants to do a bit of a shout-out to all of our subbies, everybody who does work really hard to make sure that new buildings do get built in New Zealand. It’s great to see hard-working Kiwis wanting to put up their tools and help create positive construction in New Zealand. We really appreciate people who want to work hard, get up in the morning, get their tools out, and create new houses and new facilities in our communities.

But construction is not easy, and it’s not simple, and there’s a lot of factors that go into it. You know, you’ve got an awful lot of people who are involved in the construction of a new building or a new facility, and that’s anything from the roofers and the tilers through to plumbers, electricians, plasterers, concrete pourers, painters, and bricklayers. The list is very extensive, but it’s very specialised.

When a person or an entity or a company decides that they want a new building to be built, they employ a builder or a building company, and there are an awful lot of skills that are needed, as I’ve suggested, in the building of a new facility. If you go into the detail of all of those types of skills, you end up needing an awful lot of training if one person needed to do all of that work themselves. So what ends up happening is people who have that contract use subcontractors—people who have specialised skills—because if you could imagine one company needing to have a person who is able to safely lay all of the cables and all the electrical work, and they can earth objects or ground them and make sure that they are transferring short-circuit electricity through a grounded wire to the earth, that’s a very specialised skill. I know, from my experience of working on a factory floor, as someone who made light-fitting extrusions and did the wiring behind those, you don’t want to get that wrong. So there’s a lot of training that’s involved in electrical work. But, of course, if you have that skill, then you compare that to making sure that you’re not getting any leakage in your roof work, that’s another specialised skill on top of that.

Building construction companies quite often subcontract to people who have worked their whole lives, who have built up a wealth of knowledge, and who are really awesome Kiwis getting up and donning their tools and making sure that this work is done in a good way. But the issue here, of course, is that what ends up happening is you have these contracts and you have people who have been brought about who might be a painter, for example, and they get told, “Yep, you’ll be a subcontractor for this large development. We want X number of things to happen, and we’ll pay you some money now, but we’re also going to keep a little bit of money back, just to make sure that we’re happy with the work that you do.”—and that’s quite right. That’s called “retention money”, which is why we’re having this debate. Now, that retention money sometimes is held back just to make sure that those faults are fixed before there’s a final payout, to make sure that the actual contract is really done and dusted.

But what ends up happening in reality, in some cases, is that retention money isn’t just kept aside; it’s actually used for capital and it’s used to help pay for something else that’s happening in the building and construction. Usually, retention money might be about 2 to 10 percent of any contract, but sometimes that money is not really found when a company does go insolvent, or it’s being used somewhere else. So what ended up happening was that in 2014, Dr Nick Smith from the National Party tried to make it clearer what happens with retention money through a law in Parliament. There are still faults with this law, and some companies have said that it’s not as clear as it should be. Some of that money has been used as working capital, rather than retention money, and it hasn’t been kept on trust. So we’re now back in the House of Parliament, trying to clarify this law again.

One thing that this bill aims to do is to clarify that retention money is held on trust by party A—that’s usually the big contractor—for the benefit of party B, the subcontractor, and it requires that this money is kept separate from other money or assets. That’s really important because if there’s a company taking on far more risk and they end up getting insolvent, what ends up happening is that a smaller subcontractor quite often has no claim to any of that money. It’s nowhere to be found. It also requires that party A is to give information about the retention money to party B when the money is first retained and then at least every three months. So the whole change to this trust requirement is to clarify how retention money is being held under the Act and how it can be used. There have been instances where head contractors have used retention money as working capital. The use of retention money as working capital can add additional financial risks for business, for example, if a head contractor becomes insolvent before paying out the retention money, and it can be substantive financial loss for a subcontractor. What they’re aiming to do is strengthen the trust requirements to mitigate the risks associated with the use of retention money as working capital.

Throughout the submission process, Parliament heard from a range of people involved in the building and construction industry who welcomed this change and clarification under the law. I point to a few entities like Concrete NZ, which represents a membership of more than 700 corporates and individuals in the building and construction sector; Steel Construction New Zealand; Master Builders Association; and the New Zealand Institute of Building. There were Master Electricians, who employ around 7,000 electrical workers across New Zealand; the Master Plumbers, Gasfitters and Drainlayers; Civil Contractors New Zealand. There are a whole range of people who made these submissions.

What ACT really hopes is—sure, there might be that balance between the extra cost that the business might need to take on by not having that money being available for capital funds, but our hope is, really, that that is balanced out by the certainty that this provides to subcontractors, that that money is actually held for them to be paid out right at the end when they know that all defect work has been completed to an acceptable standard.

We also retain some concern just based on the fact that we have already tried to address this retention issue in previous Parliaments, and yet we’ve come back to try and clarify the law. So the ACT Party does support this change, but we also keep in the back of our minds a form of hesitancy that this will not actually be a fix all, because we know that we’ve been in this position before, and it’s quite possible that we end up, in a few years’ time, recognising that there were more changes that did need to be made to clarify this change for party A and party B.

So, in conclusion, this law would allow subcontractors a little bit more confidence that they will have money to help them in their own cash flow when they do get paid out for the building work that they do, and I hope that this law will actually provide that confidence to people up and down New Zealand who are working in our construction sector. So, just on my final note, we love our subbies, and we hope that they do find this a good change.

HELEN WHITE (Labour): I’m pleased to rise in support of this bill. We love our subbies too and it’s good to hear the recognition of the position that those subbies are put in, because they’re often small players working with big players and they’re vulnerable in that situation. That’s led to a pretty shameful situation where the money that has been set aside—and, in fact, I was interested to see in the briefing a discussion about how this is a voluntary payment. It might be voluntary but it’s voluntary where you’ve got a big player and an actual practice of retaining this money, and those subbies have been put in a position where that money has been there and it’s been a bit tempting, and people have intermingled it and they’ve used it for other purposes.

So now that won’t happen any more, and, if it does, it’s not just the companies that are going to be liable; it’s the directors. I’m very pleased to see that, because I think it’s what a good director should never be afraid of. That’s their job, to make sure that things stay straight, and if they don’t, they can be fined $50,000 a pop. That’s an important change that we’ve got here. So I’m extremely pleased to see a piece of legislation responding to reality, not ideology—reality. We are protecting our subbies and I think we’re doing a good job here. I commend the bill to the House.

JOSEPH MOONEY (National—Southland): Oh, thank you very much, Mr Speaker. I rise to speak on behalf of the National Party, and as the member of Parliament for Southland, on the Construction Contracts (Retention Money) Amendment Bill at its third reading. The National Party supports this bill. The purpose of this bill is to amend the retention money regime in the Construction Contracts Act 2002 to further strengthen and clarify that regime. The bill doesn’t make any significant changes overall, but it does amend the retention money regime, and adds further protection to subcontractors from the 2015 amendments that the then National Government made.

It is a challenging time for construction companies around New Zealand, there’s no two ways about it. Over 100 firms, unfortunately, have gone bust since the beginning of this year alone. It is a tough time in the construction time. It is a great industry. It’s one that I worked in myself, in my younger years on the tools—I worked in roofing companies, I’ve painted for a painting contractor, I’ve worked for builders on various sites in my younger years. And I know it can be tough work, but it’s great work. It’s building houses for Kiwi families, and that’s a really great thing that they do. But there have been real challenges and they’re developing at pace. With the supply chain challenges around the world, there’s a real problem getting building products and getting them on time for building sites. There’s a huge workforce shortage in the building industry, which is having a really significant impact on the ability for companies to complete the contracts that they have agreed to do—to build the houses that they need to do. And there’s a real shortage of availability in terms of experienced trade staff.

This is having an impact on the ability for many companies to deliver projects on time and to get what are called progress payments. These are partial payments made to a business or contractor after completion of a prescribed stage of work—for example, the addition of a roof, etc.—but that needs to be completed in order for the progress payment to be made. I certainly heard from companies in my region who haven’t been able to get what would normally have been some fairly simple things, like maybe a particular doorknob or a showerhead, for example, that’s needed to complete a particular bit of work. They can’t complete a house. In fact, I’ve talked to companies who can’t complete multiple houses because they just can’t get these little pieces that they need, and that’s having a flow-on effect in terms of staffing as well. By that, I mean staff being able to actually do the jobs—they’re having to redistribute the workers they do and try and find work for them elsewhere.

On top of that, there’s a massive workforce shortage which is, in fact, affecting every industry that I talk to, but certainly affecting these companies. So there’s a huge amount of pressure on building and construction companies at the moment in this country. Unfortunately, a few of them have gone to the wall—in fact, over a hundred this year. We want to acknowledge that challenge that they’re facing.

This bill here is an amendment for those companies that do go into liquidation, to ensure that the subcontractors don’t lose out on contracted payments of the retention payment scheme. This is a problem because the subcontractors lose out on that income. That can have a big flow-on impact in terms of their ability to service their debt, pay for their bills, and keep food on the table, fundamentally.

So the amendments to this Construction Contracts Act intended to address this risk by better protecting retention money automatically by providing that it’s held on trust from the earliest practical point in time. A key concern about personal property of the subcontractors and accessibility of that property when companies become insolvent is that there are stories such as subcontractors leaving their tools and equipment on construction sites and being locked out, being unable to access their tools when the company goes into liquidation. This has also halted other work the subcontractors carry on to do, because they can’t access their tools. The High Court decision in Bennett and others v Ebert Construction Ltd noted that the Construction Contracts Act had policy gaps and the trust requirements were imprecise.

So this bill will strengthen the laws around this, and will require retention money to be held in trust by a separate accountant, in a registered bank in New Zealand, or in the form of complying instruments, such as insurance policy or guarantee. It also clarifies that retention money held in trust must be kept separate from other money or assets, and cannot be used for any other purpose. If party A, for example, becomes insolvent, the receiver or liquidator becomes trustee of the transfer money for the purpose of collecting and distributing it. So I recommend this bill to the House.

INGRID LEARY (Labour—Taieri): Thank you, Mr Speaker. This is a great piece of legislation which recalibrates the balance of power between David and Goliath, if you like; some of the large contract holders with the small subcontractees.

I don’t have too much to say about it, just to point out that the select committee process was, obviously, robust. There are 22 changes that have been accepted at select committee. To talk about one of them: there were submissions made that weren’t brought into effect, and that was submissions from local government wanting an exemption for government around the trust requirement. I think it’s great to see that this was not accepted, because it came down to a matter of principle: that the risks that small businesses and subcontractors face are the same regardless of who is the head contractor, whether it is private enterprise or whether it is the public sector. So this is really a principle-based piece of legislation, and the Transport and Infrastructure Committee quite rightly, in my opinion, said that no matter how small the risk—and it will tend to be smaller with public entities—the principle still applies and, therefore, that change should not be made.

So I thank the select committee for what was obviously a thoughtful process, and I commend this bill to the House.

DAN ROSEWARNE (Labour): Kia ora, Mr Speaker. It is my pleasure to take this short call on the second reading of the Construction Contracts (Retention Money) Amendment Bill. I just want to acknowledge the previous Minister for Building and Construction, the Hon Poto Williams, for her mahi in bringing this bill to the House, as well as the Transport and Infrastructure Committee for getting the bill to this point.

I just want to echo my colleague Helen White’s messages there around Labour supporting our subbies. This bill will improve outcomes for all parties, particularly our subcontractors, who make a significant contribution to our construction industry. As small businesses, they have a lot of skin in the game. With that, comes a huge amount of anxiety and uncertainty, and we need to ease that as much as we can. So amongst the technical aspects of this bill, there is a human component that needs to be recognised, and it is for that reason that I commend this bill to the House. Thank you, Mr Speaker.

Hon DAVID BENNETT (National): Thank you, Mr Speaker. Thank you for the opportunity to speak on the Construction Contracts (Retention Money) Amendment Bill second reading. We all know that this is an area that does come to the fore in a time of economic decline, and when companies that have invested heavily or have been led by certain market conditions to continue to progress their businesses very strongly—and no problem in them doing that; that’s meeting market conditions and such like—there often comes a day of reckoning, and the construction industry, the history has shown that that does happen like in many other businesses.

This bill is an attempt to deliver some certainty around that stage should a business, unfortunately, ever get in that position, and so we are supporting the bill because we do need to see an increase in how we can help out any of the organisations that may be caught up in such an event, and everybody involved, whether the building company or the subcontractors, all want to get a satisfactory resolution of the issue.

I just think that in general terms we also need to look at this bill in the context of what’s going on here in New Zealand at the moment. Traditionally, when there is an inflationary spike, reserve banks take the approach of increasing interest rates to curb that inflation. That’s the normal process. The New Zealand reserve bank, when they came to our caucus a few months ago, declined to take that approach. They said that this was a different form of inflation and that they didn’t need to do that. Those were their basic exact words, and then, months later, we see them hiking inflation constantly. So we have gone back to the traditional form of dealing with the situation of inflation, and that’s to put interest rates up. And the whole reason you put interest rates up—not you, Mr Speaker, but the whole reason that interest rates are put up is to reduce the demand in the economy. That’s the whole point of it. And that then means that we have a surplus of supply.

Construction is often an industry that gets caught up in that point in time, and we go to the opposite. We actually go to a position where people aren’t engaging construction companies to do work. They’re actually saying, “No, we don’t need you to do that thing that we could have done in the next six to 12 months. Hey, we might put off building that new building.” That’s, effectively, what’s going to happen in New Zealand. It’s going to be a hard landing, because, the thing is, we haven’t gone up in little incremental interest rate rises over the last few months; it’s been a huge increase. The quantum of that increase has never been seen before in the generation of many people in this House. The impact of that will be a hard landing. There’s no other way you can look at it.

To have the Government say that it’s going to be all fine and next year interest rates will level out, we’ll still have low unemployment and things will be fine—it’s a dream. It’s an absolute dream. The reality is that when you put interest rates up that hard, somebody is going to have to say no to a proposition. That’s the effect of putting interest rates up, and who’s going to be the one caught out? It’s going to be the building and construction industry. They’re the ones that are going to get caught. They’re the ones that will be out there working this out now. They’re not silly; they’ve seen it before. They’re not listening to the Government rhetoric. They know that they are at most risk.

What does that mean for New Zealanders? It means we lose that capability to actually build things when we need to review—when we come out of that point of time, when we need construction to be a growth angle for the New Zealand economy, the people aren’t there. They’ve gone to Australia. The capital is not there. Nobody’s willing to risk it. And the business owners go, “Well, hey, I’ve been burned. I’m only going to do a certain amount of growth in the next time when that growth cycle comes along.” And we’re slower. That means that New Zealand always takes longer to come out of a recession. That is the cycle that we are going to see.

This bill actually will be very important. Unfortunately, we don’t want it to ever be used. The reality is that some of these things will become more important. But the real thing this Government should be doing today, instead of doing bills like this, which are just ambulances at bottom of the cliff, is actually looking at its spending and saying, “We’re spending too much. We are creating more inflation than we need to.” They should actually be genuine about trying to save businesses from going into the situation where they need this bill. They should actually be prudent in their economic management so that we don’t have to have the excessive hike in interest rates; we don’t have to have the excessive demand that has now built up, that stops; and that we don’t have to have that unemployment, where we don’t have to have those businesses saying no, and we don’t have to have that construction industry staying down longer than it needs to, and New Zealand takes a harder, longer recovery. That is the history of economics. The Government will not accept that for one moment and they’ll be telling their members, “Don’t worry about this. Don’t worry about that speech. We’ll be fine. You’ll be at election time and unemployment will still be low. Interest rates will be coming off their edge.” They’re dreaming.

I’ll tell you what’s going to happen in a year’s time. Interest rates might come off the edge, inflation might, but unemployment’s going to go up. There’s going to be people losing jobs and it’s going to be the very young people that have been told to get a trade, to go into this career, to get in there. They’re the ones that are going to lose their job. It’s not going to be these guys in Wellington sitting in their offices. They’re still going to get paid by the Government. It’s the hard-working young men and women that have gone into the industries that actually build a country, like the construction industry. They’re the ones who are going to get hurt and they’re ones who are going to bugger off because they’ll say, “We’ve had enough of this. We don’t want a country that can’t manage itself.”, that can’t manage the conditions so that they can actually get ahead. That’s what will happen. And Labour members will lose the election on the basis of that, because the people see that, the building companies see that. They’ve been through it; they know that’s what’s going to happen.

So if Labour seriously wants to do something about this area, get rid of that Budget, take a couple of billion dollars of crap spending out of it, and actually do something to stop the inflationary aspect, stop giving money away for nothing, just to create inflation, and look at some fundamental things out there. How do you actually make it so that the construction industry doesn’t have to go through these troughs and peaks? How do we actually give them some long-term construction contracts in the next couple of years, like building some roads, that actually means that there’s actually some work for people out there in the recession that’s coming up? There is a recession coming. There is no way of avoiding it when you put interest rates up that high that quickly. It is the reason you have a recession, because you’ve done that for that reason, to cool the market.

This is an opportunity for New Zealand in the next year to actually look at how we deal with that situation that’s coming. We can be blind, hide from it, and expect an election just to cover it like the Labour Party is. Well, you can actually go out there and look at some fundamental things that actually grow business—providing infrastructure, providing that tax incentive for people to get ahead—and let people employ people. Don’t be afraid of having the private sector do well, and actually make sure that we have a robust economy going for the dark days that have not been created from overseas but we have created ourselves. This is created from our own spending.

OK, it’s the environment we all live in. But it’s the choice you have of how we react to that environment. Do you spend more, put fire on the flames, build it up, and then have to deal with it; or do you actually go, “Well, hey, this is coming in a year’s time. Let’s make sure those kids that have made an investment in our construction industry aren’t the ones on the pile and aren’t the ones that have to leave.”? So let’s get a Labour Government that actually looks for the real issue and looks for solutions in that, and not one that’s feathering its own nest, trying to just ease through to an election year, and hope it’ll get through an election and do a deal with the Greens. That’s exactly what’s happening in New Zealand at the moment.

This bill—we’ll support it. We don’t want to have it happen to any business, but there’s a better way out there and that’s prudent economic management that should be done now and not in two years’ time.

GREG O’CONNOR (Labour—Ōhāriu): There was a chap out the front of Parliament yesterday looking for new recruits for his party, and I think with that previous speech, he may be tapping on his door—Mr David Bennett’s—as a potential recruit.

I think I’m the only speaker today who was actually a member of the select committee who dealt with this bill. As you will see, there have been considerable changes made to it because it was very much a collaborative effort. It was a group of people that got together and who wanted to make this as good as they could.

I think it’s important to actually remember there are two sides to everything, and getting a balance is right. I know, as a young man working on building sites, about correcting the work that had been done by some pretty dodgy subcontractors, and so I had some sympathy for the main contractor in that case. On the other hand, I remember sitting and having breakfast with a person who had just put air conditioning into a major hotel project in Wellington, and when that contractor went broke, he was contemplating a loss of $250,000 because his retentions had gone. At that stage, I had spent considerable time with the previous construction Minister, ensuring that we were doing something about this to ensure that, actually, people did get the protection that they required.

So this is about getting the balance right. I think we have achieved that, and I’ll give credit to those—I’m just trying to think now; it was a wee while ago—whom I remember were on the select committee with me. It was probably as collaborative an effort on a select committee as I have been on, and I think we have pretty much got this right. The assurance now is that when a contractor does know that his money has been retained, he or she will have that money sitting there and—most importantly—it doesn’t become working capital, because that is generally what has happened in the past, and that’s where the problems have arisen.

So it’s a good piece of legislation on its way to, I think—as the previous speaker did mention—a time when there is going to be considerable pressure on the construction industry. I think that it is very timely that this bill will be giving that necessary protection. I commend this bill to the House.

Motion agreed to.

Bill read a second time.

House in Committee

House in Committee

CHAIRPERSON (Hon Jenny Salesa): Members, the House is in committee on the Electricity Industry Amendment Bill and the Animal Welfare Amendment Bill. I remind members that you are able to participate remotely. If you are on Zoom and want to take a call, please type “call” into the chat. You should also be able to use the chat if you want 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’ll be helpful if members ask multiple questions, if you have them, so that the member in charge can take the call and answer your questions all in the one block.

Bills

Electricity Industry Amendment Bill

In Committee

Part 1 Amendments to principal Act

CHAIRPERSON (Hon Jenny Salesa): We come first to the Electricity Industry Amendment Bill. Part 1 of this bill is clauses 4 to 43 and Schedule 1, “Amendments to the principal Act”. The question is that Part 1 stand part.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. It is a pleasure to speak on this bill. We in the National Party strongly believe that consumers and businesses and households should have affordable electricity, particularly in this current environment, where electricity prices—the cost of electricity itself; the energy—have gone up considerably under this Government. It has been a quite noticeable impost on households and businesses in particular. Businesses have faced higher energy prices at a much faster rate than domestic consumers. In fact, it has really put the viability of some businesses right on the line.

We note that last year we had businesses having to shut down because the cost of electricity was too high. The Electricity Authority has looked into this and can’t find why just over $30 per megawatt hour is an unexplained extra cost in electricity, and they don’t know where that’s come from. Unfortunately, they haven’t really been looking into that. Hopefully, they will do now, in the future, and find out exactly why we have that extra cost in our electricity.

The electricity sector is actually in a bit of a mess. Next month, even Transpower, the system operator, is predicting that we will run short of generation on a few dates. It’s unbelievable that we would be in this case, in this situation.

Maureen Pugh: It’s Third World.

STUART SMITH: It is almost Third World. That’s right, Maureen Pugh, the soon to be member for West Coast-Tasman. That is a shameful situation in a country that deems itself to be First World. We are, unfortunately, following in the footsteps of what has happened in Germany in particular, and in Europe, where the value of an open and competitive electricity market has been called into question because of what’s known as the energy trilemma—putting affordability, reliability, and sustainability as the three legs of that trilemma—calling that out and putting it off balance by putting a focus and subsidising intermittent renewable electricity sources at the expense of reliability and affordability. We are going down that path, and this bill does nothing at all to address the energy trilemma.

Unfortunately, the Minister has not explained why one of the main provisions in this—the electricity consumer agency—is needed when we have a Commerce Commission to cover off the issues that it will look at. I’ve met with the new group and they’re nice people and I’m sure they’ll do a good job, but they’re doing a good job of replicating a job that someone else is doing. This is unnecessary red tape, which is something the Government is very good at. I have to give it to them—if this was the Commonwealth Games, they’d get a gold medal in red tape. But, unfortunately, red tape strangles the life out of the economy, and we can’t have that. The Minister has had no satisfactory explanation for that.

So, Madam Chair, I will come to a question in a moment, but I think that it’s very important that New Zealanders understand why there’s going to be another leg of bureaucracy added into a system that has a very good Commerce Commission. They have their faults, and there’s no doubt about that, but, actually, they have the ability and the funding to carry out the necessary investigations to deal with this. It’s another group that’s a feel-good thing, and I just don’t understand the need for that, so I would like the Minister to address that, please.

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you, Madam Chair, and I will address a couple of the points as well as the question that the previous speaker Stuart Smith raised. I think it is really important that we do stick to the facts when we’re discussing our electricity industry.

So, first of all, there was a claim by the member who’s just spoken that electricity costs have gone up in New Zealand. I think if the member consults the electricity in New Zealand, the data that’s coming out is very clear about what is happening to electricity costs, both at residential and commercial level in real terms. So if we have a look, what’s happened: actually, for residential, we’ve seen a minus 2.3 percent cost in electricity costs for residential consumers. For commercial, we’ve seen minus 1.2 percent. So I think it’s really important we do look at that.

None the less, there are issues with the wholesale market, and this is a stream of work that the Electricity Authority has been doing a large amount of work on. They’ve done some report backs, and if the member wants to follow that work closely, he will know that actually there will be a further report back, and that’s been well signalled by the Electricity Authority and the depth of the work that they’re doing in that area.

I’d also just like to address some of the scaremongering about the notices that Transpower puts out, which are an absolutely standard part of the way that Transpower operates. What they have signalled is that in the coming weeks, next month, there will be some days when there is tightness in the electricity market. This is standard, and this is something that happens all the time; it is how our market works. That works as a signal to generators to up generation and to bring more on stream.

I’d also like to address the somewhat absurd claim that the member made that New Zealand is in danger of following down the path of Europe and Germany. I can assure that member, after having just returned from a trip to Europe and Germany and talking with those in the energy sector, that the main concern there is actually the situation with gas due to the war in Ukraine. The fact that 40 percent of Europe’s gas comes from a pipeline from Russia which is now curtailed is what is upsetting that energy market. If anything, if you speak to any of the participants in that market, they’re talking about what they can do to stimulate the building of more renewable energy at pace.

But I think it is really important that we look at this bill, because this bill looks to do some very specific things. Many of them are the result of the Electricity Price Review’s recommendations.

The first question that the member has asked is around the role of the Small Electricity Consumers Agency and why we would do it. This has been well traversed. What we do know from evidence in other jurisdictions, where consumer legislative councils have legislated authority, like we’re putting in place with this bill, is that you do see resulted lowered consumer utility bills, compared to jurisdictions that do not have them.

This advocacy council will be funded through any levy regulations being made. That would result in probably a less than $2 per year cost. As to the reason why it was done, the Electricity Price Review panel spelt that out very clearly. Our large participants in the energy market have very clear, very well-funded advocacy services and their voices can be heard. Residential consumers and, indeed, small businesses were a group that the Electricity Price Review pointed to, whose voice is not heard and who don’t have that advocacy in the same way, so there was a strong and persistent need for New Zealand to fill the gap in its network of who it is that has the input into how we make policy in our electricity sector.

This brings us into line with how most countries would seek to protect both residential consumers but also those small-business consumers who are subject to the same pressures as many households and certainly do not have the power of our major electricity users or their industry bodies to lobby on their behalf. Thank you, Madam Chair.

MELISSA LEE (National): Thank you, Madam Chair—good choice. In relation to this particular bill, I even called out to my colleague Stuart Smith that the very question I was going to ask in relation to clause 11, he had already asked. But in listening to the Minister, I have to say that it was actually not very clear in her answer as to the question that was posed by my colleague.

He did ask why this Small Electricity Consumers Agency was going to be formed, and I would add, further to my colleague’s question, that it actually says in new section 22A(4) in clause 11, “In approving a person or persons under subsection (2), the Minister must be satisfied that the person has (or the persons collectively have) the ability to perform the function of the agency.” That suggests that the Minister will appoint, and I would like to find out what kind of criteria or abilities these people actually have in the industry that they are deemed better than the Commerce Commission which already performs the function. Does she believe that the Commerce Commission does not do what they are actually funded to do, and why is there a need to bring this new agency about? It just seems like it is the Minister who wants to control an agency.

The reason I say that is I go to new section 22A(5) in clause 11, and it says, “The agency may determine its own procedure, subject to any directions given to it by the Minister.” So that is completely contrary, in the sense that on one hand, it is suggesting that it is going to be completely independent, but it is not really.

It seems really typical of this Government to create a perception that it is supposed to be independent, but it is actually not really independent, because it is getting direction from the Minister, so it will only do what the Minister tells it to do. I mean, you would have thought that when they are looking at consumer issues or when they’re looking at investigating where there is a fair price being charged by the electricity companies, for example, and consumers are not being overpriced on their electricity, you would want an organisation or an agency, or whatever is looking into it, to be independent, so they are not influenced by anyone. In this particular instance, it seems that they are influenced by the direction of the Minister, and I would like clarification on that, please.

SIMON COURT (ACT): Thank you, Madam Chair. There are a number of problems to solve with the electricity industry that would deliver better outcomes for consumers and business, and the environment. The problems to solve for electricity are security of supply, affordability, and, of course, the environmental impacts so that decisions we make about how we generate electricity and how we deliver that electricity to consumers and businesses have the smallest environmental footprint. Now, that’s not just addressing climate change; it’s also considering the impact of, say, building wind farms in the sea in coastal areas, which is not something New Zealand has done before. It’s the environmental impacts of hydropower on sensitive freshwater ecosystems.

But the Government has created a whole lot of problems for the electricity sector and consumers of energy that it didn’t need to create through its targets: 100 percent renewable electricity, which the industry has pointed out is going to be a very, very expensive outcome to achieve. It’s that 80:20 rule: the first 80 percent of your goal is usually readily achievable in the time frame, but that last 20 percent is really difficult. Well, New Zealand is often at 95 percent renewable on a good day, when the wind is blowing, the turbines are spinning, and the turbines in the dams are spinning full noise. That last 5 percent could cost billions, or tens of billions, to become a 100 percent renewable electricity nation, and it’s not necessary because there are other ways to solve that issue of environmental impact from these activities.

Then we have interventions that the Government has signalled, like the Lake Onslow dam project, a project that will flood a unique wetland in the South Island high country that could take decades to build. I mean, as an example, the Clyde Dam, announced in 1979, was completed in 1992 at a cost roughly three times initial estimates. There have been no estimates for Onslow, but it wouldn’t be unreasonable to say tens of billions of dollars and decades. If this Government remained in charge for any longer than October 2023, you could probably add a decade to that by their history of failing to deliver.

Other signals: the green investment and decarbonisation initiative—I’m getting giddy and dizzy thinking about it, Minister. It’s spinning me out how much money this Government has wasted on buying new, expensive, electrical boilers for brewers, for multinational companies that make beer and sell it to consumers, who pay them money. Now, who knew that those international brewers need a subsidy from the New Zealand taxpayer? Kids who work at The Warehouse and pay tax through their part-time earnings are subsidising multinational brewers to replace a gas boiler or some other boiler with a brand new electric boiler, courtesy of this Labour Government.

Then we’ve got the Resource Management Act barriers to develop renewables. Now, it’s been decades since New Zealanders and businesses identified the problems with the Resource Management Act in trying to get consents to build stuff, but it’s not just getting consents to build new stuff. If you run a hydroelectric dam on, say, the Waikato River—and there’s many, many dams like that built in the 1950s and 1960s—which underpins New Zealand’s current renewable profile of nearly 95 percent renewables on a good day, and if you need to re-consent that dam every 25 or 30 years—

CHAIRPERSON (Hon Jenny Salesa): Order! Does the member have questions of the Minister in relation to this particular bill?

SIMON COURT: Thank you, Madam Chair, I do, relating—

CHAIRPERSON (Hon Jenny Salesa): I invite the member to come back to this bill.

SIMON COURT: Thank you, Madam Chair. So just to close off, there are many problems to solve not helped by the Governments proposals, interventions, and targets. Then we come to this bill, which proposes, amongst other things, widening the objectives of the Electricity Authority to include the additional objective to protect the interests of domestic consumers and small-business consumers in relation to the supply of electricity, and in relation to the dealings of industry participants with domestic consumers and small businesses, the authority is to protect the interests of domestic and small-business consumers. Well, Minister, there a number of ways that the Government could protect their interests. Firstly—firstly—it could leave the market participants to solve—

CHAIRPERSON (Hon Jenny Salesa): Order! Order! The member’s time has run out.

Hon JUDITH COLLINS (National—Papakura): Thank you very much, Madam Chair. Well, this is an interesting bill, having been the energy and resources Minister at a time when renewable energy in New Zealand was 84 percent at one stage. I understand that it’s now around 63 percent, or perhaps the Minister will eventually, at the end of my contribution, want to answer that.

I’ve been looking at something, and I heard the contribution from the Minister and I thought she was quite sarcastic towards my colleague Stuart Smith—very unkind and sarcastic. She said, “If only he knew his numbers”. So I went on the look for some of those numbers to update myself, and I found that there was a paper put out by the Ministry of Business, Innovation and Employment—the Minister’s own ministry—called Energy in New Zealand 2022. There was some very good information in there, which probably helps to tell us why we’re in this sorry state when it comes to renewable energy.

So this is what it says: “Coal imports exceeded [exports] for the first time since 1990.”—so this is for the year of 2021. “This meant that New Zealand was a net importer of coal.”—for the first time since 1990, by the way. “Coal imports increased by 69 per cent … the highest level on record. This was due to higher imports of sub-bituminous coal, which was driven by the demand for electricity generation as well as constraints on the ability of domestic producers to supply the required amounts at short notice.”

I also looked to see about the local coal production for electricity, and I noted that it had actually gone up 1.7 percent in the year before—so that is, coal production in New Zealand in 2021 increased by 1.7 percent—and there is now a 12 percent increase in just one year for the production of electricity, 7.5 percent of the New Zealand primary energy contribution. When I was the Minister, that was down to about 4 percent, and that is the difference.

This Government came in and announced “We’re going to be 100 percent renewable.”, and up went the price of coal and up went the production of coal and up went the importation of coal, and now we receive coal from Indonesia. It’s not the sort of excellent coal that we have here, but, apparently, it’s better to ship it over than to sort out the production of renewable energy or to use the natural gas that we have here, which is a far cleaner-burning product than coal. Thank goodness we didn’t actually close the Huntly thermal power station, which was actually something that some people, I thought, more focused on climate change rather than actually having the electricity to pay for that climate change were suggesting at one stage. Thank goodness we didn’t, because if we had, we would now not have electricity sufficient for the winter months. Wait till the summer comes and the air conditioning and the electric vehicles are all being charged up.

I have a question for the Minister on this. Apart from the fact that I’d love to know what the current state is of just how much of our electricity produced is from renewable energy, I’d like to know from her how having another piece of bureaucracy stuck in place to supposedly protect small consumers and small businesses is going to make one scrap of difference other than to add more cost to a sector that already is producing very high rates of electricity prices.

The only thing that’s saving us in the world rankings, frankly, at the moment on electricity prices is the fact that in Europe, in particular, prices have gone through the roof because of a scarcity of supply, and we all know what that issue is. It is not an issue here because I see that our imports also of oil from the United Arab Emirates have gone right through the roof, so, clearly, Emirates will be able to continue to fly in its current state for a very long time based on those profits. So I’d like to ask the Minister this: how’s this going to make one bit of difference other than to put up the prices?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): I’ll address the very few issues that have been raised that are actually in scope of this bill.

So I think it is worth actually outlining what it is that this bill does. The bill’s purposes, in particular, are strengthening the consumer voice—I’ve addressed one of the questions around that; I’ll go over the reasons for that again in this contribution—and protecting the interests of small electricity consumers, whether they be residential or whether they be small businesses; promoting competition in evolving markets, and I think that’s a really critical place, and somewhere I would have liked to have actually probably seen some questions in this debate is the innovation there; and also regulating distribution access agreements, which is about how we prepare our electricity sector for the future and for a decarbonised future.

So one of the things that has been asked is around the purpose of the consumer advocacy group and what it will do and how it fits within the network of groups that we have across the electricity sector. Of course, as I’ve said in an earlier contribution, this was identified by the independent Electricity Price Review as a real gap.

And one of the things that I think that it’s really important to note—I think one of the previous speakers, Melissa Lee, said, “Won’t this just replicate what the Commerce Commission does?” Well, the Commerce Commission is not an advocacy group and I think it’s really important to remember that. This is a needed part of the landscape we have. We have our large electricity users who are very well represented in terms of advocacy and their voice being able to be heard in the policy process. This will complement other groups that exist, like the Utilities Disputes. And that is an excellent service that exists within our electricity sector and it can only resolve disputes on certain matters. So it needs to sit alongside that, and it is one of the things that we know makes a difference.

As I said in an earlier contribution, if we look to comparable overseas jurisdictions that do have advocacy services that are legislated, we do see smaller increases in utility bills. There is a very strong correlation between those two things happening.

As for the costs, which the member Judith Collins brought up, I already laid that out in an earlier contribution. It will result in around a $2 a year cost on levies. So this is minimal and the benefit we see to our economy, both at a household level and at the small business level, more than offsets that.

We’ve also seen some other questions that have come through—many of which weren’t in scope of the bill—but one of which was questioning the amount of coal that we used and how that fits with our renewable targets. I’m going to be generous and see this in the spirit of the kinds of things that we have to do to bring the innovation to our distribution systems that is covered off in this bill.

But one of the issues that we have in our energy system—and I would like to remind the former Minister of energy that it is important to differentiate between energy and electricity. We have never had an 80 percent renewable energy system, as she claimed that we have around 90-odd percent renewable electricity system at the moment. Our energy system is only around 40 percent renewable. We’ve got a lot of work to do in that area.

But the whole reason that our coal usage spiked last year is because we experienced a dry year, and at the moment, the only way New Zealand stores energy for a dry year is in the form of fossil fuels. We store energy in the form of coal and we store energy in the form of gas, and this simply cannot continue and is something that this Government is investing in to make sure that we have renewable forms of storage; that we have a plan for our future that fits with a decarbonised world and isn’t just relying on fossil fuels for the way that we store those things.

There’s a lot of stuff being—I can see that there’s a desire in the House to have a more general debate on energy and electricity, but let’s remember what the scope of this bill is. This is very specific, and I think a really important thing that we need to do for our electricity system, and that is making sure it is working for all the users of electricity and that we are seeing that the rights and interests of those smaller interests are also represented—households and small businesses—but also that we are preparing our system and our distribution systems to ensure we are ready for the innovation that we need. And there’s some very interesting clauses in the bill.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair, and, unlike the previous speaker, I won’t reflect on your judgment on what’s in scope for the debate or not. But the Minister did raise electricity prices. She has talked extensively about that, but she’s neglected to talk about industrial users. I know it can be a difficult concept for people to understand, but industrial users, the price that they pay and the cost that they bear actually flow through the economy—right through the economy.

We’re very aware and concerned on this side of the House about the cost of living crisis that we are currently in, and, actually, the Prime Minister refused to even utter those words for a while, but was forced into it because of us pointing out that we’re living in a cost of living crisis. Energy is a major driver of the cost of living, and I think everyone understands that. But what is causing those prices to rise and what is causing the uncertainty in the electricity sector?

One of the major causes, which Simon Court raised earlier, is Lake Onslow. It’s absolutely correct, what he said, about the likely blowout in costs in that. But what is of concern to us on this side of the House is the impact of that on the electricity sector, and the uncertainty that it raises, because anyone who goes out and talks to the electricity sector, as I have and others on this side have, knows that it’s raised all the time as a major issue for them. It’s driving their lack of willingness to invest in generation. This bill doesn’t go anywhere near that. Why is that? I don’t know.

But I can give the Minister an example of where the projects like Onslow will go wrong. We only have to look at Snowy 2.0 in Australia, which is a pumped hydro scheme first suggested by Malcolm Turnbull in 2017, and is expected to cost $2 billion and to be finished in 2021. This week, they’ve gone back asking for another $2 billion. It’s now likely to cost $10 billion and be completed in 2028. That is why the industry is so concerned about Onslow, because that is what will happen here. It will be well over $10 billion and we can’t afford it, actually, quite frankly, although with the way the Government spends money, who knows?

But I’d like to move on to the regulatory impact statement and the ability to allow the authority to amend the code if the Minister is not satisfied with progress on specified matters. So the bill now gives the Minister the ability to force the authority to make regulations if the Minister deems it necessary. Now, that is against the Ministry of Business, Innovation and Employment’s (MBIE) recommendation; they recommended the status quo. Why is that? So—

Hon Judith Collins: Power and control.

STUART SMITH: Well, yes, I think, it seems that central control is what is behind all of this, and you would really need the wisdom of Solomon to actually be able to stand up the top as a Minister, no matter how talented the Minister is—or lacking in talent—and that Minister wouldn’t have, I believe, the understanding of the intricacies in the market, and we end up with unintended consequences.

So my question to the Minister is: why is she going against MBIE’s advice on that, and why does she think she’s in a better position to make these decisions rather than officials who are well qualified in this area and across it in great detail, and what was the increase in industrial electricity prices which drives the cost of living for us all? I believe, actually, in her earlier comments, I think she was talking about the total cost of electricity that users pay, and, as the former Minister the Hon Judith Collins will know, that includes delivery cost, that includes Transpower cost. What I’d like to know is: what is the increase of the actual electricity when you strip out the cost of Transpower and lines charges within those costs? So a couple of questions for the Minister.

CHLÖE SWARBRICK (Green—Auckland Central): Thank you, Madam Chair. I’m really pleased to hear the Minister speaking to how the broad kind of impetus behind this legislation is working for all users in making sure that our system is ready for innovation. With that in mind, I have a few questions for the Minister pertaining to the actual legislation, which I’m sure she will welcome.

So to that effect, and perhaps to give some background—because I’m not an expert in electricity or the electricity authority, as probably next to none of us in this Chamber are—a few months ago, I was sitting in Morra Hall on Waiheke in June at the very grandly titled community energy resilience symposium, and, indeed it was grand. It was there to educate the community on Waiheke about something called multiple trading relationships. This pertains particularly to what actually we just heard from members of the Opposition with regard to the electricity code and the opportunity to amend it. So to that effect, it’s worth unpacking what multiple trading relationships are currently by virtue of the 2010 energy participation code. It is the case that you as a consumer can only have a one-way relationship with your energy provider, who you contract and you pay to provide that energy to you. By virtue of the 2010 code, there is an inability for you to also contract with another electricity provider who also has a contract to use those electricity lines. But if you, for example, are somebody who has solar panels on your roof, you are prohibited from having the ability to put the excess power that you may generate back into the grid and potentially sell that off or share it to those in your community or others.

In order to do this, a framework is currently, I understand, being trialled or piloted by Ara Ake. It began in 2020 and is something which would require amendment to the 2010 electricity code if it were to be applied on a broader basis. So here’s a big shout-out to those from Energy Alternatives to Dana and to Silke but also to Vern Whitehead from Electric Island and to all of those on Waiheke Island who have been doing the most when it comes to decarbonising Waiheke Island.

I do ask the Minister if she sees in this legislation that there is the opportunity for smoothing that pathway to making multiple trading relationships legal, more available and, therefore, our energy grid more resilient and more equitable fundamentally by virtue of those opportunities to amend the electricity code.

Hon Dr MEGAN WOODS (Minister of Energy and Resources): There’s a couple of questions that I will address that have come through in the speeches. The member Stuart Smith said that what I failed to mention was what was happening in real terms to the cost of industrial electricity. So I’m happy to add to the minus 2.3 percent for residential and the minus 1.2 percent for commercial. Industrial did rise; it rose by 0.1 percent in real terms. So what we can see is that we’re not seeing those elevated costs of energy that we’re seeing in other jurisdictions around the world—particularly, the UK and Europe—and I’d note that that the 0.1 percent increase to the year end of March 2022 is largely driven by spot prices. That isn’t pertaining so much to those that are on contract.

We also had a question around why it is that we’re putting the backstop provisions in this bill. Well, the backstop provisions are just that—they’re there if we need to use them. Initially in the regulatory impact statement that the member read from, the Ministry of Business, Innovation and Employment (MBIE) did give advice that it wasn’t required. They’d like to see the other measures so that we’d hope that we wouldn’t need to use the backstop, but I think if you have a look at the departmental report that followed on there, actually, MBIE recommended bringing forward the dates of when the backstop would apply. So originally it was two years, and in the departmental report we see that MBIE is saying, “Actually, let’s make that one year after enactment.” So it is a time-limited power, and it’s the kind of thing that, when we’re making regulatory change, it’s prudent to put in so that that backstop power is there should it need to be used.

I’d like to thank the member Chlöe Swarbrick for her questions around the multiple trading relationship trial that’s going on with Ara Ake that they’re currently undertaking. Of course, this is one of the reasons why the Government funded and set up the new energy development centre in Taranaki that went on to become Ara Ake. It is because this is the kind of innovation that we need to see. Certainly, this is something that we are following very closely and working very closely with the data coming out of that trial with Ara Ake. Indeed, some of our own Government programmes around how it is that we’re rolling out the trials for solar panels, or renewable energy more broadly, actually, on public housing, and in Māori housing, some of them will utilise multiple trading relationship scenarios.

I think that the member can take comfort that we can see the provisions of the bill that are actually all about promoting competition in evolving markets. There are whole sections of this bill that do look at that, and I think that’s increasingly necessary as we’re seeing the blurring of the traditional boundaries that have existed within our energy and electricity sectors, where we see the idea of what is generation, what’s transmission, and what’s distribution all collapsing into one in many of these scenarios. So, specifically, clause 47 of this bill moves key provisions from Part 3 of the Act into the code, and clause 13 provides that the code may impose obligations on a non-participant for the purposes of restricting relationships between the two classes of industry participants. So, really, this bill is an example of our legislation needing to keep up with innovation that is going to be required for decarbonisation.

MELISSA LEE (National): Thank you, Madam Chair, and thank you for considering the fact that I have been rising for a little while to ask a couple of questions. But before I do that, I’d like to make a comment and perhaps give some advice to the Minister: insulting the Opposition and members in this House is probably not conducive to a good committee stage. I think there are many Ministers who get up and actually do the process and answer questions earnestly, because, as even Chlöe Swarbrick said, not all of us are experts. Perhaps the Minister is the expert on electricity—I’m not so sure what her PhD is—but the thing is that insulting the Opposition by saying sarcastic comments like “Oh, there aren’t that many questions.”, you know, I don’t know, maybe the Minister doesn’t actually want to be here, but some of us do, and we do have questions, and it would be very helpful and alleviate the question and answer session in this committee stage if she is, actually, so inclined to be kind, like the Prime Minister said—be kind and actually, perhaps, answer some questions earnestly—

Tangi Utikere: Point of order, Madam Chair. Members are aware that if there are particular issues that members might have, there is a point of order process that members can take. I’ve been listening to the debate and it seems to me—my submission is—that many of the contributions have been time bound and out of scope, and on this side of the Chamber, we’re seeking to move some closure motions on that basis. So I would invite you to reflect on that in terms of making rulings.

Simon Court: Madam Chair?

CHAIRPERSON (Hon Jenny Salesa): Is it a point of order or are you seeking a call?

Simon Court: Seeking a call, Madam Chair.

CHAIRPERSON (Hon Jenny Salesa): Can I just respond to this point of order. I’ve been actually listening to the debate as well, and some of the contributions has been out of order in terms of the wider scope that they talk to. But I’ve actually allowed it, in the spirit of the debate, and I will now go back to the call that was being taken.

MELISSA LEE: Thank you, Madam Chair. I will go to clause 15, “Section 40 amended (Urgent amendments to Code)”, which basically talks about “expires on the date that is 9 months after the date on which it comes into force, unless it is revoked earlier under section 40A.” When you actually go through that whole section and you come to 44B, in clause 19, it talks about how the Minister may amend the code to include specified matters. If you go down to subsection (3) of 44B, it actually says, “The Minister may amend the Code under this section as if the Minister were the Authority”, and then it just has a couple of other lines.

I’d like to ask the Minister how she actually sees this particular case. Apart from it being deemed that the Minister’s changing the code on the fly and the Minister is literally—the Government actually thinks that the Government knows best, and it’s almost like this is about Wellington trying to impose rules on people, increase costs on people, and it’s literally dictating. I’m trying to find out in what circumstance will the Minister take on the role as section 44B(3) says: “The Minister may amend the Code under this section as if the Minister were the Authority”. What specific example can she give us in this Chamber, where she will actually do that job and take on the role of the authority?

SIMON COURT (ACT): Thank you, Madam Chair, and thank you for the opportunity to take a call. I have some specific questions for the Minister regarding the function of the Electricity Authority, the ability of the authority to amend the Electricity Industry Participation Code. In the last week, we have seen the Electricity Authority intervene in the market to block a commercial arrangement between an electricity generator and one of their major customers, the Tīwai Point Aluminium Smelter.

I sense the cold dead hand of a Prime Minister past, the sponsor of the Think Big regime, in some of the worst and most harmful interventions in the New Zealand economy, a former Prime Minister, Robert Muldoon, in the way that the Minister of Energy and Resources has proposed this reform package. Last week we saw the Electricity Authority intervene to block the power companies from entering into power contracts with consumers unless certain conditions are met. This must be the most serious and damaging impact on business trust in Government; one of the most terrible things this Government has done to undermine trust in the sovereign, to introduce sovereign risk to our economy.

I want to reflect on the comments of the current chair of the small electricity consumer agency, the current chair who has weighed in on this intervention—and while I have a great respect for the current chair and the work that she does in her community, she appears to be, unfortunately, just another Government comms mouthpiece when it comes to electricity and the Government’s intention to intervene in this absolutely vital part of our economy. The chair has said: “We absolutely support what the authority is doing. It sends a very clear message to the generators that they must not settle on contracts that disadvantage residential and small business consumers.” And yet, residential and small-business consumers switched power companies 400,000 times, Minister—400,000 times—in the last year. There are more than 40 retailers to choose from. It doesn’t appear that business, small business, and consumers have any barriers to getting a better deal. They might choose a deal with a supplier who offers them internet, gas, a television, a fridge. They might choose to go with a power company that offers them prices on the spot market. It might not have been the best choice for those consumers, but they had the choice, Minister.

So I want to come to my proposed amendment to the bill. I’ve proposed Supplementary Order Paper 233, which would delete clause 11, the clause relating to the establishment of a Small Electricity Consumers Agency. Now, the ACT Party—ACT is an acronym for the Association of Consumers and Taxpayers, and we take this role very seriously. But we also recognise what a dangerous precedent this sets; in fact, not really a precedent, just another silly intervention by this Government in business and in relationships between suppliers, consumers, and, of course, the taxpayer who’s going to end up picking up the tab for this unfortunate intervention.

So what I’m proposing is that the small electricity consumers already have access to the utilities disputes service. That’s a service that’s funded through a levy on electricity and gas providers. They can make determinations about disputes up to $100,000, if that’s what they agree. The ACT Party’s proposing to delete the small consumer advocacy component of this bill, because there’s no justification in the legislative statement, Minister, for strengthening the consumer voice when consumers struggle to make their voices heard and exert influence over decisions affecting them in the electricity sector. When those decisions are made about contracts between suppliers, consumers, when decisions are made between maybe suppliers who want to offer different services—it is unbelievable that the Minister believes that consumers, the customer, should have decisions as to what services businesses deliver and how they organise themselves and engage with other customers.

This is not a piece of legislation which will increase the trust that business—

CHAIRPERSON (Hon Jenny Salesa): Order! [Interruption] I call on Simon Court—I call on Simon Watts.

SIMON WATTS (National—North Shore): Thank you, Madam Chair—too many Simons in this House. Just building on referencing clause 15, the amendments to section 40, I’ve got four questions with regards to this point. I think it’s a theme that’s been carried through by a number of speakers. I guess I’m reflecting and the question for the Minister is around what is the problem we’re trying to fix, or whether this is legislation a solution looking for a problem. I just did quick review in terms of the feedback. The previous speaker talked about the competitive nature of the electricity sector in New Zealand. There are 40 providers. Overall, Consumer New Zealand’s done some analysis, released recently, which articulated that 52 percent of Kiwis are very satisfied with their power company, and it goes on and rates Electric Kiwi at 70 percent satisfied, 77 percent of Powershop, and they mention Flick as well.

The point there is: are we dealing with an industry, a competitive industry—which it is; there are a number of players in that industry and consumers have choice—and therefore what is the problem we’re trying to fix by introducing this new consumer representation group in clause 15 of the bill? So that’s the first question: have we seriously done the assessment around the problem statement, firstly.

The second question is: if we’re just going to ram this through, then what is the cost in order to fund this, and the question around the analysis that’s been undertaken independently around the cost flow-through to consumers in terms of power prices or the bills they get, because you cannot introduce regulation or degrees of bureaucracy without that having a cost, and that cost needs to flow down. In this case it will flow down, no doubt, to consumers, so I’m interested in what analysis has been undertaken around that, what the estimate of that cost is, and what it will cost to actually fund this bureaucracy that will be put in place to try and deal with a problem that I think is yet to be defined.

The third question I have is again in relation to clause 15 a little bit more broadly. How does the Minister see that this new consumer agency is going to work in the context of the authority needing to manage the concept around competition within the sector? I think there is a mismatch, and I think it was mentioned a bit earlier as well. There is a mismatch around what the authority’s objectives are, and, gee, haven’t we seen this with the Reserve Bank introducing “What’s your core business, what’s your focus—inflation.”, and now they’ve got another one. Well, it’s interesting to see the same thematic coming through in clause 15 of this bill in terms of this consumer panel, which in effect—and this has been assessed by external parties as well—creates a mismatch or a conflict in regards to what is actually the job they need to undertake, which, in effect, is to create and ensure that we have a competitive electricity sector.

So I think that the introduction of this consumer panel—and I’m interested in the Minister’s comment on that. One of the unintended consequences potentially of this consumer panel playing in conflict with trying to create a competitive structure is that we need fewer players in the market, because they have the capability and scale—that may be argued, and I’m pretty good at arguing that scale brings benefits. But one of the unintended consequences may mean that we will see less competition as a result of that because of the drive around the consumer panel.

The last question I’ve got is in regards to the analysis provided by the Ministry of Business, Innovation and Employment, and it’s been mentioned before around the fact that the officials have felt that the costs of implementing the entity under clause 15 are going to exceed the benefits. So we’ve now got an official Government organisation telling the Minister, “Nice, but it’s not going to cut it.” It’s going to cost more to put in than any of the benefits.

So what assessment or peer review of that advice from officials has the Minister undertaken to satisfy herself that this is required, and—more importantly in terms of taxpayers’ money—that this is actually going to deliver the outcomes that will make an improvement. From all the assessment that we can see in regards to clause 15 in Part 1 of this bill, that will not be the case. Thank you.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. Just before I get into the rest of it, I would like to point out that the Minister sort of dismissed the concern about wholesale electricity prices, which is quite in contradiction to an answer to a written question to me, published on 2 June, that she is concerned about wholesale electricity prices. Perhaps she has short-term memory loss.

The regulatory impact statement was quite an interesting, damning report, really, in places—as has already been alluded to—but the Minister’s power to make code, it said, will temporarily duplicate that of the authority and doesn’t conform to the practice of independent Crown entities. The Minister’s ability to regulate over the top of the authority is inconsistent with independent Crown entities’ status. I haven’t heard an explanation that makes any sense or that justifies that. Has anyone else? No one on this side has. She still hasn’t explained it. I’ve asked questions about this before, and she seems to be more interested in personal attacks than in answering questions—actually, that’s good for us, so that’s fine with me—but it would be quite interesting to find out what the justification is behind that. That would be really helpful, Minister, if you could come to that. But I do also want to go back to the point that she also hasn’t addressed, industrial electricity prices, and simply dismissing it, I think, doesn’t do her—she’s better than that, surely. Or maybe she’s not. And New Zealanders deserve better than that.

I also want to talk about Chapman Tripp’s view on the Electricity Act shake-up, published 10 September. That was quite interesting as well. It talked about: “The expansion of the Electricity Authority’s discretionary powers will introduce significant uncertainty into the sector as it will enable to Electricity Authority to, effectively, restrain market participants from being involved in specified services or activities.”—as my colleague just talked about—“This has the potential to undermine existing investments and to deter future investment in emerging technologies and services. It also expands the Electricity Authority’s role in competition policy, blurring the responsibilities of the Electricity Authority and the Commerce Commission.”—all points that have been raised in this debate, and questions have been asked and not answered satisfactorily.

The Minister also responded to one of my statements about our going down the path of Germany and Europe. This is the path they went down. This is exactly what I was alluding to, and the impact of this on investment into the sector is significant. These things have a long germination time, if you like. From when an electricity company makes its final investment decision, or FID, to the time their generation comes on stream can be quite long. The payback time can be quite long. So those companies are all prepared to sit back there and say, “Well, we’ll take a calculated risk on our customers being able to pay a price that will justify our investment in this generation.” But what they don’t want—and it was alluded to by Simon Court before: that sovereign risk is now on the table in New Zealand because of the actions of this Government. So that puts everything at risk, and this bill is just another straw on the camel’s back of sovereign risk.

Companies are talking to me about this all the time, about their lack of confidence in making investment decisions, because of the sovereign risk that is now perceived. I know from an associate that was speaking to an investment bank in the United States, looking for funding for a project in New Zealand, the bank told them, “You just don’t get it. The one thing New Zealand had going for it was confidence in stable and predictable Government, and now that is gone.” The one thing that we had is gone. This is far more wide-reaching than, I think, is appreciated, and flippant comments from the Minister do her no service, nor do they do New Zealand or our electricity sector any good service as well.

Hon Dr Megan Woods: Madam Chair?

CHAIRPERSON (Hon Jenny Salesa): I’ll come right back to you, Minister. I’ll call on the Hon Judith Collins to ask her questions, and then you can answer all of them.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Chair. Look, I want to come to clause 19, which inserts section 44B(3) and (4). This is an absolute constitutional outrage. We have an authority that has its job to do, and now have a clause in here—and I’m going to ask the Minister some questions on this.

It says here, “The Minister may amend the Code under this section as if the Minister were the Authority.” Well what’s the point of the authority? What’s the point of having an authority that actually has expert knowledge in it and is immersed in the sector to then have a Minister deciding that she can decide that they can just overrule that authority and actually be the authority?

So this is an extraordinary piece of, essentially, legislation by fiat that the Minister is seeking to give herself—and that that party over there, and its friends, are happy to give her. I have no idea why they’d do that, given the KiwiBuild disaster. I have no idea why they’d do that given the emissions going through the roof for electricity under her. I have no idea why they’d do that when we have this.

This is unusual in the extreme, because there are other options. Number one, the authority is allowed to do its job. The authority has, essentially—it’s sort of quasi-judicial in some of its mechanisms. It’s subject to the Official Information Act, and it would, no doubt, wish to comply with it. It’s also subject to judicial review of its decisions. The Minister is now seeking to make herself judicially reviewable because of this. Why is this not even going to her colleagues in the Cabinet? If she really wants to say that she has no confidence in the authority to make the decisions that she wants, why bother having them? If she really wants to do that, then why is this not, at least, an Order in Council, so that her Cabinet colleagues could look at it and say, “On what planet is she living?” Why would we have the authority?

This is a bit like saying, “Because the authority is very powerful within the industry, and we want the Minister to be in charge of everything.” It’s very clear she can’t even just send it back to the authority and ask them to rethink it. No, no, no; this is as if she is the authority. Why don’t we just get rid of the authority; is that her idea?

So question to the Minister is: how is this constitutionally sound? How is she better equipped than the authority to make these decisions? She has an ability, for instance, to change the authority if she really wanted to. She has an ability through the appointment process to do that. If she’s going to override the authority on issues like this, why would the authority have any confidence in anything else it does, and why should this House have confidence in the authority if she is showing no confidence in the authority?

We on this side have confidence in the authority, because we know that it is actually an expert body with knowledge. We also are concerned with what standard this is, where the Minister is saying that small users of electricity seem to need this agency to be set up to protect them. It’s been ably pointed out in this Chamber already, on this side, that actually there are loads of opportunities for people to change electricity retailers, and many of us do, from time to time. But these big suppliers, their costs—any extra costs—of course, will be added to the cost of what they produce, which means added cost to the consumer anyway. So how is that going to help the consumer?

So there’s two questions there for the Minister. I hope that she’ll be able to answer them without the level of sarcasm we’ve seen already from her.

Hon Dr MEGAN WOODS (Minister of Energy and Resources): What I will do in this call is go through clause 15 of the bill. That seems to be where the predominant source of questions are coming from. I’ll go through and I’ll explain what the clause does, why it does it, and where it came from. I think one of the most important places to start is what the legislative etymology of this clause is, and, of course, that was a clause that Gerry Brownlee put into the 2010 legislation when he gave himself a regulatory backstop around the changes he was making to the electricity system.

So the constitutional outrage claims from the Opposition are somewhat hollow, when, actually this is language that has just been lifted from the 2010 legislation, put in place by a National Government—exactly the different specified reasons, but the framework, the idea that you do have the ability for the Minister to act as if they are the authority for specified reasons, is straight from Gerry Brownlee’s legislation. So I think that’s something the National Party might want to reflect on when they’re calling this a constitutional outrage and the end of the world as we know it.

I think it’s worth going through and looking at exactly what this clause says. What it says is that there are some things that is our expectation, and we’ve made our expectation very clear to the Electricity Authority as to what will be done as a result of the Electricity Price Review—that there is a chance for the authority to do this through code amendments, and they’re specified through section 44B(2), which has a very comprehensive list of what those specified activities are. And if anyone want to go through and correlate those to the recommendations of the Electricity Price Review, they’ll see that they match.

So the recommendations that were made include requirements for distributors to offer retailers standard terms for access to their networks, requirements for certain categories of industry participants to make available information directed at improving the performance of the wholesale market, requirements for certain industry participants to act as market makers in relation to the training of some wholesale electricity contracts, requirements for retailers to process consumer requests for information about their electricity consumption in a timely way, limitations on retailer saves and win-backs, and requirements for retailers to provide information to the authority to enable the authority to better direct its efforts under section 16(1)(i), which relates to promoting to consumers the benefits of comparing and switching retailers.

What you will see from that selection that I have read out there is that they are very narrow specified terms, and it is saying that if these are not done in a timely manner, then the Government will come back and regulate. It is just that. It is a regulatory backstop. First of all, the Act sets out that this can be done through code amendments, and, in some cases, with the willing and voluntary participation of the industry. But what we are doing here is putting in place the legislative framework so that if we do need to regulate in the future because that has not been fulfilled, then we have the ability to bring in place the legislation. And, as I said, that is a clause that is based on a similar clause in the 2010 legislation that followed Gerry Brownlee’s reforms to the electricity market in there as well.

One of the things that one of the members of the ACT Party, I think it was Simon Court, brought up was around—and I think what he was referring to was the interim measure that the Electricity Authority was talking about in terms of the wholesale market, and this came from the review that they did do into the wholesale market. And that would prohibit generators from giving effect to a contract of over 150 megawatts or more unless certain conditions are met. This is something that has been put in place to protect our wholesale market. What we know is 150 megawatts is a very, very large contract. There are very few of them in the country. To put this in context for most members in this House, a standard windfarm is 100 megawatts—it’s 1½ windfarms—we’re talking about major use. This is to make sure that our wholesale market is operating fairly.

TANGI UTIKERE (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 76

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Motion agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Minister’s amendment to Part 1 set out on Supplementary Order Paper 203 be agreed to.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Amendment agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Simon Court’s amendments to Part 1 set out on Supplementary Order Paper 233 be agreed to.

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

Ayes 42

New Zealand National 32; ACT New Zealand 10.

Noes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Amendments not agreed to.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Part 1 as amended agreed to.

Part 2 Amendments to other enactments

CHAIRPERSON (Hon Jenny Salesa): Members, we come now to Part 2. This is the part where we debate clauses 44 to 48, and Schedules 2 and 3, “Amendments to other enactments”. The question is that Part 2 stand part. I call on Stuart Sm—Smith.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair; it is quite a difficult one to get your tongue round!

We now know what drives the Minister of Energy and Resources. We just heard it in her last contribution: it’s that she is an admirer of Gerry Brownlee’s work. I think that it is a pity that she didn’t actually support him during the Christchurch earthquake, instead of standing on the sidelines and sniping. But we now know that she admires his work, so much so that she’s included it in this bill.

I think that I’ve really probably said enough on this; we oppose this bill. We think it’s actually not—

Hon Scott Simpson: Tell us why again.

STUART SMITH: Well, I can tell you why, yes. We don’t support the Minister having the power to make regulations over the top of the Electricity Authority. We don’t think she is the source of all knowledge on electricity. She would have to have the wisdom of Solomon, and I don’t think anyone does, so—

Hon Scott Simpson: The Minister certainly doesn’t.

STUART SMITH: Well, I couldn’t possibly comment on that. And so with that, I’ve said my piece on this bill.

SIMON COURT (ACT): Thank you, Mr Chair. So I think, based on the Minister’s response to the first part, it’s quite clear that the Minister wishes to take charge of the electricity market in New Zealand by directing changes to the code and that the concerns that ACT has about the role of the small consumer advocacy agency are now confirmed: that that agency would be the mouthpiece for the Minister.

Schedule 1, which inserts new section 6, “Regulations regarding Small Electricity Consumers Agency”—under this part, the regulations allow for the recovery of costs incurred in the year ending 30 June 2022 even if the regulations come into effect after that date. That’s because the Minister, without waiting for this legislation to pass, has appointed a person to act in the role of the small consumer advocate, and that individual, who’s done wonderful work in their community, unfortunately has become the mouthpiece for the Minister.

Now, we know that the Government has declared a 100 percent renewable electricity target. We know that the Minister shares the aspiration for New Zealand to decarbonise. Now, when you consider the intervention of the Electricity Authority in the proposed agreement between Meridian, which runs the Manapōuri power station, and their client, Rio Tinto, who makes aluminium, let’s consider it in the context of other Government policy and how this bill relates to that. Tīwai Point is New Zealand’s sixth-largest emitter of carbon dioxide. They are the sixth-largest emitter of carbon dioxide. And, if you look the Government’s other policies, how they relate to this bill, it’s quite clear that the Government would prefer the Tīwai smelter to be closed and the thousands of jobs associated with that industry be lost. Of course, we know what would happen even though they use 100 percent renewable electricity to make aluminium here in New Zealand. It’s quite clear that that aluminium production would simply go to another jurisdiction, probably China, where they would use coal, not free-flowing hydroelectricity, to make it.

So we think about the regulations concerning the small consumer—

Tangi Utikere: Point of order, Mr Chairperson. Thank you, Mr Chair. It’s very clear that what the committee is currently considering is, effectively, clauses 44 to 48 and the relevant schedules. The member who is speaking is well outside of the scope, which seems to be a bit of a trend—

CHAIRPERSON (Ian McKelvie): I’ll just remind the member that the reason we have a Chair in the committee is to make those judgments. I thank you for your advice.

SIMON COURT: Thank you, Mr Chair. So, coming back to the schedule and the regulations regarding the Small Electricity Consumers Agency, it’s easy to understand why industry participants, including those who use electricity and those who generate it, are very, very concerned that this agency will simply become a communications mouthpiece for the Minister’s policy rather than actually working on market-based solutions to make sure that consumers of electricity, whether they be small business or domestic consumers, get the best deal. We do know that 400,000 consumers changed power company in the last year. We know there are 40 retailers available to choose from, Minister. So it’s not clear why this agency is necessary and, if it is, what the regulations that will be made regarding this agency will attempt to do.

You mentioned, Minister, in response to a previous question, the intervention—which the agency’s current employee claimed was going to be of great benefit—in a deal for over 150 megawatts of electricity. That’s a huge amount of electricity. The Manapōuri power station supplies 800 megawatts of electricity—800 megawatts of 100 percent renewable electricity—designed to supply exclusively the Tīwai Point aluminium smelter, which uses all of that electricity. So I would like to ask the Minister: what will the regulations regarding the Small Electricity Consumers Agency do? What are they designed to do? What effect will they have? And will this involve the Minister intervening through the code and through this agency to direct commercial arrangements between suppliers and consumers of electricity?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): First of all, I’d like to start off by reassuring that member that under nobody’s stretched imagination would Rio Tinto ever fit the classification of a small consumer of electricity, so I’d like to say that it would not be caught by these regulations at all.

The member asked what the effect of these schedules would be, in terms of regulation. It’s very clear. It’s spelled out in the schedules: the ability for this, in terms of regulation, is the ability to levy. It is not there at the moment. Of course, this is being funded out of Budget 2020, out of some of the initiatives that we funded around energy hardship. I’ve already said, in earlier contributions, what the impact of that levy would be. It’s been calculated to be the sum of around $2 per year for a consumer to fund that. But I’d like to stress that this is not a levy that is currently in place; what this bill merely does is provide the provisions for that regulation to be made.

SIMON COURT (ACT): Thank you, Mr Chair. I just want to go back to a point that was made previously about the multiple trading arrangements, and just looking at Schedule 2, which inserts new Part 6A, the “Separation of distribution from … generation and retailing”. We do have a major problem in New Zealand in that at peak times there is not enough capacity on a cold, still night in winter to deliver electricity to all of the communities that suddenly turn on their heat pump or come home and plug in their taxpayer-subsidised electric vehicle. One of the ways that this could be achieved which has been proposed by electricity distribution companies is that they would like to be able to install, for example, energy storage devices in place of where the current transformers are located on many street corners. But the problem that they have is that the Resource Management Act doesn’t allow them to do that.

Then we come to issues of microgrids. There are communities around New Zealand—and the member for Auckland Central, Chlöe Swarbrick, mentioned Waiheke, where, in fact, communities want to generate electricity, store that energy, distribute it, and have agreements between themselves in the same way as many people have agreements through the Uber app with many, many drivers, that doesn’t require a central regulator, say of taxis, to work out what the relationship should be between the customer who wants an Uber and how they get their taxi.

So I’m interested in the Minister’s comments about how new Part 6A, “Separation of distribution from … generation and retailing”, will foster the development of microgrids in communities which currently find it hard to navigate through the regulation so that if they wanted to, say, set up a solar array or a wind power array or a little hydro dam in their subdivision, that they could then store and distribute electricity to each other, and sometimes in reverse, depending on which way the wind is blowing and where the sun’s shining. And, Minister, will the regulations allow under this bill and under these schedules for communities to come to their own arrangements about how they generate, distribute, store, and exchange electricity in the absence of having to engage with a company or a regulator. Minister?

CHAIRPERSON (Ian McKelvie): Simon Court.

SIMON COURT (ACT): Thank you, Mr Chair. So I just want to come along to this point under new Schedule 6A.3, “Corporate separation and arm’s-length rules applying to distributors … generators and connected retailers”. Now, it says here that a connected generator has a capacity of more than 50 megawatts connected to any of their networks, and a retailer is involved in retailing more than 75 gigawatt hours of electricity in a financial year to consumers. One of the problems that we’ve got at the moment with our energy market is that it’s very difficult to understand what is the regulatory pathway if, say, I wanted to use the gas that I find on my land if I was a farmer in Taranaki and I wanted to put down a bore and collect that wonderful natural gas and supply it to my neighbour. The regulatory pathway sounds very complicated, Minister, and yet we have so many natural resources in New Zealand that we should be able to exploit for the benefit of our communities and to ensure that we do have a healthy economy at some point in the future.

So I’m interested whether the Minister wants to seek the advice of officials. Firstly, will new Part 6A, and will this bill and the regulations and schedules that it’s proposing, allow for communities to generate their own electricity and distribute it freely amongst themselves?

With respect to corporate separation and the arm’s length rules, will it be possible—say, for example, when I worked at a big landfill and we generated 30, 40, 50 megawatts of electricity from collecting landfill gas. Would it be possible for us to simply connect that electricity to the neighbours who were running their own industrial operation, and supply the neighbours with electricity? Will the regulations still force us to go through a lines company and then have a supplier, one of the big retailers, buy the electricity off us and then sell it back to consumers, or can we come to our own arrangements between willing sellers and willing buyers, Minister? Thank you.

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you, Mr Chair. Just to address the specifics that the member has brought up in his contributions, one is around new Part 6A and the provisions that are contained in there. This is about making good the Electricity Price Review recommendations around flexibility that is required there. These are existing provisions in the Act. Many of them that have been moved into the code, and so I think that what we’re seeing is this is about actually just shifting where we do have a number of those provisions around there in that respect.

In terms of some of the other points that the member has raised: in terms of the multi-trader arrangements—which I think is a really important part of the scope of what our electricity system and our energy system will look like in the future—this is of course something that we are actively seeking. These are exactly the kinds of arrangements that through our network of legislation and regulation we are looking to enable, because the future of energy in New Zealand is not only decarbonised but it is also decentralised and it is also digitised.

CHAIRPERSON (Ian McKelvie): The question is that Simon Court’s amendment to Part 2 set out on Supplementary Order Paper 233 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 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Amendment not agreed to.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 42

New Zealand National 32; ACT New Zealand 10.

Part 2 agreed to.

Schedule 1

CHAIRPERSON (Ian McKelvie): The question is that the Minister’s amendment to Schedule 1 set out on Supplementary Order Paper 203 be agreed to.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Amendment agreed to.

CHAIRPERSON (Ian McKelvie): The question is that Simon Court’s amendment to Schedule 1 set out on Supplementary Order Paper 233 be agreed to.

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

Ayes 43

New Zealand National 33; ACT New Zealand 10.

Noes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Amendment not agreed to.

CHAIRPERSON (Ian McKelvie): The question is that Schedule 1 as amended stand part.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Schedule 1 as amended agreed to.

Schedule 2

CHAIRPERSON (Ian McKelvie): The question is that Schedule 2 stand part.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Schedule 2 agreed to.

Schedule 3

CHAIRPERSON (Ian McKelvie): The question is that Simon Court’s amendment to Schedule 3 set out on Supplementary Order Paper 233 be agreed to.

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

Ayes 43

New Zealand National 33; ACT New Zealand 10.

Noes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Amendment not agreed to.

CHAIRPERSON (Ian McKelvie): The question is that Schedule 3 stand part.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Schedule 3 agreed to.

Clauses 1 to 3

CHAIRPERSON (Ian McKelvie): Members, we come now to the final debate, on clauses 1 to 3. This is the debate on clauses 1 to 3, “Title”, “Commencement”, and “Principal Act”. The question is that clause 1 stand part.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Clause 1 agreed to.

CHAIRPERSON (Ian McKelvie): The question is that the Minister’s amendment to clause 2 set out on Supplementary Order Paper 203 be agreed to.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Amendment agreed to.

CHAIRPERSON (Ian McKelvie): The question is that clause 2 as amended stand part.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Clause 2 as amended agreed to.

CHAIRPERSON (Ian McKelvie): The question is that clause 3 stand part.

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

Ayes 74

New Zealand Labour 64; Green Party of Aotearoa New Zealand 10.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Clause 3 agreed to.

Bill to be reported with amendment.

Bills

Animal Welfare Amendment Bill

In Committee

Debate resumed from 2 August.

New clause 2A Repeal of this Act

CHAIRPERSON (Ian McKelvie): Members, we now come to further consideration of the Animal Welfare Amendment Bill. I don’t need to remind members about the Zoom part, but I do need to remind members after the last little session that if they wish to ask multiple questions, if they have them, of the member in charge during their call, it would be very helpful.

When we were last considering this bill, we’d finished debate on clause 2. We now come to new clause 2A. This is the debate on Nicola Grigg’s amendment on Supplementary Order Paper 208 inserting new clause 2A, “Repeal of this Act”. The question is that Nicola Grigg’s amendment inserting new clause 2A set out in Supplementary Order Paper 208 be agreed to.

TANGI UTIKERE (Junior Whip—Labour): Point of order, Mr Chairperson. I seek leave for all remaining provisions to be taken as one question.

CHAIRPERSON (Ian McKelvie): Leave has been requested for all remaining provisions to be taken as one question. Is there any objection? There is no objection. On the basis of that, the question is that clauses 3 to 12 and the Schedule stand part.

New clause 2A, clauses 3 to 12, and the Schedule

NICOLA GRIGG (National—Selwyn): Thank you, Mr Chair.

Hon Mark Mitchell: This’ll be good.

NICOLA GRIGG: Mark Mitchell, don’t distract me. During the remaining course of this committee stage, the National Party intends to put up a variety of options to the Minister, and, indeed, the Director-General of Primary Industries, that would ask them—particularly the Minister—to consider options that might look like regulation, licensing, permitting, and certifying kinds of regimes. Look, we know on this side of the House that, in its heart of hearts, the Ministry for Primary Industries (MPI) believes that New Zealand can indeed continue the export of live animals in a safe, humane, fair, cruelty-free way.

The ministry itself, in 2020, came out with its own recommendations that would enable this trade to continue in a safe, humane, fair way. The ministry has drawn on the recommendations made by Michael Heron QC after the terrible accident of 2019 that would allow for this trade to continue. On this side of the House, we believe that this ban, as has been announced, is a knee-jerk reaction to a terrible, terrible accident. But we also believe that, since the ban was announced, this country is now operating in a completely different trade and export environment. This is an extremely inflexible ban. It does not allow for the economic ramifications that have been found out to be far more factual than has been demonstrated by the ministry. It is our view that the ministry has been lazy in its reporting of the economic ramifications on rural New Zealand. The ministry says it would be a $261 million loss to rural New Zealand. Well, from investigations and research pulled together by Infometrics, it now transpires it’s more likely to be a $475 million per annum hit to rural New Zealand. Therefore, as I said in my opening remarks, this side of the House wants to put up today options for the Minister to consider that might allow for the Director-General of MPI to have or to be able to draw on a licensing regime, a permitting regime, a certification regime.

So I turn the Minister’s and the House’s attention to clause 10. We would like to put forward new section 48A in Supplementary Order Paper (SOP) 205 under my name. It would insert new section 48A. As I said, this will, hopefully, contend with the economic ramification of this ban. We would like to see, on this side of the House, inserted in this bill requirements for regulations permitting the application for and approval of animal welfare export certificates by the director-general. The reason we feel so strongly about this is that there absolutely is a way New Zealand can continue this trade in a fair and humane way. Importantly, though, it would set New Zealand in a position to be a world leader in this trade area. We do not believe that a ban of New Zealand live exports to offshore jurisdictions will solve the problem of inhumane trade that is occurring from other jurisdictions around the world. We would like to see a Supplementary Order Paper 205 considered by the Minister today, please. It introduces an exemption mechanism whereby individual exports of live cattle can be granted on a case by case basis. We would ask the Minister to consider that. It will allow for regulations to be made that permit the granting of animal welfare export certificates. Thus, it gives the director-general the flexibility to authorise, or not, export shipments that would meet world-leading standards.

We believe that this will continue the preservation of global food security in an environment where we have a war in Europe. Estimations are about 100,000 cattle will be lost to that. We have a foot-and-mouth outbreak in the likes of Indonesia, and estimations are 50,000 cattle will be culled. We firmly maintain this live export trade must be allowed to continue from New Zealand to countries that are permitted and regulated in accordance to a standardised system that we will discuss as we go through this committee stage. So my question to the Minister: has he given consideration to the likes of SOP 205, whereby the director-general would be allowed an exemption regime and a certification regime?

Hon DAMIEN O’CONNOR (Minister of Agriculture): Thank you, Mr Chair, and I’ll take the opportunity to answer the questions put on that particular Supplementary Order Paper. Look, just to re-emphasise the fact that Government is moving in this area for the very reason that the member puts up, which is that we are in a different trade and export environment—quite true. Actually, the people who buy our products offshore are often paying a premium from a country where they expect we run the highest standards across all our production systems, so we have to ensure that that is true. Look, what I can do is refer to where, just in recent times, of course, we’ve had issues of non-payment, of uncertainty around the trade within New Zealand itself. That has created litigation that is not systemic, but it is indicative of the challenges around this opportunistic trading that we have.

Again, 15,000 sheep drowned on another ship in the Sudan, with the point being that across the globe, there has been growing concern around the issue of live exports. I think that we will see more, as we have clear indications from other countries that they will be looking to restrict, if not ban, the export of live animals.

The issue for New Zealand is that it is such a long distance from many of the markets that we have traditionally supplied. The issue of heat stress and the issue of animal welfare is something we can’t ensure in those journeys, which is why we are moving to ban this to give clarity to those people who want to breed, farm, and process animals in our country, so that we have certainty moving forward.

CHAIRPERSON (Ian McKelvie): I’m going to go to Mark Cameron, but, before I do, I just need to correct a statement I made earlier. When I introduced the questions, I said that clauses 3 to 12 and the Schedule will stand part. What I should have said was that new clauses 2A to 12 and the Schedule will stand part.

MARK CAMERON (ACT): Thank you, Mr Chair. Minister, you and I are very collegial. But for the love of all things common sense, how can you reconcile this piece of legislation?

It’s predicated, I believe, on the downing of Gulf Livestock 1. You’ve used the word “animal welfare”. My colleague on the right side of the House, Nicola Grigg, alluded to welfare and the massive improvements that have happened in this trade. Minister. I honestly believe this bill is ideological. You’re blurring the lines between animal welfare in transit and the tragedy of the sinking of a ship.

As a question, go back to 2015 and 2016. I’m not sure if you remember what the dairy payout was, but I was still farming—actually, I’d been farming at that point for about 25 years. It was $3.90 and finished up at $4.30. This was the reason, this trade, that I managed to be above board and not below, and that’s thousands of farmers that use this trade—so certainly hundreds at that point. This kept their bottom lines afloat.

But I want to offer you some quotes by farmers that were using this trade and continue to use this trade. Farmer producers potentially out of business. Farmhands, calf growers, livestock handlers, feed suppliers, vets—these are all people that are potentially going to be affected by the nullification of this trade. Exporters, livestock agents—wonder how many livestock agents around the country are now going to lose 15 percent, 20 percent of their trade—transport operators, and the list goes on.

The member on the right side of the House, Nicola Grigg, alluded to $261 million. Well, I wager anyone worth their salt: it’s half-a-billion dollars. We are in a cost of living crisis. Rural New Zealanders have seen fuel’s gone up—and we’ve canvassed before—fertiliser’s gone up, and there’s all manner of red tape the rural sector is now being slated or having to face.

How do you justify half-a-billion dollars, potentially, going out of the sector? And can you please clarify how all these people that are in this, embroiled—or, better word—part of this trade are going to fiscally come out of the other side better off? Why would you not agree with Mike Heron and the Ministry for Primary Industries assertions that this trade could continue under an adopted gold standard? Because I think this side of the House, and hundreds of farmers around rural New Zealand, deserve a better answer than this we’ve been given.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Chair. Just following on from some of Mr Cameron’s questions, Minister. I’ve got the regulatory impact statement (RIS) in front of me and it basically says—as the RIS acknowledges—that prior to the 2019 review, the Ministry for Primary Industries (MPI) had limited data regarding the welfare of livestock during the voyage and post-arrival. And it talks about the limited research available of livestock exports on our reputation.

So the first question is: if there was no data to back up this decision, then I would like to know the comments that the Minister’s made on several occasions about it damaging our reputation—what data and input did the Minister use? Because in the regulatory impact statement, there is very little. Also, according to this, MPI has undertaken the 2019 review on the presumption that transporting animals in and of itself does not necessarily have an adverse effect on animal welfare.

So there’s a lot of questions around this saying that prior to 2020 in that review, MPI did not have a lot of data and they certainly did a shift on the way through this, in terms of their position. So I would like the Minister to be very clear with us, over on this side of the House but also with the industry, as to what was the basis of making this decision, because it wasn’t clear data and evidence. Thank you.

Hon EUGENIE SAGE (Green): Tēnā koe, Mr Chair. Thank you. I would be interested in the Minister’s response to the Supplementary Order Paper in my name—181—which is about extending the Animal Welfare Amendment Bill to ban the export of live eels by both sea and by air.

I am really supportive of the work that the Government and the Minister has done to introduce the bill to the House and the work that he and the Ministry for Primary Industries (MPI) are doing to progress the legislation and end the really unhealthy trade in cattle, sheep, deer, and goats and any exports of them by sea.

But there’s the more fundamental issue that we have—longfin and shortfin eel—longfin eel are at risk and declining. The Parliamentary Commissioner for the Environment, former commissioner, Dr Jan Wright, in her report, On a pathway to extinction?, highlighted the impact that commercial fishing is having on the welfare of eel populations in Aotearoa and questions the stock assessments that have been done by MPI.

These eels are largely exported at the moment, but they have very little revenue that’s associated with that. For the year ending 31 March 2022, the export revenue for eel and eel products was $2.4 million. There is much more value in eels swimming live in streams and lakes around Aotearoa than being exported in polystyrene boxes to end up on some diner’s plate in Korea, Belgium, Europe, and elsewhere. The other key animal welfare issue here is that there are no regulations around how the eel will be killed for those that are exported live.

But the fundamental concern of the Greens is that eels are better swimming alive. I know the Minister has raised previously that there hasn’t been consultation with iwi, but in terms of exports, eel—tuna—are, of course, a customary fish, but they are usually eaten here in Aotearoa for customary purposes, not exported.

So I really encourage the Minister to seriously consider this Supplementary Order Paper, which seeks to protect the status of these magnificent creatures, which only breed once in their life—and that is at the end of their life when they do an extraordinary journey to the sea trenches of Tonga to breed, where they can live to 80 years or more—why they should be caught, exported for a very small amount of revenue, killed, their population affected, when they are an at-risk and declining species in the case of longfin; and why the Minister won’t consider expanding the bill to cover the live export of eels, because that would be doing something for a species that is at severe risk of going to extinction.

Hon DAMIEN O’CONNOR (Minister of Agriculture): Look, Mr Chair, thank you. I’ll start on the live eels one, and I appreciation the Greens’ concern for our longfin eels; indeed, all of us should have concerns for them. There is a limited quota capacity that is calculated on the basis that it’s a sustainable catch, available to iwi and to other fishers across the country. Some of them are, indeed, exported.

The Animal Welfare Act does cover animals, but there is exclusion for fish for a number of reasons. If we were to include and bring fish into the Animal Welfare Act and under this jurisdiction—maybe the changes that she proposed—it does require quite a lot of policy consideration. I’m not saying that it should not occur, but it would be ad hoc to bring it in at this stage and, indeed, the member, given her luck, will probably put in a private member’s bill and it might come up. I invite her to do that.

Look, there is a longfin eel strategy that is due to be released, and I think we look forward to that. I think that that will give us a clearer indication to ensure that, firstly, the quota available is a sustainable one. I think Minister for Oceans and Fisheries would be open to, you know, changes to that or working with the Department of Conservation to make sure that we haven’t got that figure wrong. But just simply supporting the Supplementary Order Paper without having done the policy work around inclusion of fish, we think, would be a step too far. But I acknowledge the concern that she has, and actually many others and most of us in the House should have, for that.

Can I just go back to the question around data. I accept actually leading into the early stages of this whole area of concern, there wasn’t very good data. Indeed, when I looked, the so-called reports had been sanitised. I had major issues with that within the department and with the system that we had that didn’t deliver us accurate reports on what was happening on some of these voyages, which, I have to say, was probably a culture carried over from the previous National Government—but I’m not going to get into that.

Can I say that that sanitisation—and again I’ve had to really push, and we have had, through the transition period that we have allowed the industry to move away from this. We have been getting better information and it has identified ongoing issues of heat stress and, of course, of lameness, which are the two areas of most concern, I think, from an animal welfare perspective.

Because we do have animals that are going from a temperate climate—often they might be in Southland, or somewhere, or South Canterbury—where many of them are loaded on to boats and they’re put on to these vessels. They are cramped. They go through tropical environments. The heat stress has been acknowledged in numerous submissions to the Primary Production Committee, one of which is a personal submission from one of the vets on board—acknowledging that those people on board were doing their very, very best in really challenging circumstances.

The idea that if the animals get hot you might hose them, in fact, would create a spike in humidity which would add to it. So all of these things that might be considered—

Barbara Kuriger: This is not on all ships, Minister. Not on all ships.

Hon DAMIEN O’CONNOR: Oh, really? Oh, is that right? The member over there knows; she’s been on one of the boats, I’m sure.

I think that if you look through some of the issues that have been brought to the attention of the select committee and certainly myself, on balance, what we are saying is that we can’t afford to put New Zealand’s reputation as good managers of our livestock and our livestock protein production system—upholding, adhering to, and promoting the highest standards of animal welfare. We can’t put our reputation at risk and continue.

NICOLA GRIGG (National—Selwyn): Thank you, Mr Chair. I’ve never heard such an elaboration on the truth in this House in my two short years.

I’ve got several questions for the Minister because he just doesn’t seem to quite be answering any questions from this side of the Chamber. I want to refer to clause 10, which amends the Act, which effectively prohibits the director-general from issuing any certifications or exemptions. So I’ve put up Supplementary Order Paper (SOP) 204 under my name, which seeks to insert new clause 10A and new section 48A. Now, within this is the gold nugget that this Government so needs: new section 48A requires that the director-general must review requirements to meet animal welfare standards for the export of live cattle.

We’ve heard the horror stories, Minister. I’ve sat on the Primary Production Committee. I’ve heard of the lameness, I’ve heard of the heat stress, I’ve heard of the reverted container ships that make animals suffer heat stress because there is not ventilation, and that there is no air conditioning and there are rough-cast concrete floors. We’ve heard it, and it was awful. No right-minded New Zealander would tolerate or accept that, but you, as Government, have an opportunity to rectify it. You have an opportunity to ensure only built-for-purpose ships are allowed to continue with this trade.

So under new section 48A, this would require within three months of this thing coming into force—which, let’s not forget, is the end of April next year. By my count, April, May, June, July—so by July 2023, Minister, we’re probably going to be in campaign mode by then, given we may or may not have an election in about September. So there’s a lot of good that you could do if you do decide to incorporate this into the law. Within three months of this section coming into force, the director-general must undertake a review of and report to the Minister on whether standards could be applied to the live export of cattle for breeding purposes.

Now, I know many of us have referred to it, but that’s because it really is worth looking at. So my questions to the Minister are: has he considered the Australian gold standard of live-export trade? Has he considered regulations that would require low-regulated stocking densities in the world, specialist training for stockmen and vets, the phasing out of pregnant cattle for export, a contingency of fodder and provisioning to ensure welfare is maintained during unforeseen delays, and a responsible vessel owner programme that would include the ventilation, the air conditioning, the stocking densities, the nice flooring, and the built-for-purpose drainage that would mean cattle aren’t standing in their own effluent?

It is all here for you, Minister. It is literally a cut-and-paste job if you were to accept SOP 204 under my name that would require your director-general to at least consider it. It is foolhardy to not consider it. The ramifications of cancelling this export are going to be widespread. I referred before to the $460 million of direct economic impact per year on our rural communities—that is 3,000 jobs. If you can implement this in regulation, in law, this is only good for New Zealand, it is only good for our export earnings, and, actually, it is only good for cattle-breeding offshore. Please do consider SOP 204.

MARK CAMERON (ACT): Thank you, Mr Chair. I’d like to carry on, if I may, from Nicola Grigg’s point as in a line of questioning. The mortality rate on-ship was actually lower than the average dairy farm and beef unit in New Zealand. It was so low it was almost non-measurable, but none the less it was measured. It was very slight. In the submissions process, when we were listening to submitters coming in, I was asking questions of veterinarian practices in and around the trade and what animal welfare looked like, and the five parameters or metrics that they used. In part of that line of questioning, I asked them about dry matter and kilos of live-weight gain and/or condition score—and I’m sure with your farming background, Mr Chairperson McKelvie, you understand the concept of condition score.

When I was querying the palletised food and the overall wellbeing to animals in transit, they were telling me that, on average, half a condition score was gained by virtue of the nature of the sedentary travel. They agreed—many, many submitters agreed—with the adoption of the gold standard as proposed: increased storage of fodder, a greater metred area per animal, purpose-built ships, baffled-effluent storage, increased ventilation. These animals actually fared better in transit than many of their animal cousins and brothers and sisters here in New Zealand. How can you reconcile that—and these are from registered veterinary practitioners that check the animal welfare pre-departure and post-arrival—because none of what is being presented here today reconciles the facts. The facts speak to that the overall wellbeing and mortality of the animals is lower in transit than it is on the average farm here in New Zealand.

CHAIRPERSON (Ian McKelvie): The time has come for me to report progress, which I shall do as we’ll adjourn for lunch.

Progress to be reported.

House resumed.

Report of committee of the whole house

Report of committee of the whole house

CHAIRPERSON (Ian McKelvie): Madam Speaker, the committee has considered the Electricity Industry Amendment Bill and reports it with amendment. The committee has also considered the Animal Welfare Amendment Bill and reports progress. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Hon Jenny Salesa): The House is adjourned until 2 p.m. today.

The House adjourned at 12.57 p.m. (Wednesday)