Tuesday, 14 March 2023

TUESDAY, 14 MARCH 2023

TUESDAY, 14 MARCH 2023

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

Hon JACQUI DEAN (Assistant Speaker): Almighty God, we give thanks for the blessings which have been bestowed on us. Laying aside all personal interests, we acknowledge the King and pray for guidance in our deliberations that we may conduct the affairs of this House with wisdom, justice, mercy, and humility for the welfare and peace of New Zealand. Amen.

PETITIONS, PAPERS, SELECT COMMITTEE REPORTS, AND INTRODUCTION OF BILLS

PETITIONS, PAPERS, SELECT COMMITTEE REPORTS, AND INTRODUCTION OF BILLS

SPEAKER: No petitions have been delivered to the Clerk for presentation. Ministers have delivered papers.

CLERK:

2021-22 annual reports for the Auckland District Health Board, Bay of Plenty District Health Board, Canterbury District Health Board, Counties Manukau District Health Board, Lakes District Health Board, Nelson Marlborough District Health Board, Northland District Health Board, Southern District Health Board, and Wairarapa District Health Board, and the Human Rights Commission

Long-term Insights Briefing of the Education Review Office, Education for All Our Children: Embracing Diverse Ethnicities.

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

CLERK:

Reports of the Foreign Affairs, Defence and Trade Committee on the:

International Treaty Examination of the Side Letter to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to exclude Investor-State Dispute Settlement (ISDS) between New Zealand and Chile

report of the Ombudsman, report on OIA compliance and practice in the Ministry of Foreign Affairs and Trade

report of the Ombudsman, report on OIA compliance and practice in the New Zealand Customs Service

report of the Ombudsman, report on OIA compliance and practice in the New Zealand Defence Force.

report of the Health Committee on the petition of Matty Angel

report of the Justice Committee on the Counter-Terrorism Acts (Designations and Control Orders) Amendment Bill

reports of the Petitions Committee on the petitions of Ana Briggs, Anna Hodgkinson, and Michiel Badenhorst

report of the Primary Production Committee on the petition of Shengjun Jin.

SPEAKER: The bill is set down for second reading, the reports of the Ombudsman and the report of the international treaty are set down for consideration. The Clerk has been informed of the introduction of a bill.

CLERK: Severe Weather Emergency Legislation Bill, introduction.

SPEAKER: That bill is set down for first reading.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. NICOLA WILLIS (Deputy Leader—National) to the Prime Minister: Does he stand by all of his Government’s statements and actions?

Rt Hon CHRIS HIPKINS (Prime Minister): Yes.

Nicola Willis: Why won’t he inflation-adjust tax thresholds, given he now accepts the case for inflation adjustment of payments to superannuitants, beneficiaries, students, and others?

Rt Hon CHRIS HIPKINS: I’m not going to get into a speculative conversation about future decisions that a Government may take on tax. The Government has been clear, however, that we are not going to be adopting the type of tax cut policy that the National Party has been promoting, that would see the vast bulk of that money going to the highest-income New Zealanders.

Nicola Willis: Why, under his Government, do everyday tax-paying workers always come last?

Rt Hon CHRIS HIPKINS: They don’t.

Nicola Willis: Well, does he think New Zealand workers earning an average wage and struggling to keep up with the prolonged cost of living crisis are being taxed too much?

Rt Hon CHRIS HIPKINS: I note that New Zealanders earning the average wage have seen their incomes increase significantly under this Government, something the National Party don’t seem to be able to decide whether they’re for or against.

Nicola Willis: Does he acknowledge that, in fact, real wages have fallen behind the cost of living, and that’s exactly why he had to do the make-up policies yesterday?

Rt Hon CHRIS HIPKINS: I reject that last part of the member’s question.

Nicola Willis: Isn’t it begging credibility for Ministers to claim the Government can’t afford tax reduction, when it can find billions of dollars down the back of the couch for other priorities?

Rt Hon CHRIS HIPKINS: No.

Nicola Willis: Why did it take the Government this long to work out the Minister of Transport was committed to a host of wasteful spending projects, and how can New Zealanders have confidence in his Government’s prioritisation process, when even in the midst of a prolonged cost of living crisis Ministers were signing up for such wasteful spending?

Rt Hon CHRIS HIPKINS: New Zealanders can have confidence in this Government, because we are absolutely focused on dealing with the cost of living crisis that’s in front of New Zealanders, and supporting New Zealanders through a significant natural disaster. That is absolutely our focus, and the announcements in recent days have absolutely highlighted that.

Nicola Willis: What does he think should be a higher priority: a childcare tax rebate of $75 a week for young families, or an extra $400 million for Government consulting and contracting arrangements?

Rt Hon CHRIS HIPKINS: Once again, the member seems to be highlighting the confusion that the National Party seem to have around consultants and contractors, because the member herself has both pledged to reduce the spending and cap it at its current level. So it’s still not clear exactly how the National Party would pay for the policy that they’ve already announced.

Nicola Willis: Wouldn’t it just be more efficient to adopt National’s policy programme, admit that his Government has been addicted to wasteful spending, and reduce taxes for working New Zealanders?

Rt Hon CHRIS HIPKINS: It would be interesting to know what National’s tax policy actually is, because it seems to change every time Nicola Willis does an interview on it.

SPEAKER: Question No. 2 in the name of—

David Seymour: Supplementary. Supplementary. Supplementary. Point of order.

SPEAKER: Sorry. Point of order—

David Seymour: I was calling for a supplementary question.

SPEAKER: Sorry. Supplementary, David Seymour.

David Seymour: Thank you, Mr Speaker. Does the Prime Minister stand by Grant Robertson’s statement to the House on 22 November that “This side of the House is able to offer New Zealanders wages growing faster than inflation”?

Rt Hon CHRIS HIPKINS: I absolutely stand by the Minister of Finance’s answers.

David Seymour: Does the Prime Minister think that the Minister of Finance was referring to wages before or after tax?

Rt Hon CHRIS HIPKINS: Well, the member might like to ask the Minister of Finance that question himself.

David Seymour: Point of order, Mr Speaker. It was a very down-the-line question about the Prime Minister’s opinion. To simply say, “Ask someone else” is not to address it; it doesn’t reveal anything about the Prime Minister’s thinking.

SPEAKER: It is an opinion and it is an answer.

David Seymour: Can the Prime Minister confirm that in 2022, inflation increased by 7.2 percent, but the average wage after tax increased by only 6.2 percent, and does he accept that one of the reasons wages after tax didn’t keep up with inflation last year is because his Government is taxing more?

Rt Hon CHRIS HIPKINS: I will go back and check the figures that the member has put before the House. But what I can say is that there is a synergy between the overall movement in wages, which was 7.2 percent; the rate of inflation, 7.2 percent; increases in the minimum wage, 7.2 percent—something that members opposite have opposed—and increases in benefits and superannuation, which also sits at 7.2 percent.

David Seymour: Did the Prime Minister notice that he left out of that list people who rely on actually working for an income to pay their bills in a cost of living crisis? Because, if he didn’t, they sure will.

Rt Hon CHRIS HIPKINS: That once again highlights the disdain that people on the other side of the House have for people who are on the minimum wage. They don’t seem to think that they work for a living, when in fact they work damn hard for a living, Mr Seymour.

David Seymour: Why didn’t the Government announce it will cut taxes for low and middle income earners so that their wages keep up with inflation, when he was very happy to announce, yesterday, that he’ll be increasing benefits, pensions, and student allowances to keep up with inflation?

Rt Hon CHRIS HIPKINS: In answer to the last part of the question, I’m absolutely proud of the announcements we made yesterday, which are normally made ahead of the 1 April changes, and they have been this time.

Question No. 2—Social Development and Employment

2. ANAHILA KANONGATA’A-SUISUIKI (Labour) to the Minister for Social Development and Employment: What additional Government support will be available for individuals and families from 1 April?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): From 1 April, the annual general adjustment will come into effect for beneficiaries, superannuitants, students, and working families. The annual general adjustment happens every year on 1 April and is designed to ensure that rates of income support do not fall behind inflation and/or wage growth. We know that we are dealing with a global cost of living crisis, and, therefore, this year, the rise in support is larger than most. Couples who receive New Zealand super and veteran’s pension will receive an extra $51.42 per week in the hand, while working-age people receiving a main benefit will see an increase of between $16.80 and $46.20, depending on the type of benefit and whether they are single or a couple. We know these lifts in income will make a big difference to many households.

Anahila Kanongata’a-Suisuiki: What other assistance comes into force on 1 April?

Hon CARMEL SEPULONI: On 1 April, the Government’s changes to childcare assistance will take effect—this includes rises to the childcare subsidy and out-of-school care and recreation subsidy. This reverses a freeze on the income threshold for childcare assistance eligibility that the previous Government put in place in 2010. Our changes will mean 10,000 more children will be eligible for support. Two parents both working 40 hours per week on $26 per hour, with two children under five, will not have been eligible for childcare assistance previously, but, from 1 April, will now be eligible for $360 per week.

Anahila Kanongata’a-Suisuiki: What changes to Working for Families come into effect on 1 April?

Hon CARMEL SEPULONI: The inflation adjustment to the family tax credit will occur on 1 April. This provides extra relief for the majority of working families. This builds on our previous changes to the family tax credit. It means that a family with two children on a median family income, receiving Working for Families, is now receiving over $1,300 more a year since we took office. If they are also receiving the Best Start payment, that figure climbs to over $3,600 per year. Supporting New Zealand families with the cost of living is the top priority for the Government. This kind of targeted support reaches those who need it the most.

Anahila Kanongata’a-Suisuiki: What is the overall effect of the Government’s changes since 2017?

Hon CARMEL SEPULONI: This Government moved quickly when we first came into office. We introduced the Families Package and we have lifted benefit rates to historic levels, reversing and surpassing the cruel cuts of 1991. When adjusted for inflation, benefit levels are now higher than at any time since the 1940s. On average, a couple with children, on a benefit, are $256 per week better off than they were in 2017. There is still more work to do and we’re not shying away from putting families first and focusing on what matters most to New Zealanders, as we continue to deliver meaningful change in children’s and families’ lives—especially during these challenging times.

Chlöe Swarbrick: Is the Minister aware that two-thirds of tertiary students regularly cannot afford the basics, and does she think that an extra maximum of $20 per week on the means-tested student allowance is adequate to bridge that gap?

Hon CARMEL SEPULONI: As the Minister for Social Development, I do not have responsibility for policy for student allowances and student loans. The Ministry of Social Development does administer the student loans and student allowances.

Question No. 3—Infrastructure

3. CHRIS BISHOP (National) to the Minister for Infrastructure: How many of the Infrastructure Reference Group projects approved for funding have been completed, and how many are due to complete construction in 2024 or later?

Hon Dr MEGAN WOODS (Minister for Infrastructure): On 1 July 2020, the Government announced the Infrastructure Reference Group (IRG) programme to help kick-start the post-COVID rebuild by creating jobs and unlocking more than $5 billion worth of projects up and down New Zealand. The purpose of this programme was to create jobs and provide much-needed economic stimulus, as well as certainty for investors and private sector businesses at a time of incredible uncertainty. As of 30 January 2023, 82 of the 224 projects with funding agreements in place have been completed. I am advised that a further 86 projects are forecast to be completed by the end of 2023, and this will account for around 75 percent of the projects. A further 57 projects are forecast to be completed in 2024 or later.

Chris Bishop: Why are six of the alleged shovel-ready projects yet to begin construction, and how on earth can they be regarded as shovel-ready?

Hon Dr MEGAN WOODS: There are four projects that have delays that have been talked about in terms of those. Many of those are outside of the control of the funding decisions that were made. If we have a look, for example, at the Marton Rail Hub: that has been appealed to the Environment Court, so we need to await the findings of that court. If we have a look at the Nelson port slipway, for example, this was only contracted in December 2022, due to protracted commercial negotiations. Likewise, the Kaipara stopbank enhancement did have a contract variation that was required. These were projects that were worked up during 2020, when the world was staring down the barrel of a construction sector with no work to do. There have been variations—and with $5 billion worth of infrastructure spend, there are four projects that have yet to be off the ground. But $1.41 billion of the $2.5 billion that was budgeted has been spent to date.

Chris Bishop: Why is the Government funding programmes—or projects—that are subject to, in the Minister’s own words, “protracted commercial negotiations” and “Environment Court appeals” before they can start, and why are they regarded as shovel-ready?

Hon Dr MEGAN WOODS: The member may one day find out that sometimes there are delays with infrastructure projects. And as his party, when in Government, found, there were programmes that failed to get off the ground. But I have seen a range of people around the country waxing lyrical around some of the IRG projects. I point to the Kōpū Marine Precinct project, when I saw a commentator say, “[The] project is going to be endearing, profitable and culturally advantageous to our district. … Today, [the] shovel ready project—and what will come from it—in many respects is a back to the future project—to a time when Kōpū was the hub of commerce”—

SPEAKER: Order!

Hon Dr MEGAN WOODS: —sorry, and, of course, that was Scott Simpson.

SPEAKER: The Minister has completed the answer.

Chris Bishop: Why has the Government used shovel-ready money to fund the white elephant boondoggle that is Project Onslow, that, on the Government’s own time line—optimistic time line—is not due to be complete until 2030?

Hon Dr MEGAN WOODS: The funding that was put through the IRG projects is for a process called the New Zealand Battery Project. It is about making sure that we have a plan to deal with the electrification and the decarbonisation of New Zealand. The money that was allocated in there was never to build the battery, whichever of those options would be; it is to do the detailed long-term thinking that his party obviously does not understand needs to occur.

Chris Bishop: Is she confident that, of all the projects funded through the shovel-ready process selected by Ministers, those projects were the top projects recommended by the independent IRG reference group?

Hon Dr MEGAN WOODS: There were 26 projects that came in later than the reference group process—of course, they all did go through a process and they went through Cabinet, and I can have confidence in those processes. If I look at one of those, the Awarua kaumātua housing project that was one of those 26, for example: last year, I had the privilege of going to open that project. They have been completed—and there are kaumātua living in those homes today because this Government had the foresight to invest in infrastructure.

Question No. 4—Social Development and Employment

4. RICARDO MENÉNDEZ MARCH (Green) to the Minister for Social Development and Employment: Are livable incomes and ending benefit sanctions “bread and butter” issues; if not, why not?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): All Governments need to make choices, and, as the Prime Minister has said, the bread and butter issues affecting New Zealanders are our priority right now. At the end of last year, we announced the changes to the childcare subsidy as part of our review of childcare assistance. This will impact over 10,000 children. This policy sits alongside other Government decisions to support New Zealand families who have been impacted as global pressures impact inflation. These changes include minimum wage increases, half-price public transport fares, and the extension of the fuel subsidy. On 1 April, beneficiaries, superannuitants, and students will also see increases to their weekly incomes. This all makes a difference and is wide reaching. We are clearly lifting incomes, and have been for the last five years. The advice I received from the Welfare Expert Advisory Group was on adequate incomes, and we have certainly made significant progress. As for sanctions, we have ended those that impact children the most. Work has been paused on the other sanctions that do not have the wider reach of some of our other priority policies. However, I can reassure the member that, since becoming the Government, there has been a 79 percent drop in the number of sanctions that affect children.

Ricardo Menéndez March: Does she agree with the Children’s Commissioner, who said that benefit sanctions harm children; if not, what evidence does she have that it is not the case?

Hon CARMEL SEPULONI: The two sanctions that we have already got rid of are the two sanctions that had the biggest impact on children, and so I’m very proud of the fact that we acted quickly to get rid of those. Some of the other sanctions, including sanctions pertaining to work obligations, are not things that we committed to getting rid of right from the beginning. We said that we would focus on the ones that were most punitive, but not all of them would go. We do want them to be a last resort. So, if we look at sanctions when they’re applied to work obligations, it’s been really important that as a Government we have invested in work-focused front-line staff so they can have those meaningful engagements with clients rather than resort to sanctions, and we’ve certainly seen the evidence of that working in the reduction in sanctions being applied.

Ricardo Menéndez March: What evidence does she have that the existing sanctions are not harming children?

Hon CARMEL SEPULONI: We have seen a significant reduction in the number of sanctions being applied to families with children. We never committed to getting rid of all sanctions. Some of the sanctions that are still in place I certainly would like to revisit down the track, but they are not a priority for us right now. The changes that we’re attempting to make at the moment are the ones that have the biggest impact and are bread and butter for New Zealand families. That work on sanctions has been paused, and we will look at that in the future.

Ricardo Menéndez March: How many more children will have to go without access to food because they’re being sanctioned by the warrant to arrest sanction, which has increased under her Government?

Hon CARMEL SEPULONI: As I said, there has been a huge reduction in the number of sanctions that have been applied to families with children, and we moved quickly to get rid of two of the sanctions that most impacted on families with children. There is work to do—that has been paused at this present time—but it is on the medium to longer term work programme for the welfare overhaul.

Ricardo Menéndez March: Is she aware that the civil defence—

SPEAKER: Sorry to interrupt. I’ll give you an extra question. I don’t think that was addressed as well as it could have been.

Ricardo Menéndez March: Appreciate that. I was thinking of doing a point of order. Thank you. How can she be confident of the impact that the warrant to arrest sanction is having on children, when she hasn’t been able to produce evidence of the impact that those sanctions have on families?

Hon CARMEL SEPULONI: There was a reduction in the last year, compared to the year before, on the number of sanctions applied for warrant to arrest. I have spoken about the warrant to arrest sanction in the past. It is not something that I am personally supportive of, but we have to make choices with regards to our policy programmes. Our actual Government agencies don’t have capacity to hit up every area we would like them to at once. What I’ve asked them to focus on are things like the Working for Families review, the childcare assistance review, making sure that we have the front-line work-focused case management that we need in place, and ensuring that they are working proactively with whānau.

Ricardo Menéndez March: Is she aware that the civil defence payment has not been updated for close to 20 years, and does she think it is adequate to support low-income families impacted by climate change - induced weather events?

Hon CARMEL SEPULONI: The civil defence payment available for those that need access to things like food or bedding or clothing because of an event that has occurred, like we have seen recently, is double that of the hardship assistance support that they can access through the special needs grant. We have committed, moving forward as part of the welfare overhaul, to reviewing the grants that are in place, and that would have an impact, if there were to be changes, on the civil defence payment. But we’re not looking at changing the civil defence payment in isolation from other parts of the system.

Ricardo Menéndez March: Will she permanently index benefits to wages or inflation, whichever is higher, to better support low-income people receiving a main benefit; if not, why not?

Hon CARMEL SEPULONI: Mr Speaker, I didn’t hear the first part of the question.

Ricardo Menéndez March: Will she permanently index benefits to wages or inflation, whichever is higher, to better support low-income people receiving a main benefit; if not, why not?

Hon CARMEL SEPULONI: Over the last 23 years—actually, when we introduced the policy of indexing benefits to wages, there’d only been two times where inflation had outstripped wage growth. And then, in the last two years, because of what we have experienced with the Ukraine-Russia situation and everything else, that has occurred. That is why we made the change. To the member, it is something that I’m certainly keen on looking at. So no commitment at this point in time, but I am committed to exploring the work.

Question No. 5—Health

5. Dr SHANE RETI (National) to the Minister of Health: Does she stand by all her statements and actions regarding wait times, including emergency department wait times?

Hon Dr AYESHA VERRALL (Minister of Health): Yes, in the context they were given.

Dr Shane Reti: When she said in answer to a primary question last week that the incorrect emergency department (ED) wait-time data was for November and December, isn’t it true that the published data actually had inaccuracies for every single month last year?

Hon Dr AYESHA VERRALL: There has been a revision to other parts of that data, and the correct data, I’m assured, is now available on the website. I want to make the important point here that this is not data collected from a laboratory or a clinical trial; it is administrative data collected in the day-to-day workings of the health system. As a result, there will be, from time to time, errors that need to be worked through with that. Te Whatu Ora has owned the mistake they have made with their calculations, and they have set up a review to identify the process that needs to be improved. That review will be led by Dr Dale Bramley and have an external, independent person on it.

Dr Shane Reti: Is the ED wait-time data for last year, that she said she had been using for ED decision-making, exactly the same as the new ED data that was published on Friday night?

Hon Dr AYESHA VERRALL: Clearly, I was not using ED department data to make decisions last year, because I was not the Minister of Health.

Dr Shane Reti: Why doesn’t she know how many staff vacancies there are in emergency departments, as stated in answer to written questions?

Hon Dr AYESHA VERRALL: If I recall the written question in question, that matter related to—no; Mr Speaker, I would like the member to put on notice which question he is referring to. There are a number of questions on this data, and I’d like to be able to give him the appropriate answer.

SPEAKER: I’ll give the member an extra question to ask that question.

Dr Shane Reti: Does she stand by her recent statement that “I would not put targets at the forefront of my health policy.”, and is this why the only target in the interim New Zealand health plan is a reduction in climate emissions?

Hon Dr AYESHA VERRALL: I have made a number of targets in health already, and one of those is the very important target that New Zealand should be smoke-free by 2025. It’s a shame the member didn’t support us in that—one of the things that could have improved the health of New Zealanders substantially. Look, I understand there is a debate about targets in our health system, and the thing I would say is what I won’t do is what National Governments did, which is implement targets, go round the country thumping the table, demanding conforming to the targets, and yet not supplying the resource in order for people to meet the targets.

Hon Michael Woodhouse: Point of order.

Dr Shane Reti: Supplementary.

SPEAKER: Point of order—

Hon Michael Woodhouse: Oh, sorry, no, no—wait till the end.

SPEAKER: OK.

Dr Shane Reti: Have any inaccuracies been found in the other data that was removed from the Health New Zealand website last week; if so, what are those inaccuracies?

Hon Dr AYESHA VERRALL: Te Whatu Ora is working through the process of quality assurance on those other targets and will publish them once they are confident.

Hon Michael Woodhouse: Point of order. Mr Speaker. Last week, you issued a ruling relating to the responsibility for Ministers in an administration. My understanding is that that ruling also applies to oral questions. Now, the Minister of Health, in one of the supplementary answers, said, “I wasn’t responsible because I wasn’t the Minister at that time.”—or words to that effect. The difficulty with that is that, actually, she is. Now, an appropriate answer could have been, “I don’t have that information. I could get it to the member asking the question.” But to simply excuse herself from responsibility for answering it because she hadn’t been the Minister in the months preceding December and November doesn’t seem to be within the Standing Orders.

Hon Grant Robertson: Speaking to the point of order, Mr Speaker, Mr Woodhouse was trying to recall something that had happened; that’s not quite what the question was. The question asked whether the member had used particular data last year. The member said that she hadn’t used that data last year. I think that is a different matter for responsibility, for example, for the actions of an agency in a period of time before the member was Minister—but it was a specific question about whether the Minister had used data, and she wasn’t the Minister at that time.

Hon Michael Woodhouse: Speaking to that point—and I won’t prolong the discussion but I think it’s helpful—the question was to the Minister, not to the individual. Furthermore, the concession that data in November and December was wrong but hadn’t been relied on by the Minister of Health was also due to a period prior to when Dr Verrall became the Minister, so it’s kind of a dollar each way in that regard. So I would like you to review that and see whether or not the answer was within order.

SPEAKER: Thank you to the Hon Michael Woodhouse for raising the issue. You are correct, although the question could have been taken in two ways, I guess. I should have picked up on it myself. The question was whether the data had been used in making a decision, and the Minister answered for herself up until the point that she took control of the portfolio. But the question really still hasn’t been answered: whether or not that was an answer on behalf of the portfolio, and therefore, whether the former Minister made decisions based on that data. Given that, the Minister could answer now, and maybe the Minister knows or does not know—I don’t know. But, if the House is happy, we’ll see if the Minister can answer that.

Hon Dr AYESHA VERRALL: What I can say is that there has been a long-term understanding of this issue of pressure on our emergency departments, and work began under the previous Minister on that. As I have come in as a new Minister, I have set that as one of my top three priorities—includes the preparation for winter or, otherwise, emergency department wait-times.

Question No. 6—Housing

6. CAMILLA BELICH (Labour) to the Minister of Housing: What reports has she seen on the performance of recently upgraded infrastructure during the recent Auckland floods?

Hon Dr MEGAN WOODS (Minister of Housing): There is pleasing evidence from Kāinga Ora that the investment in our Government house build programme and our Auckland neighbourhood programme performed as designed and mitigated against further flooding impacts. Our upgrades of existing neighbourhoods include boosting infrastructure like pipes and improving flood resilience. In Kāinga Ora’s Northcote development, the recently completed upgrade to Greenslade Reserve transformed a sports field into a stormwater retention basin with 12 million litres of water held back from the nearby town centre and surrounding homes, and draining overnight. Similarly, in the Roskill development, upgrades to Freeland Reserve—funded by the Government shovel-ready infrastructure fund—which was completed in 2022, acted as a detention wetland that mitigated stormwater for about two-thirds of the Roskill South neighbourhood, by capturing millions of litres of water.

Camilla Belich: What is still to be done to improve infrastructure and flood resilience in these large-scale housing developments?

Hon Dr MEGAN WOODS: There is a lot more work to be done as upgraded neighbourhoods in Tāmaki, Northcote, Māngere, Oranga, and Roskill are built out, with more than a billion dollars in total infrastructure being spent, including more than half a billion dollars for stormwater and other flood mitigation works. The Northcote and Roskill large-scale developments are further along than other projects, so have seen the benefit of the upgrades made already. Had the flooding occurred five years ago, the flooding impacts on these neighbourhoods would have been much worse. In Māngere, where development is at an early stage with thousands of homes to be built in the coming years, more than $200 million is earmarked for flood mitigation work.

Camilla Belich: How is the Government contributing to infrastructure upgrades in these large-scale housing developments?

Hon Dr MEGAN WOODS: Our Government is making a significant investment in infrastructure upgrades to support the delivery of thousands of new homes across New Zealand. Through the $3.8 billion Housing Acceleration Fund, established in 2021, we’re investing to increase the pace, scale, diversity, and affordability of new housing supply for buyers and renters; $2.3 billion of this is set aside for the large-scale housing projects in Auckland, like the Roskill and Māngere development, as well as in Porirua in Wellington. A further $926 million from the $1 billion infrastructure acceleration fund has been allocated to projects across the country to support new or upgraded bulk infrastructure. The end result will be more homes and more resilient neighbourhoods, and the ability to unlock even more land for further housing development.

Camilla Belich: Does increasing housing density in major housing developments increase flood risk?

Hon Dr MEGAN WOODS: When intensification is done right, with appropriate stormwater infrastructure and water-sensitive design, higher-density neighbourhoods experience the benefits of that. A good example is Hobsonville Point where thousands of homes have been built in the past decade and it has doubled the housing density of the average Auckland suburb. Despite recording some of the highest rainfall in the Auckland region during the flooding event, it did not suffer any significant flooding or damage. This proves that higher-density suburbs, designed well and at scale, can improve resilience.

Question No. 7—Transport

7. SIMON COURT (ACT) to the Minister of Transport: Does he agree with the Prime Minister’s statement that the Clean Car Upgrade scheme was, “going to make a very, very small contribution” to our emissions reductions, and which of his other policies, if any, are going to make a very small contribution to reducing emissions?

Hon MICHAEL WOOD (Minister of Transport): To the first part of the question, yes. The scheme was modelled to reduce emissions by approximately 4.5 kilotons over the period of the first emissions budget. By comparison, the Clean Car Discount and Standard were projected to deliver reductions around 35 times as large as the Clean Car Upgrade. I note, for the member’s benefit and the House’s benefit, that our Government’s response to climate change is focused on reducing emissions but also adaptation and ensuring an equitable transition away from fossil fuels for Kiwi households. And so, to the second part of the question, some policies, such as our extension of half-price public transport fares, will indeed have a fairly small impact on reducing emissions but have many other benefits, including supporting Kiwi households with cost of living pressures.

Simon Court: How many tonnes of emissions are the Clean Car Standard and Clean Car Discount policies estimated to avoid, and what will be the cost of avoiding those emissions?

Hon MICHAEL WOOD: In the first three emissions budget period, the total emissions abatement of those two policies, the Clean Car Discount and Clean Car Upgrade, is approximately 2.5 megatons—that’s 2.5 million tonnes—across that period. The Clean Car Discount policy costs are net zero to the Crown, as it is funded by a repayable loan, and there are small overall costs for the administration of the Clean Car Standard. Both policies, when they have been assessed on a cost-benefit basis, are shown to save New Zealand money for every tonne of carbon that they reduce, because the country saves so much by having a cleaner vehicle fleet because we don’t need to bring in so much expensive foreign fuel.

Simon Court: Why has the Government dumped the Clean Car Upgrade scheme on the basis it’s not going to deliver bang for buck but not the Clean Car Standard or the Clean Car Discount, the costs and benefits of which to the taxpayer he can quantify but not to the people actually paying the bills?

Hon MICHAEL WOOD: I gave a very clear account of the costs and benefits of those policies in my previous answer, and I think the member might have been reading a pre-prepared question rather than responding to the information that was in front of him. If I can repeat again: the Clean Car Discount and Clean Car Standard policies will save 2.5 megatons of carbon emissions over the coming three emissions budget periods. The Clean Car Discount policy has no net costs to the Crown, and both policies, as per formal analysis that was provided as part of the regulatory impact process, are shown to have net savings to New Zealand for every tonne of carbon that we do not emit under that policy. These are some of the most efficient policies ever to reduce New Zealand’s carbon emissions, and it’s no surprise, therefore, that the ACT Party opposes them.

Simon Court: Does he stand by his refusal to allow tradies and orchardists whose utes were destroyed by Cyclone Gabrielle to avoid paying the thousands of dollars in taxes that they would have to under the Clean Car Discount scheme in order to replace their utes, and, if he does stand by that statement, on what planet is it compassionate to force cyclone victims to pay that tax when they’ve got no option of buying an electric ute?

Hon MICHAEL WOOD: I stand by the Government’s full response to the victims of Cyclone Gabrielle, including the significant support that we’re providing to communities, farmers, and businesses across that period. I also stand by our transport policies, which are designed to reduce the very emissions which are leading to the extreme weather events that are causing so much carnage. Unlike the ACT Party, our Government actually sees the bigger picture here, which is that we need to support communities that have been affected by catastrophic climate change, but we actually need to do something to reduce the emissions that caused the problem in the first place.

Simon Court: Well, in that case, is the Government still considering banning the importation of all internal combustion engine vehicles by 2030, and is this the Minister’s idea of a “bread and butter” Government?

Hon MICHAEL WOOD: The Government is not currently considering that issue. And, in fact, the success of the Clean Car Discount and Clean Car Upgrade policies in cleaning up New Zealand’s fleet means that we are well on track to have one of the cleanest fleets in the world. The Clean Car Discount policy has shifted New Zealand from being one of the worst-performing countries in the world for low and zero emission vehicles to one of the best performing countries in the world for low and zero emission vehicles coming into our country—another climate-friendly policy opposed by the ACT Party and the National Party.

Question No. 8—Regional Development

8. TĀMATI COFFEY (Labour) to the Minister for Regional Development: What announcement has she made about the completion of regional development projects in Taupō?

Hon KIRITAPU ALLAN (Minister for Regional Development): I’m pleased to inform the House that this week, on 9 March, the Prime Minister and I were in Taupō to officially open the Taupō Town Centre Transformation project, the new Taupō Airport terminal, and the eastern arterial shared path. These three projects strengthen the economic resilience of Taupō and, of course, the wider region. This was pleasing because it was a Government-supported project but regionally led, and that regional leadership managed to deliver those three projects on time despite the multiple challenges from COVID, supply chain issues, and I commend them all for their work.

Tāmati Coffey: Why are these projects important for the Taupō region?

Hon KIRITAPU ALLAN: Taupō Airport is not just a gateway to the central North Island but it’s a lifeline utility in an emergency or crisis, with growing tourism and aviation businesses located around it, including a rescue helicopter. The new terminal is also three times larger than the old terminal, expanding capacity to keep both local people and businesses connected and to bring more people into the region. For the town centre transformation project, this has transformed the street and lane network, connecting the land to the lake and creating a quality place to attract people to spend time in the town centre, which will bring a range of social and economic benefits.

Tāmati Coffey: What economic benefits were there for Taupō during the construction of those projects?

Hon KIRITAPU ALLAN: During COVID, we prioritised the creation of job retention, and over the course of these three projects, approximately 280 people were employed in the construction of those projects. These were co-investments in partnership with the Taupō District Council, its airport authority, local businesses, and the community. From those investments, nearly 90 percent of the total cost for the town centre project was spent on local businesses. These benefits will have long-lasting impacts for Taupō, Ngāti Tūwharetoa, and the people of the wider region.

Tāmati Coffey: Why are these regional investments important for the whole economy?

Hon KIRITAPU ALLAN: As this side of the House strongly believes, our regions are the backbone of our economy, and particularly when it comes to our export sector. The Government is continuing to deliver projects to make our regions even better places to live and to work. We’re committed to ensuring our regions have the infrastructure that they need to grow and to boost regional economies through genuine local partnerships. We will also use our experience from rolling out these kinds of regional development investments to shape our locally led recovery from Cyclone Gabrielle.

Question No. 9—Education

9. ERICA STANFORD (National—East Coast Bays) to the Minister of Education: What percentage of students were meeting curriculum expectations in maths at year 8 in 2022 according to e-asTTle data, and what percentage of students passed the math assessment in the second NCEA literacy and numeracy pilot last year?

Hon JAN TINETTI (Minister of Education): The e-asTTle data for 2022 hasn’t been analysed yet and is not public. To the second part of the question, 64.1 percent of students overall passed the numeracy pilot in 2022, including 57.3 percent of those who sat the assessment in September.

Erica Stanford: Why isn’t math on the Government professional learning and development (PLD) priority list to support teachers, when the royal society report commissioned by this Government in 2021 found that nearly half of year 4 teachers said that they felt only moderately confident in teaching mathematics, and those teachers were not scheduling the subject as often, as a result?

Hon JAN TINETTI: Maths is actually very much a priority of this Government. We are finalising the curriculums in English, maths, and statistics at this point in time. From 2024, the common-practice model—meaning that consistency being taught from Kaitāia to Invercargill for maths—will be in place. It is currently being finalised and will go out to the sector. With that will be a very full support programme for our teachers as well, and we have also now developed a full set of progress steps for both literacy and maths.

Erica Stanford: How can it be that after 5½ years of her Government, and a comprehensive report recommending sustained PLD in math for all year 0 to 8 teachers, are we still got getting the PLD for our teachers in math that they need, and a whole cohort of primary school students have come and gone?

Hon JAN TINETTI: I will remind the member that, as I’ve said in the House before, last year we did an extensive PLD programme, called Just-in-Time Maths, for teachers within the sector. Again, we have put out the work and the expectations around the teaching of maths, and the development of the common-practice model—meaning that consistency of teaching, of knowing what to do, how to teach maths, when to teach it, for how long, will be absolutely evident to all our teachers. This is an area that we are putting a huge amount of effort into, and it’s one of our biggest priorities in the curriculum space.

Erica Stanford: Why has the Government still not mandated that students spend one hour on maths every day, as recommended by the 2021 royal society report, when, in 2019, just 45 percent of year 8s met curriculum expectation in math, according to National Monitoring Study of Student Achievement student achievement data?

Hon JAN TINETTI: Maths is a compulsory part of the New Zealand Curriculum. The nature of the current curriculum is relatively devolved, and the Government doesn’t currently prescribe hours or specific content of teacher; no Government has done that. We are changing that through the curriculum rewrite so it is very clear what must be taught and when to teach it, so that no learning is left to chance.

Question No. 10—Police

10. Dr EMILY HENDERSON (Labour—Whangārei) to the Minister of Police: What announcements has he made on significant police milestones?

Hon STUART NASH (Minister of Police): Last week, I was delighted to showcase the results of the police’s Operation Cobalt. Introduced in June last year, Operation Cobalt focuses on disrupting unlawful gang behaviour and has had a great success in addressing serious offending and holding people who commit serious crimes to account. I’m extremely proud of the fantastic work the police have been doing to keep our community safe, building on the significant investment our Government has made in them.

Dr Emily Henderson: What are some of the measures of success of Operation Cobalt then?

Hon STUART NASH: Well, I’m delighted to inform the House that as of 2 March this year, police have seized over 300 firearms, conducted 945 searches under warrant, and—here’s the kicker—entered over 28,000 charges against over 7,000 gang members and associates across a number of crime types. It is great to see this level of enforcement activity by the police that helps keep our community safe.

Dr Emily Henderson: And what is the investment the Government has made in the police, Minister?

Hon STUART NASH: Record levels. As well as additional funding in Budget 2022—thank you, Minister of Finance—this Government has been giving police the tools to crack down on gangs since we came into office. This includes resources to recruit the 1,800 additional police officers we promised when I was last Minister of Police. Police are on track to deliver on this target, and since June 2017, we’ve added 1,687 new officers to the front line, and I’ve been to about 40 graduations.

Dr Emily Henderson: What was the additional investment in Budget 2022 there?

Hon STUART NASH: Well, thanks to the Minister of Finance, the Government allocated $562 million for law and order in Budget 2022 for work targeting and removing unlawful firearms off the streets and progressing firearm prohibition orders. The Government is committed to ensuring police have the resources to hold those who commit serious and violent crimes to account.

Question No. 11—Police

11. Hon MARK MITCHELL (National—Whangaparāoa) to the Minister of Police: What is the percentage increase in incidents of retail crime from 2021 to 2022, and were there over 100,000 incidents of retail crime last year?

Hon STUART NASH (Minister of Police): Yes, there were over 100,000 instances of retail crime last year, and Police advise me that the increase is 39 percent—but isn’t it fantastic that we’ve made a record investment in police? We’ve delivered nearly 1,700 more police to hold the bad guys to account and keep our communities safe.

Hon Mark Mitchell: When the Minister says that the Government has had real success in combating retail crime, is a measure of that success a 39 percent increase in retail crime to over 100,000 incidents in a year?

Hon STUART NASH: Well, we realise we’ve got an issue with retail crime, but this is one of the things where, actually, technology drives outcomes. There’s a system called Auror, where we have made it so much easier for retailers to report crime to police. Let me give the member an example: in 2018, 10,845 retail crimes were reported through Auror; by 2022, that had increased to 69,000. But because we realised, Mr Mitchell, that this affects all our communities, we put in place the National Retail Investigation Support Unit, and we’ve implemented the Retail Crime Prevention Programme.

Hon Mark Mitchell: What does he say to the owners of a restaurant I visited over the weekend who were targeted by thieves last week, who say that the retail crime we are seeing is the same as what they left behind in South Africa?

Hon STUART NASH: Well, I’m not aware of that restaurant, but I would say that Police has invested millions of dollars in our Retail Crime Prevention Programme. As mentioned, we have the National Retail Investigation Support Unit. We are going really, really hard against those who commit retail crime, and thank goodness we have the ability to do so, because we’ve invested in 1,700 more police across the front line since we became Government.

Hon Mark Mitchell: What does the Minister say to the owner of the Pacific Superette in Auckland who is closing his superette for fear of being attacked again, and because the Government blames him for selling cigarettes?

Hon STUART NASH: I don’t think you will find anyone in this Government who blames any shopkeeper whatsoever for being attacked or robbed. That’s a terrible thing to say, Mr Mitchell. What I would say is that we’ve invested, on average, over $15,000 in every store that has come to us and asked police to help them prevent crime. As mentioned, Mr Mitchell, thank goodness we have 1,700 more officers to help solve these crimes, when you think that police numbers fell—police numbers fell—in the last three years of the previous National Government.

Question No. 12—Seniors

12. TERISA NGOBI (Labour—Ōtaki) to the Minister for Seniors: How will older New Zealanders benefit from the Annual General Adjustment on 1 April?

Hon GINNY ANDERSEN (Minister for Seniors): Thank you, Mr Speaker. Yesterday, the Prime Minister announced a cost of living package that will see around 1.4 million Kiwis benefit from increased income support to help with the cost of living. On 1 April, the Annual General Adjustment will also come into effect, and our seniors will receive a boost to their income. Couples on superannuation will get a fortnightly increase of $102.84, and a single person living alone will receive an additional $66.86. This is one of the largest ever increases to superannuation and will go a long way to support older New Zealanders with the cost of living pressures they face.

Terisa Ngobi: How will the 1 April increase for superannuation compare with previous increases?

Hon GINNY ANDERSEN: This will be one of the largest ever increases to superannuation. This year’s 7.2 percent rise in superannuation is up on the 5.9 percent increase from last year and will help those over 65 keep up with the cost of living pressures.

Terisa Ngobi: How many older New Zealanders will benefit from these changes?

Hon GINNY ANDERSEN: The changes will come into effect on 1 April and will support around 880,000 older people receiving New Zealand superannuation and the veteran’s pension as well. As Minister for Seniors, it is my priority that we do as much as we can to support our seniors.

Terisa Ngobi: What other income support is available for older New Zealanders?

Hon GINNY ANDERSEN: This Government has known for some time now that older New Zealanders do face rising costs, particularly during those winter months. Early on in our time as Government, we implemented the winter energy payment. This payment will come into effect on 1 May. It means that single people on superannuation will receive an additional $20.46 a week during the winter months, while couples receive $31.82 over those winter months.

Appointments

Assistant Speaker

Hon GRANT ROBERTSON (Leader of the House): I seek leave to move a motion without notice on the appointment of Assistant Speakers, despite Standing Order 29.

SPEAKER: Is there any objection to that course being taken? There is none.

Hon GRANT ROBERTSON: I move, That this House appoint the Hon Poto Williams and Barbara Kuriger as Assistant Speakers until the end of Thursday, 16 March 2023, despite Standing Order 29.

The House has a busy week ahead, but two of our panel of Presiding Officers are absent, so it’s necessary to appoint two temporary Assistant Speakers for this week only. We are fortunate that we have two experienced members who have agreed to step in. Poto Williams served as Assistant Speaker for almost two years, from 2017 to 2019, and I know has the respect of the House for her calmness, authority, and fairness. Barbara Kuriger has stepped in as a temporary Assistant Speaker before and performed the role most capably and is highly valued across the House. We are grateful to both members for agreeing to take up the role of Assistant Speaker for this week only, and I commend their appointments to the House.

Motion agreed to.

SPEAKER: I declare the House in committee for consideration of the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (No 2).

Bills

Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (No 2)

In Committee

Part 1 Annual rates of income tax

CHAIRPERSON (Hon Poto Williams): Members, the House is in committee on the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (No 2). Members, we start with Part 1. This is the debate on clause 3, annual rates of income tax. This is where the debate on the tax rate should take place, but the vote on any proposed amendments to the tax rates will take part place in Part 2, which amends the Income Tax Act 2007.

Nicola Willis: Madam Chair.

CHAIRPERSON (Hon Poto Williams): I call Nicola Willis.

NICOLA WILLIS (Deputy Leader—National): Madam Chair—

CHAIRPERSON (Hon Poto Williams): Apologies, apologies. Standing Order 352 requires that the annual taxing provision be considered separately. The question is that Part 1 stand part.

NICOLA WILLIS (Deputy Leader—National): What this part of this taxation bill represents is a significant missed opportunity by the Government to adjust tax thresholds to account for some of the extreme inflation that has beset New Zealand workers over these past few years.

What we are experiencing as a country is a prolonged cost of living crisis. There has been an admission of that via the Government, an admission that for the first time in many, many years, real wages are now trailing the inflation rate, so that in real terms, many New Zealanders are going backwards. While their nominal incomes are increasing, their actual ability to get ahead is reducing. It is that fact that has led the Government in recent times to make specific inflation adjustments to the rates of benefits, student payments, and superannuation payments paid to New Zealanders, out of recognition that tagging those to wages no longer suffices because inflation has become so out of control under this Government.

So it has been National’s consistent contention that it is very wrong, in the midst of a cost of living crisis, for the Government to persist with a rate of income taxation that is punitive. The rates that are in this bill mean that, in real terms, New Zealanders are paying a higher proportion of their income in tax than they have in many, many years. This is even while the Government’s tax take is upped by billions and billions of dollars as they are committed to a clutch of new taxes and allow fiscal drag to push people into higher tax brackets. It has been National’s consistent view that if the Government could only be disciplined about its own spending, then adjusting these tax rates for some of the inflation that has occurred in recent years would be possible.

So my question for the Minister in the chair is a simple one. It is: why won’t you simply adjust the tax thresholds to allow for this inflation so that New Zealanders can keep more of what they earn and pay a fairer rate of tax?

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. It’s a pleasure to be speaking on this bill, and obviously we’re dealing with Part 1. As my good colleague Nicola Willis has just said, the issue with this is that this bill enshrines the current rates of tax and the thresholds at which you pay the higher rates of tax. Of course, as we know, this Government has been raking in additional tax revenue; an increase of $42 billion from when I first came into office 5½ years ago.

So, first of all, let’s get some confirmation, because I know the Minister is very aware of tax revenue. Can he confirm that the Government has increased its revenue by $42 billion since it first came into office?

The second thing is: can he confirm whether or not that equates to $15,500 per family—which is not an insignificant amount of money? As I was talking about the other night at the first reading, that equates to quite a nice car that hard-pressed families could go and buy. That’s the scale of the additional tax that has been levied against New Zealand families, and it is just something that—as Nicola Willis has identified—in a period where we’ve just had rampant inflation, that additional cost could not have come at a worse time for New Zealand families.

The third thing I want to just touch on is that with the move to a 39 percent tax—and, obviously, this is about tax income rates and different personal tax rates. I would be interested to know whether the Minister would comment on whether, in fact, he’s going to move the trust tax rate to somewhere closer to 39 percent in line with personal tax rates that are set out in this bill, because he’s now, I believe, found himself in a conundrum where we’ve got a company tax rate at 28 percent, you’ve got tax on unit rates at 28 percent, you’ve got the top personal tax rate at 39 percent, and, of course, trusts are now taxed at 33 percent.

So given that the Minister and the Government want to enshrine these existing rates of personal tax rate—whether in fact he wants to or feels the need to increase the trust rate, because I think it is inevitable that the longer that the Government enshrines this differential—which is actually one of the highest differentials since 1997; a long time ago—it means that there is now an incentive for people to restructure their affairs, particularly using company trusts, etc. That’s come about through this rise in the top tax rate. So that’s the third question that I’d like to put to the Minister, and then we can maybe talk about specific thresholds after this.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. Despite being a very small part in words of the overall bill, the taxation rates are really the lion’s share of what we’re doing here. Now, we had an answer from the Prime Minister to Nicola Willis’ question around tax threshold changes that makes me wonder—in fact, I’m pretty sure I know the answer, but it’s worth putting it to the Minister of Revenue—whether the New Zealand public will ever see tax threshold changes under a Labour-led Government. Because the track record is pretty clear.

Remember the bubble gum tax? Because I do. I remember that after about seven or eight Budgets where Michael Cullen steadfastly refused to adjust tax thresholds, he bent under the weight of public pressure and threw crumbs at the New Zealand taxpayer—well, actually he didn’t, he threw bubble gum at the New Zealand taxpayer—and then he took it away again. They never actually got it. So, if you count, let’s be generous and say that it was only seven Budgets, and we’re now approaching the sixth Budget of the fifth Labour Government. So you’ve probably got a dozen or 13 times when a Labour Government in modern times could have adjusted tax thresholds. And not only did they not, but the Prime Minister said in question time today, and has many times said: “It ain’t going to happen.” Why? Because it’s not possible to give a tax threshold change to a low-income worker without giving a tax threshold change to David Parker. So they are prepared to put low-income New Zealanders through the pain of having to pay more tax because of an envy from someone who earns more than they do. That is letting low and middle income New Zealanders down. And what happens is middle income New Zealanders become low income - New Zealanders by the theft—through inflation and through tax. I talked in the second reading about this—

Chlöe Swarbrick: And a disproportionate tax burden on work over wealth.

Hon MICHAEL WOODHOUSE: Oh, well, OK, we can have that discussion, but it’s a moot point because the Government won’t even entertain it. And I want to get the Minister to confirm that it simply won’t be possible for New Zealanders to get any sort of tax relief under this Government because they won’t change the thresholds. They’re certainly not going to change the rates because that would also benefit people who are in upper incomes.

But I talked about registered nurses, that when I left the hospital I managed one would have to be a quite senior registered nurse to be on the 30 percent tax rate. Because of the failure of this Government to change tax thresholds, somebody working a bit of overtime and weekends could be on the 30 percent rate in their second year after graduating. They don’t feel any better off, but they’re paying a 30 percent tax rate where 10, 15 years ago they’d have only been paying 17.5. That’s what we’re talking about. It really hurts New Zealanders. So my question to the Minister is: is the Prime Minister’s answer indicative of an attitude, and is the track record indicative of an attitude, that no New Zealander will ever see a tax threshold change and tax relief under a Labour-led Government?

Hon DAVID PARKER (Minister of Revenue): Thank you, Madam Chair. The first point I would make is that implicit in the questions from the Opposition is the underlying assertion that New Zealanders are highly taxed and, therefore, taxes should be lower overall in New Zealand.

Hon Member: No.

Hon DAVID PARKER: Well, that is the implication that I take from the questions that are asked by the Opposition—that every time we come to this House, they’re saying “tax cuts, tax cuts, tax cuts.”

The reality is that the OECD keeps statistics on the amount of taxes as a proportion of the economy for all OECD nations, and New Zealand sits in the lower half of those OECD nations for taxation as a proportion of the economy. Taxes, of course, are needed to pay for services like health and education. Those costs, particularly in the health field, have been high in recent years. Every New Zealander knows that; we’ve all been through COVID. And now we’re also facing the costs of dealing with the storm events that we’ve had in the last month or so in New Zealand. So New Zealand is not highly taxed. We do not see a case for significant tax cuts.

In respect of the idea that we adjust thresholds or that we never adjust thresholds: the last time Labour was in Government, when we also had a 39c top income tax rate, that kicked in, from memory, at $69,000; when we reintroduced the 39c rate during this term of Government, it was introduced at a $180,000 threshold, so that incomes over $180,000—not the tax up to $180,000, but the tax over $180,000—is taxed at 39c in the dollar, and I contrast that with the threshold for that same rate in the last Labour Government, which is $69,000.

In respect of alternative ways in which you could cut the pie, I would note that the last National-ACT Government chose to increase GST into fund a decrease in income tax is typical of the last National and ACT Government and prior iterations of that. Of course, 40 percent of the income tax cuts went to the top 10 percent of income earners.

NICOLA WILLIS (Deputy Leader—National): Implicit in those remarks by the Minister of Revenue is something he keeps hinting at, which is his view that a tax swap is the way to deliver tax reduction. My question is: why is he waiting to deliver lower income tax for New Zealanders when he could do it in this bill today; and which part of the productive economy—and which talented and skilled New Zealanders—is he planning to slap yet more taxes on to pay for it?

Hon DAVID PARKER (Minister of Revenue): Answering that question, there is no increase to income tax rates for any New Zealander in this bill. They are being set at the rate that they were last year.

In respect of the earlier question from another National Party member, there is no increase to the trustee rate in this bill either.

NICOLA WILLIS (Deputy Leader—National): I wish to return to my question, because that was a cute response from the Minister and I know he can do better. This is an opportunity, in this bill, to allow for some facts which I know that he will not have argument with. Some facts, one: the tax take as a proportion of GDP is the highest it has been in more than 17 years. Fact two: this Government has increased the tax take by many billions of dollars and, as a proportion of GDP, it is up. Fact three: the effect of inflation has been to increase New Zealanders’ nominal incomes such that average wage workers have been pushed into higher tax brackets and are now paying a higher proportion of their income in tax.

So if we were to keep tax at stable levels, that would require an adjustment to the levels at which tax thresholds kick in. My question for the Minister is why won’t he do that, and, given the admission in the past 24 hours by this Government, that there is a bonfire of wasteful spending going on, why hasn’t there been an effort to prioritise taking the Government’s own belt in so that it can deliver tax relief to working New Zealanders?

DAMIEN SMITH (ACT): To the Minister, does he recognise that 98 percent of New Zealanders have been punished with his tax policies, and have received no benefits under this Government and are unlikely to, and that the word “Labour” now is a word that does not make sense any more because the hard-working people of New Zealand are being taxed perniciously at an income level? And also, economically, from a worldwide perspective, that his figures on the OECD per capita are incorrect and that we are actually going backwards in this area?

Hon DAVID PARKER (Minister of Revenue): Well, if our system is described by the member as “pernicious” in its tax rates, how does he reconcile that with the fact that the highest income tax rate in Australia is 45c on the dollar, whereas the highest it is here is 39c?

SIMON WATTS (National—North Shore): Thank you very much, Madam Chair. I want to go back to the Minister’s statements, before, because the only explanation that he could articulate in regards to why the Government is not using this opportunity to adjust the annual rates of income tax in Part 1 of this bill is because there or thereabouts New Zealand is in the pack with other OECD countries, right? That is the only real reason that he could stump up with in this committee stage. And what that fails to acknowledge is that Kiwis are hurting across this country right now, and this Government is responsible for that hurt. This Government’s expenditure is driving up the cost of living crisis that those Kiwis are facing. And this Government have an opportunity today, right here, to make adjustments to the annual rates of income tax that would inflation-adjust these rates to put those dollars back in the pockets of hard-working Kiwis. But all the Minister can come up with is some lovely statistics about OECD countries, which is abdicating responsibility from the fact that his Government is responsible for the setting of rates and they have the ability, here and now, to be able to put that benefit back in the pocket of hard-working Kiwis. But the answer to that is “No, we’re not willing to go there. We’re not willing to do that because we’re in the pack with every other country in the world, blinded to the reality of Kiwis at home, around this country, that are hurting as a result of this cost of living crisis.”

Why will this Minister not use the opportunity sitting in front of him today in regards to updating of the annual income tax rate? Why will the Minister not use this opportunity to do what is the right thing, to put that benefit back in the pockets of hard-working Kiwis? And when will the Minister—if he’s not going to do it today—look to make those adjustments in tax brackets for Kiwis across this country so that middle income New Zealand, in particular, who are heavily squeezed at the moment as a result of increasing costs across the board, will actually get that benefit?

The other aspect in regards to what the Prime Minister noted in question time today is very relevant. The Hon Michael Woodhouse raised this as well, because the Prime Minister basically gave an insight. He said that this was something that was—or potentially was—being considered. And that’s very interesting, because that seems to be in contrast to what the Minister in the chair has just said to us. So I acknowledge that sometimes communication is a little bit lax on that side of the House between the left hand and the right hand, but I’ll give the Minister an opportunity to jump in because, you know, I’ll give him the benefit of the doubt. Maybe they didn’t have a chat in the hallway on the way down to question time today about the change in policy, but the way that these policies are being burnt on a bonfire at the moment by this Government it’s no surprise that probably it’s hard to keep up with this race. But if the Minister could answer the question in regards to why and when will the Prime Minister be announcing a reassessment or a refresh of the tax rates, that would be much obliged. Thank you, Madam Chair.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. As I thought would happen, we have got into a quite deep, philosophical discussion about tax, and that’s what I love as a lapsed accountant. But I was mindful of the comment made by the Prime Minister in his post-Cabinet press conference yesterday, when he was asked about whether Government spending was inflationary. What he said was: “Well, tax threshold changes could also be inflationary.”, and what he was really saying to New Zealanders was the Government knows better how to spend their money than they do. It’s like: “Trust us. We’re going to take that money out of the pockets of hard-working New Zealanders and spend it better than they can.” Well, I don’t think hard-working New Zealanders would agree with the Prime Minister on that.

But I have three questions for the Minister of Revenue. Firstly, is he seriously asking New Zealanders to accept that the Government is committed to tax threshold changes? Because when they put back the punitive 39 percent top tax rate, they did it at a higher threshold than when Michael Cullen did it. So actually that signals a commitment to tax threshold changes. I think that’s a very long bow, but I would like to hear from the Minister. I believe the Minister said that 40 percent of the benefit of the tax threshold changes goes to the top 10 percent of income earners. Was that the metric that I think he said? He could clarify—if I try and get that. He said something about a disproportionate benefit to upper income earners for tax threshold changes—he’s not going to acknowledge that. Well, let’s pretend that that’s what he meant.

I would want to point out and ask the Minister if he can confirm whether the top 10 percent of New Zealand income earners actually pay somewhere in the region of 47 percent of income tax. So they’re already disproportionately burdened with that tax obligation, and we think that’s fair; we think that is about right. But to then turn around and say they don’t deserve the benefit of a tax threshold change because they are upper income earners is classic left-wing “play on the swings but not on the roundabouts”, and that cannot be right.

I also agree that it’s fair that because of the income transfers that take place through accommodation supplements, Working for Families, and so on, many middle income families actually aren’t paying any net income tax. They’re certainly contributing to the tax base, but they’re not paying any net income tax. So can he confirm, then, that the top 10 percent of income taxpayers are paying about 47 percent of the income tax?

And he also said about tax as a proportion of the economy and that we’re sort of in the pack in the OECD. Well, that is not surprising if in a high inflationary environment one doesn’t change tax thresholds. It’s like “It’s blue because it’s blue.” And I think those comparisons with the OECD countries can be very fraught because they have very different thresholds for a start. I mean, Australia has a quite big zero tax threshold—I can’t remember when it stops, but I think it’s something like $15,000 or $16,000—and we don’t have that. I don’t actually support that particularly, necessarily; it’s quite expensive. But also those income transfers, the very high scales that some jurisdictions will go to—the amount of sales tax that is applied both at a state and federal level in those countries with whom we compare—make that kind of comparison pretty irrelevant. And by the way, New Zealanders aren’t paying tax in those countries. They’re only worried about how much money the Government is taking out of their pockets and how that’s changed over the last six years. And the answer is a lot and a lot; in fact, a lot and a lot more.

So I ask the Minister to reconsider, and actually I think there is going to be an amendment tabled at some point. And it’s not too late. We are setting the tax rates for this year. It’s certainly not too late to do the right thing by the taxpayers of New Zealand who are being squeezed. I was at the supermarket the other day and if it made my eyes water, I really dread to think how average-income earning families are coping. It was quite a revelation.

Hon DAVID PARKER (Minister of Revenue): To clarify, the 40 percent statistic that I gave, I was making the point that the last time the National Party significantly adjusted tax thresholds, they paid for it by an increase to GST that everyone paid, and 40 percent of the income tax decreases were given by them to the top 10 percent of income earners.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. Well, first of all, I just want to return to the Minister’s earlier response where he said “Oh well, it’s great that we tax then. We need to increase taxes because we need to spend it on vital things like health and education, and all those sort of things.” Well, actually, we agree with that, that it is vital that we spend good money on worthwhile projects like upgrading our health services, improving our education facilities, doing roads, etc., but it doesn’t quite stack up because what we do know is that the Government has just been hoeing into the COVID fund, which has been like a slush fund to fund such a raft of worthless projects. And here we had Christopher Bishop in question time identifying that out of the 180-odd so-called “shovel-ready” projects, many of them haven’t finished—most of them haven’t finished, even though they were done for the express reason that they were going to be completed within 12 months, and of course they haven’t, because we know about lack of delivery. So the point I’m making is that it’s fine if you tax and spend the money wisely. Unfortunately, we’ve had a Government that taxes and taxes, and keeps increasing the tax—$15,500 per family—and spending it, and blowing it on wasteful stuff. And so that’s the first point to his earlier response.

I suppose the thing about the whole approach is the Minister’s saying “Look, we need to tax.”, and then, of course, “National’s doing the wrong thing.” Is the Minister aware that on 6 March this year, 2023 just to be exact, the bastion of capitalism, the US—guess what they’ve done! They’ve changed the personal tax rate thresholds—exactly what National has been proposing. Now, you’d think the US—wow, they wouldn’t be worried about those poor people, those hard-working families that are struggling to go to the supermarket. I’m so glad to hear that Michael Woodhouse goes to the supermarket, a modern man, so he’s grounded in what’s happening—you know, the price of milk—unlike some people. And so even the bastion of capitalism recognises that it’s actually quite good to increase thresholds to try and deal with this inflationary pressure. And, of course, we’ve had rampant inflation in New Zealand, largely driven by this Government, who, as I’ve said before, has been wasting money on a whole lot of stuff. Even the Reserve Bank Governor agrees that fiscal and monetary policy need to work together, and we’ve had fiscal policies that have been out of kilter.

So I suppose this raises this big issue: what’s best? What’s the best economic approach? What the Government wants to do is keep on increasing the tax burden on New Zealand families. So, as I said at the outset, the tax take in New Zealand’s increased by $42 billion per year—if you go back to 2017 it’s now $42 billion higher—and it will continue to increase partly as a result of people being more productive in Government, companies paying more tax, but largely due to inflation. It’s called fiscal drag that we’re all aware of. So that tax take will keep increasing. And the issue is: are you not better to leave the money in the hands of the families that need it most? The point has been made earlier about it being the middle income, the hard-working families that are the ones that have missed out and are facing the hardest onslaught of the cost of inflation.

The Government’s obviously announced increases to beneficiaries and superannuitants—that’s one way of dealing with it. But it’s the working families that have largely missed out on a way to deal with these huge cost increases that they’re incurring. And so the issue is: do you actually reduce the tax burden on people so they keep their money—so when the pay packet comes in, they immediately keep more of that money—or are you better to do the thing where the Government takes a greater share of that tax and then uses the ministry of social welfare, that big mincing machine, to then, using several hundreds or maybe thousands of staff, work out how to pay it, and then pay back in the form of benefits? We think it should be, firstly, by reducing the tax burden.

Hon DAVID PARKER (Minister of Revenue): Once again, listening to the Opposition you would think that they are the vanguard of tax cuts for the middle-income New Zealanders, when their actual record when they were last in Government was that 40 percent of the income tax cuts went to the top 10 percent of income earners.

Indeed, it was only just before Christmas that, again, the National Party was saying their core tax policy would be to get rid of the 39c rate. In respect of these assertions that, according to the Opposition, taxes are somehow out of control and burgeoning in a way that is improper in New Zealand, I would note that core Crown tax revenue in 2008 was 30 percent of GDP and the actual figures for 2022 were 30.2 percent of GDP. In the intervening period, it did drop by 1 or 2 percent of GDP under a National Government, because, of course, that’s what they always do: they cut services in order to reduce taxes. Who gets the benefit of those tax decreases under National and ACT administrations? Well, as I said, the facts speak for themselves. Their major change to thresholds was when they increased GST to pay for a decrease in income tax, 40 percent of which went to the top 10 percent. Always has been that way, always will be that way; some things never change.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. Tēnā koutou e te Māngai. It appears as though this debate this afternoon has descended into a discussion on the philosophy behind tax and what the outcomes are that we’re trying to incentivise in our economy. So with all of those contributions, particularly from members of the Opposition, I thought it timely to raise the spectre of the research that I know the Minister in the chair has been undertaking within the broader revenue portfolio, because, of course, in this platform economy and remedial matters bill, we will be touching on some of those tax burdens and where they, perhaps, could be alleviated.

I note, in early 2020, that he delivered a speech to the University of Auckland and said—and I quote—“What’s hidden is that the effective marginal tax rate for middle income kiwis is generally higher than it is for their wealthier co-citizens. Indeed some of their wealthier Kiwi compatriots pay very low rates of tax on most of their income.” Of course, then it was followed up by Official Information Act requests to Treasury and the IRD, as published by Thomas Coughlan in our press gallery, where it was found that the wealthiest New Zealanders, on average, tend to pay a lower rate of tax than essential workers in our economy.

So, as a follow-up question, to the Minister, actually based off some of the interactions that we’ve had in annual reviews, and otherwise, where he noted that we could, perhaps, have expected there to be some initial research published at the end of last year—where that research is.

Hon DAVID PARKER (Minister of Revenue): A couple of Budgets ago, Parliament authorised the collection—or Budget night legislation—of information on a survey basis from the highest wealth holders and income earners in New Zealand. Until that legislation was passed, there was a dispute amongst some taxpayers as to whether Inland Revenue was entitled to that information. Some taxpayers and their agents said that the only information that Inland Revenue was entitled to was information for the administration of tax that was payable, rather than for the administration of the tax system. So this Parliament changed the law to make it clear that the Commissioner of Inland Revenue has the ability to collect information for policy purposes, not just for tax administration purposes.

In the same Budget, the Parliament gave another Budget line to the Inland Revenue Department. The Commissioner of Inland Revenue was authorised to do a survey to find out how much tax is, in fact, being paid by the wealthiest New Zealanders as a proportion of their economic income, which is a different question to taxation as a percentage of taxable income, because we know from overseas studies that the wealthiest cohort earn a lot of their income in non-taxable forms, even though it’s economic income. That information is expected to be published in full within the next two months.

DAMIEN SMITH (ACT): Just on the current situation, would the Minister accept that one of the reasons why wages after tax didn’t keep up with inflation in 2022 is because the Government is actually taxing more? And, on the 98 percent of low and middle income earners who want to keep their wages and manage inflation, why has there been no conversation to pull the additional lever to cut wasteful spending in Wellington and make sure all workers have more money in their hand after tax—wouldn’t that be a better bread and butter solution?

Hon DAVID PARKER (Minister of Revenue): As the Prime Minister said just yesterday, we, of course, always review expenditure. We reprioritise spending initiatives within Government departments every year and the Budget exercises how that is controlled by the Minister of Finance. So the idea that we don’t reprioritise expenditure is just nonsense.

It is true that there are some of the major cost centres in New Zealand cost yet more year on year. The most obvious example of that is in health: health technology improves and, therefore, there are more treatments that are available to assist people in their health needs. The demographic of the population also changes through age. As a consequence, the costs of servicing the health needs of not just the New Zealand population but every wealthy population around the world—the cost of health services increases as a percentage of the economy year on year in just about every country in the world.

Of course, if you don’t fund those costs increases properly, then you squeeze things like the amount of money that’s available to Pharmac for drug expenditure, which is one of the reasons why, when we came into Government—because there had been such miserly increases in the Budget for Pharmac—there were a lot of drugs that could save lives that weren’t being funded, and we’re making progress in ensuring those drugs are funded. How do we do that? We actually do that through the taxes that we collect from New Zealanders, and New Zealanders value that when they have health needs that the public system provides for.

CHLÖE SWARBRICK (Green—Auckland Central): Really appreciate the engagement from the Minister on that broader philosophical question, which, of course, was raised by the comments of the Opposition around where tax burden can and perhaps should lie in this country, particularly his comments on that tax burden on wealth versus work and the research that he’s undertaking, which, of course, will help us to have a far more informed debate moving forward.

Just reflecting on those answers, there are two key questions that fall out of those answers. The first is whether, in his statements, we can expect to see that research published in full in the next two months—for clarity’s sake, the first question, whether we can expect that to be published prior to the Government’s Budget being debated in this House.

The second question is whether we can expect to see this term of Parliament, prior to the election, the introduction of the bill on tax principles, which I understand was a piece of work occurring in line with that broader piece of research.

Hon DAVID PARKER (Minister of Revenue): The information on the high wealth inquiry that Inland Revenue are conducting—which is anonymous by the way, I never see, no one ever sees, who the people involved are. Indeed, there are very strict security protocols around that information so that it cannot be used for tax administration purposes. It’s an inquiry for tax policy purposes, not any enforcement reasons. That information, I expect, will be out before the Budget.

In respect of the question on the tax principles Act, a final decision hasn’t been taken by Cabinet on that matter yet.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I’m going to return to that topic in a sec, but I must admit the Minister’s sounding like the Minister of Education did last week when she started to talk about proportionality, which was a very confusing sort of session, if anyone had been following question time last week. When the Minister in the chair, David Parker, says, “Look, hey, the tax percentage take compared to GDP hasn’t increased much.”, the reality is that GDP, the gross measure of GDP, has increased quite significantly in New Zealand. It was about $330 billion and now it’s about $370-375 billion. Of course, a lot of that is driven not from the actions of Government—in fact, I’d have to say, in many cases, in spite of the Government, even though this current Government has laboured businesses with, we’ve estimated, about $3.5 billion of additional costs because they just love socking it to businesses in New Zealand. But even though they’ve been socking it to New Zealand businesses, none the less, in the spirit of entrepreneurship, New Zealand businesses have grown, and that’s why the GDP has grown quite significantly, a major portion of that increase.

So on one side of the coin, we’ve got an economy that has grown, partly through inflation but mainly through the efforts of people working in businesses—not only the owners; all their staff, all that good stuff. Then, at the other level, we’ve got the tax take, and what I take from the Minister is “Hey, look, as long as you keep that in balance, that’s OK.” The issue is that would be OK (a) if you’re spending on the right sort of stuff—and as I said before, we’ve had that slush fund during the COVID period. But, secondly, what we’ve seen is just money going into other projects that obviously offer little benefit, and at the same time we’ve been running quite significant deficits.

So the issue around the tax position for New Zealanders is: how do we grow the economy? How do we support middle-income families? That is why it always comes back to: what is the personal tax rate that New Zealand pays? As I said before, the US, and also the UK, has been looking at adjusting, and have adjusted, their tax thresholds, in line with what the National Party has supported.

Now, just going back to the issue of looking for other sources of tax, the issue has been raised around the witch hunt of those with owned trusts, particularly. That’s why my earlier comment, which the Minister I think addressed, was around “Is the trust tax rate going to go up as a result of going and looking at wealthy New Zealanders’ trust position and their personal tax position?” But there is a perception that the Minister has used that initiative and used the IRD to further the policy intent of the Labour Party. I think Chlöe Swarbrick’s question is actually appropriate, because there is a view that this is a Labour initiative and using IRD to further its own policy agenda. It doesn’t matter whether it’s a confidential study or not. So I would reiterate, in that question from Chlöe, that it would be great to have visibility around the results of that prior to the Budget, and we do need to understand the tax principles that the Minister’s been talking about for quite some period of time.

But the final bit I just want to touch on, and we haven’t talked about, is the issue of the hidden economy and those not paying tax, because the estimates of the hidden economy in New Zealand vary quite significantly, from a billion dollars, I’ve seen, right through to about $10 billion. So the questions I put to the Minister about the actions of the IRD, how much effort is going into it, I’ve got to say, from the—

Hon Dr Deborah Russell: Point of order. This is Part 1 of the bill, and it is about the annual rates of taxation. I just question the relevance of what the member is talking about—in your judgment, of course, Madam Chair.

CHAIRPERSON (Hon Poto Williams): Thank you; I appreciate that. It is a very broad-ranging part of the legislation, and I am feeling some anxiety as the member does traverse these questions over and over again. However, I have given members some leeway considering it is a very broad part of the legislation.

ANDREW BAYLY: Thank you. I’d just like to thank the tax expert Dr Deborah Russell for her helpful interjection there. The reason why I’m asking this question—one of the reasons—is that we need to maintain the personal tax rates to fund part of the Government’s expenditure, and if there is a good argument that we should be getting more income from the hidden economy, it actually gives the potential to reduce the personal tax rates. I have written many written questions to the Minister. It seems the approach around—[Time expired]

DAMIEN SMITH (ACT): Question for the Minister: does the Minister accept that 98 percent of New Zealanders under these income tax rules are receiving no benefits, and that, in a cost of living crisis and the greatest inflationary period we’ve had in recent history, it’s been a mistake not to be more flexible in his approach?

Hon DAVID PARKER (Minister of Revenue): That’s an easy answer to that. The answer is obviously no. The benefits that New Zealanders receive from these tax rates include a health system, an education system, more police, and many other benefits. In terms of Mr Bayly’s assertion that the COVID recovery fund was a slush fund, that is the fund that paid the income supports via businesses to many millions of New Zealanders who remained attached to their employment during COVID, as a consequence of which the upturn from the economic consequences of COVID were far better than anyone predicted. Because we managed the economy so well coming out of COVID, New Zealand had amongst the lowest rate of unemployment in the world.

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

Ayes 76

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

Noes 44

New Zealand National 34; ACT New Zealand 10.

Part 1 agreed to.

Part 2 Amendments to Income Tax Act 2007

Income Tax Act 2007”. The question is that Part 2 stand part.

CHAIRPERSON (Hon Poto Williams): Members, we now come to Part 2. This is the debate on clauses 4 to 101,“Amendments to

ANDREW BAYLY (National—Port Waikato): I just want to ask the question—clause 7 and clause 8, around residential land transfers. This is about defining the brightline rules when land is transferred from a trust to a trustee, and sets it out and, basically, defines when that land becomes subject to the brightline test, and it refers to transfers of land on or after 1 April 2022. I just have a very simple question: clause 7 deals with residential land, and clause 8 deals with residential land transferred in relation to certain Māori trusts, as opposed to just being general family trusts. Can the Minister confirm that they are the same provisions, and, if they are not, why would there be a difference between residential land transfers to “ordinary”—if I can use that word—family trusts than those to a Māori family trust?

Hon DAVID PARKER (Minister of Revenue): I’m not aware of the answer to that question but I will check with officials—

CHAIRPERSON (Hon Poto Williams): The Hon David Parker.

Hon DAVID PARKER: —and return to the—sorry, Madam Chair.

CHAIRPERSON (Hon Poto Williams): No worries.

Hon DAVID PARKER: I’ll check that with officials and get back to the member.

ANDREW BAYLY (National—Port Waikato): OK. Sorry, this might be a fast-moving debate, this one. Another little area I just want to ask the Minister to check—lucky he’s got his advisors there—is clause 18, “Treatment of amounts derived from cross-border employees”.

As the Minister will be aware, if you’ve got an employee working for a foreign-domiciled tax entity and they come and work in New Zealand, there’s an obligation to pay the PAYE on their New Zealand resident income. There’s certain rules around it, which are covered under clause 18(1) amending section CE 1F, inserting new subsection (3B)(b), employees present in New Zealand for a period during which they have breached those rules around paying the PAYE. There’s a 60-day clause—this is under new subsection (3C), “Grace period”—for the adjustment to be made; any correction to be made. Can I just ask the Minister to confirm why that 60-day period? Because I think that’s a really important thing: that there’s an understanding on whether there’s consistency across other such breaches of the tax bill or other pieces of tax legislation that have previously been passed.

Hon DAVID PARKER (Minister of Revenue): Responding to that last issue first—and I will check with officials to check that I have this correct—but I think the 60-day grace period is to reflect the fact that where you have a non-resident in respect of these somewhat complex tax arrangements, it might take a bit of time for the overseas-based entity to get their head around the rules and do the right thing. So they’re given a period of grace to do that.

In respect of the earlier question about whether there is a difference between Māori land trust structures and other trusts, I’m advised that the difference is necessary because of some of the rules that relate to Māori authorities and the ancestral rules relating to some inheritances around some Māori land trusts.

If I could bring to the attention of the House—it’s an issue that the Greens, in particular, will be interested in—we have tabled a Supplementary Order Paper (SOP) 322 to extend the exemption from a fringe benefit tax in the bill. The bill already attempts to deal with an inconsistency in the tax legislation around car parks. Employers can provide a car park to their employee, which is of financial benefit to the employee, and they don’t pay fringe benefit tax on the benefit that accrues to the employee, even though there could be some tax avoidance involved in it.

The prior National-ACT Government, under Peter Dunne, tried to amend that by including fringe benefit tax on car parks. They were pushed back on that and gave up on that, which left an inconsistency between fringe benefit tax implications for generally fossil fuel - heavy forms of transport and public transport, and this legislation fixes that by removing fringe benefit tax on employer subsidies for public transport.

The Green Party have wanted to take that further and extend the exemption from fringe benefit tax to employer contributions or purchases of bicycles—including e-bikes, and scooters, including e-scooters. The Green Party had promoted that as an SOP—it wasn’t tabled in time for it to be free of the financial restrictions that are attached to proposals with fiscal implications. So the Government, to assist, has tabled a Supplementary Order Paper to similar effect, which is now on the Table.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Chair. Tēnā koutou e te Whare. Just speaking to the Government’s Supplementary Order Paper, which has just been tabled, No. 322—thrilled to see this. When I spoke on the bill last week in the second reading debate, I was lamenting the fact that the bill didn’t yet include an exemption for active transportation, like bicycles and e-bikes and scooters.

We heard extensively at the select committee that there was huge support for this and that the fringe benefit tax was an active barrier that was preventing employers from providing that support to switch to more sustainable modes of transport for their commute to work. And it is one of those common-sense measures that’s actually win-win, because it’s good for public health, it’s good for clean air, it’s good for the environment, it can help reduce congestion in our cities, and it can help people get around, particularly when they’re dealing with uncertainty over public transport services, or when public transport services just don’t exist. That’s where vehicles like an e-bike—which have an upfront cost, which can be a bit of a barrier—can be a huge benefit. It also reduces their personal commuting costs while reducing emissions.

So it’s just a fantastic policy initiative, and I thank the Minister and the Government for taking it on board. And I really just want to speak to the success of the people-powered campaign that led to over 400 submissions at the select committee, which I’m sure was very influential as well. It does speak to the power that people can have in the democratic process and the important role that they have to campaign for solutions, because there are many positive solutions out there. And, you know, sometimes Government departments aren’t always the keenest to be leading from the front when it comes to changing things. And, you know, I do understand that there will be some slight additional work that needs to be done on this in terms of regulation, which is provided for in the Supplementary Order Paper, in terms of determining exactly what sort of vehicles are eligible to make sure that it is used for vehicles that are practical for the purposes of commuting to work and not recreation.

So I do and I would contribute to the House that I have some ideas on how we could ensure that the vehicles that are eligible for the exemption are ones that are practical for transport and not expensive mountain bikes that will only be used off road. There’s some examples from overseas, like the UK with their cycling to work scheme, which has been in place for over 20 years—of how they ensure that it is primarily leading to those public benefits and not private benefits. And so I think that’s something that the IRD and the Minister might want to look at in the development of the regulations and also just some practical aspects of—if it is an e-bike, for example, if it has integrated lights, if it has a front or back rack, if it has mudguards, it’s very likely to be a utility bike. And if they are considering a cap on the value, they should consider that a higher cap be applied to cargo bikes, which are rated to carry more than 160 kilograms, because that can also carry additional passengers, like children, which makes it more practical for commuting for some families.

But thanks—yeah, very, very pleased to see this development. And I just really want to shout out to all of that the hundreds of people who submitted in favour of this to the select committee.

Hon DAVID PARKER (Minister of Revenue): Thank you, member, for that contribution, and, you know, some credit where credit’s due: the Hon Julie Anne Genter has been pushing this hard for a while and convinced the Government.

In respect of the journey that we’re on as a country to reduce carbon emissions, it is very complex and there are lots of little steps, each of which seems relatively insignificant in the great scheme of things, the sum of which, however, is significant, and this is one of those initiatives. I think I should also give a bit of credit to the prior Prime Minister the Hon John Key, who stopped the sneering at cycleways that we suffered until that point in New Zealand, and gave recognition to the fact that there are many modes of transport that can have better health and environmental effects, as the Hon Julie Anne Genter has already mentioned.

Now, the emissions reduction plan that we’ve signed up for as a Government has got many components and somewhat ebbs and flows a little bit. We recently decided that we weren’t going to proceed with the biofuel sales obligation—there were mixed views about that in society. So we’ve lost that contribution to our emissions reduction. We pick up a bit, here, through encouraging more active forms of transport, which, as the member has said, has a health benefit in that there are reduced particulate emissions. It’s a more active form of transport, so there’s a health benefit to the person who’s actually being more active as they go to work—that has a personal health benefit for them. There’s also, of course, a congestion benefit and a reduction in carbon emissions. So we’re pleased to be supporting that initiative.

SIMON WATTS (National—North Shore): Thank you very much, Madam Chair. Minister, I want to take a look, if I may, at clause 17, which is in regards to “Treatment of amounts derived by cross-border employees”. For those of you watching at home and enjoying this debate on tax legislation, just keep up to play with this, because this is a good clause. So what I’m interested in, particularly around new section CE 1F(2), inserted by clause 17, Minister, which is a reference there to “Amounts treated as derived 20 days after payment”. The question is quite simply whether the Minister believes that there is adequate flexibility in regards to that 20-day aspect, acknowledging that there’s a number of differences and complications that come with individuals that are deriving income, particularly when working on a cross-border mechanism—whether he believes that that 20-day period, which is obviously quite specific, is appropriate and is flexible enough in regards to what is required, and whether any other consideration was given to that point. I do note that it was something that was canvassed at the select committee phase and I’m interested in the Minister’s comments in regards to it.

Hon DAVID PARKER (Minister of Revenue): Thank you for that question. Clause 17, which inserts new section CE 1F into the Income Tax Act, on the treatment of amounts derived by cross-border employees, at subsection 2 does have a 20-day period which says that “the PAYE income payment is treated as derived by them on the 20th day after payment when the employer chooses to deliver their employment income information”. But then it needs to be also read in light of clause 18 of the bill, which inserts a new section CE 1F(3C), which says that there’s a 60-day grace period. That grace period addresses perhaps some of the issues that the member’s concerned about, because it recognises the difficulties in complying with New Zealand’s tax system when you’re a non-resident. Because many breaches of our rules are inadvertent, we’re trying to reduce compliance costs and administrative costs both for the taxpayer but also for the revenue department by allowing people to correct these things promptly if a mistake is made.

DAMIEN SMITH (ACT): The fringe benefit tax on public transport exemption ignores the fact that the ability for employers to provide such a benefit is severely constrained by practicalities. For example, an employer would need a process agreed with Auckland Transport for Auckland Transport to identify the employees and for Auckland Transport to invoice the employer directly. That seems, to me, very impractical. If the Government wants to encourage public transport use, why hasn’t it preferred to allow employers to reimburse employees for the costs without tax?

Hon DAVID PARKER (Minister of Revenue): That’s a fair point that the member makes. These rules do need to be practical. They are designed with a view to minimising avoidance, but you can go too far in your precautions. If I understand the member’s point correctly, he could be referring to the situation where an employer, rather than giving someone $10 a week to cover their bus fares, is required to purchase the bus fares on behalf of the employee directly from Auckland Transport, for example. That’s an issue that has been raised by others in addition to the member. We are concerned to look at that and make sure that we’re not creating another problem by being too loose there. But we will have a look at that issue again, and if it’s not working in as practical a way as was hoped, we will address that in a future tax bill—perhaps in the May remedial tax bill.

ANDREW BAYLY (National—Port Waikato): I just want to turn to the Minister’s Supplementary Order Paper (SOP) 319, which is about employee benefits for North Island flooding events. I did have a very careful look to just see what areas were covered by this SOP, which, unfortunately, we haven’t seen until just before this committee of the whole House stage. So it covers Coromandel, Gisborne, Northland, Wairarapa, Wairoa, and then it also covers Bay of Plenty and the Waikato and Tararua. And it covers the three major North Island flooding events, which is Cyclone Hale, the heavy rain of the Auckland Anniversary, and Cyclone Gabrielle, which we all know has caused such incredible damage to a large number of places.

So, look, whilst we haven’t seen it, as I said, in the main we support this SOP as a way of allowing people to move into other areas, leave their homes, go and help in the areas that have been badly affected and to deal with issues such as reconstruction and repair of land, infrastructure, and other property in the affected areas of the specified areas. And a “distant workplace” is a workplace that is the area affected by the North Island flooding events—that’s the definition.

So that seems good. The quantum is $5,000, which is an increase in what we had used for Christchurch, which I think this is a replica from—I’m looking at the Minister. Perhaps the first question is: the appropriateness of $5,000. So given the rapid increase in rents—and we now know rents have increased $170 per week since 2017. The average rent now is $575. That means that works out to, I think, 8.6 weeks. So my first question to the Minister is: why the $5,000 and why the eight weeks? Why was that particularly deemed appropriate? And then there is the specified period of eight weeks. So why that specific period? I’m looking at—just to help the Minister—proposed new section CZ 24B(1)(c), inserted by clause 31C in Supplementary Order Paper 319. It would be very useful to understand that.

And I just wonder, in the proposed new section CZ 29B(5)(b), inserted by clause 31D in Supplementary Order Paper 319, it talks about recovery, “includes restoration and enhancement.” I suspect the SOP should actually say restoration and enhancement of what, because it’s not clear. But maybe that’s a drafting issue. Anyway, it would be useful just for the Minister to elaborate on that, given that select committee wasn’t made aware of this before it came to the committee this afternoon.

Hon DAVID PARKER (Minister of Revenue): The $5,000 amount was based on the figure that had been used by the last National-ACT Government, post the Christchurch earthquakes, adjusted for inflation. So there’s no trickery in it; it’s just that old figure adjusted for inflation since—no trickery at all.

Andrew Bayly: I wasn’t suggesting it was trickery.

Hon DAVID PARKER: I know. I know you didn’t, but there’s nothing more to it. I don’t want to say it’s arbitrary—it’s not arbitrary—but it’s just the old figure adjusted for inflation.

In respect of the eight-week period, I’m not sure if that’s the same as it was post-Christchurch. I’m advised that it’s the same period that was used post - Christchurch earthquakes—or Canterbury earthquakes, I should say.

DAMIEN SMITH (ACT): Just referring to proposed clause 31B, inserting new section CZ 23B “(Employee benefits for North Island flooding events: exempt income)” in Supplementary Order Paper 319: new subsection (1)(g) provides that in order for a payment to be tax exempt, it needs to have been treated as being exempt income by the employer. This raises a practical issue for employers who have conservatively paid tax on any payments to employees while waiting for action from the Government. Inland Revenue need to make it clear that employers are able to rectify past payday findings to correct prior taxable amounts.

I’d like to note that this rule allows an employer to give up $5k to employees who were impacted by flooding, without tax. There are lots of businesses who will have made emergency payments to help employees.

Hon DAVID PARKER (Minister of Revenue): I’m advised that the answer is yes.

SIMON WATTS (National—North Shore): Thank you very much, Madam Chair. I want to have a brief discussion in regards to Supplementary Order Paper 322, which I think was derived from the submission of the Greens’ Supplementary Order Paper 320, which wasn’t tabled. But it’s in regards to the exemption of fringe benefit tax (FBT) on bicycles and other items such as that, including electric scooters, etc. I guess the point of clarification is around how this potential exemption could be open to abuse in terms of obtaining these assets—bicycles—and getting the exemption for FBT but then using them for private purposes. I’ve got two young boys, 10 and 12, they love riding bikes, right? But if I told them, you know, “That’s Dad’s bike and it’s only to be used for commuting to work”, well, I don’t know, maybe it’s just my two boys at home, but I’m thinking they probably are going to be using these bikes for private use, right? I don’t think that’s too far a bow to draw in regards to this.

But also, I’ve got a number of number of mates—and maybe it’s a North Shore thing: I’ve got that lycra club—you know that lycra club? It’s about 6 a.m., 7 a.m. in the morning, getting up and you’ve got the lycra club going and they’re up; driving up. And I don’t mean to offend many of my friends that will be watching because they’re part of those clubs; I’m not myself. But the challenge is, I can just foresee it. I’m not going to draw any of my friends or colleagues into this, but I can just foresee that they’re going to go, “Well, this is quite a nice opportunity, isn’t it? You know, we’ll get that little bike through the work scheme, through the bank scheme.” Because interestingly, they had this in the UK when I was working in the UK, and I won’t go into any detail but you could also get the same exemption in that. And what happened, interestingly, is a whole lot of people ended up with nice flash race bikes for the weekend, all fully funded through the taxpayer—and, you know, while it’s not appropriate, obviously this is open to rort.

And the challenge that I want to ask the Minister is: while it’s all nice on paper, isn’t this really going to be just an opportunity for tax leakage—not in regards to the tyre tube, but leakage in regards to tax revenue?

Chris Penk: Ha, ha!

SIMON WATTS: Geez, that was all right, quite nice, Mr Penk. The reality is, you know, no matter what controls or important stuff is put in place, once these bikes are bought, they’ll be on TradeMe in the next week, won’t they? They’ll be selling them on TradeMe down to their mates, 15 percent or whatever, not quite—but a little bit of a discount. And this is just going to become a circular economy.

Hon DAVID PARKER (Minister of Revenue): Just in respect of the answer I gave to Damien Smith, the way in which an employer would deal with payments that have been made previously would be to amend their employer monthly schedule of their payments to reflect the fact that it was a tax repayment.

In respect of the issue that the member from the North Shore raised in respect of abuse: incidental private use is OK, the e-bike has got to be mainly for commuting. And members will note that new section CX 19D(3), proposed in Supplementary Order Paper 322, includes regulations that can be made as to the maximum allowable cost of the vehicle; we’re not going to be allowing this to be rorted through gold-plated bikes. There can also be regulations made about the requirements for any vehicle, and the Hon Julie Anne Genter has already covered what some of those things could cover.

DAMIEN SMITH (ACT): I’d like to refer to clause 31D, proposed section CZ 29B “(Accommodation expenditure: North Island flooding events)” in Supplementary Order Paper 319. CZ 29B(3) requires employees to be hired and working on site within six months of the flood in order to benefit from the extended five-year exemption for employee-provided accommodation. While the legislation at CZ 29B(4) provides that the Minister of Revenue can extend this state by Order in Council, it is clear that this time period is unworkable and should be extended to four years at the outset, like with the earthquake-equivalent rules. Noting that the base tax rule is that all accommodation provided by an employer to an employee is taxable income to the employee. However, there are some exemptions, including when an employee is provided accommodation because they are working on a big out-of-town project. In many cases, there’s no benefits to the employees; they may be maintaining a home elsewhere, they’re away from their family, etc. The base time for this rule is three years. However, it’s proposed to extend this to five years, which could realistically be how long some infrastructure projects or repair projects may take. A five-year exemption was provided for workers on the earthquake rebuild. However, that was more generous than what has been suggested here, which is that an employee needs to be engaged and working on a project by July this year. This just isn’t realistic and things aren’t organised that quickly, and we’d like the Minister’s opinion on that.

Hon DAVID PARKER (Minister of Revenue): Well, with respect, I disagree. It’s not yet clear that that longer period will be necessary. If the member is proven right by events as they actually unfold, then we could look at the issue again.

SARAH PALLETT (Labour—Ilam): I move, That the question be now put.

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

Ayes 110

New Zealand Labour 64; New Zealand National 34; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 10

ACT New Zealand 10.

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s amendments to Part 2 set out on Supplementary Order Papers 319 and 322 be agreed to.

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

Ayes 74

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

Noes 44

New Zealand National 34; ACT New Zealand 10.

Amendments agreed to.

CHAIRPERSON (Barbara Kuriger): Brooke van Velden’s amendments to Part 2 set out on Supplementary Order Paper 321 are out of order as they were not lodged with 24 hours’ notice. Nicola Willis’ tabled amendment inserting new clause 99A is out of order, as it was not lodged with 24 hours’ notice.

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

Ayes 76

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

Noes 44

New Zealand National 34; ACT New Zealand 10.

Part 2 as amended agreed to.

Part 3 Amendments to Goods and Services Tax Act 1985

CHAIRPERSON (Barbara Kuriger): Members, we now come to Part 3. This is the debate on clauses 102 to 137 and the Schedule, “Amendments to Goods and Services Tax Act 1985”. The question is that Part 3 stand part.

SAM UFFINDELL (National—Tauranga): Thank you, Madam Chair. I’m just rising to talk on the addition of GST to the electronic market place for the supply of goods and services. Now, I know that and I do—and I assume a few people in this House do, and I know the good folks back home in the electorate of Tauranga certainly do when they’re sitting around on a Saturday night and they want to get home, they’ll be opening up their phones and getting an Uber and then probably getting home and quite likely also ordering up some Uber Eats. We are in the middle of a cost of living crisis, but the feedback that we have been hearing from this is that the additional GST on these goods is going to most likely be passed on to the consumer.

So I’d like to ask the Minister: has he heard anything to the contrary around that, and, if he has, why are they still proceeding with it, given that it is likely to be inflationary? And we do have a lot of food inflation, as well, I know, and I see a few folks round here do like to try and beat that—beat the fresh fruit and vege rises that we’re having at the moment—and order their Uber Eats online, or maybe it’s just a way of balancing the nutrition in their diet.

The other part of that that I’d like to explore with the Minister is around why this is being applied inconsistently with how GST is applied, where the current regime allows sellers of goods and services to earn up to $60,000 before GST is applied to them, and what advice the Minister sought and obtained around why it was necessary to extend it without a threshold to suppliers in the electronic market place. Thanks.

Hon DAVID PARKER (Minister of Revenue): Thank you for those questions. Indeed, the taxation of transport and accommodation services booked through online platforms is the most important part of this part of the bill, and I’m happy to address that. In New Zealand, GST applies to almost all goods and services—the exclusions are interest and rent; those are the main ones—and our system is meant to be consistent across both different sorts of expenditure within the economy and different methods of delivery, and the rules need to keep up to date with changes in technology. It was for that reason that the last National-ACT Government introduced GST on apps that were purchased through the likes of the Apple Store in order to protect the tax base. The OECD has gone further.

We take advice on these matters from the Organisation of Economic Co-operation and Development; they said that Governments around the world need to adjust their tax policies to make sure you can’t create what is, effectively, a legal fiction that because you’re booking your accommodation through an online app that notionally has that contract based in overseas jurisdiction, even though the service is paid for in New Zealand, by a New Zealander, to a New Zealander, we thought that that hole in the GST system should be plugged.

Indeed, the member would be interested to hear that on 1 September 2022, his finance spokesperson, Nicola Willis, said, “It’s about fairness, ensuring motels are treated the same as Airbnb and that Ubers are treated the same as taxis.”, and she was right. So I’m happy to quote her. The reason why this is favoured by not just the Labour Party and various other parties that are in this Parliament but by Hospitality New Zealand and the Taxi Federation is that they know that it is unfair that they could be undercut by people on the basis of GST in these circumstances.

In terms of the GST, members have quoted perhaps an unfortunate paragraph in the regulatory impact statement (RIS) for the bill that suggested that, at the extreme, 15c extra GST could be passed on by the providers of these services; in fact, that’s not correct. It was pretty loose language in the RIS, because people get a credit for the notional GST input expenses that they would claim if they were filing their own GST, and that’s 8.5c of the 15c GST that would be charged. So the maximum extra impost in respect of those people would be 6.5 percent, and, of course, many of their competitors are already paying GST in full on their competitive services. So the effect on prices will be even less than that.

Hon TODD McCLAY (National—Rotorua): Thank you to the Minister. Actually, what he’s described is not levelling the playing field in as far as GST is concerned, and there’s some real-time examples of that. What the Minister has tried to suggest is that, actually, what he’s doing here is the same as what we did when we were in Government, and, as I remember, I might well have been the Minister at the time. What we said was where one supplier overseas provides goods to New Zealand—tangible goods to New Zealand—over a threshold, they must register for GST and we would simplify how that would be done. And the reason for that is the thresholds remain the same. The example that the Minister gave—and he mentioned our finance spokesperson saying that they should all be treated equally and the same, and fairly—is correct. But this legislation does not do that.

If we take a New Zealander that has a bach and they want to rent it out on a nightly basis and they advertise in their local newspaper or in a magazine and that is rented a number of times and they collect $10,000 during that year, they do not have to, Minister, register for GST. But if that very same New Zealander uses an online service—in New Zealand or overseas—they will have to register for GST and, therefore, an additional 15 percent will be charged to them. In effect, what the Minister is doing is saying, whilst the GST system in New Zealand is simple and it’s very, very straightforward, it’s not complicated, it has rules in it, he’s saying, in this case—because this is a Government that wants any single bit of tax it can get off New Zealanders to spend, not on those New Zealanders but on things the Government decides are priorities—that they’re going to change the GST system and not keep it equitable or fair and just collect off those New Zealanders, irrespective of how much they earn.

Now, if this legislation had said where a New Zealander with a car on Uber or a New Zealander that rents out a property over Airbnb receives $60,000 worth of income in that year, they must pay GST, that would be fine, but the law already says that—that actually if they collect $60,000 or more or if they expect to collect $60,000 or more in a year, they must register for GST and charge it. That’s not what this legislation is doing, and it’s quite, quite different from what was done in a previous Government to what we’re doing now.

For the first time, that individual who will be having GST collected on their behalf does not have the ability to offset any GST expenditure, which would be the case if they were registered normally under GST in New Zealand, and the reason for that is the Government has decided that, actually, an average of what their expenditure may be means 6.5 percent would be what they would be getting back, or what wouldn’t be passed on.

Minister, you haven’t made the case that New Zealanders won’t pay more for this. For any New Zealander out there that has a business that earns or expects to earn $60,000 or more, irrespective of how that money is collected—internationally, domestically, via post, through advertisements online—they should and must register the GST, but that’s not what this legislation is doing; it’s saying to New Zealanders that make a bit of money on the side who have a tax obligation placed upon them, to pay tax on that money that they’re earning, that, irrespective of the amount that they may end up charging or earning in a year, GST will be collected on their behalf, they won’t be able to claim GST back because the Government is deciding how much they should get back, and, ultimately, it is the New Zealand consumer that will pay more.

Hon DAVID PARKER (Minister of Revenue): Well, interesting that I didn’t hear from that member any reference to Nicola Willis’ statement on 1 September: “It’s about fairness, ensuring motels are treated the same as Airbnb and Ubers are treated the same as taxis.” But I’m not surprised. Look, the policy rationale for why you have a $60,000 limit for GST turnover, before you pay GST, isn’t that people charging for less than $60,000 services per annum should have a GST advantage over other people; it’s just that when you’re a small business like that, the administration costs for a small trader are disproportionate to the GST that would be collected. So it’s an administration rule that’s an efficiency rule that sits behind that. And of course that just falls away when, instead of 100 Uber drivers all doing their own GST returns, you collect it at the platform level because of course the compliance costs associated with this just are so much lower, on average, because it’s one GST return for Uber rather than 100 GST returns for 100 Uber drivers. So that’s why you can move away from the $60,000 threshold. As to the point that the Uber driver doesn’t get the benefit of their inputs, they do in the calculation that is made, which is why, in effect, they are paying a net GST of 6.5 percent instead of 15 percent gross.

Hon TODD McCLAY (National—Rotorua): Thank you, Minister. I did make reference to what Nicola Willis said. I said that they should be treated equally and they should be treated fairly, and in this case they are not. If we take the example the Minister has given of a taxi driver versus an Uber driver, that taxi driver gets to claim back the full amount of GST on their purchases in the case of their work vehicle; an Uber driver does not get to do that—number one.

Number two: Minister, I assume what you’re saying in as far as the only reason that this Government, the Labour Government, is not making people who earn $60,000 or less register for GST and collect GST and pass it on, is because it’s too difficult. What that suggests is if this Minister can find a way to make it easier and less costly administratively for smaller businesses to have to collect and pass on GST, and the Government will decide what their off-put on that should be, that he’s in favour of that.

In effect, the taxi driver and the Uber driver are not being treated the same. Where a taxi driver will earn $20,000 in a year, he does not have to register for GST, but may choose to; an Uber driver who will only earn $20,000 a year will have GST collected on his or her behalf. That’s not equal and that’s not fair, as our finance spokesman said the system should be. If this is just around how easily money can be collected, then New Zealanders all over the place should be very, very worried, because it sends a signal that the Government, if it can find ways to collect tax from you, will be coming to do that.

The final thing is: fine about this Minister finding an easier way to collect money from very, very many New Zealanders, from those that have baches and they rent them out from time to time to those that want to supplement their income through driving a car or riding a pushbike to deliver food and so on who must pay tax on that earning. What he’s actually saying is that he does not believe that there will be an extra cost to the New Zealand consumer, and that is manifestly not correct. This isn’t a fair and equal service. It burdens New Zealand consumers because they will have to pay more, and at the same time it is actually un-levelling the playing field, saying there are a group of New Zealanders who earn less than $60,000 for whom now the GST regime will be applied to, but they won’t get the same benefits of getting GST back, depending upon what their outgoings are. Secondly, another New Zealander that doesn’t work online with a New Zealand company overseas will not have to register and pay GST for the same amount of earnings.

That isn’t fair, that isn’t equitable, and it’s actually just this Government after more tax to spend on things they want, rather than trusting New Zealanders to have their own money and get on with their lives.

DAMIEN SMITH (ACT): The Minister of Revenue mentioned that Inland Revenue will get only 6.5 percent of each dollar spent on stays and rides by way of the sales tax. In practice, the law of supply and demand meant that 6.5 percent tax burden was likely to be split in some proportion between hosts and drivers on the one hand, and the customers on the other. So the price of stays and Uber rides is likely to rise, but not by the full 6.5 percent. Do you agree with that, Minister, and what do you think the figure is?

Hon DAVID PARKER (Minister of Revenue): I agree.

CHAIRPERSON (Barbara Kuriger): OK. So Andrew Bayly’s tabled amendments to Part 3 are out of order as they were not lodged with 24 hours’ notice.

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

Ayes 76

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

Noes 44

New Zealand National 34; ACT New Zealand 10.

Part 3 agreed to.

Part 4

Amendments to the Tax Administration Act 1994

CHAIRPERSON (Barbara Kuriger): Members, we now come to Part 4. This is the debate on clauses 138 to 183, “Amendments to the Tax Administration Act 1994”. The question is that Part 4 stand part.

The question is that the Minister’s amendments to Part 4 set out on Supplementary Order Paper (SOP) 319 be agreed to.

Amendments agreed to.

CHAIRPERSON (Barbara Kuriger): Brooke van Velden’s amendment to clause 183 set out on SOP 321 is out of order as it was not lodged with 24 hours’ notice.

A party vote was called for on the question, That Part 4 as amended be agreed to.

Ayes 76

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

Noes 44

New Zealand National 34; ACT New Zealand 10.

Part 4 as amended agreed to.

Part 5

Amendments to other enactments

CHAIRPERSON (Barbara Kuriger): Members, we now come to Part 5. This is the debate on clauses 184 to 198, “Amendments to other enactments”. The question is that Part 5 stand part.

DAMIEN SMITH (ACT): The Supplementary Order Paper that was tabled had the Government applying interest deductibility limitations to large developers to give them a benefit. We wanted to explore with the Minister of Revenue why this is not applicable to all landlords, and if we could have the reasons why, please.

Hon DAVID PARKER (Minister of Revenue): The tax treatment of property in New Zealand has been problematic for a number of years, and it’s led to distortions in the economy, which has been one of the reasons why, in recent decades, the proportion of existing homes in New Zealand that are owned by people who live in them has decreased, and the proportion of homes that are owned by people who own multiple homes and rent them out has increased. So the balance between owner-occupation and landlords, if you like, has changed.

We don’t think that’s socially desirable, on this side of the House. It’s in part being caused by the ability of a landlord who’s already got a property portfolio being able to leverage that portfolio to borrow, effectively, the full amount of the next purchase. Now, there are some constraints around that according to bank rules that are imposed by banks, or by the Reserve Bank. But in general terms, the ability to 100 percent leverage the next property has meant that landlords have been able to outbid the person who just wants one home for themselves, because of the tax position that they are in and the ability to leverage that class of assets through a mortgage to pay for the extra second-hand home.

So we as a Government moved to limit that by saying that we were phasing out interest deductibility for landlords for existing homes. That happens progressively over a number of years, and we’re partway into that. And it’s actually one of the reasons that’s credited by the Reserve Bank, and various other commentators, for the fact that this dramatic house price inflation that we had that was creating a bubble—which if it had popped quickly would have created risks to the economy more broadly. But it would also have caused significant harm to the more recent purchases of those properties if they were leveraged and they were, for example, a first-home buyer rather than a person who sold one home and bought another one in the same market.

Now, as we did that, we also were conscious that we actually do want an increase in rental stock, more in line with the rental markets that we see overseas where professional rental market investors get involved in larger developments. And so we initially agreed that there would be a period for which they would have this interest-free. There was a view expressed by the Minister of Housing that we discussed at Cabinet that we needed to have absolute clarity around that, that we were really trying to stimulate that part of the rental market for the large landlords, if you like, that type of long-term professional landlord rather than a short-term landlord. We wanted to make it absolutely clear that we were not trying to discourage that sort of investment, because we do need that additional rental stock. So that was the reason why the extension of interest deductibility for that type of investor was agreed. And that’s also the reason why we didn’t think that it should necessarily flow through to all other rental investors. We are trying to stimulate that section of the market.

RACHEL BROOKING (Labour): Thank you, Madam Chair. Sorry for hiding behind the Minister here. On that point about wanting to increase the bill to rent land and the rental market for those long-term durations, leases, and also these bigger developers, can you comment on what will be the new section 58A of the Residential Tenancies Act—which is found almost at the back of the bill on the second to last page—whereby this applies to a tenancy of at least 10 years in respect to having build-to-rent land, and why the decision is there for 10 years. Thank you.

Hon DAVID PARKER (Minister of Revenue): Madam Chair, thank you. For the reason that we’re trying to create a long-term rental market where people who—and there are people in society who will always need to rent; we want them to have security of tenure so that they can put down roots, they can become involved in their local communities, they can have assurance that their kids can go to the local school, and so that we can encourage security amongst that group of people. Now, one of the ways we can do that is to confer this additional tax advantage to the investors who are backing that sort of relationship with their tenant where they have a long-term lease that gives them security to live there as their kids go through primary school, for example. And we thought that was a reasonable quid pro quo. The cost of it to the Crown is actually not very high because the difference between the existing 10-year period for which deductions are—is it 10 or 20 years before? [Interruption.] Twenty years, sorry. So already the law allowed a 20-year interest deductibility period for a landlord. The net present value to a landlord of the extra deductibility and interests in years 21 and beyond, when discounted to the value today, 20 years earlier, is actually not very high. So in dollar terms, the cost to the Crown of this move is not high. And in dollar terms, the benefit to the long-term landlord is not very high. But it does signal an interest in us that we are trying to create this long-term rental class for the benefit of society by enabling people to have a 10-year-plus lease.

Now, this is very common in a lot of overseas jurisdictions. Indeed, in a lot of overseas jurisdictions you essentially—so long as you pay your rent and you don’t knock the property around, if you get a long-term rental you can essentially stay there for life. And, indeed, in some countries you can keep it in your family, so long as you’re still paying the rent. Now, we’re not going that far in this legislation, but you can see that we’re trying to weight the market for existing homes in favour of owner-occupiers, including first-home buyers, but in respect of rental stock we’re trying to create a longer-term opportunity for renters and investors alike.

DAMIEN SMITH (ACT): Did any consideration—going into Cabinet—discuss the benefit to the renters who will bear this cost, and, with this exemption and distortion in the market from the industry-adopted building limitations, why is building around residential properties the Government’s focus solely?

Hon DAVID PARKER (Minister of Revenue): I’m not sure I caught the gist of that question. Could I ask the member to repeat that.

DAMIEN SMITH (ACT): Yes. Did anybody in the Cabinet consider the benefits and costs to renters who will bear this cost of this distortion?

Hon DAVID PARKER (Minister of Revenue): Well, there is no direct correlation between landlords’ costs and rents charged to tenants, as was proven by the fact that during the period when interest rates were—and interest is one of the biggest, if not the biggest, costs to landlords. In the five or 10 years post the global financial crisis, when interest rates were consistently coming down, rents didn’t follow. So it proved the point that there is no direct correlation between those costs and rents—which is not to say that those costs don’t influence rents; of course they do. We believe that the changes that we have made to tax rules in the last few years have improved the outcomes in New Zealand. They’ve improved the ability of an owner-occupier to compete against a landlord for the purchase of an existing property—that’s undoubtedly true, it’s arithmetically easily proven—and it seems to be also shown by the correlation with the proportion of homes that are being purchased by occupiers rather than landlords. Since we’ve introduced this rule, the percentage of existing homes that have been sold to people who actually live in them rather than own them to rent them out—that percentage going to owner-occupiers has increased. We see that as evidence that what we have done has worked there.

In respect of the point that the member made—that this is distortionary—well, I can see the member’s argument in that regard, but property is a very unusual asset class, and because banks love the security of a first mortgage over land, it’s much easier to leverage a property transaction than it is any other business transaction. Indeed, many other business transactions are leveraged over property. Does that create a distortion? Well, we think that the status quo ante created a distortion whereby there are increasing proportions of existing homes that’ve been purchased by landlords, relative to owner-occupiers, compared with earlier years in New Zealand. So you could argue that that set of events was distortionary. Does it create other distortions in the economy? Not in a meaningful way, I don’t think. The ability to deduct interest, for example, if you’re a small business, or if you’re a person who borrows money to buy a small business, or to expand a small business or a medium-sized business or a large business—that borrowing is secured over land and that interest remains fully tax deductible.

SAM UFFINDELL (National—Tauranga): Thank you, Madam Chair. I noted the Minister in the chair there talking about distortions and how the changes by this Government has made it easier for owner-occupiers to get into housing. But I’d just like to test a little bit around that. We heard interest deductibility come up as well. I remember, at the time, your officials, Minister, were saying that that would be passed on to the renter, and we saw some stats out today saying that rents are up $175 a week since Labour came into power. So you’ve got your aspiring person out there wanting to get into the housing market, to become an owner-occupier; it is more than likely they are renting. They are now facing $175 a week more in rental costs. What distortions have you seen, or has your ministry seen, about how that is potentially keeping these renters from entering a housing market to become owner-occupiers, given that it is now so much harder for them to save up a deposit?

Hon DAVID PARKER (Minister of Revenue): A market that is growing generally clears at the marginal price of the increment to supply—it’s a pretty common economic principle. So the increment to supply in housing is a new house on land that didn’t previously have a house on it, generally. So if you want to have a more affordable house market, going forward, relative to incomes, you need to ensure that the supply of land and new houses on the land is efficient and competitive. The answer to that does not lie primarily in tax policy; the answer to that lies mainly in the planning system.

I think it’s interesting that in this House there’s widespread agreement—across both sides of the House, actually—that one of the reasons why house prices went so high in New Zealand, in the last decade or so, was that land prices went so high, and there were many reasons for that, including a drop in interest rates, and the advantages that landlords had competing against a first-home buyer. But one of the other ingredients—and it was overly strict rules that prevented people subdividing their land within an existing city boundary, or subdividing land on the edge of a city, and that drove up land prices which flowed through not just to the cost of the new house, which was, of course, more expensive because there were so few opportunities just to build a new house; land prices went up really high for the new house—that flowed through to the price of all other housing, because the market price was set by the marginal cost of the new increment to supply that was held falsely high, and that flowed through to existing house prices as well.

So I’m actually very pleased that, as a country, we’re in the process of overcoming that. I think this Parliament’s been quite brave in respect of some of those planning decisions, and we’ve reached across the political divide and we’ve actually freed up the rules that were so constraining the building opportunities, both to intensify in existing cities—we’ve removed a lot of the rules or are in the process of removing a lot of the rules that stopped people doing what they wanted to do. We’re not forcing anyone to do it; we’re just removing some of the inhibitions that stop them doing it. As a consequence, I think that, over the decades to come, you’re going to see land prices slowly readjust backwards to where they were.

Now, the cost of building a house, in general, tracks inflation. As the cost of building goes up, the house content of a new house increases. But we’re also doing things to try and remove some of the competitive constraints there—for example, some of the work that, again, the Minister of Housing has done to enable competitive products to be imported to compete against Gib products, which have been in short supply and prices have been driven up there. So all of these ingredients flow into house prices, and I think it’s simplistic to say that tax is the primary driver.

SAM UFFINDELL (National—Tauranga): Thank you, Madam Chair. Thank you for your comments there, Minister. I’m not sure the question that I put forward, though, was addressed because it was around what the Government has done around interest deductibility and any inequities or distortions that has caused by denying want-to-be homeowners—aspiring homeowners—from entering the market, given that most of those costs have been passed on from the landlord to the tenant. And partially as a result of that, we have seen rents go up $175 a week and a lot of those aspiring people, they won’t be living at home. Some of them maybe live with their parents, which is very fortunate if they are, but a lot of them will be renting and bearing $8,000-$9,000 additional a year in rent that they won’t be able to save up for their deposit.

I’d also note some of the Minister’s comments that were made there around planning. And we do have two new planning bills currently. We spoke on the first reading late last year and there’ll be another one coming up soon from this Minister, I would assume. And some of the commentary around those has been that that will make it more difficult to get consents and to get things done. If the Minister has any opinions to the contrary on that, I would be very keen to hear them about how that will speed up the consenting and the delivery of more affordable housing. And I’m sure we can both agree, on both sides of this House, that we do have a real housing crisis. We do have what could end up being a generational divide where we have people—you know, probably a lot of people in this House are fortunate and they have been able to get on that ladder, but for a lot of people coming up to 20, 30 years and below, unless they’ve got the bank of mum and dad behind them, they are going to really struggle. So I would like to see how those planning rules are going to further that.

I did also note the Minister talked around what the housing Minister had done with building products. And the Minister is correct in that some of the upward pressure on that has come from building suppliers. I believe our colleague Andrew Bayly did suggest at some point last year that we look at approving what the Australians have approved. We have a pretty closed-up system here in New Zealand, and if we have a comparable jurisdiction like Australia approving building products, then why not, Minister, just allow those to be brought into the New Zealand market? As in the case with Gib, that would certainly make life a lot easier. It would enable the supply, it would help reduce some of that upward price pressure, and I’m sure there’s many other aspects of building materials where that could be extended to as well.

Hon DAVID PARKER (Minister of Revenue): I can confirm that nothing in this part of the bill either affects the public house build or the private house build, which is going very well in New Zealand, but this legislation doesn’t impact upon it.

NAISI CHEN (Labour): I move, That the question be now put.

CHAIRPERSON (Barbara Kuriger): The question is—no, actually, I’m going to go to Brooke van Velden, because Brooke’s just arrived, in fairness.

BROOKE VAN VELDEN (Deputy Leader—ACT): Thank you, Madam Chair. I’m rising on behalf of ACT and mum and dad landlords and tenants up and down New Zealand to talk about the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (No 2). This is an unusual bill to talk about—

Hon Members: Part 5.

BROOKE VAN VELDEN: Yes, I do recognise this is on Part 5, but this is an unusual bill to be talking about residential tenancies Acts and interest deductibility changes and landlords, but that’s what we have in front of us because we’ve seen some shoddy lawmaking by this Government and we’ve seen some shoddy policy situations come from this Government. And I’m talking about the interest deductibility limitation changes that the Government put through a couple of years back. It applies to this bill because when they changed the build-to-rent criteria and said, in fact, “We don’t want to have large-scale developments subject to our Government’s changes for interest deductibility changes.”, they’ve now had to go, through this bill, and make changes to the Residential Tenancies Act to allow for the exemption for big build-to-rent developments—and you’ll find it all on the last page of this bill.

This goes to show why the Government should never have put in place interest deductibility limitation for landlords, because they then, last year, decided they got it wrong. But they didn’t get it wrong for landlords who are mums and dads, for people who have one or two rental properties. They said that they got it wrong for large-scale build-to-rent investment. And so because they thought that their interest deductibility limitation changes would negatively impact on investment and development in New Zealand for big developers, they’ve sought a change in this bill just for large-scale developers.

The ACT Party says if we’re going to have an exemption to our interest deductibility changes, we should make an exemption for all mum and dad landlords, because the problem that affects the big developers also affects the little guys too. And so that’s why the ACT Party is calling for the Government to extend the exemption for interest deductibility changes and extend it to all mum and dad landlords up and down New Zealand.

We welcome the fact that the Government made a mistake and they decided to rectify the issue, and they’ve made an exemption for the interest deductibility limitations for large-scale developers. But they should make that exemption for all landlords and all tenants, because we’re living in a cost of living crisis. People are seeing that rents are going up, and all of their costs: all their food, their petrol, childcare costs—everything you can think of feels like it’s getting more expensive. But they have made an exemption just for the big guys and not for the mum and dad landlords, who will now be passing on the interest costs to their tenants, increasing the cost of living for renters up and down New Zealand. That’s not fair, it’s not right, and the Minister should listen to Kiwis. He should do the right thing, take this exemption further, and support ACT’s call to get rid of the interest deductibility limitation changes that have only imposed more costs on landlords and more costs on tenants while we’re living in a cost of living crisis.

The fact that we now have to have a whole change and an amendment to the Residential Tenancies Act because we now need it to define a whole bunch of stuff around what it is to be build-to-rent land so that these developers could be exempt from interest deductibility changes shows why it never should have happened in the first place. Thank you, Madam Chair.

Hon DAVID PARKER (Minister of Revenue): I’ve already addressed those issues on a couple of occasions, but I will, in a summary form, readdress them. There’s already, for a new build, a 20-year interest deductibility period. This extends it in perpetuity in return for a 10-year-plus lease.

NAISI CHEN (Labour): I move, That the question be now put.

Motion agreed to.

CHAIRPERSON (Hon Jacqui Dean): Brooke van Velden’s amendment deleting clauses 195 to 198 set out on Supplementary Order Paper 321 is out of order as it was not lodged with 24 hours’ notice.

A party vote was called for on the question, That Part 5 be agreed to.

Ayes 76

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

Noes 44

New Zealand National 34; ACT New Zealand 10.

Part 5 agreed to.

Schedule

Schedule agreed to.

Clauses 1 and 2

CHAIRPERSON (Hon Jacqui Dean): Members, we come now to Clauses 1 and 2. This is the debate on the title and commencement.

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

Ayes 76

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

Noes 44

New Zealand National 34; ACT New Zealand 10.

Clause 1 agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to clause 2 set out on Supplementary Order Paper 319 be agreed to.

Amendments agreed to.

CHAIRPERSON (Hon Jacqui Dean): Andrew Bayly’s tabled amendment to clause 2 is out of order as it was not lodged with 24 hours’ notice.

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

Ayes 76

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

Noes 44

New Zealand National 34; ACT New Zealand 10.

Clause 2 as amended agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Hon Jacqui Dean): Madam Speaker, the committee has considered the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (No 2) and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

House in Committee

House in Committee

ASSISTANT SPEAKER (Barbara Kuriger): I declare the House in committee for consideration of the Criminal Proceeds (Recovery) Amendment Bill and the Criminal Activity Intervention Legislation Bill.

Bills

Criminal Proceeds (Recovery) Amendment Bill

In Committee

Part 1 Amendments to Criminal Proceeds (Recovery) Act 2009

CHAIRPERSON (Hon Jacqui Dean): Members, the House is in committee for consideration of the Criminal Proceeds (Recovery) Amendment Bill and the Criminal Activity Intervention Legislation Bill. We come first to the Criminal Proceeds (Recovery) Amendment Bill and we begin with a debate on Part 1. This is the debate on clauses 3 to 42, and Schedule 1, “Amendments to Criminal Proceeds (Recovery) Act 2009”. The question is that Part 1 stand part.

HARETE HIPANGO (National): Thank you, Madam Chair. I acknowledge Minister Kiritapu Allan in the chair. Noting that this is before the committee of the whole House for debate—looking at the amendments—I wasn’t a member that sat on the Justice Committee at the time this bill came before the select committee, but it is noted that when it did, it was referred to the committee on 27 September 2022. Submissions were called for, with a closing date of 26 October 2022. Five submissions had been received from interested groups and individuals, and oral evidence heard from three submitters at hearings in Wellington by video conference. As a result of that, there has been a report filed back to the House by the Justice Committee, identifying that the amendments that had been canvased in select committee were recommended unanimously.

In turning to the committee to debate Part 1, looking at those amendments before the House, I turn specifically to clause 5A, and that is the “Meanings of associate and organised criminal group”. So Minister, there has been some concern, I understand, as to what the term “associate” would mean and how that would connect an associate to either the organised criminal group or the person participating in organised crime. So the meaning of “associate”—and this was a clause that, although I wasn’t at select committee, would have been the subject of considerable debate—means a person who is associated with the member or participant, and is not a mere acquaintance of the member or participant.

I would invite the Minister, if Minister Allan is able to do so—in terms of clarification around “acquaintance”—to explain what that would be. The meaning of “associate”, under clause 5A as the proposed amendment, in subclause (1)(a) “means a person who—(i) is associated with the member or participant; and”—not “or”, but “and”—“(ii) is not a mere acquaintance”. Could we seek some clarification around that, please, Minister?

Hon KIRITAPU ALLAN (Minister of Justice): Well, thank you, Madam Chair, and I thank the member Harete Hipango for her contribution. The member is correct. I just want to acknowledge in particular the submission made by the Law Society in giving their reflections on this particular provision. It wasn’t well contested. I think that the words of the legislation are relatively clear in this sense: “a person who—(i) is associated with the member”, and in clause 5A(1)(a)(ii), is “not a mere acquaintance of the member or participant”. When turning their minds to this particular issue, police, justice, and the like were, I guess, very cognisant to make sure it wouldn’t include anybody that had ever touched the pathway of, and, therefore, not a mere acquaintance but somebody that did have some kind of deeper or additional components to that relationship.

So I note in the departmental report there is a good discussion on the scope and clarity of what an “associate” is intended to mean. On balance, having now heard the submissions—officials and myself included—we considered that the definition balance that need for clarity of what the scope of association was, but we also balance that with the risk of creating loopholes if we were to start listing all and sundry as to who might come within that definition. So that was indeed the intent there.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. I acknowledge the Minister in the chair, who, as with previous stages of the bill, is no doubt joining us on this side in wanting to examine the way that the bill interacts with fundamental rights, and of course we understand and agree with the Government’s intent in so far as it is seeking to ensure that those who undertake criminal activity shall not profit by it but also to, thereby, deter people from engaging in that activity in the first place.

In Part 1, which I hope we’re in—and I’m about to be told if we’re not—

Matt Doocey: Yes, we are.

CHRIS PENK: We are—thank you, sir. In Part 1, we see the way that the definitions give effect to that intention in the bill. In relation to the human rights, I just wonder if the Minister can help to place on record the fact that we are interested in a civil forfeiture regime, which is to say that there are assets that would, effectively, be able to be confiscated. Of course, property rights are important in their own right, if you know what I mean, but so too is the presumption of innocence in the criminal justice system. The potential connection between those two is that if a person can’t justify having property that is regarded as legitimate property, then, according to this piece of legislation—and existing legislation in a similar space, to be fair—that would be subject to confiscation. But it’s important, I think, for us to all acknowledge and understand in this House—and to anyone applying the law in the courts of the land later—that such a determination can’t be used and be imported into the criminal context to say, “Well, therefore, they must have done something wrong that would meet the burden of proof that is higher.” Of course, in a criminal case, partly because of the onus of proof, where that lies—and, again, we talk about the presumption of innocence and the burden being on the prosecution to make out their case, and also the threshold, which is, of course, beyond reasonable doubt in criminal matters.

So I hope that the Minister will agree, roughly speaking, with the points that I’ve made. But if she has a different gloss to put on them, that would be useful to know at this point, as well.

Hon KIRITAPU ALLAN (Minister of Justice): I just want to acknowledge the member Christopher Penk’s contribution. As always, it was thoughtful and considered, and albeit we stand on opposite sides of this House, I always appreciate the way that he turns his mind to the fundamental rights and how we’re grappling with these two particular areas. In the one sense here, or on the one hand, it’s upholding that rule of law by enabling forfeiture of illicit assets, and then, on the other side of the ledger, of course, it’s protecting people’s rights with safeguards against undue and unjustified seizure. I think this is a good example of where we’ve grappled with how those two sets of rights rub up against each other.

So, to the first part, I think that this entire committee will be well across the fact that criminal activity depends on the trade commodity. For a lot of the underworld, so to speak, it depends on the trade of illicit assets gained by illicit means, and it is challenging to reach into and obtain that source of property. So, in particular, what the first part of this bill seeks to achieve is: making sure that we can do that, we can crack down on the bosses of the crime, so to speak, those that are benefiting from the illicit profits, but that we do it in a way that also ensures that the State does not encroach too much into the private affairs of an individual. We’ve had to do that by creating a series of safeguards in the bill, as we have created these two new types of forfeiture audits.

So those safeguards that we’ve included to uphold and protect people’s rights are, by and large, four parts. One is that we have to be satisfied that the person or the associate could not have acquired those assets legitimately. We’ve put in a cash threshold there of $30,000—the asset must be over $30,000. Two, that the police must prove the criteria for a new audit. That means that the person has a final opportunity to present evidence showing that there is indeed a legitimate source—and where they do that, there is no worries. Third, that the court must not make a type 2 assets forfeiture order, unless it was satisfied that it would be in the interests of justice to do so. That sits also, of course, within the context of some of the broader overarching provisions that already sit within the Criminal Proceeds (Recovery) Act 2009, so some of these things aren’t new, including that interest of justice test.

So I hope that that helps the committee and the member to understand how we’ve tried to balance those sets of rights: one, upholding the rule of law, enabling that forfeiture of illicit assets sourced from illicit means; secondly, by protecting people’s rights with safeguards against unjustified seizure.

NICOLE McKEE (ACT): Thank you, Madam Chair; thank you, Minister; and just if I may also thank the officials that are here, because this was a very complicated bill that we went through, and they spent quite some time trying to explain to us how it was going to be effected. So while they’re in the room, I’d just like to acknowledge them.

Minister, at clause 2, on the commencement date, we have within this bill various different dates of when it will come into force. Some of it will be by Order in Council, others will be 12 months after Royal assent, and there’s also a number that come into effect on the day after the Royal assent. These clauses—the ones that will come into effect about a week after the third reading—relate to transitional settings, to KiwiSaver forfeiture orders, returning of property seized but not subject to forfeiture, disputed ownership, and it’s also about when a self-incriminating statement can be used and when it can’t and when there are exceptions.

I’ll begin with the KiwiSaver forfeiture orders, Minister. Can you please advise if I am correct in understanding this scenario—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! The member is making comments around the commencement, so we will come back to that in the debate, but I’d ask her to confine her comments to Part 1—clauses 3 to 42—and Schedule 1.

Hon Kiritapu Allan: I will come back to that, though, in that part.

CHAIRPERSON (Hon Jacqui Dean): Thank you.

NICOLE McKEE: OK, thank you. May I carry on—may I seek another call?

CHAIRPERSON (Hon Jacqui Dean): I’m inviting the member to address Part 1 of the bill. The member will certainly have another call, should she wish.

NICOLE McKEE: Thank you, Madam Chair. With the KiwiSaver forfeiture orders, can the Minister advise if I’m correct in understanding this particular scenario? If you could picture a hard-working mum with a criminal son. She has $100,000 in her KiwiSaver account. Her son, who is involved an organised crime, deposits $50,000 into his mum’s KiwiSaver account in cash in an effort to hide it, so mum now has $150,000 in her KiwiSaver and it’s earning interest. Investigations are held and mum is found innocent of any wrongdoing, but there is a forfeiture order on her KiwiSaver now, as it’s been proven that while $50,000 of it was a gift, it wasn’t legitimate.

So my first question, Minister: can you confirm that all proceeds found to be legitimately contributed to mum’s KiwiSaver account will be returned to her along with all the interest that she has earned, and that there is indeed a short time frame for which this is to occur—that reintroduction of the money back to her account?

Hon KIRITAPU ALLAN (Minister of Justice): Thank you, Madam Chair, and I thank the member Nicole McKee as well. I know that she’s turned her mind diligently to these issues, and the fact of that example is a clear instance where you are thinking about the practical ramifications of the provisions that we’re introducing, and I just want to acknowledge that.

To clarify, using that example that we’ve just heard, the $100,000 in there—that’s mum’s legitimate, hard-working cash; $50,000 from her son, ill-gotten gains; and together, it’s $150,000. The way that that would need to be separated out is that the $50,000 plus the interest that’s accrued on that $50,000 would need to be returned. That $100,000, plus the interest gained on that, is the rightful property of the mother.

I recall in my original discussions with officials, actually, using a very similar example. The origin of this particular KiwiSaver provision was an interesting one. It was based on a case—I’m not sure if that was provided to the committee, but it was provided on a particular circumstance where a senior public servant had committed fraud. They had then transferred that fraudulent money into a KiwiSaver account, and then there was no way for the police or for the State to be able to reach it, essentially.

So, first of all, it’s not a broad way of hiding ill-gotten gains that we’re aware of, but it was a particular circumstance which created an unjustified result: in the first instance, the resource was taxpayer money, and, secondly, the State couldn’t recover it. So that was what these circumstances were to respond to. But from my discussions with the officials, I was satisfied that—as you’ve rightly described the situation—the ill-gotten gains would be the subject of the forfeiture, but the gains that are rightly sought by the mother would be retained as her property.

NICOLE McKEE (ACT): Just further to that—thank you, Madam Chair—if we look at the example of where this situation occurred, and it was a public servant, how does that fit into this regime of significant criminal activity based on gangs and the work that they and those in organised crime groups undertake? Will this clause actually allow for instances where public servants do commit crimes like this to also have forfeiture orders placed upon them?

Hon KIRITAPU ALLAN (Minister of Justice): Thank you, Madam Chair, and I thank the member for the question; again, one very similar to the one I asked at the outset. Yes, so the primary purpose for the introduction of the amendments is the seizure of cash that we can identify from organised criminal groups. Assets that they hold, whether those be motorcycles or large quantities of cash that just simply cannot be identified—that’s the primary focus. But there were a number of other, I guess, areas which had been identified by the police as being problematic and that could be tidied up as a part of this bill, as well, because it amends the overarching criminal proceeds scheme. So that’s where you see that particular circumstance of the KiwiSaver being a virtuous hiding hole. We don’t think that’s appropriate, and this bill, through this provision, will seek to circumvent that.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Madam Chair; and Minister, thank you for standing and taking a call on that. I do want to just seek some more clarification around it, because I know that during the select committee process there was a lot of discussion around this. It was the fact that we recognise that these gangs, these organised crime groups now are sophisticated and they’re clever in the way that they launder money and hide their money. We also had to recognise the fact that often friends, associates, or family members are intimidated and they feel they have no choice but to allow their own accounts to be used to launder money from the gangs. So I just think that was a very good point that was raised by Nicole McKee, who, of course, is on the Justice Committee with me, and we had wide-ranging discussions on this.

I think you’ve gone part-way towards—for any members of the public that are watching the committee stage this evening—explaining how there are safeguards in place, but maybe you could just go a step further, Minister, in explaining that the example that Nicole McKee gave was a mother of a gang member who had her KiwiSaver account that had $100,000 of legitimate savings in it that then had a further $50,000 of ill-gotten gains, laundered money from her son, who is a patched gang member, and how do you anticipate the legislation will be used by the police in terms of determining whether or not that $100,000 from the mother was legitimate?

Because, sadly, there will be cases where a family member is actually complicit in the laundering and has agreed to that and allowed their account to be used in that way. I would anticipate that that would then mean that there would be a full seizure of those funds. But how do you anticipate, as our justice Minister, that the police will treat this legislation in terms of how they’ll deal with those often complicated and sophisticated sort of instruments that these gangs have put in place, so that we’re not capturing innocent people that have been used as tools, who have been coerced and often, sadly, in some cases threatened? Thank you.

Hon KIRITAPU ALLAN (Minister of Justice): Thank you, Madam Chair, and, look, I do just want to acknowledge the member. I know that he spends a lot of time thinking about the way in which we get these issues right. It comes back to probably some of my comments that I made to the member Chris Penk that we’ve got the two sets of rights rubbing up against each other. One is they’re upholding the rule of law by enabling the State to chase illegally gotten gains, so seize those assets. So that’s the upholding the rule of law. So against that, unreasonable search and seizure and making sure that people that have, justifiably—you know, they’ve worked hard, they’ve done what they should have, making sure that they don’t get entangled in a measure, an instrument that wasn’t intended for them.

So I won’t go through the safeguards again, but I’ll probably just highlight one of the final prongs of the test that’s in the interest of justice. So the way that the legislation is set out now is that the clean money, the money that belongs to the mother is hers and it’s—I mean, there may be some investigations that find she was complicit and that will be part of determining whether she comes to the table with clean hands, so to speak. That will be a test that will be subject to investigation and inquiry, and where it finds that those hands aren’t clean, well, that may result in a different treatment of the money that was in there if it was found to be in any way tainted because it was received through ill-gotten gains or something otherwise. So they have to treat it in a particular way.

But what the legislation requires, though, is that they have to be assured that the asset—like I said, it had to be acquired illegitimately and it had to be over that threshold of over that $30,000, and it would not be in the interests of justice to not forfeit that resource. So there are a range of checks and balances.

This has been challenging. I, too, want to acknowledge the officials who had to diligently step through that balancing act. I was surprised, if I’m frank, that we only got five submissions on this bill—just noting the nature of the rights and the intersect at play—but I think that probably said to me, in the round, that where we’ve landed is probably about right in terms of whether we’ve treated those two sets of rights appropriately.

NICOLE McKEE (ACT): Thank you, Madam Chair. Minister, I was looking at new section 5B(1)—inserted by clause 5—followed by 5B(1)(a), followed by 5B(1)(b). When I looked at 5B(1)(b), I got quite confused, so much so I had to stop looking at the screen for a while because I thought I was interpreting (b) incorrectly. What it states in the bill is that legitimate property—at 5B(1)—means all property regardless of whether it’s been gifted, whether it’s been loaned, even if you’ve got it by way of credit, it’s something purchased by another for another, but also for the benefit of the respondent. But new paragraph (b) then says it does not include property acquired as a result of “activity that’s engaged in by the respondent or any other person and is an offence.” I had to keep looking at that, because I thought “and is an offence.”? Well, maybe it should be “is not an offence”. But I looked at it in a different way, thinking there’s a double negative that we’ve got going on there. Maybe I’m reading it incorrectly, so I just want clarification again, Minister: is this new section saying that if you’re a criminal identified as being part of an organised criminal group and you’ve acquired property through crime and that property isn’t legit, we’re going to take it—meaning the Government will take it if it’s not legit—but if that property, that perhaps a criminal has put in someone else’s name, was paid for from legitimate income earned by that criminal and this can actually be proved, then the house is safe? Is that what it’s saying?

Hon KIRITAPU ALLAN (Minister of Justice): Thank you, Madam Chair. Let’s just go to and fro and see if I’ve got you right, and then, if I haven’t, feel free to ask me again. So, as I understand it, the way that those two provisions are separated out, (1)(a), where the resource has been gained in a legitimate way: I, a person that is also involved in an organised criminal group, go to work every single day, I pay tax on that money; I’m a builder, who knows—you know, I’m doing something every single day that is all as a consequence of legitimately obtained funds. The rule is that the State can’t reach into those legitimately acquired funds. Where, however, through my organised criminal activities I have then gotten ill-gotten gains and I have put those into the same pool, whatever that may be, that’s where that subsection 1(b) applies.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. I’ve been listening carefully to an excellent debate, actually, if I may say, across the House, and I just had a brief comment which includes a couple of questions along the way, if I may, regarding new section 24A, as it will be, within the Act, so that’s clause 15 within Part 1. I think this is probably my final contribution on Part 1, but my eye was drawn, actually, initially on seeing this—it might have been at first reading but, if not, then during the select committee process—to the phrase “restraining order”, and, of course, in the law, restraining order usually has a different meaning and it’s what you might think of, of course; it pretty much does what it says on the tin which is to stop an individual having contact and, you know, restraining him or her from—usually him, actually, to be fair—having contact with another person, for pretty good reasons, and that’s sound public policy basis for that meaning and effect of restraining order.

In this legislation, of course, it’s property itself that would be restrained, so that would be the specific property of the “respondents”, to use the phrase in the legislation. I’m just interested in the way that determination would be made, and I see it’s set out actually very clearly, I think—and a bit of a nod to the drafters there, and also the officials who have advised you, Minister—because I think using the formulae to determine what meets the threshold as to value, and also the tests involved along the way is actually really helpful. I think this is quite readable legislation and that’s a very good thing.

So we see that that an order restraining a particular piece of property can be made if there’s reasonable grounds to suspect or believe that the respondent was an associate of one or more members, and, you know, you can imagine how the word “associate” itself can be quite vague—others will have comments to make on that, and, indeed, already have, including my colleague and friend Harete Hipango—but those members or participants have, in that capacity, been involved in significant criminal activity, or unlawfully benefited from significant criminal activity.

The unlawful benefit, I guess, is a bit circular, in the sense we’re saying it’s on a level—property is illegitimate or unlawful if it was the result of unlawful activity. In a way, that might sound intuitive, but it’s important, of course, to be clear in the law. So that’s fine. The question that I have along the way is whether there is any guidance that the Minister can give as to what significant criminal activity might be, whether that’s examples or just maybe an underlying philosophy—the way that she might think that that would play out. Instinctively, of course, significant criminal activity—probably some very learned judge would say “criminal activity that’s not insignificant” and that would be about as helpful as these things always are when they’re quite circular in nature. So any guidance the Minister can give in that regard would be helpful.

I guess for the sake of completeness, it’s worth noting that the effect of property being restrained means that it can’t be flogged off, in the vernacular—that is to say that it can’t be disposed of or dealt with other than as provided for in the restraining order. I suppose the restraining order might set out a way in which it can be dealt with, and it would be under “the custody and control of the Official Assignee” who is—you know, that’s an office or an institution, if you like, even, that we’re used to having control of assets for those who society or the law has deemed aren’t appropriate to be handling them. Of course, in an insolvency context, that’s reasonably familiar to practitioners of the law, and some poor souls are all too familiar with it on their own account. But, in any case, that’s obviously part of the architecture of the law that we have already.

So I’m interested in the fact that the legislation is making use of these existing mechanisms and ways of thinking, and, really—just to reiterate before I resume my seat, probably for the final time in Part 1—that I would be keen to know any guidance that the Minister can give the committee on the subject what might be “significant criminal activity” for these purposes.

Hon KIRITAPU ALLAN (Minister of Justice): Again, thank you for those insightful questions, and particularly with respect to the distinction that the member has observed, at clause 24A(1)(b)(i) and (ii). So there, for the committee’s benefit: “all or any of those members or participants have, as members of or participants in the group,—(i) been involved in significant criminal activity at any time; or (ii) unlawfully benefited from significant criminal activity”.

Yes, on their face, they could include anything and everything under the sun. In the primary legislation—the Criminal Proceeds Recovery Act 2009—at sections 5, 6, and 7, but in particular 6 and 7, “significant criminal activity” is defined and it means “an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—(a) that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or (b) from which property, proceeds, or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived.”, and there’s a little bit more there. Then, to the “unlawfully benefited”, this is defined in section 7 of the primary legislation: “In this Act, unless a context otherwise requires, a person has unlawfully benefited from significant criminal activity if the person has knowing, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).”

CHAIRPERSON (Hon Jacqui Dean): Harete Hipango—well, if she still wants the call.

HARETE HIPANGO (National): Thank you, Madam Chair. I heard someone else take a call and thought it might go that way, so I appreciate being called.

Minister, I’d like to pick up on some points that are raised by my colleague and friend Chris Penk in relation to the use of the term “restraining order” under new section 24A, proposed as an amendment in clause 15. Not having sat on the select committee at the time that there were these discussions and considerations, “restraining order” for those of us who have worked in the Family Court—and bearing in mind that this is likely to be in the jurisdiction of the District Court criminal court dealing with some aspects of civil proceedings as well.

Has it been considered, Minister, that rather than referring to the term “restraining order”, which in the Family Court is associated with a protection order and the safety and protection of an individual as opposed to property, which is what new section 24A is specifically about; so that there is the absence of confusion, has consideration been given to the terminology as a property restraining order, so that there is that clear delineation in terms of jurisdiction but an understanding by the public as to what this relates to and means?

Hon KIRITAPU ALLAN (Minister of Justice): I thank the member Harete Hipango for the question. Section 5 in the primary Act defines a “restraining order”, so these have been in operation for the proceeds of crime regime since 2009. I’m not sure of its whakapapa prior to then, but the operational provisions are in sections 24 to 27, and there it’s defined, or how these are made. So the court hears an application for a restraining order related to specific property where that court is satisfied on reasonable grounds to believe that property is tainted property and they then may make an order that that property—“(restrained property)”—is not to be disposed of. There’s a range of other provisions there, and then it walks through the way in which the court must treat those restraining orders.

So what we’ve sought to do in this amendment bill is to add no undue—or further disrupt, if you will, the current existing regime, but add, in essence, to what is already there.

NICOLE McKEE (ACT): Thank you, Madam Chair. Minister, we’re inserting a new section, 24A, which is about making restraining orders relating to specific properties of associates. And at section (2A) of that clause, it talks to formal valuations of property. The Commissioner of Police is not required to provide the court with any formal valuation, and may provide estimates as evidence in regard to property values. And we actually delete section (2B) in the original bill because we’ve got these amendments in at (2A).

What is the expectation of the police here, Minister? What are the number of valuations that should be presented? And if they’re not formal valuations, who actually does do the valuations? And, then, what is the expectation of how property will be valued if it is not done formally, especially when we’re likely to see quite high valuable assets like homes and motorbikes—some in the hundreds of thousands of dollars—being seized?

If we are not to give a formal valuation, then who is giving the valuations? How many of them are to be required? And because we say within that clause that the police “may provide estimates”, will they actually provide estimates or could they just stand up and say, “Well, no, we decided not to today.”? Could you just explain how that clause is actually going to work in regard to the valuations, in regard to the provision of estimates, who gives those estimates, especially for the high value of some of those seizures that we’ll be expecting to make?

Hon KIRITAPU ALLAN (Minister of Justice): Thank you to the member. In consultation with my officials, I understand that essentially it’s a bit of a pragmatic test that’s required to be satisfied. So let’s say that the police have seized a nice Harley-Davidson—one like my father drives or something: you know, a good one. What they are required to do is basically provide the court or provide evidence of that value, so from a reputable, you know, just go online would be sufficient enough. It needs to be “reasonable.” There just needs to be reasonable evidence to support the valuations that are provided for the determination to be valued.

NAISI CHEN (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 74

New Zealand Labour 64; ACT New Zealand 10.

Noes 46

New Zealand National 34; Green Party of Aotearoa New Zealand 10;

Te Paati Māori 2.

Motion agreed to.

The result corrected after originally being announced as Ayes 76, Noes 44.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 318 be agreed to.

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

Ayes 108

New Zealand Labour 64; New Zealand National 34; ACT New Zealand 10.

Noes 10

Green Party of Aotearoa New Zealand 10.

Amendments agreed to.

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

Ayes 108

New Zealand Labour 64; New Zealand National 34; ACT New Zealand 10.

Noes 12

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

Part 1 as amended agreed to.

Part 2 Amendments to other Acts

CHAIRPERSON (Hon Jacqui Dean): Members, we come now to Part 2. This the debate on clauses 43 to 52 and Schedule 2, “Amendments to other Acts”. The question is that Part 2 stand part.

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

Ayes 108

New Zealand Labour 64; New Zealand National 34; ACT New Zealand 10.

Noes 12

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

Motion agreed to.

Schedule 1

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Schedule 1 set out on Supplementary Order Paper 318 be agreed to.

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

Ayes 108

New Zealand Labour 64; New Zealand National 34; ACT New Zealand 10.

Noes 10

Green Party of Aotearoa New Zealand 10.

Amendments agreed to.

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

Ayes 108

New Zealand Labour 64; New Zealand National 34; ACT New Zealand 10.

Noes 12

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

Schedule 1 as amended agreed to.

Schedule 2

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

Ayes 108

New Zealand Labour 64; New Zealand National 34; ACT New Zealand 10.

Noes 12

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

Schedule 2 agreed to.

Clauses 1 and 2

CHAIRPERSON (Hon Jacqui Dean): Members, we come now to our final debate, the debate on clauses 1 and 2, “Title” and “Commencement”.

Hon KIRITAPU ALLAN (Minister of Justice): I just want to respond briefly to my friend, Nicole McKee, who at the outset asked an interesting question just on the range of different commencement clauses that we have in the bill. She rightly notes that there are a series—sorry, I’m just flicking my way there—of commencement dates. These are listed in clause 2: one is that it’s on a date set by Order in Council; there’s another to the extent not brought into force earlier than 12 months after Royal assent; and then there’s sections 7, 32, 34, 38, 39A and 42, and Subpart 1 of Part 2, that come into force on the day after the Royal assent; and then an Order in Council made under this section, the secondary legislation; and then that has all of the particular provisions that relate to this. A good question, and as I understand, the commencement clause brings different provisions into effect at different times—and there’s a delay for some of the provisions because those relate to the need to have regulations prescribing the forms of orders and applications. I hope that makes sense. Thank you, Madam Chair.

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

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

CHAIRPERSON (Hon Poto Williams): Members, the House is in committee for consideration of the Criminal Proceeds (Recovery) Amendment Bill, and the Criminal Activity Intervention Legislation Bill. The committee is considering clauses 1 and 2 of the Criminal Proceeds (Recovery) Amendment Bill.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. Just a brief one from me on the title and commencement, if I may. We had a good discussion before the dinner break with the Minister, and we have another Minister in the chair and no doubt he’ll engage in good faith as need be. But, in fact, the point that I’ll make is really just more in the nature of a comment rather than a question, which is that, in the name of this bill, obviously, we’re amending existing legislation that already provides a regime for the proceeds of crime, roughly speaking, or property that’s not legitimate to use that language in the bill. But it does occur to me that we’re using that word “recovery” and, of course, that’s ultimately the intent of the legislation: that property that has been obtained in a way that can’t be justified as legitimate in certain circumstances will be recovered by the State. But I also think that the word “retention” in there might have been helpful, just to give an indication that there is provision in this legislation for property to be retained, or obtained, I suppose, but held in any case in a sort of a limbo kind of state, literally a holding pattern whereby the State might say that it’s impossible to determine one way or the other if the property is legitimate or not, and the person from whom that property has been seized has the opportunity for a period of time to demonstrate that they do, in fact, have it legitimately. So perhaps just as to the title, if we were to have said “Criminal Proceeds (Retention and Recovery) Amendment Bill” that might have perhaps given a fuller picture, but I’m not going to be so churlish as to suggest that there’s anything wrong with the title as it is, more just the fact that reflecting the whole way that the law operates would have given a fuller picture.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Madam Chair. Look, just to carry on from my friend and colleague Chris Penk, the Criminal Proceeds (Recovery) Amendment Bill, yes, it probably would have been clearer if retention had been captured in that, but I think that the criminal proceeds recovery is really the guts of the bill. We’ve talked about it—it’s been well-canvassed and well-spoken about through the committee stage in terms of having legislation that actually allows our responsible agencies to be able to identify, take action, and recover criminal proceeds of crime. I think that it was important, especially around KiwiSaver accounts, that we really litigated criminal proceeds, because there was a risk through the select committee process that you could capture people that quite legitimately had savings inside their KiwiSaver accounts that weren’t criminal proceeds, that didn’t come from criminal proceeds, but in fact could have been mixed with cash that was laundered and put into those accounts that were from criminal proceeds. So again, I think that has been well discussed through the committee of the whole House stage and also there’s the work that select committee did.

I’d like to acknowledge the officials also and just say that although, yes, I agree with my colleague Christopher Penk, who always puts a very legalistic lens across this legislation as our shadow Attorney-General, and it would have been nice to have seen retention included in there, at the end of the day we support this bill because we recognise that it is going to be useful in terms of giving our agencies the additional powers that they need to be able to recover criminal proceeds with this bill. Thank you, Madam Chair.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported with amendment.

Bills

Criminal Activity Intervention Legislation Bill

In Committee

Part 1

Discharging firearm with intent to intimidate

CHAIRPERSON (Hon Poto Williams): Members, we come now to the Criminal Activity Intervention Legislation Bill. We come first to Part 1 of the debate, on clauses 3 to 14, “Discharging firearm with intent to intimidate”. The question is that Part 1 stand part.

TANGI UTIKERE (Chief Whip—Labour): Thank you, Madam Chair. I seek leave for all provisions to be taken as one question.

CHAIRPERSON (Hon Poto Williams): Leave is sought for that, is there any objection? There is appears to be none. That will be so.

Parts 1 to 5 and clauses 1 and 2

CHAIRPERSON (Hon Poto Williams): The question is that Parts 1 to 5 and clauses 1 and 2 stand part.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. Can I also just acknowledge your extension to the role for this week as well—congratulations, kia orana, kia manuia to you, Madam Chair.

CHAIRPERSON (Hon Poto Williams): Kia orana.

TANGI UTIKERE: I just have a couple of questions for the Minister that he may wish to respond to when he gets a chance. They relate to two components: the first is around the expansion of police power to seize and impound vehicles, and as I understand it, the bill amends the Land Transport Act (LTA) to include some new offences of dangerous and reckless driving and that the mandatory 28-day impoundment power exists. So my question to the Minister is: I assume that that is consistent with other provisions of like offending within the LTA, so a response around whether there are levels of comfort around that. And the other is, I guess, more of a wholesale definition of the word “cash” when there is the introduction of a new “cash seizure power” for police where they can seize and hold cash where it’s found in suspicious circumstances. My question for the Minister is around the importance of defining “cash” within the legislation so that it’s captured alongside other assets. So I’d be interested when he gets an opportunity to perhaps provide a response to those two questions.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Madam Chair. Look, it’s our pleasure to stand and take a call on this Criminal Activity Intervention Legislation Bill and support the bill. I think that one of the things that there’s been quite a bit of discussion in this Chamber about is the ability for police to be able to execute those search warrants on a home that they think may be associated with gang activity, particularly those that are involving firearms.

It sort of goes back to, if I can use the example in South Auckland, where we had 23 drive-by shootings that were generated over a dispute over a gang patch, and one gang taking offence at the way this gang patch was procured or treated by another gang, which led to a totally unacceptable situation where we had 23 drive-by shootings. How we avoided a tragedy of a member of the public being seriously hurt or killed—I don’t know how we did that; we obviously had the luck of the Irish on our side there, but it was luck that we all strongly felt was going to run out. So a big part of this bill is being able to give our police officers the tools that they need to be able to take action and address that.

I see that we have our officials in the Chamber. Can I please acknowledge all of you for the work that you have done. There were some very robust discussions had and some tricky questions put by the Justice Committee. The way that you responded to that and the work that you did was first class. So I want to thank and acknowledge all of you for your work.

I know that my colleague across the Chamber has already raised an issue that he’d like the Minister to respond to. But, I guess, if I was going to ask the Minister in the chair to address anything, it would quite simply be to go over the safeguards that we believe are strong enough in this bill to ensure that we don’t have an outcome that we don’t want—that is, quite simply, armed police officers entering a home of an innocent family or homeowner, because having armed police officers enter a home, in itself, can be quite traumatic, especially in a home where they actually aren’t involved in any illegal gang activity, drive-by shootings, or the procurement or possession of firearms. So if the Minister can take a call and maybe talk to those safeguards. Thank you.

Hon ANDREW LITTLE (Minister of Defence): Thank you, Madam Chair. I’ll take two questions at a time and I think we will be able to get a good, coherent discussion on this legislation. So, on behalf of the Minister of Justice, just responding to Mr Utikere’s questions, first of all in relation to the power to seize vehicles and the mandatory 28-day seizure: the bill provides for a constable who’s been satisfied that particular offences have been committed—and I’ll come to those in a minute—and it is mandatory for the police to then arrange the seizure of the particular vehicle. The offences that the bill adds as the basis for that seizure now include dangerous driving, reckless driving, and careless driving without injury or death. This is because we’ve seen this increase in pretty poor driving practices often used to intimidate other road users when some of these individuals are together in their vehicles or on their motorbikes. So we needed to both broaden the ability to exercise the seizure power, but actually to send a pretty firm message that if you do this and you’re caught, you’re going to lose your vehicle—no ifs, buts, or maybes.

The second question that the member raises is about cash and what constitutes cash. Very helpfully, my colleague the Minister of Justice has ensured that there is in the drafting of the bill a definition of cash, which draws on other legislation. In fact, one has to refer to section 5(1) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. And since it’s been about 22 months since I’ve been Minister of Justice and I had all the justice legislation committed to memory, I don’t have a record of that particular provision, except that it adequately defines what money is and it also includes, in addition to what’s provided for in that legislation, gold bars and gold ingots. So these are a source of value, obviously, and can be used and exchanged as well. It’s interesting, and I think members might want to—without getting into an academic exercise—compare the definition of cash with the new section 67A provided for in clause 27 of the bill, which relates to the prohibition of certain cash transactions. And there there’s reference to jewellery, watches, gold, silver, and other precious metals. So I think this is a good attempt at making sure instruments and objects of value that can be used to launder are properly captured.

The member the Hon Mark Mitchell raises a question about safeguards, particularly when it comes to powers of entry to households. The member is, of course, right—and he is a man of experience in this area who no doubt will have executed a number of search warrants in his time in the police force—that carried out in certain ways, this can be a very intimidating exercise. Sometimes the subjects of warrants behave in a way that it’s difficult to avoid what might otherwise look like intimidatory sort of activity. But I can say to the member that I’m confident that under the scrutiny that the bill has received, the provisions relating to the applications for warrants or searches where judges have to be satisfied of a number of factual grounds before a warrant can be issued and therefore obviously executed are very clear.

So looking at the new section 17D, which is provided for in clause 20 of the bill, makes it very clear about what judges have to consider when they’re looking at the content of an application for a warrant. The content is specified in new section 18C, also in clause 20. But the issues that the judge has to apprise him or herself of are very clearly laid out in that new section 18D, and I’m confident that that requires a number of safeguards. And the final sort of safeguard is if a judge is a little bit concerned, a judge can require a warrant report to understand what is being seized under the warrant and how it’s been executed. I think that provides a transparency safeguard that we haven’t seen before.

Dr EMILY HENDERSON (Labour—Whangārei): Madam Chair, I would be appreciative if the Minister could have a look at clause 5 of the bill. Now, actually before I begin, I do also want to say it’s lovely to see you, Madam Chair, in your, albeit temporary, ascension to this new role.

I have a background as a prosecutor, as the Minister is aware. I’m also a defence counsel’s daughter, and was brought up on stories of inappropriate searches, so I note my colleague Mr Mitchell’s comments across there about the overreach that can occur with police powers being misused, and sitting between those two stools, one familial and one professional, it’s always an interesting balance.

But the particular issue I’m interested in is in new section 308A. For those watching, this is the new offence of discharging a firearm with the intention to intimidate. Now, as the Minister will be aware, we already have in the Crimes Act 1961, section 198, which is the discharge of a firearm or doing of a dangerous act with intent. Now, this makes a 14-year maximum penalty for those who, “with intent to do grievous bodily harm”, discharge a firearm. But here we have the change to a person who “commits an offence who discharges a firearm intending to intimidate 1 or more persons.” Now, I do note to the Minister that, of course, the penalty is significantly lesser. It is under 308A(2), “A person who is convicted of an offence under subsection (1)”—which is the substantive section that I referred to—“is liable to a term of imprisonment not exceeding 5 years.”

So, obviously, as my colleague Mr Mitchell alluded to earlier, we have a situation where we have behaviour happening in the community, and we over this side of the House have a very different perspective as to the roots of that behaviour, why these things have happened, why we have this rise in antisocial behaviour—as opposed to our friends across the House. But it is important that we give police powers to deal with bad behaviour. It is important that those powers be proportionate. I think that it is of interest and it is relevant, if the Minister would talk to the difference in the standard there: the intent to intimidate as opposed to the intent to commit grievous bodily harm. Because obviously what we’re talking about, in my perspective as a member of the Justice Committee who worked through this bill, is those situations where someone does a drive-by, fires out the window, and is intending to put fear into people, but is not in fact caught by section 198. Now, that’s my understanding of where this comes into. It is to curb that reckless, appalling behaviour, but where the intent does not actually exist to cause grievous bodily harm.

So, you know, I would be very keen to hear the Minister talk about that because I think there is a—it behoves us not to go creating crimes willy-nilly. We don’t need to load the statute book with more that are not actually going to be relevant and important. I think that’s a principle of which my father would be quite keen. It behoves us to make sure that when we do create a new penalty, it has the appropriate sentence there. I think that this is something that will get used, and I would like to hear a bit more about why it was felt to be important to do, and why it was felt to be proportionate. That is my question.

Hon ANDREW LITTLE (Minister of Defence): I’m very happy to respond to the discursive comments by my colleague Dr Emily Henderson just now, and I think I can reassure the member, and indeed I can reassure the whole House, that as Cabinet very carefully considered these provisions, we considered that the current provisions of the law, the Crimes Act and the Arms Act. Indeed—so the Arms Act has a provision that if somebody basically uses a firearm in an improper sort of way, discharges the firearm without reasonable excuse in or near a dwelling house, then there is a penalty for that as a crime associated with it, and it focuses on the misuse of the firearm. The penalty for that is up to six months’ imprisonment or a fine not exceeding $10,000.

Obviously, we also considered section 308 of the Crimes Act, as the member has adumbrated in her comments as well. Section 308 focuses on discharging a firearm in a dwelling, and then there’s other crimes that relate to a clear intent to cause harm to somebody or if somebody driving by and recklessly firing without aiming at anybody in particular and doing so in a public place—that is not covered by the law as it is at the moment. So we needed a law that meant that if one of these goons carries on in their vendetta, or whatever is motivating them to drive around shooting a firearm, they are in a public place and they’re firing aimlessly or directionlessly but with an obvious intention to cause fear or some intimidation, then we have a law that captures that. And using a firearm in that way—and for some of these people, of course, they don’t wish to cause injury; they just wish to cause a sense of fear. That is arguably a lesser moral wrong than somebody who is using a firearm to deliberately try to cause injury or death or cause harm to or within a household or a dwelling.

So it’s for that reason that, having gone through that iterative process and that deductive process and that very close analysis of existing law—the circumstances in which this law might be used—we settled on a penalty that is less than the penalty for discharging a firearm with a view to causing harm, but is more than discharging a firearm without reasonable excuse in a dwelling. That falls at the low end of the moral opprobrium spectrum and we need the penalties in the law to reflect the appropriate point on the moral opprobrium spectrum, which leads us to this particular penalty here.

We know that, as the member has indicated—she wonders whether I think that this will be used. I am confident that it will be. I think our colleague Mr Mitchell alluded in his earlier comments to the number of antisocial behaviours and drive-by shootings that are happening involving firearms. There’s a level of incidence now that is a cause for concern, ought to have the attention of this House, and ought to lead to appropriate adjustments in our criminal legislation. This does that and I think will have a very meaningful effect to both disincentivise that behaviour but, if the behaviour happens, then there is a recourse for it.

HARETE HIPANGO (National): Thank you, Madam Chair, and I acknowledge Minister Little in the chair beside you this evening. Minister, I’m cognisant—and we will be all the more so cognisant—that tomorrow is the anniversary of the Christchurch mosque shootings, where 49 people were killed. Minister, speaking to, and in responding to, my colleague across the Chamber, in relation to clause 5 but also the proposed amendment, section 308, around threatening acts, this is, essentially, to do with what could be deemed to be drive-by shootings. I reflect on, back in Whanganui a number of years ago, a little girl who was a family member, Jhia Te Tua, a baby who was killed as a result of a drive-by gang shooting.

Minister, I didn’t sit on the select committee. My colleagues the Hon Mark Mitchell; I believe, Simon O’Connor; and also the Hon Paul Goldsmith did; and my colleague Christopher Penk and I are tasked with the duty to address some matters here in the committee of the whole House. Following on from my colleague, in relation to section 308, “Threatening acts”, I’m particularly interested in the discussion around section 198 and the difference in the tariff—the sentence to be imposed—and the determination to be made by the court in relation to that upon sentencing. But this section 308, “Threatening acts in relation to dwellinghouses and persons in dwellinghouses”, to be replaced by section 308(b), with “by threatening behaviour, alarms or attempts to alarm any person in a dwellinghouse.”

Minister, would you, please, be able to give context in terms of the following section to be inserted around the discharging of firearm to intimidate—what that threatening act or behaviour or alarm in relation to dwellinghouses and persons in dwellinghouses would be which would be different to matters such as assaults or other such criminal impositions on the persons in the dwellinghouse.

Debate interrupted.

Voting

Correction—Criminal Proceeds (Recovery) Amendment Bill

CHAIRPERSON (Hon Poto Williams): Members, just before we move forward, we have a correction to a vote. When we were considering the Criminal Proceeds (Recovery) Amendment Bill, the result of the vote on Part 1 closure motion was incorrectly announced as Ayes 76, Noes 44. The correct result is Ayes 74, Noes 46. The record will be corrected accordingly.

Bills

Criminal Activity Intervention Legislation Bill

In Committee

Debate resumed.

Parts 1 to 5 and clauses 1 and 2 (continued)

NICOLE McKEE (ACT): Thank you, Madam Chair, and thank you, Minister. If I may just indulge you for a couple of seconds to reiterate what my colleague Mark Mitchell has said about the officials and the work and advice that they have given us for this bill. We were hearing this bill at the same time as hearing the Criminal Proceeds (Recovery) Amendment Bill, and at times it got quite confusing, so I’d just like to acknowledge and thank the officials for the work and advice that they gave.

Minister, I too would like to ask a question about clause 5, which inserts new section 308A. The amendments made to this section relate to threatening acts in relation to dwellinghouses and persons in dwellinghouses. We introduced new section 308A, “Discharging a firearm to intimidate”, and I have to ask, Minister, why is this clause here? If the Minister’s answer is that it introduces intimidation and harsher penalties, then, again, I ask: why introduce this and tell the country that you’re doing something about the drive-by shootings when, in actual fact, you already have legislation in place that will take care of that, and that is under section 48 of the Arms Act, “Discharging firearm, airgun, pistol, or restricted weapon in or near dwellinghouse or public place”, which reads “A person commits an offence and is liable [for] conviction [of] imprisonment for a term [of] not exceeding 6 months, or … a fine not exceeding $10,000, if the person, without reasonable excuse, discharges a firearm, airgun, pistol, or restricted weapon in or near a dwellinghouse or a public place so as to (a) endanger property; or (b) endanger, annoy, or frighten any person.” The only difference here is that we don’t have the word “intimidate” and we have, just as per section 198, a difference in the tariffs or the consequences.

This Government has shown that we’ve got no qualms in introducing harsher penalties into the Arms Act, so adding intimidation to section 48 and adjusting the penalties could have been a simple fix. Instead, we have a clause that is lesser than the clause in the Arms Act because it doesn’t address endangering property, annoying, or frightening people, nor does it address drive-by shootings away from a dwellinghouse—those that are attacked, say, in a park, for example, unless we’re using section 198, which has different penalties, which my colleague Emily Henderson spoke to. So, Minister, can you explain whether a drive-by shooting not near a dwellinghouse is captured by this clause, or would that type of incident revert to section 48 of the Arms Act or section 198 of the Crimes Act, where a much lesser penalty for a drive-by shooting would apply? And is this an attempt to signal to the community that the Arms Act, as amended by the Government and New Zealand First, doesn’t work, or is it virtue signalling to the community that the Government is on top of drive-by shootings by creating more unnecessary legislation where legislation already exists?

Hon ANDREW LITTLE (Minister of Defence): Thank you, Madam Chair. And thank you for those two contributions—first from Harete Hipango, and I’ll just respond quickly to Ms Hipango’s contribution. The reference to threatening behaviour or intimidating behaviour is, I think—and can be—widely understood, and it goes beyond physical threats. It can be the use of voices, it can be a mere presence. And I’m confident that the courts have considered enough of these matters to be very clear about what can constitute intimidation in those particular circumstances and, indeed, threatening behaviour.

To Nicole McKee’s question, and I think we do have to be careful sometimes that when we come to this House with axes to grind that sometimes we don’t cause those issues to get in the way of, I think, a reasoned and reasonable debate. I disagree with the member’s analysis on the application of section 48 of the Arms Act. It does not apply in the sort of circumstances that the law has been found inadequate to cover, when it comes to drive by shootings. Section 48 of the Arms Act is very much focused on what happens around a property or a dwelling. It focuses on the largely accidental or unintended discharge of a firearm, and where there is some intent and damage to property or buildings. It is not intended to deal with the situation where somebody is openly in the public, on a public street, on a high road, and acting like a galah by discharging a firearm with the intent to intimidate people around them. And the reason why this has been added into the law is not because of any inadequacy of the Arms Act—the Arms Act is very good now, thanks to the good work of the Hon Stuart Nash—but this is an inadequacy in the Crimes Act that needs to be addressed so that the police dealing with antisocial behaviour by those who would use firearms in a public place to intimidate others can be dealt with, and the penalty reflects that. That is the material difference between these matters.

I move, That the committee report progress and sit again presently in order to progress the Severe Weather Emergency Legislation Bill.

A party vote was called for on the question, That the committee report progress and sit again presently.

Ayes 108

New Zealand Labour 64; New Zealand National 34; ACT New Zealand 10.

Noes 10

Green Party of Aotearoa New Zealand 10.

Motion agreed to.

House resumed.

CHAIRPERSON (Barbara Kuriger): The committee has considered the Criminal Proceeds (Recovery) Amendment Bill and reports the bill with amendment. The committee has also considered the Criminal Activity Intervention Legislation Bill and reports progress in order for the House to progress the Severe Weather Emergency Legislation Bill and for the committee to sit again presently. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Bills

Severe Weather Emergency Legislation Bill

First Reading

Hon KIERAN McANULTY (Minister for Emergency Management): After discussions at the Business Committee, I seek leave to present a legislative statement on the Severe Weather Emergency Legislation Bill.

ASSISTANT SPEAKER (Hon Jacqui Dean): Leave is sought for that course of action. Is there any objection? There is none. That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon KIERAN McANULTY: I move, That the Severe Weather Emergency Legislation Bill be now read a first time. I nominate the Governance and Administration Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 16 March 2023, and that the committee have the authority to meet at any time while the House is sitting except during oral questions and during any evening on a day on which there has been a sitting of the House, despite Standing Order 196.

The recent severe weather events in the North Island have caused widespread damage to land, waterways, infrastructure, and roading. Most of these areas are now moving away from the initial emergency response and into the recovery phase, where the needs of our communities are broader and more complex. We need to make sure that recovery is not held back by the existing legislative framework, and that the actions that need to be taken to support the recovery can happen in a timely and efficient manner. The Severe Weather Emergency Legislation Bill will enable this. The bill is intended to assist people, their communities, iwi and hapū, and local authorities with the recovery and improve resilience for the areas affected by severe weather events. It will make urgent changes to statutes to facilitate recovery in the areas affected by recent weather events. The bill will ensure emergency powers are available when needed and that these can be carried out efficiently. The amendments will help local authorities to take immediate action to improve resilience to future weather events. They will also help all local authorities and civil defence and emergency management groups to operate safely and effectively.

We have experience with previous emergencies, such as the earthquakes in Canterbury and Kaikōura, which required urgent legislation to change existing legislative constraints to support recovery. We have used these experiences and the lessons learnt while drafting this bill. The bill will make urgent direct amendments to the Civil Defence Emergency Management Act 2002, the Local Government Act 2002, the Resource Management Act 1991, the Food Act 2014, and Food Regulations 2015 to provide relief to those people and communities affected by the severe weather. This will support recovery and provide authorities with the powers necessary to facilitate an efficient, timely, and effective recovery. In particular, the amendments will help local authorities with their planning and decision making and will also allow for concurrent declarations of states of emergency and transition periods and enable remote attendance at meetings. It will also modify statutory time frames—that are not always practical for businesses or individuals to meet during an emergency or response—for a limited time to permit certain emergency response activity carried out by rural landowners and occupiers.

The bill amends the Civil Defence Emergency Management Act—or the CDEM Act—to address some known issues around concurrent declarations of states of emergency and notices of transition periods. Making these changes will help civil defence and emergency management groups access emergency powers when they are needed, which will reduce delays which cause risks to health and safety. It is essential that CDEM groups have quick access to the full range of powers available under the CDEM Act to respond to any other emergencies that may impact their communities while we respond to and recover from emergency events.

The bill also makes time-limited changes to parts of the Resource Management Act (RMA) to permit certain emergency or remedial actions to be carried out by owners or occupiers of rural land. The RMA changes also extend time frames for advising local authorities that emergency work was undertaken and applying for retrospective consents of emergency work. Under the RMA, local authorities have rights of entry without prior notice to any place. Given the large number of evacuations that have occurred, the bill requires that anyone entering a place under those RMA powers when the occupier cannot be found there must display a notice with the date of entry, reasons for entry, and the contact details of a person who can provide further information. This notice must be in a prominent place on the land and written notice must be served to the relevant ratepayer. This is the same approach taken following the Hurunui/Kaikōura earthquakes and tsunami events. We know that it may not be possible for the people dealing with the impacts of the severe weather events to comply with the RMA planning and regulatory requirements or to meet existing time frames for retrospective consents. These changes are similar to provisions in the Hurunui/Kaikōura Earthquakes Emergency Relief Act. I understand that after these earthquakes, these provisions provided significant help and certainty to local authorities, infrastructure providers, and rural landowners and occupiers.

These provisions help carry out emergency works quickly and enable the return of critical services. I’m inviting the committee to consider the most appropriate drafting to ensure that damage to infrastructure that was initiated by the severe weather events—but occurs some weeks or months after the event—is sufficiently covered. This relates to the wording in section 330A and 330B(1) of the Act.

The bill amends the Local Government Act 2002 to enable local authorities and civil defence emergency management groups to enable local authorities and civil defence emergency management groups to meet by audio or visual link, and for the members to be counted as present. Currently, these groups are able to attend remotely, but their votes are not counted. This restriction can become particularly difficult during an emergency, as some elected officials may not be able to attend meetings in person because of damaged roads or bridges. This amendment will help with timely decision-making as part of the response and recovery.

The bill also proposes amendments to the Local Government Act to ensure that local authorities are not prohibited from amending their current long-term plans in relation to water services and infrastructure. Currently, due to the recent water services reforms, local authorities cannot include any content relating to water services in their long-term planning, given these responsibilities are due to be transferred to new water service entities. The recent extreme weather caused significant damage to water infrastructure and water services. This will require local authorities to amend their current long-term plans in response to this damage. The bill proposes that the Local Government Act be amended to enable local authorities to amend their current long-term plans in relation to water services. This change is also extended to local authorities that are unaffected by the cyclone, who may also wish to amend their current long-term plans to take immediate action to improve their resilience to future weather events.

Finally, the bill amends registration and verification requirements in the Food Act 2014 and the Food Regulations 2015. These changes will extend the registration period for a food business so these businesses can continue to operate during a time where their registration may have expired. It will also exempt food businesses from verification requirements during an extended period.

Alongside the changes to the RMA, we recognise that it may be difficult for affected communities to follow the regulatory requirements for food businesses and this will allow them to stay open. This is an important change, not just to provide certainty to businesses but to ensure these businesses can remain open and provide food throughout this uncertain period, particularly for small and isolated communities. The risk of not making these changes is that the recovery will be slowed down or stopped by the current regulatory environment. These urgent amendments under the bill will help facilitate the initial stages of the recovery and provide legal certainty where needed, and we need to make these changes as soon as possible.

The Government recognises that passing emergency legislation can reduce the ability of the public and other organisations to provide input into the bill and for the full scrutiny of parliamentary select committee processes. However, this needs to be balanced with the need to provide certainty for the recovery effort, on what emergency legislation may be provided. This is critical as recovery efforts will likely encounter substantive repair and rebuild issues and individuals and businesses may face regulatory requirements that they struggle to meet.

I’ve considered the issues, and I believe that a shortened parliamentary process is justified for these changes. I ask Parliament to support the bill and acknowledge the collaboration and cooperation from other parties in planning for this and its procedure. Cyclone Gabrielle, Cyclone Hale in the North Island, and heavy rain events—including the Auckland floods—have been devastating for our communities, and it is vital that we have the tools we need to support people to recover as quickly as possible. This will not be a short process, but this is part of the many ways we can support those impacted by those devastating severe weather events. And therefore, I am pleased to commend this bill to the House.

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

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Speaker. I don’t think anybody who didn’t experience the weather events in the upper North Island, Hawke’s Bay, the Gisborne area, and the Auckland area, or who hasn’t been there subsequently—as I haven’t yet—could begin to comprehend the scale of the damage, destruction, and trauma on people’s lives that has occurred. I think, as economic development spokesperson, I do hope to get up to those areas, but at this stage we are in a response and recovery phase, not a rebuild phase, and I want to commend Government members, local members, my own colleagues who have provided support to their communities through this very difficult period.

I also want to acknowledge the Minister and the Leader of the House for their engagement in what is a very expedited process, but I have appreciated that Ministers Robertson and McAnulty have shared with us their plans, got final drafts of the bill to us in a manner and at a time when the National Party were able to have a good look at what is an omnibus bill—so it needed multiple pairs of eyes over it—and work constructively to ensure that we have a process that will have this bill passed. I should say, from the outset, the National Party will be supporting it through its stages.

That acknowledgment may not be across the House, in terms of process, but, you know, look, I’ve been part of a Cabinet that’s been there before, and I know how hard and how important it is to get the legislative regulatory framework in place to do the right thing. So I acknowledge the need to do that, and National will be supporting it.

I speak, in the first reading, as a bit of an opening bat in an omnibus bill where the majority of the changes come in the environment space, the Resource Management Act (RMA) space, and the local government space, and the emergency management response. Two of my colleagues are unable to speak at this time on that so I’m very happy to kick things off. Look, this is a solid-looking piece of legislation but I’m pleased it’s going to get some scrutiny, even if it’s only for 36 hours, because I think there are a couple of potentially clunky or cumbersome aspects of it—and I acknowledge and appreciate the fact that Minister McAnulty has said that, you know, we can make this better, and if there are things that come out of the select committee process, then that will be something we can attend to.

I’ll give the House an example of where I think there perhaps could have been a slightly sharper emphasis. One is in the timing of the expiries of certain provisions of the bill which are very—well, they’re all over the place, really. Some of them are expiring in May this year; some of them aren’t expiring until 1 April 2025. One of the things that worries me a little bit is that we have put hard closures on some of these obviously temporary changes. But if, in fact, as we go through this recovery phase, it is deemed that it’s necessary to extend them, it seems to me that we would have to do that by primary legislation. I wonder if a better way to do that is to put an expiry of, say, 24 months across the whole bill, and then give powers to—and I’m not a big fan of Orders in Council but I’m pretty sure this could be done by Orders in Council we could bring the expiry of certain parts of this bill forward. It would seem to me that would be a more of a belts and braces approach.

The Minister mentioned sections 330A and 330B(1), and I think that is an area where the select committee does need to have a look at it. This is where there are powers to go on to properties, I think, for activities that are deemed necessary, even if it’s not possible to contact the owner or occupier of the property. Now, the definition at 330AA (1) includes “a person, local authority, consent authority, network utility operator, or [a] lifeline utility” when they’re undertaking an activity. It doesn’t appear to me and to our broadcasting and communications spokesperson that that could include a telco. As far as I can tell, a telco is not meeting a definition of a network utility operator; it may do—I don’t think it does. So that’s something the select committee will need to have a look at: is the definition sufficiently broad to enable telcos to go on to land? Because, as we know, communications were down for a long period of time in the East Coast area and it’s going to be absolutely vital that these sorts of things can happen.

That’s, I guess, an example of where there are some things that we’re doing in this bill that are temporary, but, actually, they seem like a good idea anyway. I know that officials would say to Ministers “Oh, well, we need to do more policy work before we can, perhaps, make permanent changes to legislation.” But, actually, for example, allowing councils to meet by Zoom, or local authorities to meet by an other-than-in-person means seems to me, in the wake of the pandemic, and what we know now in the emergency, like a pretty sensible thing to do. Why would we have a sunset clause on that sort of change? We probably won’t have time to address that in the two days we’ve got to consider the bill, but I do think it’s worth thinking about for the future.

Now, there’s been quite a bit of feedback that my colleagues have received, particularly from the farming community about their powers to be able to restore land or waterways to what they were pre-flood, and the degree to which taking that action might put them at risk of them being in breach of the RMA. Up until this point, it did appear that they would then need to go and get a retrospective application which, if it was declined, could put them in something of a quandary. The worry they have is that they are either putting themselves at risk or they will act too conservatively to actually get a recovery in a timely manner.

I do note that the bill does provide for an ability to do that but it does have something of a sting in the tail, potentially. There will be an amendment, by way of new sections 331B and 331C, I think, in respect of the activities that they do need to take if they believe, on reasonable cause, that “it is causing or is likely to cause loss of life or injury to humans, loss of life or serious detriment to the health or wellbeing of animals, or serious damage to land or property”—that’s all very important—and that the activity will, after the passage of this legislation, be deemed to be permitted unless they don’t do the paperwork right, is my reading of the bill—if they don’t give the necessary written notices to the relevant consent authorities or they fail to comply with subsection (2) of section 331B. It does seem to be a little bit bureaucratic.

I can just imagine a few farmers out in these affected areas who are not going to be paying too much attention to the paperwork once they know that they can go ahead and do the work that they need to do to correct waterways, to remove silt, and to clear other debris and create the conditions for better animal welfare. I just can’t see them—if it’s a permitted activity, it’s a permitted activity. Let’s not punish them by having even a retrospective—an obligation to do it is fine, but to deem that permitted activity “not permitted” just because they didn’t do the paperwork I think is just a little bit hard. So I hope we hear tomorrow from the rural community, perhaps Federated Farmers or other organisations that can take a look at this and see whether or not this is a risk that I perceive, because the last thing we’d want is to have this bill passed and then not have the required effect.

I think there is also a similar clunkiness in respect of the food regulations, which, basically, says you can extend a registration if it’s been expired only if you pay a fee and meet the conditions of the Food Act at sections 56 or 86B. Again, that should be deemed to be the case if they were registered one day and compliant one day. Let’s not get them jumping through hoops, because it would appear that would undermine the expeditious nature of this clause.

So there are things we can do to improve it, I think. It’s really important that we have that conversation tomorrow with submitters and officials, so that we can make this the best bill it can be.

Hon MICHAEL WOOD (Minister of Transport): I thank the Minister, Kieran McAnulty, for bringing this piece of legislation to the House, and colleagues from around the House—including the Hon Michael Woodhouse, who’s just spoken about this bill—for the cooperative and constructive approach that they are taking to what is an important piece of legislation, as we continue to support regions of our country that have been devastated by the events of the past six weeks between the anniversary weekend floods and Cyclone Gabrielle.

I think probably by now many members of the House will have had the opportunity to visit some of the affected regions, and, indeed, some members will live in those affected regions. As they say, there’s nothing quite like seeing these things for yourself. I spent some time around Napier and the Hawke’s Bay last week, touring around in particular the damage to transport infrastructure but also gaining an insight into the extraordinary damage through wide swathes of what was previously productive, lived-upon farmland and horticultural areas. And these areas are just unrecognisable from what they were before. The damage across transport infrastructure—both road and rail—productive land, private property, and community facilities is immense and, no doubt, for the people who are living in those places, overwhelming.

And so really it is with that scale of damage in mind that we contemplate in the House taking the relatively extraordinary measure of a piece of legislation like this, which we will be progressing much, much faster than an ordinary piece of legislation. It will extend certain powers and abilities to take actions that we would not normally allow for, but the scale of the damage is such that it is important that we give both private individuals, local councils, and other authorities the ability to get on with the job and support those communities as we continue to work through what is the tail end of an emergency situation for many people.

I want to specifically focus my comments on the importance of this bill for the repair of transport infrastructure within the affected regions. And here I note all of the regions who have been severely affected, from Northland to Auckland, Coromandel, Hawke’s Bay, Tai Rāwhiti, the Central Hawke’s Bay, Wairarapa, and the Waikato—all of which have been affected very, very severely. Now, my trip down to the Hawke’s Bay, going through the Esk Valley—the sights were extraordinary: the Napier to Wairoa rail line, which had only been restored as recently as three years ago, to all intents and purposes looked like someone had picked it up, screwed it into a ball, and thrown it back on the ground, such was the force of the of the weather events. Critical roading connections, including around about 50 bridges, have either been compromised or destroyed across the State highway and local roading network through Tai Rāwhiti and the Hawke’s Bay. And all of this infrastructure is critical for the community life and supply chains of those regions.

Now, the overall recovery is going to take a long time. The full recovery will take place over a period of some years, but the period in front of us, in terms of the rebuild of transport infrastructure in the coming months, is a critical one. Transport rebuild is taking place in three phases. The first is the restoration of lifeline links. That is, ensuring that communities who were disconnected by the extreme weather events are reconnected for the purposes of basic supplies, food and water, fuel, medical access, and, in some cases, the need to take account of animal welfare needs. That job’s completed in around about 75 percent of the situations across Hawke’s Bay and Tai Rāwhiti, and there are other areas in Northland and Auckland where we still have not achieved those reconnections. That work is the number one priority and absolutely critical: to restore those key connections for communities who do still remain, basically, cut off from key supplies that are just so important for the maintenance of life in those areas.

Following on from that, we will move into a phase which will be focused on the restoration of basic service levels for communities and supply chains across the affected regions. That will be a big job. That will be a job which is in the billions rather than the hundreds of millions of dollars. But the task in front of us in the next few months is to get on with the job as quickly and as efficiently as we reasonably can, to restore those connections for communities. And the provisions of this piece of legislation give Waka Kotahi and local authorities the ability on the ground to do that, to be able to work through consent processes much more efficiently and, indeed, retrospectively, where that is required in order to be able to restore those lifeline connections. Quite simply, without the provisions of this piece of legislation, the restoration of those connections to communities who desperately need them would take much longer, and I don’t think that that is something that any of us would want to see for communities who need action as soon as possible.

I do particularly note the comments of the Minister in his reference to section 330A and 330B(1), where he has noted his intention to table a Supplementary Order Paper which will address the issue about damage which has occurred subsequent to the original weather events. The original weather events which are identified in the legislation are the Auckland Anniversary weekend floods, Cyclone Hale, and Cyclone Gabrielle. However, there has been some significant damage done to roading and other infrastructure that has actually occurred, connected to but subsequent to those events. For example, the most recent significant slip, which has cut off State Highway 25 around the Coromandel Peninsula, actually occurred about two weeks after the original weather event. And so the Minister’s reference to that particular issue was making sure that in the scope of the legislation, we will clearly have the ability to deal with those issues that are clearly connected to the original weather events but might have happened sometime after them. That will be an important matter to be considered as we work through this bill in the next few days, and I hope that we can get a good outcome on that.

I acknowledge the other changes that are proposed in the legislation. Coming out of local government myself, I agree with both the Minister and the Hon Michael Woodhouse about the importance of giving some flexibility to local government at these times, as, for example, Parliament gave itself as we dealt with the exigencies of COVID. In places like the Coromandel, a cut-off road will potentially mean that local elected representatives face a 2½ hour journey each way in order to be able to get to council chambers to take part in important discussions and decision-making for their regions. It is only reasonable and appropriate that we give those local authorities the ability to carry out their business in an effective way at a time when their communities need them to be making decisions at a reasonable pace. I believe that’s important, and while I don’t think decisions have been made on this, I certainly hear the calls from the member opposite who just spoke about possibly considering the value of that being a longer-term arrangement as well.

I do believe that the way that we’re working this bill through the House is as good as it could be. It has clearly been moved through quickly, but, through cooperation between parties, we are going to have a short process, which will allow scrutiny of the legislation. That is always desirable; it is important. And, as the Minister indicated, the Government is committed to making improvements where we can, as a result of good, constructive dialogue in that short select committee process and as a result of debate in the House and in the committee of the whole House.

I acknowledge again the Minister for bringing this piece of legislation to the House. It’s a very important part of affecting these regions who have been so devastated. It will be critical for the transport rebuild, and I look forward to its speedy passage in the coming days. I commend the bill to the House.

SIMON WATTS (National—North Shore): Forty-five days ago, the rain began to fall in Auckland. I remember that evening, and it was about this time, because I ended up sleeping in the regional terminal at Auckland Airport as a result of not only planes not being able to fly out of that airport but the inability to leave that airport because of significant flooding. Watching the TV screens from the airport, along with many other people through that evening and into the night and overnight, it was very clear at that point that not only our city but one of the biggest regions in our country was embarking on a significant weather event that was going to have long-lasting implications that we continue to feel and continue to see today.

The result and the response of those members of our communities, particularly those first responders, on that evening, on 27 January and the days following, were in all instances heroic and there are multiple stories that we’ve heard in this House in regards to those actions by those individuals, common people, average Kiwis across the country and across the city that went over and above what was required to help their fellow neighbour. That was a challenging time, and then what we saw following not only a few weeks subsequent to that and further on were the other implications particularly in Tai Rāwhiti and the Hawke’s Bay region in terms of the significant implications of the cyclone, which brings us to where we are this evening in regards to passing legislation: the Severe Weather Emergency Legislation Bill.

As has been noticed by our prior speaker, the Hon Michael Woodhouse, the National Party will be supporting this legislation alongside the Government, and that is because it is absolutely appropriate and practical that we do take the appropriate steps to deal with a number of the aspects that need to be dealt with, and, in particular, deal with some of the legislative elements that are holding not only the response back but also enable us to move forward should we be faced—and when we are faced—with a similar circumstance in the future. I think it is, without doubt, that with the amount of increased weather events that we’ve seen in this short amount this of time this year, it is no doubt that that is something that we need to actively prepare for as we go forward into the future.

The changes in this legislation, as the Minister has articulated, relate in regards to the Civil Defence Emergency Management Act. I’m not going to go into detail around those aspects. There were also changes in regards to the Resource Management Act, in regards to the time frames around advising local authorities and being able to apply for consent in terms of emergency work.

I guess, those aspects, in terms of the relationship between local government and our community are critically important. As National’s spokesperson for local government and regional development, I’ve absolutely seen and continue to get dialogue from councils and mayors across the country, and, in particular, in the regions heavily affected, that there are elements that we need to improve.

But I do want to also acknowledge the significant efforts by those members of our community who work in local government and in local councils and our territorial authorities and those organisations and companies and entities that support those councils, for the work that they have done and continue to do day in and day out. We’ve seen their faces on TV. And even though the headlines aren’t hitting every night, you can see in many of their faces the tiredness of the significant contribution that they have done for their communities. They are the unsung heroes in regards to providing that local on-the-ground response, which is completely unmatched.

While here in Wellington, we may often think that we have a significant influence in regards to dealing with local events, it is our local communities that are best placed to deal with local issues, and those are the individuals and those are the elements within our community that really come to the front when we’re dealing with such significant implications, and those are the individuals that wear multiple hats in our communities.

So while they may be a councillor on the local council or on the local board or even the mayor, often their other hat is in a voluntary capacity, whether it’s a local fireman for the fire brigade or part of their local St John’s or they’re a member of one of the local charities that provide support, or Red Cross and other elements in their family and all their elements are all linked, as well. That’s what happens in local communities across this country, and particularly in rural and provincial New Zealand.

There is one component that I want to raise in this bill which I think is disappointing: that the Government has used this opportunity to fix an error in regards to the three waters Water Services Entities Act. They’ve used this piece of severe weather emergency legislation to correct an error in the Water Services Entities Act, in clause 14, in regards to the issue around long-term plans. This is not a clause related to the cyclone. The Minister didn’t pay too much wording to this clause when he provided an overview, and there’s a reason why that is. It’s because they’re using this bill to push through this correction which is completely—well, there’s a number of words for it: a little bit or trickery, a little bit of craftiness, skulduggery. But that is the reality. Clause 14 of this bill needs to be very clearly looked at by the committee tomorrow. The question needs to be asked: is this clause directly related to the severe weather emergency events that we’re dealing with or is this simply coincidental, an opportunity because they made a mistake and it wasn’t clear around what long-term plans need to be completed by councils as part of the three waters legislation, and they’ve now created a precedent where councils are unable to do their long-term plans, until the water services entities come into effect on 1 July 2024—and they know that’s an issue, because it’s been raised by councils, including in select committee—and they’ve used this legislation to pump through a quick fix.

Well, we can talk all night—and we will, and many speakers will talk about the good elements of this bill. But it is a real shame that the Minister has decided that, actually, while we’re pushing this through in good faith on all sides of this House, now is the opportunity to just push through a little convenience clause to fix up an error on top of multiple errors in legislation, as we all know, in regards to the Water Services Entities Bill. So I want to raise that very clearly. I’d like, and I expect, to discuss that at the committee stage. I’m expecting to have a very clear articulation in terms of what is the true justification for clause 14 of this bill and why is it necessary that it includes councils and territorial authorities that are not implicated by the cyclone, which is what the Minister said in his opening address—he said it quite subtly, right? Might not have picked up on it, but he mentioned it. That is important for us to go through, because we’re all here trying to do the right thing, and I think we’re all absolutely on board with that. But that does not provide an off-ramp for this type of opportunistic implementation of a clause in a bill that deals with issues because of poor regulation-making by a Government in regards to bills that are not related to this cyclone.

So that is all I’m going to cover at this point. I’m looking forward to going through the committee phase that will follow, and the shortened select committee process tomorrow. I acknowledge that, all in all, the majority of this legislation, with the exception of the clause that I’ve noted, is absolutely fully supported by this side of the House. I do hope and wish that the speedy pushing through of this legislation positively benefits those communities across this country that have been and continue to be heavily impacted by the severe weather events that occurred and started to occur just 45 days ago. Thank you, Madam Speaker.

Hon KIRITAPU ALLAN (Minister of Justice): It’s 14 March today, and on 14 February, one month ago, in Te Tai Rāwhiti we were about, oh, 15 or so hours into an event which will become one of the most devastating in our region’s history. Always in Te Tai Rāwhiti, in terms of weather events, we have benchmarked and looked to Bola as the event that kind of defines—it’s before Bola or after. That changed us in 1988. Well, Gabrielle certainly put Bola in its place. When you get up into the region and you look over the damage that’s been done throughout the entire landscape, it’s like deep fingernails have scratched through the surface, impacting towns, communities—22 communities in Te Tai Rāwhiti. Currently, we have 1,100 people still disconnected, and the road ahead is really long.

This legislation brought by my colleague the Minister for Emergency Management, the Hon Kieran McAnulty, it’s incredibly helpful and has been requested by the councils and people of our place. So I want to acknowledge our colleague, Minister McAnulty, for responding in such a pragmatic and efficient manner.

Before I just turn to the nuts and bolts of the bill and the ways in which the provisions in this bill will assist communities like mine, Te Tai Rāwhiti, I really want to put on record just some of the beyond human, almost, stories from the people that responded one month ago in our region. There’s a particular chap, though—his name’s Frank. Frank had only been in the civil defence role for Te Karaka for about three months, I think, and I met Frank on about 16 February. That was about two or three days after he had taken about 500 people from a small township called Te Karaka up two hills at 5 a.m. on the morning of the 13th, when the Waipawa breached. When I met him two days after that, and a couple of other hundred from Te Karaka, they sat for 27 hours up on those hills because, as it played out, all of the ordinary communications that we’ve become so reliant on—phones, internet, you name it—she was gone. So they didn’t know what to do because there was simply no information to help guide them. But they watched from those two hills in Te Karaka as their homes were destroyed.

You know, you go up the coast a little bit and you meet with somebody like Lillian Te Hau-Ward, who has, essentially, been in response mode since, really, 10 January—that was when Cyclone Hale presented itself. That’s 10 January, and we’re in 14 March now. People are tired, but it’s people like Lillian Te Hau-Ward, who runs a very, very tight ship up there in Tokomaru Bay, servicing the hundreds of people that are reliant on people like her, her leadership—it’s just hard to comprehend and hard to share and hard to grapple with the nature of the things that they’re dealing with in our little hometowns. So I bring these stories to this House to uphold and acknowledge them and to put a spotlight on them, because they are heroes and they are heroines, and they are still right now in that state of response, because the roads are out and there’s a long task ahead of us.

This bill, I said in my opening remarks, had been called for by local government. In my neck of the wood, I want to acknowledge our mayor, Her Worship Rehette Stoltz, and her chief executive Nedine Thatcher Swann, and the Controller, Ben Green. Now, those three have been this indomitable sort of tripartite that’ve led us through these two most recent events but seven severe weather events over the past 18 months.

One of the things that this bill will do—there’s two things. One, it’ll enable them to be able to have meetings, because currently people can’t practically physically travel from Ruatōria and Tokomaru Bay and all the way up the coast to the council meeting. So I’m sure that the likes of—oh, well, you know, all of the councils up the coast will be a little bit pleased; I’m thinking of you, Rawinia Parata. But they’ll be able to continue with their council business, and it’s so important that those voices are around the decision making, the council-making tables, because it’s those communities that are in absolute isolation.

But secondly, too, there’s just the flexibility that we’re providing through this bill, and whilst the Opposition found some negative comments to make there, being able to amend those long-term plans, particularly with regards to their water infrastructure, is going to be absolutely fundamental. It’s just completely shattered itself in a region like ours. So those powers that this bill provides to those councils have been sought, and I commend the Minister for responding in the way in which he has.

Turning very briefly to the amendments that this bill makes in the Resource Management Act, as has been said in this House a few times now, our horticulturalists, particularly in my region, and, of course, our farmers, sheep and beef specifically, are working like the clappers—you know, we’re still getting a strong grasp in terms of what the nature of the devastation is, and I’ve just got to acknowledge every single one of them that have had crops destroyed, farms absolutely decimated. But they are undertaking that task, which, is, you know, moving silt and actually getting stock off property and doing what they need to do. They’re taking preventative and remedial action, which is required. Now, you know, this ordinarily requires permits for a lot of the work that’s been undertaken by those on the land, but I appreciate what these amendments will mean to people that are just cracking on and doing the job. Now’s not the time to be doing that paperwork.

I want to acknowledge the environmental issues, because I know that there’s some concerns there, but in a time of crisis it’s not unusual for Governments to be able to bypass the ordinary processes in order for that expediency.

So, look, with my full support, in my role as the Minister responsible for the recovery in Te Tai Rāwhiti and the Bay of Plenty, I want to commend—and I want to acknowledge our colleagues who have been working tirelessly on this, including the Minister Grant Robertson, to make sure that our response is locally led, and that these provisions that come through in this legislation tonight enable that locally led response. So, therefore, I wholeheartedly commend this bill to the House.

Hon EUGENIE SAGE (Green): E te Māngai o te Whare, tēnā koe. I’m pleased to take a short call on the Severe Weather Emergency Legislation Bill. It is a short bill, but it is an important one. Like the Hon Kiritapu Allan, I really acknowledge the huge heroism of so many on the ground in areas that have been affected by these severe weather events and their strength in keeping on going on this long road to recovery and the dedication that they are applying to supporting others. I also thank the media for the stories that they have shared with Aotearoa New Zealand and beyond, which has enabled others to come in and awhi and support those who have been affected.

This small bill is important, because it does override existing legislation—normally the Green Party is never very comfortable about that, particularly if it’s being debated by Parliament under a very shortened select committee period of only a day, but if this doesn’t go through this week, recognising that next week is a recess week, then potentially some of the activities that are being done in Tai Rāwhiti, in Hawke’s Bay, in the Bay of Plenty, in Tararua, and in Auckland are illegal. So that’s why we are supporting the bill and acknowledging the reality of a shortened select committee period being necessary in this instance.

Aotearoa has suffered a lot of emergencies from, in recent years, the Pike River mine disaster, the Christchurch earthquake sequence, the Rena oil spill, the Kaikōura-Hurunui earthquakes, Mycoplasma bovis, the Port Hills, the Nelson-Tasman fires, the Christchurch mosque attack—of course, we’re coming up to a significant anniversary of that—and Whakaari / White Island. Our emergency management system is how we organise and manage the people, the plans, the infrastructure, and the assets which are needed to respond to these events. There is a small element in this bill, in terms of the video meetings, which comes out of something that the Hon Gerry Brownlee initiated back in 2017, a technical advisory group to look at the experience of the Canterbury earthquakes and how emergency management could be improved. There have been subsequent amendments to legislation to take account of those learnings.

One of the changes here to the Resource Management Act is to allow landholders and land occupiers, if they’ve been affected by Cyclone Hale, Cyclone Gabrielle, and the Auckland Anniversary Weekend storm to take action if they consider that immediate preventative or remedial measures are required to avoid, remedy, or mitigate loss, injury, detriment, or damage. That means that these activities, responding to the weather damage, can be done as a permitted activity. There were very similar provisions done in response to the Kaikōura-Hurunui earthquake sequence, which assisted, particularly a lot in the farming community, to respond where there’d been major slips, earthworks were needed, fencing needed to be restored, works in riverbeds to actually enable them to farm again.

I do not recall any evidence that there was any abuse of those provisions, and I think, while Mr Woodhouse has raised the burden of paperwork, I do note that the bill refers to the landholder or occupier simply providing written notice to the council within 60 days. That potentially could just be by email. It’s not requiring anything similar to a resource consent application, and communication is critical in recovering from disaster events. Having the council know the scale of works that are being done in rivers, on erosion-prone hillsides, for infrastructure—like culverts and bridges—is important in terms of coordinating the recovery efforts. So just this notification to the local authority, I think, is an important provision.

I recognise too our whole civil defence and emergency network, and the significant effort and involvement of local authorities in that. They are the foundation of that. So the provisions in the bill which allow the emergency management groups to meet by video and councils to meet by video are important. I was surprised to see those in the bill—that this hadn’t been done before. Parliament select committees meet by Zoom all of the time—not all of the time, some of the time. Why local authorities can’t do that permanently and why this measure to allow them to meet by video ends in April 2024 seems puzzling; similarly with the emergency groups. That should just be part of the nature that they operate now, recognising, of course, if communications are down, that will be challenging—but recognising that when roads are closed and it’s not physically possible to meet face to face they should be able to meet by audiovisual means. It’s also a much more efficient use of time when these people are enormously busy in doing the response and coordinating others. So both of those seem logical. Similarly, with the changes to the Food Act and the food regulations, to allow an extended period for food businesses to renew their operations and continue operating, that also seems a really sensible change. The bill is going to the Governance and Administration Committee and the astute chairing of Ian McKelvie, I’m sure, will draw out any issues in it.

I do just want to respond to some comments made by Simon Watts in relation to three waters. I similarly was puzzled when I first saw that provision in the bill, which allows councils to amend their long-term plan in relation to three waters infrastructure, but recognising that in Tai Rāwhiti, Gisborne, the huge damage to their water network would mean that unless there was provision like that, which allowed them to amend their long-term plan, they may not be able to have the funding to improve that network. So that made sense; it was obviously something the select committee didn’t pay enough attention to when the Water Services Entities Bill went through last year, because potentially, unless that prohibition on councils investing in waters services through their long-term plans is removed, it creates a deficit in terms of what the entities will inherit when they come into operation. So that change also made sense.

It’s a small bill, but it will be very useful in terms of a better-coordinated emergency response and allowing people to get on the road to recovery and actually do the work on the ground and to ensuring that the declarations of emergency and the transition period that any of the issues with those overlapping are worked through as well. So it’s a bill that the Green Party supports.

SIMON COURT (ACT): Thank you, Madam Speaker. Let’s just go over some key dates, why this legislation that Labour’s brought to the House tonight is necessary, and what ACT believes we could do to improve it.

So the floods hit Auckland, devastated large parts of Auckland, on 27 January. Cyclone Gabrielle arrived in Auckland: motorways were closed, the Harbour Bridge was closed on 6 February, and that storm devastated Coromandel, Northland, Bay of Plenty, parts of Auckland, Tai Rāwhiti, and the Hawke’s Bay, and eventually dissipated on 16 February. A national emergency was declared on 14 February, round about seven days after the storm first hit New Zealand. What did the Government do? Well, they declared a state of emergency. Civil Aviation rang up Napier Airport and said, “You better shut down the airport to general aviation because we’ve heard there’s planes in the air, and there might be too many aeroplanes and helicopters up there trying to save people, rescue people, and deliver them food and water at the same time. You better shut that airspace down.” Well, a helicopter pilot said, “You know what? We’re used to flying—when we look up the valley, we fly up the left-hand side and we fly down the right-hand side. And we never, ever, ever ask anyone for permission, because this is how we operate helicopters in Hawke’s Bay. But no, the Government—Civil Aviation—rang up the airport and said, “You better close your general airspace.”

And then what did we have? The Prime Minister and other Government Ministers gaslighting the people of Hawke’s Bay, saying that there was no crime, there was no looting, there were no gang members patrolling, toddling around in cars, looking for things to take and people to harass. There were no ram raids. There were no robberies. There’s nothing to see here. Well, it turned out that after a few days, the Prime Minister admitted he was wrong.

Then, of course, we’ve heard all the sounding off from Labour Ministers about where people should be stopped from living—what they called managed retreat. But when David Seymour and I visited the Hawke’s Bay, what we saw—

Anna Lorck: Hawke’s Bay—no “the”.

SIMON COURT: —Anna Lorck—was stopbanks that had worked and protected towns like Taradale, and stopbanks that had failed because they were made of nothing more than gravel piled up from the river, and they had never been designed and built or maintained properly. So when we hear about managed retreat in places the Government wants to stop you living, let’s first look at the infrastructure. And that is why—after consulting with farmers, with contractors, with builders, with people in local civil defence actually carrying out the recovery in Hawke’s Bay—ACT put together 15 urgent ideas for recovery from Cyclone Gabrielle, which we released on the 3 March. Fifteen ideas. We didn’t wait till 14 March to turn up with the half-baked bill, tinkering around with the Resource Management Act (RMA) and trying to fix a few things with three waters, like Labour has. We had 15 urgent ideas for recovery, which we had road tested with the people of Hawke’s Bay and other places that were affected.

So I want to give you a bit of a hint about what that might involve: dealing with lawlessness—dealing with lawlessness. That’s what the people of Hawke’s Bay asked for. Tougher sentencing for those criminals who were caught looting. And for goodness’ sake, can’t possibly go through with a three waters transition, taking all of Hawke’s Bay’s and other councils’ assets and handing them over to a new water service entity at the time when half of their infrastructure’s underwater and they have no idea when they’re going to be standing up the waste-water treatment plants again. And, of course, cut wasteful Government spending, reprioritise things, and remove those Resource Management Act barriers to rebuilding and recovering.

We also proposed avoiding artificial shortages of building materials by adopting standards from other countries, assuming that in Japan and California they know how to build houses and we could simply adopt their building standards in New Zealand if people wanted to order building materials. And, of course, we suggested if local government’s going to have enough revenue to rebuild, that central government should be prepared to share half of the GST that it takes from building activities—back with local government and local communities who are facing the cost of rebuilding the infrastructure—instead of keeping all of that GST money for itself and demanding that local councils and communities come begging on one knee, saying, “Please, sir, please, ma’am, can we have some money to rebuild?”

Now, I want to come to the problems with this bill, the Severe Weather Emergency Legislation Bill. It’s a truncated process—one day. And who knew—clearly, the ACT Party must be quite effective at stopping the Government doing dumb stuff, because they referred this bill to a committee that ACT does not have permanent representation on. But we’ll be doing our best to rectify that in the next few hours. Then, we’ve heard from the transport Minister about his new-found discovery that roading resilience is important. This comes just a few days after he’s cancelled the “cash for clunkers” scheme, that half-a-billion-dollar scheme that would have paid people $12,000, on average, to hand over a cruddy used car in exchange for taxpayer—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! I am very cognisant of the fact that this piece of legislation is going through the House under a truncated process. However, I have been listening to the member’s contribution and I will ask him to come back more closely to the subject matter of the bill in front of us.

SIMON COURT: Thank you, Madam Speaker. So let’s just focus on roading resilience, which is a point that the transport Minister Michael Wood brought up—how important roading resilience is, because lifeline routes in places like Hawke’s Bay and Northland and so on are important. In the National Resilience Programme Business Case in 2020, it points out that roads like the Brynderwyns are in extreme risk of failure and that Waka Kotahi should upgrade the alternate routes. And what’s happened since then? Absolutely nothing. So this new-found admiration for the role of engineers and roads that are resilient and resistant to floods and damage—well, it’s welcome, but, crikey, it’s three years late at least, Minister.

Then, we understand that one of the problems that this bill seeks to address is that local councils who want to rebuild their water infrastructure—whether it’s waste-water treatment plants, whether it’s stormwater culverts, drinking-water supplies, reservoirs—won’t be allowed to make those investments because the Water Services Entities Act says they’re not allowed to propose any investment in three waters assets between the time that Act comes into force and the time of the transition to the water service entities on 1 July 2024. The ACT Party opposes the three waters reforms because it makes no sense whatsoever to take those assets out of local council hands and centralise them. And, of course, again, the ACT Party has proven to be prescient, to have foresight and vision, in that we said that would be a bad idea. Turns out, it’s such a bad idea that even the Labour Party introducing this bill here this evening recognises that the three waters transition cannot proceed—cannot proceed—and meet those time frames, if at all, because if you take control for the delivery, for the funding, and for the operation of three waters assets away from people who are responsible for land-use planning—local government—you lose all the coherence, you lose all the links, and, of course, you lose that link between funding, financing, and delivery of water services assets.

So what would ACT do? Well, what we’ve said is here’s an alternative and we look forward to debating this at select committee and, of course, at the committee of the whole House. We’re really looking forward to that opportunity on Thursday, the committee of the whole House stage. We hope all of the other members of Parliament are looking forward to debating with us on Thursday afternoon 15 urgent ideas for recovery which are not included in this bill but should be—such as a special economic zone for the people of Hawke’s Bay so they can rebuild and recover without undue Government interference. For example, imagine this bill says that you’ll have to apply for consents to do stuff within 60 to 160 days, but you’ll only be allowed to carry out that work—emergency recovery work is a permitted activity, whether it’s clearing a slip, whether it’s fixing a culvert or standing up your barn that got knocked over—as long as you ask for permission between 60 and 160 days afterwards. And as long as it’s immediate—you do something immediately. But, of course, what we’ve already heard from Minister Michael Wood is that some of these slips and some of these geotechnical processes take months to develop. And so what the ACT Party says is that, look, we shouldn’t have to worry about getting consents for any of this stuff—if you’re fixing up roads and infrastructure, making your property safe again. In fact, that ties in very nicely with our long-term solutions to reform the RMA, which we published in November.

So the ACT Party will be supporting this bill to first reading. We have significant reservations. It goes a fraction of the way to helping Hawke’s Bay and the rest of New Zealand recover, but we will be supporting it.

Hon STUART NASH (Minister for Economic Development): Thank you very much, Madam Speaker. I’m a little bit surprised that I’ve just heard that ACT member Simon Court talk about the recovery and response—certainly, the initial response—in a way that is quite disparaging to a vast number of Hawke’s Bay people that did it really tough. There are areas of heroism there. There were people who went over and above, there were people who put their own lives at risk, and it’s actually quite astounding that there weren’t more people who died—thank goodness.

But to say that Labour Ministers gaslighted I find quite offensive, because he’s talking about me, who’s one of the local MPs; he’s talking about Anna Lorck, one of the local MPs; he’s talking about the Hon Kieran McAnulty, who’s one of the local MPs; and talking about the Hon Meka Whaitiri, one of the local MPs. To say that we gaslighted the people of Hawke’s Bay is wrong and it’s quite offensive, because all four of the MPs that I’ve mentioned—and Kiri Allan, of course, is the local MP for Tai Rāwhiti—were out there working with our local communities, understanding what they needed, helping them, advocating for them in front of Cabinet, advocating for them in front of our caucus, and letting New Zealand know that, in fact, this was serious.

The devastation to Hawke’s Bay was significant, and I think that—I was going to take personal offence, but I thought, no, I won’t do that. But I just think that the ACT member needs to be a little bit careful in his use of language, because it belittles the efforts that some very good people who are working very hard for their constituents actually did on the day.

Members, let me tell you a story. On 10 December, myself and James Palmer, who was then the CEO of the Hawke’s Bay Regional Council—he’s now the head of the Ministry for the Environment—turned a sod on a stopbank behind the Pettigrew Green Arena. For those who know Hawke’s Bay, this is in Taradale, near the Eastern Institute of Technology. I remember looking at the stopbank and I said to James, “No way—look how high this is. The river is never going to come this high.”, and he said, “We built this for the one-in-500-year flood.” I said, “Well, OK, that’s pretty significant.”, and he said, “What we did is we also built it a metre higher than the engineers wanted.” Wow, you know, that’s pretty big, and the only way they could build that was through the COVID relief funds. So it was paid for by central government.

Well, that stopbank that was built for the one-in-500-year flood, and that was built a metre higher—the water came within 30 centimetres of the top of that stopbank, and if that stopbank had broken or if that stopbank hadn’t been there, then the conversations we’d be having today would be significantly different than the conversations we are now having, because the whole of the Taradale suburb in Napier—and, no doubt, others—would have been completely devastated.

So, again, to say that the regional council were negligent in the way that they maintained their stopbanks is, I think, just simply incorrect, and the reason I say that is because the amount of rain that fell during that 24-hour period was so far outside the parameters within the models of the regional council that it just could not have been predicted. Now, of course, we’re going to have to change all the models, and the stopbanks are going to have to be rebuilt and we’re going to have to assess how we look at risk, but the bottom line is the regional council was not negligent in the way that it treated the people of Hawke’s Bay. Hawke’s Bay members did not gaslight their communities and their local electorates. People worked incredibly hard and are continuing to, and it’s what this bill is about.

I also remember being in the Finance and Expenditure Committee on 22 February 2011, when Amy Adams received a call informing her of the most severe of the aftershocks that killed 185 people in the Canterbury earthquakes. We were—right across the House—devastated that one of our most beautiful cities could have become home to one of the most deadly events in New Zealand’s history, but the House came together in the case of the Canterbury earthquakes and passed legislation that allowed the rebuild to progress in a way that was outside the laws of the time but was necessary, given the unique circumstances and the Christchurch community’s requirements. While the loss of life from these recent weather events doesn’t match the scale of the Christchurch earthquakes, the trail of destruction is significant.

As Kiri Allan pointed out, up and down the East Coast, the soils were already sodden from a summer of very, very heavy rain. If anyone manages to fly between Napier and Gisborne, or go and have a look on any one of our Instagram accounts or social media, you will see hillsides absolutely devastated, and the people say to me, “Where did all the silt come from?” Well, it came from so many slips up and down the Coast that you’ll just look at these photos and you’ll think, “OK, that’s where the 2 metres of silt in the Esk Valley came from.”

The events of the rainfall on 14 February were significant to the point where, once again, our Government knows that in order to recover and rebuild, we need to once again come together in a bipartisan way in order to allow us to move forward. This is what the Severe Weather Emergency Relief Legislation Bill does. It’s pragmatic. Farmers don’t have to seek resource consent in order to repair their roads, shore up their infrastructure, and do what farming folk do in order to address the issues immediately facing them. It allows the application of retrospective resource consents where they’re absolutely necessary in terms of emergency work.

It allows local officials to meet remotely. I mean, you wouldn’t think you’d need to pass legislation in this day and age to enact that, but you do. Up and down our electorates, people who are elected officials on bodies—like, for example, the Wairoa people can’t come down to Hawke’s Bay Regional Council meetings or people in Napier and Hastings and central Hawke’s Bay can’t travel to Wairoa for regional council meetings, so it allows them to meet remotely.

It ensures civil defence and emergency management quick access to emergency powers. In essence, it empowers key decision-makers to move with speed and clarity where perfect is sometimes the enemy of good, and good is vital in order to get stock off land and communities reconnected and key infrastructure up and running so that at least people can move around. It’s not perfect at this point in time. Bailey bridges aren’t permanent, but we need to be able to do this sort of stuff in order to allow communities to connect and move forward.

In terms of Simon Court talking about roading resilience, well, I think one of the first announcements we made was $250 million in terms of emergency roading infrastructure. It’s not all—it’s going to cost significantly more than that. But we got money out the door really, really quickly because we understood that those who had been devastated—whether it was a lack of access or whether their orchards had been wiped out or whether the crops were devastated or whether they’d lost their homes or their livelihood or their business had been impacted—needed immediate assistance.

The Minister of Finance always said that this wasn’t the endgame but that there was more to come as we reassessed the situation, and we continue to reassess the situation. In fact, we had the extreme weather events Cabinet committee tonight. There are many, many decisions that are going to have to be made to allow Hawke’s Bay, Tai Rāwhiti, Auckland, Coromandel, and parts of central Hawke’s Bay to recover in a way that allows us to build forward and allows people to build forward with a level of certainty that’s required. But this piece of legislation is a start because, as mentioned, it’s pragmatic. It allows things to happen in a way that things need to happen and in a way things probably couldn’t happen under current legislation, and we don’t take this sort of legislation lightly—we absolutely don’t.

In fact—and I could be wrong, and no doubt some member will correct me if I am wrong. But I do think the last time we did pass this sort of legislation was actually the Christchurch earthquakes. As the member Eugenie Sage mentioned—and because I’ve been in the House all during this time, I don’t think there is any incident where people abused the legislation, because we all knew the necessity of getting it right. I think the social licence—well, no, not social licence. The credibility, the integrity, of anyone who sought to deliberately abuse this sort of legislation would have been held to account in a way that meant they probably could not live in the community that they had been part of.

This legislation also allows local authorities an alternative way of providing notice of entry for emergency activities and solutions where the landowner or the occupier isn’t present. I’ve been down to the Esk Valley about four or five times. There’s an avocado orchard there that used to belong to friends of my parents. I used to play there when I was young. The trees must be at least 50—so they’re about 10 years older than I am—and they’re completely devastated. I mean, avocado trees aren’t the most robust trees, but these are 50-year-old trees. Every single one of those trees is gone.

In fact, Esk Valley is one of those scenes—I know a lot of people know Esk Valley. It’s where you drive through to go from Napier at the beginning of the Napier to Taupō road, and it is one of those scenes, literally, where artists paint, because it’s sort of quintessential New Zealand. You’ve got your orchards, as mentioned—your avocado orchards—and you’ve got your vines, you’ve got your poplars, you’ve got your willows, you’ve got your beautiful scenes, you’ve got some nice houses on the hills, you’ve got houses on the flat. It’s completely wiped out.

So this legislation is necessary to allow us to move forward in a way that will get Hawke’s Bay up and running. It’s not the last—there’s a lot more that needs to be done—but it’s a good start.

ASSISTANT SPEAKER (Hon Jacqui Dean): The Hon Louise Upston—five minutes.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Speaker. Like my colleagues on this side of the House, I am pleased to take a call on the Severe Weather Emergency Legislation Bill. The piece that I want to talk about specifically is the changes to the Resource Management Act 1991. This was an issue that was raised with me on 23 February, so one week after the cyclone and flooding events occurred. And I raise it because some of the landowners and farmers that I’d met with on the ground were very concerned about, you know, the threat of doing work and then being punished afterwards for unauthorised activity that in many cases they did to save lives, to save their animals’ lives, and. to a much lesser degree, about property. I think one of the things that’s really unfortunate in this—and National does support this legislation, I want to be clear about that—is the delay of the three weeks has had an enormous, enormous impact on some of the people, particularly those who live in the rural parts affected.

I’ll specifically talk about Hawke’s Bay, because that’s the area that I’ve spent time in. I think that’s the bit—we have a model of legislation: the Hurunui/Kaikōura Earthquakes Recovery Act 2016 is the one that was proposed and I think the lesson that needs to come out of this is when Parliament has legislation that has been used before, we need to be much faster. We need to be much faster. So for the issue to be raised on 23 February, three weeks later, for us to be dealing with legislation that in many cases is a very close mirror of the Hurunui/Kaikōura legislation, I think, is frustrating.

And, you know, members that have spoken who have visited many of the people involved will know that every day is another day that exhausts and stresses them. And so the inability—while in the grand scheme of things it’s a month today since the event, every day dealing with the very severe circumstances that they’re facing is a day too long. So for many of the families that are still isolated and cut off, the ability to be able to take some of those very simple actions to remediate, to restore access, to provide access to water for their stock, for example, for drinking—all of those very practical, sensible things.

It was really telling on one occasion, in one of the rural communities, getting an explanation about what was happening on the ground and a very flash car pulling up with some very, you know, well dressed people getting out. And the locals said, “There’s the clipboard Charlies.” If I hadn’t seen it, I wouldn’t have realised just how frustrated they were with the group of what they saw were officials that were to tell them off, to tell them what not to do, to tell them they had to stop. For some it was anger and frustration, and for others it was fear. It was quite remarkable—the fear of legislation like the Resource Management Act, and that they might have to do something and then apply for a retrospective consent that might not be granted, and that they would end up in court because they’d taken action on their farm to save their animals’ lives. It seems irrational, right? But, actually, that was the fear. And I think with this legislation, although National supports it, it would have been really useful if we’d got it in faster.

So I would say for those affected by it, organisations like Federated Farmers, although it’s only a short select committee process, I really hope that they do submit on it so that the legislation, if there are still wrinkles in it, can be ironed out. And I would encourage the Government to look at measures like this permanently. So instead of having to wait an additional three weeks for special legislation, actually let’s have some sensible provisions in the Resource Management Act that allow for extreme weather events and doesn’t have to have the event listed. Thank you, Madam Speaker.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Kia ora. First, I’d like to share with my colleagues in a mihi to our bereaved whānau, to our affected whānau, our displaced families and businesses, and also mention the first responders and community volunteers, and all those that are out there fund-raising for the various communities as well. I think, if anything, in this crisis we’ve seen the real backbone of Aotearoa, which is aroha, manaaki, and ngākau. I also want to do a mihi to two big kaupapa that are coming up, which are the Tūtira Mai relief fund that is happening at Pipitea Marae this weekend and another big fund-raising at Hoani Waititi Marae on 25 March. The spirit of Aotearoa has certainly wrapped around the hardship of what everyone is enduring.

To return to the Severe Weather Emergency Legislation Bill, the first reading, we support the purpose of this bill. I have a couple of short things that we’d like to mention alongside that. We understand that it is to improve resilience for the areas affected by the severe weather events and their councils and communities. It’s a practical measure and clearly is needed in the wake of Cyclone Gabrielle to support emergency responses. So we will be, again, as I said, supporting the bill at its first reading.

We have a few concerns. We have not seen mention of hapū, iwi, marae, Māori, or even Te Tiriti o Waitangi either in the Act or this amendment bill. We are therefore calling on the Government to adopt our recently announced policy to recognise a national Māori civil defence framework in the Civil Defence Emergency Management Act. Marae have been outstanding and they are outstanding emergency hubs, and we look forward to seeing this realised and resourced.

Having spent time in devastated communities in Ngāti Kahungunu and Tai Rāwhiti over the past few weeks, we’ve seen firsthand the importance of having aligned resources that get to the ground and get to where they’re needed. I guess what we’ve been really concerned about is we understand there is another bill in the works looking at a wider overhaul of the emergency management system. It’s also being reported that the current Minister is dropping the previous Minister Kiri Allan’s proposal to have Māori representatives with voting rights on the local emergency management groups, and this is a concern, and that there should not be Tiriti obligations—again, this is a concern that the Minister is applying this approach.

We believe that the bill before the House today shows that despite how our people, how our marae act with urgency, that they are the first to stand up supporting all peoples of Aotearoa when responding to natural disasters, that urgency is not applied to us as tangata w’enua in supporting and resourcing our people. Our people need to see the same access to resources and infrastructure as local government, such as access to helicopters, which we saw a lot of comment about. There should be legislative obligations on local and national response groups to engage and resource w’ānau, hapū, iwi, marae, Māori organisations, and community response groups.

Nō reira te āhuatanga o tēnei wero.

[So the nature of this challenge.]

Again, as I said, we support it, but we do hope that there’ll be improvements as the process quickly goes along. Kia ora rā.

Hon MEKA WHAITIRI (Minister of Customs): E ngā mate huhua o te motu kua wehe atu ki te pō, haere, haere, moe mai rā.

[To the many deceased across the country who have departed into the night, farewell, farewell, take your rest.]

I’m pleased to take a call on the Severe Weather Emergency Legislation Bill. But as is our custom, it is important that we acknowledge those that have passed and I want to take the time to name those that have passed through the recent event that we’ve experienced in this country. I want to mention Ivy Collins, two years old, from Eskdale Valley; John Coates, 64, from Te Karaka; Marie Greene, 59 from Puketapu; George Luke, father of the former Kiwi Issac Luke, who died on the Taihape-Napier Road; Shona Wilson, who passed away, from Tūtira; Helen Street, 86, from Onekawa; Brendan Miller, 43, from Matapiro Road, Hastings; Ian Mclauchlan, 76, from Waiohiki; and Susane Caccioppoli, 55, from Eskdale Valley; and on top of that, the two Muriwai firefighters Dave Van Zwanenberg and Craig Stevens. My heartfelt acknowledgment to the whānau of those that have lost their lives during Cyclone Gabrielle.

This legislation is an omnibus bill which addresses and is the first suite of legislative tools to help those most impacted by Cyclone Gabrielle. It involves amending several of the pieces of legislation that the Minister, the Hon Kieran McAnulty acknowledged: the Civil Defence Emergency Management Act, the Resource Manage Act (RMA), and, of course, the Local Government Act. There are two pieces on this bill that we are debating tonight that come under my purview as the Minister for Food Safety, and those are changes to the Food Act and, of course, introducing some changes around the Food Regulations. And those two pieces as part of this bill is really to acknowledge those businesses who would normally register but due to being cut off cannot, and this gives some guarantee, whether you’re in the Far North, in Auckland, in Te Tai Rāwhiti, or Te Matau-a-Māui that you’ve got some protections as a business operator. So that’s why I’m standing in support of this piece of legislation.

But like many, you know, it is a time to reflect that Gabrielle was a massive event in the history of our country. And if we talk about where we were on the 13th, which is where we got the notice, for those that come from Te Matau-a-Māui—and, of course, as the MP for Ikaroa-Rāwhiti, I go from Wainuiōmata right to the very top of the East Coast. And so the heart of Gabrielle really did impact the epicentre of my electorate, which was from Wairarapa up to the very top of the East Coast.

But I was here, on the 13th, because we were supposed to start back in Parliament on 14 February and, of course, the last flight out of Napier—I’m surprised our flight took off because it was not very good weather. Heoi anō, we loaded and we got to Wellington. Early hours that morning, I took a call from my sister. My sister is currently a resident in Awatoto and she only just got her power on three days ago. So for 28 days—and she’s a resident of Napier—no power. These are the realities of many of our communities that come from Te Matau-a-Māui. But I took the phone call that people were evacuating from our papa kāinga, which is not far from where I live—four families—and that they were going to my home. I live in a place called Whakatū, which is in-between Hastings and Napier.

I said, without doubt, take the whānau to wherever you can to help at this time. I was here about to start Parliament. I have an 85-year-old mum and she would have been beside herself knowing what to do to awhi and manaaki our whānau. So I took the decision to get in my electric car and all the way back to Hawke’s Bay I was wondering, why are you driving into a storm with an electric car? But that’s what you do when you want to get home to loved ones; you take whatever you can and I never thought twice and I jumped in my electric vehicle and I stopped at the Pak’nSave at Porirua and I filled as much stores and supplies into my vehicle, because I knew that where I was going there would have been a huge demand and a calamity, as I discovered when I finally got there.

The normal drive from Hawke’s Bay to Wellington on a good day is about a 3½ hour drive for me. It took me most of the day. I left here at 8 o’clock and I pulled in at home at about 6.30 and I was greeted by a very wet whānau. We’d lost power, we’d lost the phone, and for a week we cooked off the barbecue. I was appreciative that we had the barbecue, because that fed the families they had vacated to my whare. But that was a small price to pay considering the enormity of it for many whānau that were impacted by Gabrielle.

So I do want to acknowledge those first responders. I want to acknowledge the three “Navy SEALs” that came to the rescue of Chris Barber and his brother Philip from Eskdale. When these three Māori fellows turned up on the floatable to rescue Chris and his family, he said to them, “Are you the navy?” And they said, “Nah, we’re just three Māori boys.” So now he calls them his Navy SEALs. Of course, there are many important heroes that tuned up to help. I want to also acknowledge Corporal Storm Harrison and Staff Sergeant Davey Forbes, who were actually commanded to go to a place called Glengarry, which is just west of Puketapu, but they chose to actually go into Eskdale Valley and through that, they ended up saving people.

So in times of great tragedy, the human body that I witnessed and saw firsthand on the ground showed that people put other people’s lives before theirs. And it’s important, while we are debating this important piece of legislation, that we don’t lose sight of the human cost that this storm and this cyclone—and past cyclones and future cyclones—is going to be paid. But the resilience of the community—and I was based in Te Matau-a-Māui, in Hawke’s Bay. For 21 straight days that’s where I based myself to ensure our region had what it needed, because I couldn’t get to Tai Rāwhiti, because the roads were closed. So Hawke’s Bay was where I based myself.

And for all those communities that just rallied, that took care of themselves—and I want to especially acknowledge the marae: the maraes of Waipatu, of Te Aranga, of Omāhu, of Waiohiki, of Tangoio, of Pētane, Moteo, Pukemokimoki. They stood themselves up as welfare centres. They didn’t ask for any money, but just did what they needed to do. And they supported whānau, large whānau, large hapū—Māori, non-Māori, our Pacific whānau. They awhi-ed them all because they needed to be awhi-ed. And I want to acknowledge the enormous effort our marae played in this event.

I want to also acknowledge the iwi around the country that loaded containers and ships of kai and resources and just got them to the areas that they needed to get to. And I want to mihi out to all those iwi that took the time to actually provide support and awhi to those areas that needed it the most. Of course, our regional leaders and councils continue to do enormous work and, of course, our growers and farmers. I want to say that they have been hugely impacted and I know this bill will go some way practically for our growers, our orchardists, actually being able to burn trees that they can no longer use because there’s too much silt and they cannot use them. So they need to ensure that the RMA enables them to do that. For our farmers, getting stock out of isolated places where they’ve got no bridges and no roads, and so they’ve got to cross stock either through waterways or in trucks pulled across waterways—that’s why the changes in this legislation are needed, because practically that’s what our producers, our great food producers from Hawke’s Bay, have asked us for.

I’m pleased to say that we’re taking on that plea and this bill will, hopefully, go some way to ensure that our growers and our producers of good food will be able to return back as quickly as they can through this legislation, which is one of a suite of legislation that will be required to get our communities, to get our nation back up on its feet. I commend this bill to the House.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Speaker. At the risk of becoming a little biblical, which I don’t normally do, there is a time and place for everything. This is not a time, in my view, for cheap political point-scoring, and certainly the committee stage of this bill tomorrow will not be a time, in my view, for, again, cheap political point-scoring. It’s time for constructive debate, constructive discussion—and I think there’s time for that, and I’ll get on to that in a moment. So I was very disappointed to hear that sort of thing going on in response to what I think is the reason we came to Parliament.

We came to Parliament to make a difference to people’s lives, and to do it, in some cases, as quickly as we possibly can, and that’s exactly what this bill is endeavouring to enable. We can’t go out and fix the things that have been broken—that’s not our role; we can’t do it—but we can enable those things to get fixed and those people’s lives to be put back together as quickly as we can. That’s the whole aim of this type of legislation. I think, as a Parliament, we should be very pleased to be part of that, and I think we should constructively work our way through in the next 36 hours to make this bill as good as we possibly can. I’m very pleased to be involved in that and have the opportunity to chair the select committee that’s going to run that process through.

And just as another point before I get into the things I want to discuss, I was really interested in Debbie Ngarewa-Packer’s point about iwi. They certainly have had and will have the opportunity to submit on this bill, and numerous iwi organisations have been written to and offered that opportunity; I’m sure they will take that up.

So I think that the feedback we get tomorrow, in the course of those discussions, will be very constructive. I realise the time constraints are significant and some people won’t be able to submit, simply because of that. But none the less, I think we’ll get a very good amount of feedback and I think it will work really well.

The whole aim of this bill—and it’s been mentioned plenty of times in the House tonight, and I don’t really need to go there, but I will very briefly—is to make things much easier for people to put things back together, to pull things apart, and to repair the damage that’s been done.

I think, as we go through this, there’s been enormous trauma on a large number of people right throughout New Zealand, and I think we should acknowledge that. I know Meka Whaitiri did acknowledge that in her speech, and I think that’s a very important part of where we get to with all this stuff.

I was the mayor of the Manawatū at the time of the 2004 floods and would have dearly loved a piece of legislation like this. We didn’t think quite as forwardly in those days as we do now. A piece of legislation like this would have enabled things to happen probably much quicker in the long run.

In response to some of the comment that I’ve heard tonight, I’ve never seen a farmer reluctant to come forward and fix things. Whether they were legally allowed to fix them or not, they’ll fix them and they’ll worry about the response later. I have seen pretty big tractors come out on the road and clear the road in five seconds and worry about the consequences later. I think, on the whole, New Zealanders are pretty much like that. I think, interestingly, our legal system has got more tolerant of that sort of behaviour, because when you live in remote parts of New Zealand, isolated, you don’t have much choice. Some of you would have seen the picture of grapes coming through a river today on the back of a massive great big tractor—well, they’ve got to get them out somehow. I think that’s exactly what this piece of legislation is about: enabling that sort of thing to happen legally and allowing them to get on with life and do what they need to do to make it happen.

I was very interested in—Louise Upston, actually, raised the issue of a piece of legislation like this becoming permanent so that Governments have access to it in the future for future events. Clearly, this piece of legislation can’t become permanent; it’s not designed in that manner at all. But it would be really interesting for the Parliament of the future to look into a piece of legislation that could be plucked off the shelf at a day’s notice, because this is very similar to the legislation put in place—with different wording around the fact that this, of course, is a flood, not an earthquake—to deal with the Kaikōura-Hurunui earthquake. I think it’s well worth considering, for future parliaments, the potential to put in place a piece of legislation that could be plucked off the shelf instantly, and it would have alleviated some of the challenge that Louise Upston was talking about in her discussion on this issue.

I want to acknowledge Minister McAnulty and all that have contributed to getting this piece of legislation to where it’s got to. As I said earlier, the select committee will give it a great deal of consideration. I think the legislation itself, as has been mentioned, is not all that complicated; it’s quite a small piece of legislation, relatively simply, but none the less, there are some improvements that may well be made to it, and, hopefully, the submitters will put those to the select committee tomorrow and enable us, if there is reason to change some small bits of this legislation, to do so.

There will be many people who can’t be helped, I guess, by this piece of legislation. One of the things that I’ve noticed in the top end of my electorate, and certainly in Louise Upston’s electorate, is the massive damage to forestry that’s been done—literally thousands of hectares of forestry just smashed up as though it doesn’t exist. There was no rain of significance in that area, but the winds as a result of the storm have done immense damage to those forests. That’s going to take ages to clean up. There will be some recoverable out of it, but not much. So there’s many, many people that have suffered damage in the course of this event right throughout New Zealand that will never recover all of what they’ve lost, and we can’t hope to put that in place in this House either.

We heard from Minister Wood about his plans to repair roads and infrastructure and to get those operating as quickly as possible. Whilst it seems sensible to attempt to build back better—as we’ve heard that terminology a little bit in the course of this—it’s almost impossible to build back better instantly, because the urgency is to get the road open and to get the house fixed and to get all those things fixed so that people can get on with their lives as quickly as possible. The interesting thing about building back better is that we as a country have got to do a whole lot of work on that because we’ve never really done that work. I’d urge, again, Governments of the future to get on with that job pretty quickly; we can’t do it in the course of recovering from an event like this. That’s got to come later.

I think the really interesting issues that are going to come out of this—and this legislation will again help with that—are decisions around what houses you do fix and what you don’t, what rebuilding we allow and what we don’t, and the other really interesting thing, I think, is when you start to rebuild flood banks or stopbanks, to what level of protection you want to rebuild those to and what the long-term prognosis of rebuilding those stopbanks is going to be. After the 2004 floods in the Manawatū, Palmerston North decided they would run their stopbanks up to a 200-year return period for floods—pretty significant. Interestingly, the recent rain tested a fair bit of that, so we know it works. The problem with that, of course, is you end up like the challenges they had in America, where the stopbanks get bigger and bigger and bigger and bigger, and then where do you go? So there are some big issues like that.

But there are all sorts of solutions that can be put in place to, I guess, alleviate those problems. One of the really big challenges that particularly Hawke’s Bay has—and I know that probably better than the other areas because I have a daughter, some grandchildren, a brother, and a sister all living there; fortunately, not badly affected by this—is that it has some of the most fertile land we’ve got in New Zealand; some of the most highly productive land we’ve got. We can’t really afford to lose it. So we’ve got to find a way of mitigating those challenges. We certainly can’t afford to lose them, nor can the people that live there.

So it’s really important that we not only put the legislation in place to enable the quick recovery, which is what this legislation will do—and some of it might be quicker than necessary. Michael Woodhouse touched on some dates earlier that I think we’ll probably need to look at as a select committee—or may well need to look at as a select committee, as well. But it’s important that we get that in place but it’s equally as important that we get the longer-term planning done as to where we go in the future with this stuff, because there’s no question that all this has happened before, we just didn’t have the built environments we now have around these areas. So when the floods in the 1930s and the 1920s, or whatever, happened, we didn’t have that massive built environment that then caught the water and created a lot of the damage that’s happening now.

So there are some big challenges for all of our regions that are affected by this. There’s certainly some big challenges for our cities that have been affected by it, and particularly Auckland and, of course, Scott Simpson’s very beloved Coromandel. But I think this piece of legislation is really good. Hopefully, tomorrow we can put it in a slightly better place than the Minister’s brought it to us—but who’s to know that? But that’s all I’ve got to say on it, and I look forward to what we get through in the next couple of days.

ANNA LORCK (Labour—Tukituki): Thank you, Madam Speaker. The people of Hawke’s Bay are not interested in politics right now. What they’re interested in—and what they’re seeking—is leadership, and support, and progress to enable us to move forward and start repairing the horrendous damage that has been seen across our region.

I’ve lived in Hawke’s Bay all my life. My family was there on the day of the storm, and I was here in Wellington. I didn’t actually get to speak to my family till late in the evening, where they managed to get me a 15-second phone call to say, “We’re OK.” I think that, for me, really put into perspective how serious and significant this was for friends, family, whānau, and people across Hawke’s Bay, because everyone in Hawke’s Bay knows everybody in some way. We’re well connected.

So in the morning, when I hoped to get home, I heard the news that Hastings and Napier, for the first time, were completely cut off from each other—twin cities that were split up. So I packed a backpack, bought a waterproof raincoat at the airport, and got on the flight and thought, “Gee, I might have to ask Stuart Nash if I can stay with him for a couple of days because I might not be able to get home.”

As I got off the plane, I was one of the first off and I saw Jimmy Guerin, a private helicopter pilot. He was on the tarmac and he saw me and he said, “Anna, do you need a ride home?” And I said, “Thank you.” With that, the aircraft crew came up and said, “Have you got a helicopter?” And I said, “No, Jimmy has.” And they said, “Well look, we’ve got all this blood and supplies that needs to get to Hawke’s Bay Hospital.” So we were able to do something so quick. It was really significant, but enough to make us know that we were helping out.

When I got up on that helicopter with Jimmy and he started to talk about what had happened in the last 24 hours, and seeing what I saw, I had no idea how we were going to even begin to do the work that we have to do—there was just so much water. And this is what this bill is about.

It is about starting to get the progress in a pragmatic way to enable Hawke’s Bay and other regions to start connecting back. One of the most important things that I can bring to the House is to talk about those communities who have helped each other. Communities have helped communities from day dot, when there were no communications; when people had no way to talk to each other. People just had to do what they had to do.

I heard stories from helicopter pilots literally flying from one house to the other, where they would have people on their roofs saying, “Don’t fly,” waving them and saying, “Go there,” because they knew that at the house up the road, there were people in more danger than they were.

I heard how, at the end of the night—when it went dark and they had to stop flying—they were leaving people, knowing that there were people still waiting to be rescued. I can’t even begin to imagine what that was like for those people. We’re talking about older people, we’re talking about families, we’re talking about people who had to hold babies above their heads and walk out to save themselves. But so many people saved themselves, and it is heartbreaking and a time to acknowledge those who have lost their lives—and to their family and whānau who have lost loved ones. But I cannot, still, comprehend how we saved so many people and how many people rescued each other. And that is still something that I think Hawke’s Bay is coming to terms with: how many people we could have lost, but we didn’t.

I just want to acknowledge that, with these isolated communities, there have been Hawke’s Bay heroes. There have been people who have stepped up in leadership, who have done so because they knew that they had to do something. A woman, Isabelle Crawshaw, who has worked relentlessly building with her community and keeping everybody feeling connected, talked about having to say goodbye to her two little children, who were safe but they went and stayed with her mum, so she could get on with looking after everybody around Pātoka. It’s those human stories, where we all are connected in some way, that I think will be shared stories for years and years to come.

I wanted also just to talk about when you are on the ground as local MPs, or, for the MPs that have come in from other parties—and I do acknowledge that too. We do have a job to do, but the job to do is to listen, to bring that information to the House so that we can make better decisions. I visited a grower, in the weekend. They asked me to come out and see them in the Dartmoor area. He’d been a grower for 46 years, and he’s lost everything. He’d be lucky to harvest 10 percent of his apple crop. He was one of the first squash growers in New Zealand, and a kiwifruit grower. And, through all of his devastation, Danny Bearsley said to me, “I want to show you something.” He said, “Look over there,” and he pointed to an area of his farm that had been a maize paddock. And he said, “I reckon this is one of the best places we could dump silt, and I’d suggested that to the Hawke’s Bay Regional Council a couple of weeks ago. But there was a lot going on, and now I’m looking to talk with the regional council this week. We could build a massive hill out of it, but it’s a great place for it.” It’s pragmatic, practical solutions from people on the ground with industry knowledge who are going to come up with ways to help others.

I think, as a local MP, it’s my duty to make sure that when these solutions come up, we champion them, and we make sure that we help growers in the best way possible to get rid of what is a massive, massive, daunting problem. The silt, it is just kilometres and kilometres of it, so I am really pleased that when you meet someone like Danny, even while he’s facing those tough, tough times—Danny, you absolutely think about others as well.

And I’d also like to mention a couple of other growers who have opened their property up to people from all over political parties so that they can come in and they can see the damage. That’s Des and Lesley Wilson. Again, their property has been completely smashed. She talks about—and I think it’s important to hear this—when she woke up, at three minutes past six, she could walk on her lawn, and thought, “Gee, we’ve got over with a few fallen-over trees.” Within 30 minutes, the water was up to here [puts hand to chest]—30 minutes. She turned around and suddenly saw that it had dropped a few inches, and the water started going down. But that’s because the Pātoka bridge down the road had absolutely wiped out. It is at that speed that the water hit, and we have a duty, at speed now, to do everything we can do to help build back and come back and do more for Hawke’s Bay and the other regions. I commend this bill to the House. Thank you, Madam Speaker.

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Hon Jacqui Dean): The question is, That the Severe Weather Emergency Legislation Bill be considered by the Governance and Administration Committee.

Bill referred to the Governance and Administration Committee.

Instruction to Governance and Administration Committee

Hon KIERAN McANULTY (Minister for Emergency Management): Thank you, Madam Speaker. I move, That the Severe Weather Emergency Legislation Bill be reported to the House by 16 March 2023 and that the committee have authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, despite Standing Order 196.

The rationale here is pretty simple, and it’s been articulated well by many contributions in the House: that the contents of the bill and what it proposes to do is urgent in nature. It will assist those that have been impacted by the cyclone, and if we delay, then it will prevent them in their recovery. It could lead to local councils not being able to make decisions. It could prevent local authorities from declaring a local emergency if another severe weather event or natural disaster hits. It could mean that some businesses, through no fault of their own, have to stop trading, and it could also mean that some people get caught out because of administrative time lines, doing emergency works that are required for themselves, their businesses, or their communities. I don’t think anyone in this House wants those things to happen, and therefore what we’ve proposed is that this sit with select committee for a day, come back to the House on Thursday, and then we complete this, so that once it’s passed, they can continue with the recovery with those protections.

I want to take the opportunity to acknowledge other parties in the House, but in particular Chris Penk and Michael Woodhouse for the constructive way in which you’ve dealt with both the Hon Grant Robertson and I around this matter. No one likes rushing things, but we also didn’t want to go through urgency; that wouldn’t have been proper. Through the conversations and the discussions that we’ve had, in a really constructive manner, we’ve been able to find a way through this, and I just want that on record, that it’s appreciated.

Motion agreed to.

ASSISTANT SPEAKER (Hon Jacqui Dean): I declare the House in committee for consideration of the Criminal Activity Intervention Legislation Bill.

Bills

Criminal Activity Intervention Legislation Bill

In Committee

Debate resumed.

Parts 1 to 5 and clauses 1 and 2 (continued)

CHAIRPERSON (Hon Poto Williams): Members, the House is in committee on the Criminal Activity Intervention Legislation Bill. When the committee reported progress, we were considering the question that Parts 1 to 5 and clauses 1 and 2 stand part.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair, for the opportunity to resume the debate. I think that all the parties in the Chamber are on board with the aims of the legislation; others can speak for themselves, obviously—ultimately—as to whether they wish to support it or not. From the National side of things, we’ve made it clear that we do support the aims of the legislation, but, nevertheless, we have been interested to know that the limitations that are imposed on “criminal activity” are reasonable in their scope and the way they would be exercised. So the Minister in the chair earlier—the Hon Andrew Little—talked in terms of safeguards, and he provided a number of different examples of the way that the legislation was designed to avoid overreach by the police and others who effectively would carry out the policy on behalf of the State.

And, actually, I just do mention in passing, as my colleague and friend the Hon Mark Mitchell has done—and perhaps others too—our gratitude to the New Zealand Police force for the difficult and dangerous work that they do. We are grateful to those who have advised the Justice Committee—of which I was a member, I think as a substitute—and certainly, colleagues had the benefit of their advice throughout this process. So, the safeguards that the Minister was talking about—and no doubt his ministerial colleague the Hon Kiritapu Allan will be equally diligent in that regard and respond to any questions we might have.

In my case, I wish to just really point out a safeguard within a safeguard, which is to say the search warrant regime that’s set out in Part 3 of the bill. I mean, if anyone’s looking particularly—it’s clause 20, and its new section 18C, as it will be within the legislation; it talks about the content of the application. So the safeguard that Mr Little was talking about earlier was an application for a search warrant. And, of course, a search warrant is the mechanism by which we can require that those who would be conducting a search do so in a reasonable way, as well as the fact of the search being reasonable in the first place.

So the protection within that that I was quite interested in relates to the grounds on which the application was made, but also the names of any persons other than persons who are gang members of the gang referred to in paragraph (e), whose places and vehicles are proposed to be entered and searched. Because, of course, if a person who owns a place or a vehicle will be subject to a search and they themselves are not particularly intended or expected to be exposed in any sort of criminal activity kind of a way, then that’s something that we should be interested in. But, of course, it might be that a person who has nefarious intentions might have their activity bound up in those places and vehicles none the less.

So if we think about the freedom of association—and in a previous bit of legislation today we were talking about whether “associates” of criminals should be subject to the same strictures or similar restrictions. Well, that’s reasonable to the extent that we don’t want criminal proceeds to be hidden effectively in the name of a family member or whatever. In this case, it’s slightly different, but it’s still that question of freedom of association, because here we’re trying to understand how we can ensure that the policy aim of deterring or detecting criminal activity is met, notwithstanding that it might be on the property—the place or the vehicle—of someone who isn’t actually themselves any kind of wrongdoer. So that’s something that I know that the select committee was careful to avoid having more broadly prescribed than necessary; although I do note a sensible drafting change that they made along the way—no doubt on the advice of officials—whereby it’s the addresses or descriptions of the places proposed to be entered or searched. And, of course, it might be that a physical street address isn’t known, but a warrant application shouldn’t fail only for that reason. If a reasonable description could be made in the application for a warrant, then then it should be good enough, and the Chamber, no doubt, will accept that change and continue to pass the bill.

I’ve got only one or two other comments—perhaps, as the end of a five-minute block is ticking over, I’ll resume my seat. Others might have some other comments, including, of course, the Minister herself.

Hon KIRITAPU ALLAN (Minister of Justice): Look, I’ll just briefly respond. In response to the query from the member, at Subpart 6A in what will be the new clause, 18C(1)(h), the purpose of that particular provision, it’s really to focus on where—if a place is to be searched, or it isn’t owned or occupied, or used by a member of an organised criminal organisation, but instead by a person who is encouraging or assisting with the conflict. So, for example, somebody who might be supplying weapons within that vicinity, and that person must be specified in the warrant. There’s some analysis that’s been done, particularly in light of the Privacy Commissioner’s submission in the departmental report as well, around pages 11 and 12, at paragraph 72 which help elucidate some more of the official thinking there.

NICOLE McKEE (ACT): Thank you, Madam Chair. Minister, I’m going to move to Part 3, at clause 23, where we introduce a new section 160A, relating to the disposal of weapons. It talks about seizing weapons and I guess “weapons” can be all sorts of things. They can be bats, they can be knives, they might even be cars, and quite frequently they’re often illegally held firearms.

This clause talks about the destruction of weapons. It addresses the consent to destruction, and gives the ability for the actual owner of a weapon—whether that be a car, a knife, or a firearm—to apply within 30 days of a destruction notice for that weapon to be released rather than destroyed. The bill goes on at subsection 2—especially at 160A(2)(c)(ii)—that police will decide if there is a legitimate reason to own and possess, and ultimately whether that weapon will be destroyed.

When I spoke to the police at the Justice Committee and I queried about stolen firearms being returned to their legitimate owners, the police indicated that they would automatically check if the firearm has been stolen, and would return that stolen item to its owner. Now, the owner may not realise that their stolen firearm has actually been retrieved and seized by police, so therefore won’t know that they have 30 days in which to apply for the destruction notice to not be valid.

The police have said that they will make all attempts to find the legitimate owner of a firearm, and I’m presuming also of any other weapons that are being seized—perhaps, you know, the car is used as a weapon—and that they would, at that time, ensure that the firearm in this case would be given back to the owner. So I just want to clarify that that is indeed what will happen, and that the section 160A(2)(c)(ii), where police will decide if there’s a legitimate reason to own and possess, is not needed for a firearm owner if they were in legitimate possession when it was stolen at that time.

My concern, Minister, is the potential for police to find a legitimate firearm but then decide that, actually, they don’t want that legitimate owner to possess that firearm. So just seeking clarification, please, that should an illegally held firearm be found and it’s later found that it has been stolen, it will not be destroyed if police can, with due diligence, ensure that the rightful owner receives their firearm back. Thank you.

Hon KIRITAPU ALLAN (Minister of Justice): Thank you to the member Nicole McKee. I know that this is a particular area of interest, given your life prior to your membership of this House, and so these are very legitimate concerns for you and your constituents. I think one of the things that gives me some heart, or, I guess, the safeguard that’s hard-wired into the legislation is there at clause 23, which inserts new section 160A(2)(b). The police must undertake reasonable inquiries to ensure that they can locate the rightful owner, then there is that process by which they go through.

But I think probably getting into the issue that we’re all most intimately concerned about here is that the purpose of this legislation is to ensure that firearms aren’t in the hands of the people whom we all collectively probably agree, in this Chamber, they just shouldn’t be in the hands of. We only need to recall what happened up there in South Auckland towards the end of last year when there was that particular heightened conflict. Firearms—stolen firearms, to the most extent—were the key contributor to undermining public safety in quite a significant way. So the target of this legislation is the unlawful possession of firearms that should never have been in the hands of those that are holding them in the first instance.

NICOLE McKEE (ACT): Thank you, Minister, for answering that. I just now would like to move very quickly to new sections 18E an 18G. Again, just seeking clarification for the viewers that are at home: 18E is about places and vehicles that may be searched on more than one occasion. Minister, if you could, please, confirm that this actually relates not to one single warrant being actioned on one person multiple times, but one single warrant being actioned on multiple people, hopefully at the same time. That’s just for clarification for those people at home. What this actually means is that one warrant may be produced at the time that they are undertaking a search and seizure on one property, but that same warrant is also being produced at other properties at the same time. That’s what that section 18E means.

Further, a clarification to new section 18G, which is that the judge may require a warrant report. This is about a judge actually asking the police to, really, give them back some information as to whether or not the warrant was successful in how it was addressed. But, actually, it comes down to a judge “may” warrant this. So I’d like to know, Minister, should the judge actually ask for that information? Who is collecting that information? Will it be made publicly available so that we can ascertain that the clauses within this bill are being effective correctly? Thank you.

Hon KIRITAPU ALLAN (Minister of Justice): So to the first inquiry, just on the way that new section 18E will operate and function, in effect, it’s a blanket warrant for a period of time that applies to a particular area that can be exercised in one or multiple instances all done under that one warrant. So it’s a confirmation as to your understanding of the way in which that warrant operates.

As to whether or not a judge may require a report, I think there’s probably a couple of factors going on there. I think there will be a period of time where—you know, you’ve got to understand the way in which, are these warrants working as intended? So giving the court the ability to make a call-in report as to where these warrants have been put in place. I guess it provides another check and balance for New Zealanders, because, as we talked about earlier this evening, that rub between upholding the rule of law and making sure that people aren’t undertaking unlawful activities, creating public harm, and undermining public safety versus, I guess, the undermining of freedom of movement and being able to operate freely. This is a part of the many safeguards that I think you see hardwired into this Act to make sure that the State doesn’t overreach in the use of these warrants and must be accountable.

In terms of who will hold that information, it’s the court. The court will hold that information. Now, there’s a range of ways in which that information can ultimately become public, i.e., court proceeding are, by and large, open proceedings—unless there are particularly circumstances, thresholds have to be met, etc., but the beginning presumption is that hearings are opening, they’re public, they’re accessible, and they’re transparent.

Hon MARK MITCHELL (National—Whangaparāoa): Thank you, Madam Chair. To the Minister in the chair, Kiritapu Allan, I understand that—I don’t know if I can refer to this; you can correct me if I’m wrong, Madam Chair, but when Minister Andrew Little was in the chair, he raised an issue that I wish to raise with him. I’m aware that the Minister may not have been in the House and may not have heard what he was talking about, but it related to new section 308A, “Discharging [a] firearm to intimidate”. The argument that he put up is that it’s a lesser charge, it’s not going to be considered quite as seriously as someone that takes a firearm with the intent of harming, shooting, or killing someone. But I’m just interested to really understand the rationale behind that, because we know that if a gang member has got, especially, a high-powered rifle or firearm and their intent is to take that firearm and use it to shoot into a dwellinghouse, then there is a very high chance that someone is going to be seriously hurt or killed with the use of that firearm. It may not even be the intended victim or the intended person that they’re actually trying to threaten or intimidate. The current charge comes with a maximum sentence of five years’ imprisonment. I’m just wondering what the rationale was behind the fact that this wasn’t treated in the same way as someone that picks up a firearm and takes it with the intent of killing or injuring someone.

At the end of the day, you’ve got the actus reus, you’ve got the mens rea. The mens rea, obviously, is forming the intent and the idea in terms of what you’re going to do and what you intend to happen, and, really, although you could put up an argument and say—and we’ve created this argument, of course, for a defence lawyer—that it was never the intent to hurt anyone or kill anyone; quite simply, the intent was just to intimidate or threaten, but, to me, that’s a bit of a nonsense, because if you take a high-powered, military-style rifle and you start shooting into homes, those rounds can pass through not one home but they can pass through two or three homes. So you must have formed the belief, you must have known, that your actions or the results of your actions could’ve resulted in the serious injury or death of people inside that dwelling or even the dwelling next door. So I’m just interested to know: what was the rationale in terms of not going and not recognising and not saying that, actually, this is going to be treated in exactly the same way as if a gang member actually picked up a firearm with the intent of going and shooting someone?

Hon KIRITAPU ALLAN (Minister of Justice): Look, thank you to the member for raising this issue, because it’s one of a matter of distinction, right? So this here, so where you can clearly show that somebody has the mens rea, and then the actus reus, that they’ve followed through and I have the intent of killing you and therefore I’ve gone out and tried to kill you—there are charges that exist for that. This here is to capture a whole suite of incidents that we saw, particularly last year—and it might have been prior to that; forgive my ignorance. But that was certainly the time when I was in office, and you had people with weapons shooting them at homes—not necessarily at people, but into homes or past homes in probably quite an intimidatory way.

When we looked at the suite of the offences to which they might be liable, I mean it was absolutely paltry the charge that came with—it was like a $10,000 fine in particular circumstances. So first we had to lift that up, where if I’m driving past you and do a drive-by—you know, let you know that you should be in danger. I might not be trying to kill you at this point, but bang, bang past your house or over your house. We wanted to introduce an appropriate offence to respond to that type of activity. That said, where there is evidence to support that it was intended to be more malicious than that, we would expect that the police officers would charge them with the appropriate offence for those circumstances.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. Just at the tail end of the bill, as we approach the tail end of the evening: seizure of cash found in suspicious circumstances. So this is the part of the law that will say that someone can’t have dealings in a very large—a suspiciously large—amount of cash, and with all the implications that has for money laundering and, in fact, the Anti-Money Laundering and Countering Financing of Terrorism Act is the bit of legislation it’ll be changing or amending. I’m just interested, to really help put on the record, actually, what the Minister and the Government intends by having the prohibition on certain cash transactions. This is new section 67A, as it will be within the Act, in clause 27. So this is saying a person who is in trade, basically, can’t buy or sell a number of different items if the cash amount received for that would be at a certain level that would be too high. So, first of all, we’ve got a list, and it has jewellery, watches, and then gold, silver, or other precious metals; diamonds, sapphires, or other precious stones; motor vehicles—as defined another piece of legislation—or ships, which is, again, as defined in another piece of legislation.

So if the Minister casts her mind back to law school, she’ll remember the principles of statutory interpretation—I’m probably getting a few reactions around the room as I take people back to those days. Harete Hipango is trying to avoid my eye and, indeed, her own past, not in the sense of any of this kind of activity, I hasten to add, but just in terms of having studied these principles. Anyway, so it’s important when we list things that we understand—or rather that courts will understand—just how broad the legislature intended to be. So I think I’m right in saying that the intent is to really capture as many different kinds of cash or cash-equivalent transactions in that space. So if the Minister is able to confirm, whether that’s tonight or not, that would be helpful.

Then the other comment, I guess, was just in the amount that’s being talked about. So we’re making an offence of receiving the cash. This is not the person who’s obtained it by some other illegitimate method, so it’s quite a serious matter, because we’re saying people can’t even unknowingly be party to allowing money or cash to launder the results, or the proceeds of crime.

There’s a cash seizure threshold—tongue-twister, as it is—and it’s set out to be NZ$10,000 or equivalent cash amount, which is about a shopping trolley’s worth of groceries at the moment. Buying fresh fruit and veggies—anyway, that’s another subject for another day: #CostOfLivingCrisis.

So we’ve got $10,000, and then a bit later on it says, “Oh, by the way, that can be amended by regulation to be more or less than $10,000.” So, basically, it can be any amount by regulation. That’s a bit “Henry VIII” clause-ish, but perhaps there’s a good reason for that. I suppose it’s to guard against inflation, or perhaps the likely nature of the offending and the items that might be traded in this kind of way.

So any comments the Minister can make from that to help set the record straight for any further possible uses of the legislation would be very helpful indeed. Thank you.

CHAIRPERSON (Hon Jacqui Dean): Members, the time has come for me to report progress.

Progress to be reported.

House resumed.

CHAIRPERSON (Hon Jacqui Dean): Madam Speaker, the committee has considered the Criminal Activity Intervention Legislation Bill and reports progress. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Hon Poto Williams): The House stands adjourned until 2 p.m. tomorrow. Pō mārie.

The House adjourned at 9.59 p.m.