Thursday, 1 June 2023

THURSDAY, 1 JUNE 2023

THURSDAY, 1 JUNE 2023

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

GREG O’CONNOR (Deputy 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.

Business Statement

Business Statement

Hon GRANT ROBERTSON (Leader of the House): Next week, legislation to be considered will include the first readings of the Fuel Industry (Improving Fuel Resilience) Amendment Bill and the Sale and Supply of Alcohol (Rugby World Cup 2023 Extended Trading Hours) Amendment Bill; the second reading of the Deposit Takers Bill; and the third readings of the Child Support (Pass On) Acts Amendment Bill and the Health and Safety at Work (Health and Safety Representatives and Committees) Amendment Bill. Wednesday will be a members’ day, and on Thursday there will be a debate on local issues.

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

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

SPEAKER: Petitions have been delivered to the Clerk for presentation.

CLERK:

Petition of SAFE requesting that the House ban the use of colony cages for hens

petition of Josiah Tualamali'i requesting that the House conduct an inquiry into best practice for justice interventions to support young people.

SPEAKER: Those petitions are referred to the Petitions Committee. I present the report of the Controller and Auditor-General entitled Four initiatives supporting improved outcomes for Māori. That paper is published under the authority of the House. Select committee reports have been delivered for presentation.

CLERK:

Report of the Finance and Expenditure Committee on the Auditor-General’s draft annual plan 2023-24

reports of the Health Committee on the:

2021-22 annual reviews of the South Canterbury and Waitematā District Health Boards, and

petition of Marion Maw: Ensure access to ERP therapy for people living with OCD

report of the Social Services and Community Committee on the 2021-22 annual review of the Museum of New Zealand Te Papa Tongarewa Board.

SPEAKER: The draft annual plan is set down for consideration. The Clerk has been informed of the introduction of a bill.

CLERK: Fuel Industry (Improving Fuel Resilience) Amendment Bill, introduction.

SPEAKER: That bill is set down for first reading.

Oral Questions

Questions to Ministers

Question No. 1—Finance

1. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Has he received any advice from Government officials in the past year that included proposals for reducing the income tax paid by New Zealanders; if so, has Cabinet given consideration to any of those proposals?

Hon GRANT ROBERTSON (Minister of Finance): To the first part of the question, as I have previously said, the Government receives a range of tax policy advice during the parliamentary term, and that includes ideas for both reducing and increasing taxes. For the second part of the question, as the member knows, Cabinet discussions are confidential until such time as announcements are made or material is otherwise released.

Nicola Willis: Did he consider including income tax relief in Budget 2023, and, if not, why not?

Hon GRANT ROBERTSON: The Government gave consideration to a wide range of policies in Budget 2023, but, as the member well knows, the Government’s conclusion was that now is not the right time for tax cuts when there is so much pressure on delivering the public services that New Zealanders need.

Nicola Willis: Have Government officials in the past year provided advice on possible new taxes, such as, for example, a tax on unrealised capital gains?

Hon GRANT ROBERTSON: As I said in answer to my primary question, officials provide a wide range of advice across the parliamentary term about a wide range of taxation issues. Any announcements about those would be made by the Government, as the member knows. In the Budget, we made an announcement about the trustee tax rate, and we also have made very clear that there will be no other tax changes in this term of Parliament, beyond those that we campaigned on.

Nicola Willis: Does he think it would be appropriate for Government officials to be asked to work on tax policy for the Labour Party manifesto?

Hon GRANT ROBERTSON: I do not believe that would be appropriate. Any advice that I have sought or have received in my time as Minister is in my role as Minister.

Nicola Willis: Can he confirm no tax proposals were prepared by IRD and taken to Cabinet that will form a part of the Labour Party’s election year manifesto?

Hon GRANT ROBERTSON: I repeat the answer that I’ve just given: any and all advice received by the Government is received by the Government and us as Ministers.

Nicola Willis: Well, then can he assure New Zealanders the Government has not weaponised the Public Service to prepare Labour’s election year tax policy to avoid paying for their own research and policy advice?

Hon GRANT ROBERTSON: I repeat the answers I’ve just given to the previous two supplementaries.

Nicola Willis: Given he won’t give a straight answer, can New Zealanders conclude—

Hon GRANT ROBERTSON: Point of order, Mr Speaker. That statement is completely out of order.

Hon Gerry Brownlee: Oh, what? And none of the comments you make are? Dear Lord!

SPEAKER: When you’re ready, Mr Brownlee, thank you. Starting off a question like that is never helpful. I’m going to rule that question out of order.

Nicola Willis: Why won’t he just be clear and tell New Zealanders that he is considering adding a new tax but that he doesn’t want to tell them until much closer to the election?

Hon GRANT ROBERTSON: We have been very clear that the taxation policy we took to the 2020 election is what the Government is implementing. We were clear in the Budget about what we’re doing on taxation. There is no proposal to do anything beyond that by this Government.

Question No. 2—Cyclone Recovery

2. ANNA LORCK (Labour—Tukituki) to the Minister for Cyclone Recovery: What announcements has the Government made about support for severely affected locations in the wake of the Auckland Anniversary weekend floods and Cyclone Gabrielle?

Hon GRANT ROBERTSON (Minister for Cyclone Recovery): The Government is continuing to support those communities and regions affected with the recovery and rebuild from the recent extreme weather events. Today, we announced that the Government will enter into a funding arrangement with councils in cyclone and flood affected regions to support them to offer a voluntary buy-out for owners of category 3 designated residential properties. We will also co-fund work needed to protect category 2 designated properties. This will help councils get the right solution in the right place and avoid significant financial hardship for property owners.

Anna Lorck: What else did the announcement say about support for severely affected locations following the recent extreme weather events?

Hon GRANT ROBERTSON: What we announced today is that we will work through the details with councils on how the funding of buy-outs for category 3 properties, and support for areas where category 2 properties are, over the coming weeks. We expect to have those details resolved later this month. For properties designated category 2, where community and or property-level interventions are possible to manage future severe weather event risk, the Government will work with councils to help them build flood protection and other resilience measures. The initial support for this is already in place, with $100 million initial funding announced in Budget 2023. People in homes designated as category 3 properties, where future severe weather event risk cannot be mitigated, will be offered a voluntary buy-out by councils, the cost of which will be shared between the Government and councils. Decisions on the details of how the voluntary buy-out process will work will be made in the coming weeks. Issues to consider include the criteria for valuation of category 3 properties, the split of cost between councils and central government, and the treatment of uninsured properties.

Anna Lorck: What other work is the Government doing to support those affected by the recent weather events?

Hon GRANT ROBERTSON: Today’s announcement was about residential properties. We are, of course, continuing to work with sectors, such as the horticulture sector, on possible support for commercial operators, and also on regional plans that will provide overall support for recovery and rebuild. A parallel process is also under way to engage with Māori, including on appropriate processes for whenua Māori. Engagement with those communities will be led by Te Arawhiti, the Cyclone Response Unit, and local councils. This process will ensure that there are equitable outcomes for those communities.

Chris Penk: Thank you, Mr Speaker. With key details not advised today, such as residential housing outside the Hawke’s Bay, how to treat uninsured properties, and the split of costs between councils and central government, aren’t these statements in the nature of an announcement about announcements?

Hon GRANT ROBERTSON: Absolutely not. And to pick up one of the member’s points, the announcements today apply to every region affected. That announcement is that there will be a voluntary buy-out programme led by local councils and financially supported by the Government.

Question No. 3—Housing

3. CHRIS BISHOP (National) to the Minister of Housing: Is she satisfied with the performance of Kāinga Ora?

Hon Dr MEGAN WOODS (Minister of Housing): Yes. I am particularly satisfied with how Kāinga Ora has turned around what was, essentially, a sales unit six years ago into an agency that not only builds thousands of public houses but also has a national urban development function, to ensure that housing is enabled across the housing continuum. Kāinga Ora has built or enabled a gross number of 14,000 houses since October 2017, across public and transitional housing, KiwiBuild, and large-scale projects. Based on current staffing levels, this is one staff member per two houses built or under construction, compared to two staff members per home under construction under the previous Government.

Chris Bishop: With reference to that answer to the primary, and particularly the reference to KiwiBuild, is she saying that the Government’s success in building 2,000 KiwiBuild homes in the last six years is actually a success?

Hon Dr MEGAN WOODS: What I pointed out to that member is that Kāinga Ora is an agency that has turned around from being a sales unit for flogging off State housing to building a Government housing programme that not only contains the record number of State houses built since the 1970s but that also contains market houses and KiwiBuild houses. This is a Government that builds houses, and we are proud of that.

Chris Bishop: Why does Budget 2023 allocate $3 billion to Kāinga Ora and forecast that to build 3,000 houses, at an average cost of $1 million a house?

Hon Dr MEGAN WOODS: The member is simply incorrect in his calculations. What Budget 2023 does is allow a borrowing facility of up to that amount. Of course, if Kāinga Ora were to build 3,000 houses—which it won’t, because the community housing providers will be building some of those—that would be a net number. In order for Kāinga Ora to deliver, say, net 2,000 houses, it actually has to build around 1,000 houses. I compared, before I came down, the construction cost of our community housing providers compared to Kāinga Ora, and, actually, Kāinga Ora has, in the last financial year, delivered two bedroom units at a lower cost than all of our providers.

Chris Bishop: Why does she have any confidence Kāinga Ora will deliver these extra houses on budget when Budget 2023 allocates an extra $7 billion to the agency, which is more than is being allocated for the national resilience plan?

Hon Dr MEGAN WOODS: I have confidence because the operational funding that was allocated in the Budget is for just that: operations. It is the money that is required for the operating supplement and the income-related rent subsidy—something that member is going to have to get his head around, in terms of what a real commitment to public housing looks like.

Chris Bishop: What’s more of a failure: spending $2 billion on KiwiBuild for 2,000 houses or spending $3 billion on Kāinga Ora to deliver just 3,000?

Hon Dr MEGAN WOODS: The member is incorrect in both instances. KiwiBuild has not had to exercise the discounted underwrite on any of the properties. There are 1,700 New Zealanders that are in affordable first homes over six years under our Government, compared to less than 100 under National over nine years. So I will put that record next to theirs any day of the week. And, as I pointed out in previous answers, the member has simply got his mathematics wrong.

Chris Bishop: Is she comfortable with the billions of dollars that Kāinga Ora has borrowed in the last six years, relative to a State house waiting list that has quintupled under her watch?

Hon Dr MEGAN WOODS: I am more than comfortable, because it’s to fix the decimation of a housing programme that happened under nine years of National. Not only did they end up with 1,500 fewer public houses held by either Housing New Zealand or community housing providers than when they started, they failed to deliver. If they had delivered at the rate that we are, we would have 20,000 more State houses in this country. But not only did they sell them off and fail to deliver; they also raided the coffers of Housing New Zealand and took out over half a billion dollars rather than building houses with it.

Question No. 4—Police

4. VANUSHI WALTERS (Labour—Upper Harbour) to the Minister of Police: Talofa lava, Mr Speaker. What progress has been made on the Government’s target of 1,800 additional police officers?

Hon GINNY ANDERSEN (Minister of Police): In 2017, the newly elected Labour Government committed to a target of 1,800 additional police on the front line. New Zealanders told us that they wanted more police in our communities, and we committed to delivering that. So it was with great pride today that I attended the graduation, along with the Prime Minister, of Wing 366, this morning, which now sees police with 10,700 officers—an increase of 21 percent since 2017. With the recent commitment to maintaining an ongoing ratio of one police officer to every 480 New Zealanders, the public can be assured that under a Labour Government, there won’t be a cut to the number of officers keeping our communities safe.

Vanushi Walters: Minister, where are these additional police being deployed?

Hon GINNY ANDERSEN: Let me be clear: every single one of our 12 police districts in New Zealand is better resourced and better staffed today than when we came into office in 2017. The most significant increases in police numbers have been in Eastern District, with 24 percent; Northland, 23 percent increase; Bay of Plenty with a 20 percent increase; and with other districts right around the country receiving, at a minimum, an 11 percent increase in front-line staff. We’ve also significantly bolstered the number of cops working to fight organised crime and gangs, which includes both centralised and specialist ability that can be readily deployed to other districts.

Vanushi Walters: And how has the diversity of the constabulary changed?

Hon GINNY ANDERSEN: More good news: we knew it wasn’t just enough to increase the number of police; we needed to work hard to ensure our police service reflected those communities they serve. That’s why I’m incredibly proud that we’ve had a thousand additional policewomen join, which represents an increase of 61 percent since 2017. We’ve seen more Māori officers increase by 40 percent since 2017, Pasifika officers increase by 83 percent, and Asian officers increase by 157 percent since 2017. I want to thank every single member of our police service for their commitment to their country, and especially to welcome those new recruits who have joined since 2017.

Vanushi Walters: Minister, what other work is supporting the police?

Hon GINNY ANDERSEN: We know it’s not enough to simply have more police on the ground in the communities; we need the right rules and the right tools in order to do their jobs well. That’s exactly why, alongside the 1,800 additional police, we’ve also invested in the tactical response model rolled out nationally. We’ve also invested an additional $94 million into tackling gangs and organised crime, and we’ve changed the law to crack down on gang profits, seize and impound vehicles, and enable targeted powers during gang conflicts. This Government is committed to supporting our police; unlike the austerity of the last Government that saw a decline under real police numbers.

Question No. 5—Economic Development

SPEAKER: Question No. 5, the Hon Michael Woodhouse.

Marja Lubeck: No supp, Mr Mitchell?

Hon MICHAEL WOODHOUSE (National): Thank you, Mr Speaker. My question—

SPEAKER: Oh, be quiet, Marja Lubeck. Sorry about that—the Hon Michael Woodhouse.

5. Hon MICHAEL WOODHOUSE (National) to the Minister for Economic Development: How much money, if any, has been spent on consultants and contractors working on the Government’s Industry Transformation Plans since 1 July 2020, and how much is expected to be spent on consultants and contractors in the next financial year?

Hon BARBARA EDMONDS (Minister for Economic Development): Talofa lava. Fa‘afetai tele lava, Mr Speaker. Industry transformation plans (ITPs) allow the Government, with businesses, workers, and iwi, to help industries become part of a high-wage, low-emission economy. ITPs reflect our strategy in Budget 2023 to strengthen the economy by investing in the basics for growth, skills, better infrastructure, and science and technology. Responsibility for development and delivery of industry transformation plans rests across multiple agencies. For the five ITPs that fall within Vote Business, Science and Innovation, for which I am responsible, approximately $4.6 million has been spent on consultancy services from 1 July 2020 to the beginning of May 2023. Scoping work to deliver on the ITPs over the next financial year is still in progress, so no estimate is available for the second part of his question.

Hon Michael Woodhouse: Can she confirm that that $4.6 million is part of more than $200 million the Government plans to spend on industry transformation plans, and, at a current cost of $75,000 per page, how on earth does this represent good value for money?

Hon BARBARA EDMONDS: What I can confirm is that good value for money is lifting the productivity of the labour market and the environmental performances of key industries, which is essential to underpin higher living standards in the future.

Hon Michael Woodhouse: Well, in that case, does she agree with the chair of the Productivity Commission, Ganesh Nana, who said that ITPs were “very small, not attracting any non-government dollars, and don’t have connections to the researchers”?

Hon BARBARA EDMONDS: What I do agree with is that six of the eight ITPs that have been developed and launched have actions already under way, including through Budget 2023, where $29 million has been invested as a result of the ITP in the agritech catalyst.

Hon Peeni Henare: Can the Minister confirm that the ITP development was done with the sector, the community, the workers, and also Māori and unions to make sure that the planning process was done with sound research and sound information?

Hon BARBARA EDMONDS: Absolutely, I can confirm that industry transformation plans are a partnership both with business, workers, and iwi to help our industries become part of a high-wage, low-emission economy.

Hon Michael Woodhouse: Does she agree with BusinessDesk’s Pattrick Smellie, who said, “If a listed company were to spend whatever has been spent so far on the ITPs to produce as little as they have, shareholders sure as hell wouldn’t be voting them a few tens of millions of dollars to keep going.”, and why did the Government vote itself tens of millions more in Budget 2023 to keep them going?

Hon BARBARA EDMONDS: As I’ve said in my previous answer, ITPs provide a way for the Government and industries to partner to transform industries for the future. You must have a plan in order to plan for the future, as opposed to policy on the hoof.

Hon Michael Wood: Does the Minister agree with the head of the Employers and Manufacturers Association, Brett O’Reilly, who said in respect of the advanced manufacturing ITP, “We know through COVID there was a fresh appreciation of the contribution that advanced manufacturing makes to the New Zealand economy and people’s livelihoods. We need to build on that, and the ITP sets a clear path to achieving the growth and productivity gains our country needs to compete.”? [Interruption]

SPEAKER: Order! I am going to give Government members a warning. Simply standing up and asking a question such as that, and we’ve had two so far, basically almost giving a narrative at the end of them and they’re clearly over—giving the answer to the Minister really is out of order. So I’m going to rule that one out of order.

Hon Michael Woodhouse: Wouldn’t she agree that with millions being spent on consultants and plans at a cost of $75,000 per page, the only industry this Government is transforming is the consultancy industry?

Hon BARBARA EDMONDS: As I’ve said previously, ITPs reflect our strategy to strengthen the industries for the future. Consultancy investment has been crucial to the development of ITPs—for example, research to enable evidence-based decision-making, market reports to provide baseline information and sector insight, and business case development to support large investment initiatives such as the $29 million in Budget 2023 for the agritech catalyst.

Question No. 6—Health

6. MARJA LUBECK (Labour) to the Minister of Health: What announcement has the Government recently made about reducing pay disparity between community and hospital nurses?

Hon Dr AYESHA VERRALL (Minister of Health): Last week, I was pleased to announce that approximately 6,100 more GP community nurses and kaiāwhina will be eligible for pay rises of an average of 8 percent. This will go a long way to addressing pay disparity between hospital nurses and nurses in the community, including GP nurses. This will also lift pay rates for about 1,300 nurses and kaiāwhina who work in Family Planning, Plunket, Well Child Tamariki Ora, school nursing services, mental health and addition, rural hospitals, telehealth, community care services, and the youth one stop shops.

Marja Lubeck: How will this support GP community nurses and kaiāwhina with the cost of living?

Hon Dr AYESHA VERRALL: This significant investment is a major step towards tackling longstanding issues of pay gaps between nurses who work in the community and those who work in hospitals. This incentivises nurses to work in parts of the sector that keep people well in their homes and communities and supports those nurses with the rising cost of living.

Marja Lubeck: When will these increases come into effect for these nurses?

Hon Dr AYESHA VERRALL: This group of hard-working nurses will benefit from this pay boost from July this year. This payment is in addition to the payment that 8,160 nurses and kaiāwhina received under this initiative from the start of April.

Marja Lubeck: How many nurses will benefit from this programme of work?

Hon Dr AYESHA VERRALL: In total, this pay disparity programme has increased the pay of 14,250 nurses and kaiāwhina across New Zealand. I am proud of this Government’s record on valuing this vital workforce. Nurses play a critical role in caring for the health and wellbeing of our community. This is in addition to our action for nurses employed by Te Whatu Ora in hospitals. Since we became Government, graduate nurse base salaries have risen 35 percent from $49,000 to $66,000, and the top base salary for registered nurses has risen 43 percent from $66,000 to $95,000.

Question No. 7—Revenue

7. DAMIEN SMITH (ACT) to the Minister of Revenue: How many people earning less than $180,000 a year with a family trust will pay the 39 percent rate of tax on any income they earn from that trust, and does he think it is fair for someone earning $80,000, such as a hairdresser, mechanic, or butcher, to be subject to the top tax rate if their business is held in a trust?

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue) on behalf of the Minister of Revenue: I am advised that Inland Revenue does not hold the information requested by the member, because it is dependent on how the trust operating the business treats the income—in particular, whether the income of the trust is taxed as trustee income and therefore taxed at the trustee rate, or beneficiary income taxed at the beneficiary’s personal tax rate. Regarding the second part of the question, under both the current law and the proposed changes, trustees have the ability to distribute the income of the trust to the beneficiary to be taxed at their personal tax rate. In the example in the member’s question, the effective income tax rate for someone earning $80,000 is approximately 22 percent, which is lower than the current trust rate of 33 percent. Accordingly, currently the trust would normally distribute the business income to such a beneficiary of the trust to be taxed at their lower personal tax rate. This can continue, in which case the tax change will have no impact on their tax position. Alternative methods to the same effect include payment out by way of salary if the butcher works in her or his business. The substantial effect of the change is to reduce tax avoidance by the wealthy, high-income New Zealanders who do earn more than $180,000 and who otherwise could avoid tax via trusts. [Interruption]

SPEAKER: Order! We’ll hear the supplementary in silence, please.

Damien Smith: Is the Minister aware that in the 2021 financial year, 92 percent of trusts in New Zealand earned less than $180,000, and is he concerned about how middle-income families, small-business owners, and retirees with trusts will be impacted by these proposed tax changes?

Hon Dr DEBORAH RUSSELL: On behalf of the Minister, yes, I am aware of the number of small-earning trusts. In fact, it’s really interesting to know exactly how trustee income is distributed in this country. The top 5 percent of trusts with some taxable income in the 2021 tax year accounted for 78 percent of all trustee income. In fact, most trusts have relatively small amounts of trustee income. The lower 75 percent of trusts with taxable income accounted for only 2.5 percent of trustee income. In fact, of course, with that lower amount of trustee income, if it is distributed to the beneficiaries, then it is taxed at the beneficiaries’ marginal tax rates. It is a fairly straightforward matter to do this.

Damien Smith: Does the Minister recognise that many families put their assets into trusts to protect them from relationship breakdowns or the event of a remarriage, and does he think it’s fair for these families to pay an extra 6 percent or even 9 percent tax for protecting their assets?

Hon Dr DEBORAH RUSSELL: On behalf of the Minister, of course, in order for trustee tax to be paid on income earned by a trust, that trust would have to earn income in the first place. If assets are being placed into a family trust, it is for the protection of the asset, not in order to earn income. Such family trusts, we think, earn very little income. However, it is impossible to tell how much income family trusts earn, because tax law does not make a distinction between family trusts, trusts that are used for business, or trusts that are used for investments and so on. They are all just trusts for the purposes of tax law.

Damien Smith: Supplementary?

SPEAKER: Sorry, the member has run out of supplementaries.

Question No. 8—Whānau Ora

8. SORAYA PEKE-MASON (Labour) to the Minister for Whānau Ora: How is Budget 2023 supporting the kaupapa of Whānau Ora to improve whānau wellbeing?

Hon PEENI HENARE (Minister for Whānau Ora): Whānau Ora has supported our whānau from crisis to crisis, from COVID-19, recent weather events, and currently through tough economic times. The success of Whānau Ora comes down to Government working together with our whānau and community to determine their own wellbeing. Since 2018, this Government has increased the Whānau Ora budget by 145 percent to invest in the kaupapa that lifts whānau wellbeing. This year, we have invested $168.1 million for the next four years. With this funding, we will ensure the Whānau Ora workforce, including our Māori and Pacific providers, are well looked after. We will also ensure we can continue to rise to the increasing demands in the current economic context, supporting thousands more whānau each year to access the support they need and deserve.

Soraya Peke-Mason: How will Whānau Ora support māmā, their pēpi, and their whānau through the funding provided in this year’s Budget?

Hon PEENI HENARE: This year, the Government announced $64.4 million over four years for the Ngā Tini Whetū initiative for delivery across the North Island. This funding is focused on supporting māmā, pēpi, and whānau through the first 1,000 days’ period—a period we know is a pivotal time for whānau, parents, and their child. The first 1,000 days is often determinative of future wellbeing outcomes for whānau, and the initial prototype of Ngā Tini Whetū was a great success. Recently, I attended the launch of reports evidencing this success, which speaks to the power of whānau-led service delivery. This funding allows Whānau Ora to test the Ngā Tini Whetū model with a specific kaupapa of huge importance to whānau.

Soraya Peke-Mason: How will Budget 2023 support the Whānau Ora workforce?

Hon PEENI HENARE: This year’s Budget will provide $35 million over four years to ensure Whānau Ora providers can continue their support for whānau and continue to develop their skills. I’ve seen firsthand the work Whānau Ora kaimahi do across Aotearoa New Zealand, and I am proud to see funding that recognises this extraordinary work. The funding increases will ensure staff wages can reflect performance and living costs. Pasifika Futures, one of the three commissioning agencies, have told me that this recognises the considerable cost pressures that they are currently under, but allows them to continue the important work that their whānau need.

Soraya Peke-Mason: What feedback is the Minister hearing about the announcements?

Hon PEENI HENARE: Hugely positive—with the exception of the other side of the House. The Whānau Ora Budget announcement has been well received. My colleagues and I travelled the motu—which means country—last week and here is some of the feedback. Pasifika Futures say they are pleased to have the amazing work our families and partners have recognised in Budget 2023. Tairāwhiti region says, “Ka nui te mihi, Minita.” These are huge investments for Māori that I believe will only strengthen us as a people and as a community.

Question No. 9—Energy and Resources

9. STUART SMITH (National—Kaikōura) to the Minister of Energy and Resources: Does she agree with the Prime Minister that the tone of the Government’s campaign suggesting New Zealanders take shorter showers is “a bit off”; if so, does she think spending $2.8 million on that campaign is acceptable during a cost of living crisis?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Yes, I agree with the Prime Minister. As I said last week, the Energy Efficiency and Conservation Authority (EECA) are reviewing the material of their regular energy efficiency campaign to make sure the tone is right, particularly during a cost of living crisis. While it is EECA’s job to provide information to the public about energy efficiency, and it does that on a regular basis, I acknowledge that releasing the campaign on the same day as the official cash rate was poorly timed. I note that this energy efficiency campaign happens regularly, and the Energy Spot goes back to 2009, when it was launched by the previous National Government, by then energy Minister Gerry Brownlee.

Stuart Smith: Is she aware that when former Minister of Energy and Resources the Hon Gerry Brownlee ran an energy saving campaign, inflation was as low as 1.7 percent, and can she confirm that when she announced the “Finding Money in Weird Places” campaign, inflation was at a staggering 6.7 percent?

Hon Dr MEGAN WOODS: What I can confirm is that in 2009, when the Energy Spot campaign was launched, of course this was the year that New Zealand went into recession for the first time in a decade, in the wake of the global financial crisis, and GDP fell by 4.3 percent in that year. But I’ve always thought that Gerry Brownlee and I agree on most things, and when it comes to times when households are finding it tough, there can actually be some merit in our agency, which is tasked with educating people on how it is they can save money on their power bills—we are giving just that information on how to save money on power bills.

Stuart Smith: How much money will the average household save by having a shorter shower, and is that more or less than the extra $760 that New Zealanders are forking out in mortgage repayments over the last two years?

Hon Dr MEGAN WOODS: As the member has probably seen, households can save up to $500 across all of the tips that are there. But I do notice—I hold this example from 2009, headed, “Getting out of hot water”, where there was advice for people to reduce their shower time in a household of three—that each minute you add to your shower is about $70 a year. It also told people to wash their clothes in cold water, fix dripping hot taps, and to check the shower floor. The information that was released is very much a continuation of the information that was pioneered by that innovator Gerry Brownlee in his time as the Minister of energy.

Stuart Smith: Does she seriously think that the solution to solving this country’s prolonged cost of living crisis is to lecture New Zealanders about having shorter showers and using their slow cooker more?

Hon Dr MEGAN WOODS: In 2023, the advice that was issued was for people to change the washing machine settings to cold water to save up to about $50 a year. I think this was a little less prescriptive than 2012, when the National Government told people to save energy by using cold water to wash their clothes and other lightly soiled loads. Our Government does not take a position on how soiled people’s washing is. I seek leave to table this example from the 2009 Energy-wise campaign. It is not publicly available. I had to reach deep into the archives of EECA to retrieve this information.

Nicola Willis: Point of order, Mr Speaker. Obviously, we can’t table things that are already publicly available. I’m wondering if that, like the Minister’s brochure, was sent to 600,000 people in full colour, at taxpayer expense?

Hon Dr MEGAN WOODS: Speaking to the point of order, Mr Speaker.

SPEAKER: Yeah—no, you’re not! And that wasn’t a point of order either. We’ll just call that one all and leave it there.

Question No. 10—Housing

10. RICARDO MENÉNDEZ MARCH (Green) to the Minister of Housing: Is she committed to ensuring the Kāinga Ora build programme will deliver enough housing for everyone currently on the waiting list and for projected future needs?

Hon Dr MEGAN WOODS (Minister of Housing): I’m proud of our Government’s record, adding a record number of homes through Kāinga Ora and community housing providers (CHPs) since 2017—more than any other Government since the 1970s. Through Budget 2023, we have also committed both operating and capital funding to deliver an additional 3,000 public homes by June 2025. This commitment provides certainty for Kāinga Ora and CHPs to maintain the momentum that they have built up. As I have previously said, each political party will need to show New Zealand what their delivery plans are ahead of the election and how it fits within their prioritised manifesto commitments. But public housing alone will not solve New Zealand’s housing crisis, and that’s why we’ve invested a massive $3.8 billion in the Housing Acceleration Fund to fund essential infrastructure like roads and pipes, as well as investing $350 million into the Affordable Housing Fund to deliver more affordable rentals, which will also help to reduce the wait-list.

Ricardo Menéndez March: Does she think it is fair to not commit to adequately funding the Kāinga Ora build programme so that everyone on the housing waiting list has a warm, dry, affordable home to live in so she can turn it into an election year political football?

Hon Dr MEGAN WOODS: The member’s characterisation is simply not correct. Our Government, at each Budget, has put additional funding into the operational funding that is required to build State houses. When we came into Government, there was only income-related rent subsidy funding or operational funding for around a thousand additional places. In the time that we have been in Government, we have increased the Budget each and every year to fund increased commitments. I am proud to stand here as a Labour Minister of Housing and say that one in seven of every public houses in this country was built by our Government in the last six years.

Ricardo Menéndez March: Does she agree that it is essential to have a long-term build programme for Kāinga Ora to clear the public housing waiting list, and, if so, why was that not present in the Budget?

Hon Dr MEGAN WOODS: Yes, I do agree, and that is why our Government, at each and every Budget, has put funding in to ensure that momentum can be maintained. When I spend time with both our community housing providers and with Kāinga Ora, in order for them to do the contracting that is required to maintain momentum of the largest State house build in a generation, they need the ability to contract out to 2025. That is exactly what our Government has delivered. Our Government has delivered operational funding for an additional 21,000 public and transitional houses over the last six years in Government. A decade before that, across both our community housing providers and our State house provider, we ended up with 1,500 fewer houses over that decade. What we have done is something I am proud of.

Ricardo Menéndez March: Will the Minister commit to changing the ratio of public versus private homes that are being built as part of redevelopments so that we can clear the public housing wait sooner and ensure that everyone has a warm, dry home to live in?

Hon Dr MEGAN WOODS: One of the things that I spoke about when I spoke at the Community Housing Aotearoa Conference last week was actually about the fact that what I want to see us do in the year that we’ve just funded of the public housing plan is build in those very difficult places, those places where we haven’t built for decades because we do not own the land. It is about rebuilding our public housing infrastructure outside of our main centres. So, no, I won’t commit to that, because I want to see Gisborne have State housing again. I want to see Rotorua have State housing again. I want to see Timaru have State housing again. I want to see Ashburton have State housing again. Making a simple commitment like the member is asking me to do would be short-changing the people in regional New Zealand.

Question No. 11—Commerce and Consumer Affairs

11. LEMAUGA LYDIA SOSENE (Labour) to the Minister of Commerce and Consumer Affairs: Talofa lava lau afioga le Fofoga Fetalai. What announcements has he made about supporting competition and better deals for consumers across the economy?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Talofa lava, Mr Speaker. Three market studies by the Commerce Commission have found concerning use of land covenants: building supplies, fuel, and groceries. Large players in these sectors use land agreements to make sure their competitors can’t locate close by. This tactic obviously has a chilling effect on competition. Using land agreements that dampen down competition for consumers isn’t good enough. So that’s why I’m undertaking a review of anti-competitive land agreements.

Lemauga Lydia Sosene: What are anti-competitive land agreements?

Hon Dr DUNCAN WEBB: These are agreements—

Chris Bishop: Google it!

Hon Dr DUNCAN WEBB: —such as land covenants or lease agreements—this is for you, Mr Woodhouse—that make it harder for an existing or potential competitor to do business. For example, a company selling a gas station might prohibit the land ever being used for another gas station. Another example is where a land purchase agreement requires only building materials from a certain supplier to be used. These agreements suppress competition, and this Government is doing something about it.

Lemauga Lydia Sosene: Why do they matter to Kiwi consumers?

Hon Dr DUNCAN WEBB: Kiwi consumers win when existing businesses compete and when new businesses are able to get off the ground. A competitive market sees different players vying for customers with the best deals on price or the most innovation and products, services, and variety. This Government knows Kiwi consumers deserve the best, and that’s why we will unearth what’s going on in these arrangements and act to ensure the most competitive markets—not just in fuel, groceries, and building supplies but wherever they’re needed in the economy.

Lemauga Lydia Sosene: How can Kiwis get involved in the next phase of the work?

Hon Dr DUNCAN WEBB: It’s time for Kiwi businesses that have experience in anti-competitive land agreements to start thinking about how the system could work best. Shortly, the Ministry for Business, Innovation and Employment will be seeking feedback from anyone with experience and insights into how these agreements are working. With input from businesses small and large, we can determine what arrangements are out there and whether they’re working for New Zealand consumers. Then, unlike the last Government, we can get cracking to get these markets working for all New Zealanders.

Question No. 12—Cyclone Recovery

12. CHRIS PENK (National—Kaipara ki Mahurangi) to the Minister for Cyclone Recovery: How much of the cyclone recovery funding provided to the Hawke’s Bay region for business support grants has been allocated to date, and can he confirm whether any funding that has not been paid out in grants will be returned to the Government?

Hon BARBARA EDMONDS (Associate Minister for Cyclone Recovery) on behalf of the Minister for Cyclone Recovery: Fa‘afetai tele lava, Mr Speaker. On behalf of the Minister, the business support package to help businesses in cyclone-affected regions is led by the local delivery partners, who know the region best, supported by central government through the Ministry of Business, Innovation and Employment (MBIE). The response in each area will be different, and this regionally led approach means the decisions made by the local agencies will be driven by the local needs in their communities. All applicants who have met the criteria have been or will be paid out. I am advised that, for the Hawke’s Bay, $21.6 million of the allocated funding of $30.4 million available to support businesses in the region has so far been paid out to help with clean-up costs from the impact of the cyclone. The grants have been paid to around 1,500 businesses. These figures have not been finalised, with some outstanding grants yet to be fully processed. The policy, as we announced it when we released it, was that any remaining funding that has not been allocated will be returned to MBIE.

Chris Penk: Does the Government seriously believe that the needs of businesses hit hard by Cyclone Gabrielle have been met by the regime they established, and, if not, what is the Government going to do about it, in particular that additional $8.8 million that has not yet been distributed?

Hon BARBARA EDMONDS: The Government absolutely acknowledges that it is a tough time for our affected businesses right throughout the North Island who have been severely affected by these weather events. The distribution of business support grants is made by the local delivery partners and the criteria that was set by MBIE. We will ensure that we are supporting these businesses right throughout the recovery phase of the cyclone, and we will continue to keep a watching brief on it.

Chris Penk: Does the Minister agree with the comments of the Hon Kieran McAnulty that among key factors contributing to the lack of funding delivery is “people’s emotional capacity”, and, if so, does the Minister believe that people’s emotional capacity will be helped or hindered by the lack of distribution of these funds earmarked to support them?

Hon BARBARA EDMONDS: I always agree with my ministerial colleagues, particularly when their comments are made in the context around communicating the support that’s available to them. Right at the beginning of the cyclone, it was a difficult time for a lot of those businesses, and we had a role to play, through local delivery partners, to ensure that we communicated to them how they could access that business support.

Bills

Accident Compensation (Access Reporting and Other Matters) Amendment Bill

Third Reading

Debate resumed from 30 May.

VANUSHI WALTERS (Labour—Upper Harbour): There’s been a bit of a theme in politics over the last week. It’s been a theme of the “nice-to-haves” versus the must-haves. For example, on that side of the House, access to medicine is a “nice-to-have”; on this side of the House, it’s a must-have. On that side of the House, access to contraception is a “nice-to-have”—let that sink in—on this side of the House, it is a must-have. Listening to the debate on this bill on Tuesday evening, it sounded like the Opposition members were saying that the data on who is and who isn’t accessing ACC is just a “nice-to-have”—put out a request and see what you get. On this side of the House, we say that it is a must-have.

I wanted to respond to some of the tensions that I heard in the House on that Tuesday night. The first is: request or require. There’s a core question about whether data is a “nice-to-have” or whether it is a must-have. It’s true that we will not be requiring, through legislation, data about every single aspect of Government, but there are issues where we must know the data, which is why we’re requiring, as legislative directive, for data to be provided in relation to ACC access.

The second question is what sort of data you are requiring and how you require it. Now, what we heard on Tuesday night was that we already have the information; that’s what the Opposition was telling us: “Just request it. Just put it out in your letter of expectation.” But Jan Logie actually responded to this really well. She said that there’s not information about access to all parts of the ACC scheme; there is more research needed. She also pointed out that it is different to require reporting to the House. In short, it is about broadening the content of data that’s coming to us, and strengthening the weight of that data by ensuring reporting to the House.

Finally, I want to talk about operationalising the data collection and reporting. I think it’s very easy for us as parliamentarians here to request a variety of information. What we very rarely think about is how that lands with agency managers on the other side. It is very different, asking a manager for a snapshot or even a period of review, as opposed to creating systems that collect enduring data. There is a very valid reason for putting it within legislation. It allows greater reach and an investment in a robust data set. Data in this area is a must-have. I commend this bill to the House.

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

TAMA POTAKA (National—Hamilton West): Hine tū, hine ora; hine noho, hine mate. Talofa lafa. Taeao manuia aiga. Happy Samoan Language Week.

Look, there have been a few winners this week. Speakers have reincarnated themselves using wondrous fiction and weird hashtag bluster to persuade us of unconvincing statute making - based whakapapa profiling. Aotearoa New Zealand is not built on unbalanced leanings, which the Government seeks to reshape currently using cultural orthodoxy through legislation. No, whānau, it is built on personal responsibility and an absolute aspiration for safety, prosperity, and success—including around accident prevention. Requiring agencies to, and letting departments, pick a specific group in society based on one whakapapa profile and then report on it, no matter how worthy that group is, seems to be a step—nay, a stumble—too far at this point of our young country’s catharsis.

Thanks to my taokete Minita Henare for presenting this bill, which the National Party and I continue to respectfully oppose. Since my last comments on this matter, I’ve been lucky enough not to be involved in any accidents and complete more ACC claims—no injury visits to Peter Hunt, physio, at Central Physiotherapy Clinic on Pembroke Street in Hamilton West; no acupuncture treatment over madam Su’s in my Chiefs brother Jamie Strange’s electorate.

This run of good luck has been enhanced with me declining the recent parliamentary rugby team’s invitation to play the South African Buffalos, or avoiding buffaloes and potholes laced across Whatawhata Road in Dinsdale.

Barbara Kuriger: Hard to avoid the potholes.

TAMA POTAKA: That’s right. The bill seeks to legislatively require the ACC to report annually—yes, annually—on how Māori and other populations are accessing the scheme, and on identified disparities and barriers to access. Why? Why not trust the ACC management team, or do it by ministerial directive or good governance rather than legislation? We could even match it up with the census—if it was reliable.

I wonder how much resource is required—how many more bureaucrats are needed—to run this work stream. Maybe we get one of the big four to provide a framework, a recruitment agency to find more staffers, and a PR company to run a barbecue down at Mount Smart to ask accident questions of Māori punters attending the next Warriors game. The resource implications of the proposed legislation are unclear.

As you know, as one of the few Māori here in the House today—I see Soraya over there; e mihi ana ki a koe te tuahine—I feel like the last butter chicken pie sitting in the BP warmer on a beautiful Te Kūiti afternoon. Everyone’s looking to me to see if I’ve got enough pastry; enough chicken. Or am I dry and pasty instead? Is there something wrong with me? Why force an agency or department to legislatively report on something they’ve previously reported on, voluntarily, between 1982 and 2006 and can do so again with ministerial directives or trust in the actual ACC governance team to do the right thing?

It goes against limited government, it goes against the principle of free and frank advice, and it demands further resource across the whole of Government that is now carrying a very growing and heavy debt burden. Demographic projections reinforce that that debt will be borne disproportionately by the very Māori and their mokopuna who apparently this legislation seeks to protect. Every fanciful idea like this costs money that is funded by more debt or tax that the Government is scheduling—say, a levy on whānau trusts and the very iwi trusts who woke up last week; they’re facing 39 cents.

Folks, I won’t repeat but can reiterate: I don’t need another statistics inquiry about my life when I get injured or about how long my showers are taking—albeit I did have a cat wash last night in the parliamentary gym and missed all the hazardous moments drifting in through that facility. Uncles Woodhouse and Watts refer to this being a well-meaning waste of House time, and I can’t do anything but tautoko that view.

It’s yet to be evidenced that we require a special report, but apparently we need one. Yet women, transgender people, and other population groups do not need a special demographic inquiry and reporting through this legislation. But Māori? Yes, we need a new report. I feel like I’m starting to be a caged animal at the Hamilton Zoo in Rotokauri—studied, researched, and assessed on a regular basis by bureaucrats and perhaps more consultants.

At this moment—in the year of our multi-lingual atua, 2023—spending more money on gathering statistics for statistics’ sake is not good enough. We don’t need another clunky effort to count Māori. What we need are better outcomes by encouraging community-driven efforts through Whānau Ora and other programmes originated through National, or events like Iron Māori or the national Waka Ama Championships, or ACC’s investment arm looking at social bonds based around injury prevention.

I honour my admired and esteemed peer, the Minister for ACC, the Hon Peeni Henare, for his dynamic and honourable vigour in presenting this bill—but oppose it today. As Scribe would say,

You pick me up every time that I fell

When I was going through hell, you told me that I would prevail

In a world of slip, trip, and fall, we don’t need whakapapa profiling legislation to make us better; we need good investment and good governance to prevail. Tōfā soifua. Ka kite.

PAUL EAGLE (Labour—Rongotai): It’s great to speak in the House this afternoon. I was enlightened by—I just heard one phrase there: butter chicken pie. That got me excited! It made me think I need to avoid some of those pie shops down The Parade in Island Bay. Thanks to the previous speaker, Tama Potaka, for highlighting that.

Look, I’m taking a short call on this bill by the Hon Peeni Henare in Samoan Language Week. That made me think—one thing I did do yesterday was I had chat with a good friend of mine Taulalo Fiso, who was in the Accident Compensation Corporation—ACC—prior to 2010. We had a good chat about this. We weren’t there to talk about this, but I knew that I might be talking about this today.

So, look, I just want to reiterate a couple of things for the House in terms of what this bill is going to achieve, and that is to really improve the focus on and the understanding of how people with personal injuries are accessing the ACC scheme and, secondly, to increase the transparency of the levels of access to the scheme—the key point here is to look at, or include, any disparities in accessing the scheme by Māori and identified population groups—and, number three, to give better effect to the purpose of weekly compensation.

That’s something that Taulalo and I had a good chat about, because that’s the key thing in this: it will bringing forward the eligibility for the minimum rate of weekly compensation from that sixth week to the second week of the claimant’s incapacity to work. I think that’s key to this, and it will impact 10,000 New Zealanders. I think that that’s an amazing contribution that this bill will achieve. So I commend this bill to the House.

LEMAUGA LYDIA SOSENE (Labour): It’s a real pleasure to be speaking on this bill, the Accident Compensation (Access Reporting and Other Matters) Amendment Bill. I want to acknowledge that at the time of the drafting of the bill I was not a member of the Education and Workforce Committee, so I do thank the committee for their work and especially the submitters, who took the time to put their views forward.

We’ve heard the purpose of the bill is to improve the focus of and the understanding of how people with those personal injuries can get access to the ACC scheme and have help earlier, but also to improve the transparency and the levels of access to the scheme, because sometimes the very schemes that are there are not clearly understood by many people in our community—because of the languages and the understanding, sometimes, of what they are entitled to. There are disparities in the access to the ACC scheme, specifically for Māori, Pasifika, and other groups.

The amendment bill will give better effect, specifically to the weekly compensation. It is not about the Government being noble—as I heard from other speakers the other evening—but it is the right thing to do to especially allow for those who need compensation earlier, down from the six weeks and that long wait of another four weeks. They can actually receive it in the second week. That is the main change. So it is an important bill. I commend this bill to the House.

SAM UFFINDELL (National—Tauranga): Thank you, Madam Speaker. I always love it when the Speaker pronounces my difficult last name correctly, so thank you for that. All this talk of pies has got me quite excited! I know people say the Prime Minister’s a real pie man. He might be the sausage-roll man, but I love my pies. Paul Eagle and Tama Potaka were talking about them. I just want to admit that I had another one for lunch today, and it was fantastic. On this bill, the Accident Compensation (Access Reporting and Other Matters) Amendment Bill, at its third reading, I’m very glad that I didn’t burn myself with the pie, which is quite fortunate. It was a bacon and egg one. If it had been mince and cheese, it could have been a little bit different!

Paul Eagle: “Always blow on the pie.”

SAM UFFINDELL: Thank you, Mr Eagle, for the advice to always blow on it. I usually do. Thank you for that.

We stand here talking about this bill, and I am just wondering whether there are other things that we could be talking about except for a bill which probably doesn’t need legislation to deal with it. We do note that previously this reporting had been done from 1982 to 2006, when the then Clark Government stopped that. If the idea was to gather statistics, potentially just doing what is necessary to turn that back on could have been the more appropriate way to go about it. We do work through this, though. I note that there is a provision in here to move the compensation back from starting in the sixth week to the second week. In principle, I think that’s probably a fairly reasonable step to take, because, if you’ve injured yourself, whether you’ve burnt yourself with a pie or you’ve twisted your ankle in a pothole and can’t go to work, or you’ve spent too long in a hot shower—six minutes potentially; you’ve got a bit of scalding and you need to take time off work—it’s probably good that you do get those earnings sooner rather than later, especially in the middle of a cost of living crisis, when people are really struggling to pay the rent or pay their new mortgage rates which they have just switched on to.

So I think that is probably a good step in that regard, but I do question why we are here debating something which, as I have mentioned before—whether it really did need a bill to adjust and whether it’s something that could have been adjusted some other way. My colleague, the very astute and always entertaining Tama Potaka, talked about why his whakapapa is the thing that is being looked at and how he feels a little bit affronted about why he’s being treated as another statistic. I won’t comment any further on that other than to recognise what Tama has said. I don’t know if people ever do statistics about me—probably not—but, if they did, I would just like to think that you could collect that information through the channels that were already established. Also, what are you then using that information for? It hasn’t really been shown through this bill that there will be any definitive outcomes through that. There is nothing to show that certain whakapapa have more difficulties accessing ACC.

So I’m at a bit of a loss, and I would think, if you wanted to improve the functioning of ACC, there are probably better ways and better use of the House’s time as well—

Hon Dr Deborah Russell: Such as?

SAM UFFINDELL: —as opposed to pushing through this bill—such as speeding up the bureaucratic process, because we do know that people do spend a lot of time. They call up, they get caught in bureaucratic tangles, they get bounced around on phones, backwards and forwards to Wellington, back to the ACC office. For people who are sitting there, who have recently been injured, and who are looking at a loss of their income, for what would have been up to six weeks, now looking like that will come down to two—

Hon Member: Stick to the bill.

SAM UFFINDELL: Stick to the bill? That is actually in the bill, thank you. It does go from six to two. I appreciate the kind suggestion, but it is here. It’s also in my bill notes; so there you go! For the people there, you could speed it up; there are other ways that we could have used this time, as opposed to producing this. I would really be focusing on the bureaucracy and the operational processes within ACC to make sure that that is being sped up.

These are vulnerable people that we’re dealing with. These are people who have injured themselves. They most likely have dependants or family to look after. They probably don’t have income-continuity insurance, and they are faced with a potential loss of livelihood and all of the negative consequences that come with that. How are they going to put food on the table? How are they going to pay the rent? How are they going to buy the kids’ footy boots? How are they going to do all of those things that they used to do?

Tama Potaka: And inflation.

SAM UFFINDELL: And they are also suffering with inflation. Tama, that is right. Is it not better that we speed up that process instead of wasting all of the parliamentarians’ time—and, no doubt, all of the hard-working officials’ time in ACC, drafting and coming up with legislation that isn’t necessarily required? Shouldn’t we have said to them, “Look, this is what the issue is: it takes far too long to work through stuff. Can you have a look at your operational processes, look at where there’s a bit of wastage, look at where there’s duplication, look at where we could speed things up, and let’s focus on that.”? You know what would also be a really good idea? Let’s look: you’ve got six steps here, for instance—just being hypothetical, Madam Speaker. Shall we look at what’s involved in each of those and then set time targets around that? OK. Do we then want to put some sort of compliance process on top of that? That would then make sure that everyone is hitting those benchmarks, and if they aren’t, what are the remedial processes that we need to implement to make sure that people are working a little bit faster? And, ultimately, the person who’s had the injury is then getting the payment faster, and they’re also not stuck with the uncertainty and stress that they already have by having to spend hours on the telephone.

So I would have liked to see us focus more on that. I note that we haven’t. Our position, on this side of the House, is that we see this bill as unnecessary. We think there are better things that we could have focused on and that we should be prioritising. As a result, we will oppose this bill.

ANGELA ROBERTS (Labour): Thank you, Madam Speaker. It is a real pleasure to stand and take the last of the last calls on the Accident Compensation (Access Reporting and Other Matters) Amendment Bill. There’s something very circular about this conversation in that there’s a feeling of completedness when you can come back to an election manifesto promise and say to the electorate that we have delivered upon it. That’s really important that we can do that.

And it’s really interesting: over the last few days, we’ve started to talk about what we will restore or what we will cut and how things might look. And so it’s really great that this bill is a really good example of how we’ve had—one aspect of this bill is about restoring and replenishing entitlements that have been taken away. And we hear the Opposition talk every day about recommitting to cutting things, and then we have to come along and restore them. And, you know, that’s the tiring and wasteful bit.

I do want to acknowledge the confusion, I guess, about the intent of the data that we are requiring ACC to gather now and the discipline that comes with that requirement. The interesting thing is it was suggested that we should just trust the officials to get on with it. Well, that would be great, except the politicians—it doesn’t matter which side of the House we’re talking about—interfere, and that means that we have had interruptions to what is a really important aspect of data gathering and evidence, which is about it being longitudinal. And so, actually, the really important thing is this helps the officials to start to build a really strong database and it gets the politics out of it. And what it means is that we can return ACC to its original purpose of assisting all New Zealanders who have had an injury, not just claimants. I wish to thank the two Ministers who had helped to shepherd this bill through the House, and I’m very proud to commend it.

ASSISTANT SPEAKER (Hon Jenny Salesa): Fa‘afetai tele lava.

A party vote was called for on the question, That the Accident Compensation (Access Reporting and Other Matters) Amendment Bill be now read a third time.

Ayes 75

New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Noes 41

New Zealand National 31; ACT New Zealand 10.

Motion agreed to.

Bill read a third time.

Bills

Business Payment Practices Bill

Second Reading

Hon GINNY ANDERSEN (Minister for Small Business): I present a legislative statement on the Business Payment Practices Bill.

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

Hon GINNY ANDERSEN: I move, That the Business Payment Practices Bill be now read a second time.

Thank you, Madam Speaker. As the New Zealand economy recovers from COVID-19 and the recent extreme weather events that we’ve seen, particularly on the East Coast, it is more important than ever that we support small-business owners and operators, who are the bedrock of our country’s economy and also so ingrained within our local communities. Timely payment for goods and services delivered is crucial for the financial health of any business, and especially New Zealand’s small businesses. Recent years have seen some improvements in business payment times, but this movement, while positive, is marginal and low. Since taking on the small business portfolio, I’ve heard from many small businesses right across New Zealand that delays in receiving payment are hurting their cash flow, increasing their stress, and inhibiting their business growth.

Larger firms are often set in a position to take it or leave it when making payments and are making use of the advantage of their size. That advantages themselves at the expense of those smaller suppliers. When this happens, small suppliers often feel unable to ask for more reasonable terms, powerless for fear of losing their income. Furthermore, when the bill payer doesn’t meet the terms they’ve agreed to, the small business affected may not be able to do much about it.

Research from Xero is interesting. It says that almost half of all invoices are paid late in New Zealand. Again, the perception of a power imbalance often is too great for the small-business owner to risk upsetting their large customer. If small businesses rely on large payers for a lot of their revenue, they will be anxious not to rock the boat as their livelihood may well be at stake. This is preventing a significant segment of our business ecosystem from realising their full potential. The effects of poor payment behaviours can run through supply chains and have consequences for the broader economy—for example, higher cost on capital or unnecessary insolvencies. In 2019, the Small Business Council reported that, among the big issues facing small businesses, it considered timely payments was top of that list. The council said it had problems with payment practices, and they found that they were particularly difficult to deal with given the current tools available to them and a new approach was needed.

The bill being debated today will deliver that change. The Business Payment Practices Bill will establish a disclosure regime that brings transparency to business, to business payments and practices in New Zealand. Small businesses will have better information to inform their decision making when engaging in new customers. They will be able to decide who they wish to do business with. Large businesses who care about their reputations will want to ensure that their business practices stand up to scrutiny. The bill requires entities with more than $33 million in revenue and $10 million in third-party expenditure to have to disclose information about their payment practices twice each year. The Government needs to lead by example, so the bill will also apply to Government entities just as much as the private sector. Disclosed information will include information relating to payment times, reporting entities, payment terms, and conditions. This information will be submitted and stored on a publicly available, searchable register administered by the Ministry of Business, Innovation and Employment (MBIE). The register will be free for users to access.

I would like to take a moment to thank the people and organisations that took their time to submit on this piece of legislation, and the Economic Development, Science and Innovation Committee for their work that they did on this bill. I am pleased that the committee has unanimously recommended some important changes to make this legislation more effective. These include more clarity on what counts as payment information, more specificity around which reporting entities the new transparency regime will apply to, measures to minimise compliance costs, and a range of technical improvements. I thank them for their work, and those officials that have supported their work to happen as well.

One other important change the committee has recommended was to provide a six-month transitional period before reporting entities must start reporting and collecting this information. I acknowledge that many reporting entities will need to make changes, some of them quite technical, to their payment systems to be able to adapt to the new transparency requirements. This is unavoidable. To make it easier for reporting entities to provide the required transparency, the select committee has suggested that initially only reporting entities with $100 million of annual revenue will need to report. Many of these companies will already be reporting in Australia, which has a similar requirement in place. So they will need to be well placed to extend this transparency to their New Zealand operators, and, to be quite frank, that’s only fair.

The bill provides for the appointment of a registrar who will be responsible for establishing and maintaining the register and the associated compliance and enforcement functions. It will also provide infringements, penalties, and criminal offences for any contraventions of its obligations. The bill’s penalties would, of course, only apply to the most wilful and problematic offending. In Australia, which operates a similar regime, reporting entities were provided with a 12-month compliance holiday before its regime’s compliance tools came into effect. We are not proposing that here, but, none the less, the primary compliance lever will still be reporting entities’ desire to enhance their reputation as good business operators who pay fair terms. Reporting entities that offer good payment terms will want to shout this out from the rooftops, no doubt. The transparency this regime requires will enable them to be able to do that. Favourable comparisons will be made against reporting entities that offer less desirable payment terms or are slow to provide the required transparency.

Important details of the bill will be determined through secondary legislation. Most importantly, the bill’s regulations will specify the exact information reporting entities will need to disclose. MBIE officials are working on those draft regulations now and, to this end, are consulting with stakeholders, subject matter experts in both New Zealand and Australia, where a similar regime is already in place. I’m confident that the regulations will achieve the right balance, making sure that useful information is made available to small businesses while also keeping in mind minimising compliance costs for large ones and enabling the smoothest possible implementation phase. I intend to publish the regulations as soon as possible after the bill receives Royal assent. This will ensure that reporting entities have as long as possible to get to grips with the new requirements and make any required systems or process changes that they need to do to IT systems.

I’d like to conclude by acknowledging the select committee, the department officials, the select committee staff for their hard work, and for all those who took the time to submit on this bill. I commend it to the House.

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

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Speaker. It’s a pleasure to be talking on the Business Payment Practices Bill in its second reading. This is an interesting bill.

First of all, I’ve just got to congratulate the Minister, because this is her first piece of legislation that she’s had to talk about in respect of small businesses. Newly minted, and here she is, up today, little bloop at the start that mucked it up a little bit, but, none the less, trying to put forward a bill for supporting small businesses. And, of course, it wasn’t her idea; this came from her predecessor, the Hon Stuart Nash.

Hon Member: Oh!

ANDREW BAYLY: Oh, Mr Nash, that’s right. So, anyway, the Minister’s got the wonderful opportunity of actually trying to put through a bill that might support small businesses.

And, of course, this is a Government that has just set about killing small businesses. How many things have they done to add compliance costs, to make it harder? Last night, we did the WorkSafe rule: now anyone, even if you’ve got a business with one person, can request a business to set up a health and safety committee and have a representative—one person. So, rather than talk to a boss or something, we’ve now got this situation. And this is just the cascade. We’ve just done the ACC one. There is a cascade of legislation that this Government has set about for the last six years to make it so much harder for small business. And that is the issue. If the Minister actually got out and talked to people, rather than saying she’s been in contact, or whatever, that is the single-biggest issue for small-business owners. They just feel like they’re getting socked all the time. The issue is that they believe that the Government thinks they are just a pile of cash for the Government to go and raid, to take a whole lot of money off them and spend it on a whole load of rubbishy projects, and that’s what’s happened over the last six years.

ASSISTANT SPEAKER (Hon Jenny Salesa): On that note, can the member come back to the bill. Thank you.

ANDREW BAYLY: Yes, I’m very happy to, Madam Speaker. This bill is all about intent, it’s all about being seen to do something for small businesses at the end of a six-year-long period, and it is about trying to work out and assist businesses around business payment systems. The issue is that the bill doesn’t actually deal with the problem.

We are opposed to this bill because, on a number of counts—and it really is a bad piece of legislation to try and deal with the issue of poor payments. We recognise that businesses need to have prompt payments, but this is not the solution to it. We’ve done our best in the select committee to improve it, because we know that this bill will go through the House because Labour dominate Parliament. That’s why we’ve worked very proactively in the committee, and a number of the amendments that the Minister spoke of were generated by National Party members. That’s because, if this thing is to go through, we want to make sure it at least has some reasonable conditions to it to make it try and actually get to some point of being useful. But it will not solve the big issue.

The biggest issue is its focus on large companies. Perhaps, the worst-paying group in New Zealand is actually Government departments. We spend $42 billion as a Government, and if you talk to anyone who has dealings with the Government, actually, Government departments, in the main, are often slow payers. All it would take is for the affected Ministers to tell their departments to make payments on time, and you wouldn’t need a piece of legislation to do that. That’s the first bit.

The other thing is that it’s focused on large businesses. For instance, there are certain agencies that are slow payers, and one of those particularly is the building and construction sector. That is why the National Government changed the rules and implemented some new rules to make sure that contractors particularly were protected when it came to liquidations and those types of events, because that’s really dealing with the nub of the issue.

What this bill requires is large companies—and, often, they are good-paying companies; it’s actually the smaller companies that have got cash-flow problems that are the ones that are slow-paying. It is focused on the large ones, and it requires them, every six months, to send some information in to the Ministry of Business, Innovation and Employment (MBIE), and MBIE are then going to set up a register.

Of course, I start to get a little bit worried at this point, because the reality is, first of all, that such a system has been in place in England and Australia. The Australians put it in place about three years ago and are currently reviewing it because it is not working. In fact, the evidence from Australia that having put this regime in place, which is what this is modelled on, has actually led, on some occasions, to even slower payments occurring to smaller businesses—slower payments; it actually resulted in a worse outcome.

One of the reasons for that—and I think we’ll find out, in time, from the Australian review of it—is that there’s an assumption, because many MPs from Labour don’t actually come from a business background, that every business person sits around in their office in Howick, in Eketāhuna, and in Mataura in the South Island, thinking, “You know, I’m very worried about my business; I’m very worried about how I’m going to get paid. Oh, guess what I’m going to do! I’m going to go on to an MBIE website and have a check as to whether someone is going to pay me on time.” I say to you that the register will be out of date immediately as soon as it’s published. So that’s the first thing: the reliance on data that will be out of date.

The second thing is that business owners don’t sit there waiting to go on an MBIE website to see whether, in fact, that’s the source of truth in New Zealand, because, normally, business people are a lot more busy than that. If you do want to get a credit assessment, guess what, you ring up one of the four credit assessment firms in New Zealand that have been operating for years and that have history of doing it. Centrix put out a survey this morning, and guess what! To get an up-to-date, comprehensive assessment on a business, as of today, is 33 bucks—$33. That’s all it costs, right? But hey presto, MBIE now—and this is what really scared us in the select committee—rather than going and saying to one of those four providers, “Guess what! You’ve got a good service, you’ve been doing it for years, and, actually, you know what you do, because you’re in the business of providing independent credit assessments. Why don’t we contract with you and we might even post some of the data on our website?”—even if they want to run their own website; I’m talking about MBIE—what they want to do is set up their own system.

So we asked some of the own-credit places, “What would it cost to set up a system to do this?” The estimate was $3 million to $5 million. And guess what! IT projects—hmm, yeah, they have a bit of risk and Governments are not particularly good at it, so you could probably assume at least at the top of that spectrum. And then the ongoing costs are about $1.5 million to $2 million. On top of that, MBIE are going to go out and hire a whole lot of people—a big swag of them—because, of course, they’ve got to report every six months; put it on the website. So we’re going to create a new department at MBIE. Why wouldn’t you just go and get the 33 bucks? I think the biggest thing MBIE could do is to tell people where they could go and get an up-to-date assessment.

So that’s the prime stuff. It didn’t work in Australia particularly, and it’s a system that’s going to be Government-run, and, of course, no one follows what Government does when you’re in business, because if you want to go and get something, you go and get the source of truth from the right people.

I think the issue with this whole thing is that we are trying to solve something. What we should have been doing is focusing on is those companies, those industries that have specific issues and dealing with it. I would suggest to you that the Government agencies are the number one that Ministers should have dealt with. But we should also deal with specific sectors. This is a poor outcome. I’ve spoken to a number of the business agencies, and when they start to hear this is going to cost a couple of thousand dollars for small businesses to operate and to do this—this is a poor outcome. That is the reason why we’re opposing this bill.

NAISI CHEN (Labour): Talofa lava. There is nothing more than that speech by Andrew Bayly that tells us who the National Party really cares about. Their interests are in the big players in our economy, in the larger companies, and they don’t want to look after the small businesses that are actually propping up middle New Zealand. They don’t want to look after the interests of our mum and pop businesses; they just want to look after the interests of all big companies, the ones with over $100 million.

I think this bill goes to the heart of the difference in values of the two parties. This is a bill that makes sure that we protect our small companies and businesses, the ones that make up 80 percent of New Zealand companies. It is making sure that they can go to a publicly available register to make sure that, if they’re going to engage with a bigger company, they can see their business payment practices and whether they’ve paid their suppliers on time, and whether they have a good track record.

I do want to thank the select committee as well—the Economic Development, Science and Innovation Committee, the best select committee around here—for making sure that we have worked in the detail during the select committee process as well. As the Minister has already mentioned, we’ve now implemented a six-month transitional period.

But one thing I really wanted to talk about was that $10 million in expenditure threshold to make sure that the big companies that we do see and that have to come in and declare their payment-practice time lines on this register are the ones who actually have a big market share in spending here in New Zealand. We were given some of those examples, in select committee, where it could be a digital company where the majority of their so-called bills will go towards paying people’s wages or paying Government taxes or paying other things, and we wanted to make sure that their suppliers were actually a significant part of the business’s expenditure as well.

So this is a very sensible bill. We’ve made the relevant changes. We’ve listened to submitters, and we’ve listened to small businesses—it was actually their idea—who wanted the bill in the first place. That’s why I commend this bill to the House.

Hon MICHAEL WOODHOUSE (National): Talofa lava, Madam Speaker. Well, I must say I’m surprised and somewhat disappointed by the chair of the Economic Development, Science and Innovation Committee. I have watched Naisi Chen as the chair of that committee, and I thought she was better than that speech, and one of the disappointing aspects of that—and, typically, in a gaslighting sort of theme—is that because somebody doesn’t agree with the solution that is being proposed, they either don’t understand the problem or they’re in the pockets of fat cat business people. I think that’s the most disappointing aspect of what Naisi Chen has just told us, because, actually, the committee worked extremely constructively through this process, and certainly better than was described by that speech.

The select committee now has an even, three-three split on it of three Government members and three Opposition members. Therefore, if some consensus can’t be reached, bills being considered by that committee would be reported back unamended, and, actually, that’s not what we want to do. We want to make sure that we are constructive, even if we don’t support legislation. So the committee has reported back to say that we couldn’t agree on whether the bill should pass, but we bring the bill back in an improved form to allow this place to consider it on its merits, and, as Mr Bayly said, it will pass because the Government has a majority. But we have worked extremely constructively even though we didn’t support the bill.

Now, I will agree with the Minister on the case for change, and this is the point: we understand the problem. I want to quote or paraphrase from the submission that we received from Chartered Accountants Australia and New Zealand, an organisation of which I’m a member. They did survey their members and they said that extended payment terms for members’ clients do “exacerbate cash flow issues, place strain on business relationships and, in some cases, impact business solvency.” Members told them that the power in the relationship tends to reside with the large businesses and their payment practices, despite that, “are unlikely to impact a decision to do business with them.” And that’s inherently the problem: smaller businesses may be aware from their past experience that larger businesses are not good payers, but nevertheless they rely heavily on them for their business and are caught in a—it almost sounds like an unhealthy relationship.

So there is a problem—there’s no doubt about that—and it’s appropriate, I think, that we should be debating this bill hard on the heels of the ACC bill that’s just passed into law, which I described as a well-meaning waste of time. So is this, because it will not achieve the goal it purports to achieve.

Chartered Accountants Australia and New Zealand did cite the international evidence for that very purpose, because they presented that since Australia had put in place a regime—and the Minister describes this as similar to Australia’s. Well, it’s not, really, because the threshold for reporting is much, much higher and their problem was much, much greater. One in four big businesses in Australia is taking more than 120 days to pay their small-business suppliers. They didn’t find that out; they already knew that when they put that regime in place. But the evidence from both Australia and the United Kingdom, who have a similar regime, is that it hasn’t worked.

If the goal was to improve payment timeliness by big businesses, it’s failed; not only that, but in Australia, it’s got slightly worse. So the idea that transparency would be some kind of cash-flow disinfectant for larger businesses so that they might be named and shamed into compliance is actually not borne out by the international evidence.

I’m a bit of a pragmatist: frankly, if it works, do it; if it doesn’t, don’t—particularly when it comes at a cost. As Mr Bayly mentioned, there are significant costs, firstly, on the Crown for the establishment of the regime, the IT platform, and the reporting networks that are required to be got along with that, and, again, we’re not sure exactly what it is because we haven’t seen what the regulations will look like. We certainly have better guidance from the bill coming out of select committee than when it went in, but that’s not the full cost by a long chalk. In fact, the vast bulk of the effort and cost is going to fall on businesses, as usual. Now, one might think that was appropriate if, indeed, it was going to improve things. The international evidence, and my prediction for New Zealand, is that it won’t.

Now, $33 million is the threshold in New Zealand, but, as Mr Bayly said, 33 is a very pertinent number in this regard, because that’s all it takes to get a credit report in New Zealand—$33. For that amount, a small business, who perhaps has not had a trading history with a larger organisation, can get a credit score, company information, credit default information, and any insolvencies and judgments that have been entered against the company or its directors, and it can make credit inquiries—for $33. That is already in place—that’s all this needs.

I would also add that, actually, the problem that we have in this country isn’t as great as Australia’s. The information provided to the select committee was that, while there are problems with credit payment timeliness, it is the Government that is one of the worst offenders, but our average days to pay is actually pretty good. It’s under 30 days—that’s the average. Obviously, there are outliers, but there are also reasons for doing so.

One of the things that the National members on the committee worked hard to do was to make it a little bit more sensible, and we’ve got three concessions that I think are quite important to mention. Firstly, we’re talking about trade supply. The bill wasn’t clear about what on earth we should be asking large businesses to provide in respect of payments, but for a service organisation—take a hospital, for example—about 75 percent of that cost base is going to be staff. If one includes those payments in the calculation, the days to pay are, basically, zero—you’re paid on pay day—and that could materially skew the average credit timeliness data. So wages and salaries had to be taken out. Rent, bank fees, and utility bills—which are always paid, effectively, often by direct debit—could also skew timeliness data. They are now going to be left out. So we’re talking about credit terms on trade only, because that’s really what we want to know: how good is an organisation doing on that?

Disputed invoices: it’s not unusual, and sometimes they can be quite prolonged. Even moderately sized invoices—if they’re taking months to resolve because of concerns about the quality of the work being provided, or whether the service or good has been provided at all, again, it could affect payment term calculations. So they are also being excluded.

We had, as Naisi Chen mentioned—and, in fact, was claiming credit for it in a way—this minimum threshold of when companies are required to report. The original bill specified a minimum of $5 million for all creditor accounts. We got—finally—the committee to agree to go to $10 million for that, because that’s a much better proxy for the trade creditor’s proportion of a company with $33 million of turnover. But I can tell you that it was like pulling teeth to get the Labour members—and, indeed, it needed the perhaps less than idle threat of returning the bill back unamended had this very sensible change not been made, and it was made and suggested because the National members of the committee are accountants and merchant bankers and business owners, not unionists and lecturers.

We did get it in a better shape, so we are bringing it back to this House for its consideration. I thank the submitters, many of whom agree with me that this is a well-meaning waste of time, and we won’t support it. We’ll continue to oppose it. But I can also tell the House that, when the National Government comes into office at the end of the year and it is established that the process won’t work, we will be removing the burdens on small and large businesses that are dead-weight costs on our economy where the costs of doing business far outweigh the benefits to it—and that’s coming very soon.

INGRID LEARY (Labour—Taieri): This change will be good for small business. I’ve been a small-business owner, where I had staff and contractors, between five and 25 people at any one time, and a turnover, occasionally, of more than a million dollars. I learnt very quickly that cash flow is incredibly important to small business, and being across my cash flow was a way, at precarious times, to stay afloat. It was the number one discipline in running a small business. I would have welcomed a scheme like this.

I also worked for an international organisation that quite callously changed its payment terms from one week or two weeks to the four- to six-week minimum—whatever it could get away with. It didn’t matter how that impacted on the trade suppliers; those trade suppliers were a widget in the system when it came to that international organisation, and it made life very, very difficult for them. So I’ve seen the impact from both ends.

I think the National Party missed the point, really, that this is not about small businesses paying money to go and get a credit check; it is about incentivising the right behaviours from big business. What this bill does is it rewards good payment terms. That, in itself, drives good behaviours—that’s the point of this.

The other change, actually, that I don’t think National can take full credit for is the change to the $10 million threshold on expenditure. That was something agreed to by all of us as a committee, and, certainly, as a small-business owner, I understood that making this change and making this scheme proportionate so that it didn’t cast a net a too widely was really important. So we worked very collegially with the members of the other side of the House to make sure that we did have a fit for purpose scheme.

So this is great for small business. I’m not sure why the National Party don’t want to back small business. I’ve been a small-business owner, I know how important cash flow is, and this will make a real difference to small business.

CHRIS BAILLIE (ACT): Thank you, Madam Speaker. I rise on behalf of ACT to speak to the second reading of the Business Payment Practices Bill. I wasn’t in the select committee, but I don’t think it takes much to look through the bill and to see how silly it really is.

The bill’s intention is to improve transparency about business-to-business payment terms and practices, such as the amount of time it takes for entities to pay their suppliers. The bill would require entities to report on their payment practices twice a year if they have revenue over $33 million. And this is where the silliness of the Government is visible to see: revenue over $33 million. Most small businesses employ up to 20 staff, and this bill won’t help them one little bit.

I talk to small-business owners every day and ask them how they have felt they’ve been treated over the last five or six years, and they are hurting; they think that they’ve been treated with utter contempt. And then you ask them, “What about this Business Payment Practices Bill?” and explain it to them, and they just shake their head and laugh. I listened to Mr Bayly before and he had the temerity to mention that very few Labour people have owned businesses. And I heard the outcry—I heard the outcry—but the outcry was all in the past tense: “I used to own a business.” “I owned a business.”—“I owned a business.”

Hon Dr Deborah Russell: That’s because we are MPs. Our job is here.

CHRIS BAILLIE: Try and do it—well, you might need to go back to the business in October, because it is a lot harder—[Interruption]

ASSISTANT SPEAKER (Hon Jenny Salesa): Order!

CHRIS BAILLIE: —to do business now than in the old days. The fact that similar schemes introduced in Australia and the UK have shown no noticeable improvement in payment practices should raise concern, and Ministry of Business, Innovation and Employment officials have admitted that they don’t know the scale of what the issue is. So there might be a chance that business owners actually don’t really want to do this—hurt other businesses and their staff on purpose. The bill is designed to keep up the appearance that the Government cares about small business, but it is actually doing nothing to help. Once again, it is a solution looking for a problem.

When introducing the bill to the House, Stuart Nash stated, “Small-business owners in New Zealand continue to report that delays receiving payments are hurting cash flow, increasing stress levels, and inhibiting their business growth.” It was as if the biggest problem that small business is facing is payment from big business, and it just showed a complete ignorance of what businesses are facing. Small businesses do have cash-flow problems, they have ever increasing stress levels, and they do have many things that are inhibiting their business growth. All of these things have been caused by this Labour Government—a Government that doesn’t understand or care about business and what is required to make this country thrive and so workers can be rewarded for their efforts.

I listened to Minister Andersen’s disingenuous introduction alluding to really caring about business, but we look at the absolute nonsensical wage rises: 44 percent increase in minimum wage and a 7 percent increase in productivity. Extra stat holidays: $450 million to businesses. Extra sick leave: almost $2 billion to business, and where Andrew Little just said, “Oh, it won’t hurt them very much; that’s OK.” The list can go on. All of these additional costs are being sucked up by businesses who have had to continue to try and make a profit to pay their staff. They’ve contributed to our high inflation and the struggle with the cost of living that New Zealanders are dealing with at the moment.

This bill won’t help small businesses a bit. What will help is some common sense and genuine support for those hard-working employers by voting ACT on 14 October, and we don’t support the bill.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Speaker. I just wanted to make a quick reflection, listening to previous speakers on this bill, that it is often those politicians that deride so-called identity politics that will start their statements saying things like “as a merchant” or “as a business owner” and then go and talk about the “woke reign of terror of identity politics”. I don’t really care whether anyone was a previous business owner if they’re perpetuating systems that drive inequities. And I think it’s important to ground our debates in this bill and what this is trying to achieve, which is greater transparency in terms of business-to-business payments, with an attempt to even the scales between big and smaller players.

The Green Party does support the intent of this bill and particularly its attempt to bring forward greater transparency when it comes to this. In terms of alleviating unethical practices from bigger players, I don’t think anyone has said in their speech that this is some form of silver bullet, and when it comes to the practices of the big players, there are many other levers this Government could be using, such as an excess-profits tax, which would actually even the scales even further.

But when it comes to the comments made regarding the select committee, I do want to acknowledge that there obviously were challenges with an even number of people from Government and Opposition when it came to recommending whether this bill would go through or otherwise. But, from what I can understand, both parties were engaging with submitters in good faith, and that ultimately, I think, was one of the key things that needed to happen. So, as I said previously, the Green Party does support greater transparency in business practices and will be supporting this bill.

SHANAN HALBERT (Labour—Northcote): Thank you, Madam Speaker. It’s my privilege to speak on the Business Payment Practices Bill, second reading, this afternoon. Like any good local MP, and there are very many across the House, we all worked hard to engage well with businesses in our electorate. We know that the majority of businesses in our electorates are small businesses, and I’m very proud of the work that this Government has done to support small businesses over what has been a very difficult period and challenging time in the last few years, particularly over the pandemic. But those of us who would have spoken to their small-business owners will know that delays receiving payment are hurting their cash flow, increasing their stress in their business in already difficult times, and inhibiting their business growth.

This bill is about disclosing practices like the amount of time it takes for entities to pay their suppliers. It requires large firms—and we are talking large firms; those with an excess of $33 million annual revenue—as well as Government departments and other large entities, to publicly disclose information about their payment practices. They will need to report on their payment practices twice a year if they have that level of revenue, and that data would be stored and made publicly searchable by the Ministry of Business, Innovation and Employment.

I said that I’m proud of the work I do as the local MP working with my local businesses, ensuring that they get the resources and support from not only our Government but I encourage future Governments to do the same. So I commend this bill to the House.

TAMA POTAKA (National—Hamilton West): Manuia le aoauli. Thank you for the chance to pass comment on this bill. It’s suggested this bill will lead to businesses mitigating reputational risk by improving their business payment practices. We know that New Zealand Aotearoa is a nation of small to medium sized enterprises—97 percent of our companies. They’re doing it tough, coming out of COVID—that lockdown for years in Auckland—coming out of the regulatory chill but getting frozen along the way, finding it tough to get staff with all the immigration bottlenecks in arcane, Orwellian employment legislation. Unless you’re a recruitment or consultancy practice in Wellington, waiting for a call from your local bureaucrat, business can be a tough gig right now.

This piece of proposed legislation is out of touch, out of mind, out of control, and demonstrates the wrong Kiwi SMEs. Apprentices paying for ute taxes for more Tesla subsidies—

Helen White: You’re going to cut those credits too, aren’t you?

TAMA POTAKA: —especially in Central Auckland, Helen. More tax for SMEs running their affairs through trusts. Now more compliance for business—effectively, a new tax; what I’ll call the “B2B” tax.

The real undercurrent of this bill, however, whānau, is more control. Not only does this Government want us to suppress education aspirations or raise more tax from the hard-working people of Hamilton West, it wants to take more charge on business payment practices in a potentially parasitic manner. Our various respective committee members have feverishly paddled the parliamentary waka in a multi-partisan manner, and I appreciate there were some changes made at the Economic Development, Science and Innovation Committee—kei te mihi ki a koutou; massive thanks—but increasing the minimum threshold when companies are required to report was a great idea. I wish you all took it up further—to, say, $100 million.

More compliance for SMEs is just not right, and definitely not right, right now. We could have just amended the Financial Reporting Act. Instead, we’ve sent the destroyer to sink business with the omnipotence of the current Government’s regulatory wave. With the power of majority Government—with 62 members—comes responsibility to be careful with overregulating everything in business. That responsibility, and this piece of legislation, has been wielded in an imbalanced manner and deserves more caution.

Members, if this bill turns into legislation, it will worsen the cost of living crisis. The hard-working people of Hamilton West know it; ditto the people of Papakura, whaea Judith; ditto Tauranga Moana, Master Uffindell—two areas often referred as “Hamilton North” and “Hamilton Far East”, respectively! And I caution the Government around going too far with the dictates of what is right and left—I mean wrong—with business. We’ve seen this in the environmental space, the immigration space, and the collection of injury information around Māori, and, ad nauseum, we see it right down there in the weeds of business payments practice.

My friends and peers, hear ye, hear me, we’re going too far yet again in telling business how to run business. The value of big Government is one that the current Government lives by. And I remind listeners this afternoon that limited Government is something to cherish and behold. But, when you get an imbalance of Kāwanatanga with community and business, when Kāwanatanga, like the factory in The Lorax, just keeps biggering and biggering, we end up in a stylishly squishy and opaque situation never contemplated by my ancestors who signed up to the Treaty of Waitangi. Kao, kei te hē. [No, that’s wrong.]

Of all the problems that face SMEs, this was not one to pick today. We believe SMEs need to be paid on time, but we don’t believe that this bill will achieve its objectives. We’ve seen recent international examples—Australia, UK—where there’s been no discernible improvement in payment terms by big business despite similarities in the regulatory impositions that are proposed today.

The cost for firms, $2,000 or $3,000 over in Aussie. Imagine putting those costs back on SMEs today, here in Aotearoa—another cost; effectively, another tax; I repeat, the “B2B” tax. It would be a lot easier to use one of the credit assessment companies, like Centrix, to assess it in real time—33 bucks.

Whānau, big business should be allowed to run big business. Legislation and .govt.nz should not run big business. The Ministry for Business, Innovation and Employment (MBIE) have stated they don’t know the prevalence of the issue of delayed payment and whether practices are intentionally exploitative. I propose the question: should we be legislating without evidence of the benefits of legislation, or whether the relevant agency is not aware of the scale of the issue?

The MBIE proposal to build its own IT platform to employ people to collate data sounds like another recommendation from a consultant. Was it from one of the big four, an IT consultant? Folks, we can’t even count the number of people in New Zealand on any given night, let alone create another IT ether—like springing a leak in our multi-partisan waka and curtailing any ballast it might have had.

Let’s get New Zealand back on track, people—back on track. Let SMEs use the funds directly and in areas like e-invoicing and technology solutions. Let’s reduce the red tape. And, as I said, way back then in the days of Victoria University law school, when my friend and colleague over there on the other side—I repeat to him today: stop the war on mums and dads, stop the war on communities, and stop the war on business. Kāti rā, tēnā tātou katoa. Kia ora! [Well, greetings to all of us. Thanks!]

TANGI UTIKERE (Labour—Palmerston North): Talofa lava, Mr Speaker. It’s a pleasure to rise and take a call on the Business Payment Practices Bill, which is a bill that will provide for hard-working business owners and will provide for an increased level of transparency. I was sitting here listening to the ACT member Chris Baillie, before—

Hon Kelvin Davis: Oh, you poor thing!

TANGI UTIKERE: —who talked about—yes, it was rather unfortunate, but he talked about the fact that members on this side of the House talk about how they used to be a small-business owner, how they used to be this, and how they used to be that. Well, unlike the ACT Party, we’re not part-time members of Parliament on this side of the House. We prefer to put all of our focus into supporting our communities rather than the ACT Party, who seem to have adopted a part-time approach.

But that to one side, I want to acknowledge the work of the Economic Development, Science and Innovation Committee for the work that they’ve done in bringing some of the changes to the House, changes that look quite sensible: locking in a transition period for this piece of legislation to apply, looking at that first reporting period applying to those entities for which the threshold is a minimum of more than $100 million over a two-year period—actually a two-year consecutive period, according to the select committee’s report. But it also introduces other provisions that make a lot of sense—for example, the entities’ ability to separate or distinguish those invoices that might be in dispute vis-à-vis those that might be paid late. So those are just some examples of some good changes of a hard-working select committee that will make a difference to small businesses and other businesses. I commend the bill to the House.

GLEN BENNETT (Labour—New Plymouth): Kia ora, Mr Speaker. It’s lovely to be here talking about the Business Payment Practices Bill today. As we continue the theme of small-business owners, I was one also. Many years ago, I owned a small coffee business, back before coffee carts were cool. I led the way—don’t take that as a complete fact! For three years, I ran a small coffee cart. It was part of a lot of the other work I was doing, and it was always a challenge in terms of payment, in terms of ensuring that I got through. I would often run events for companies or they’d put on a breakfast and you’d turn up and you’d make them the coffees. It really was a challenge. I wasn’t out to make a lot of money. I was doing other work and also running a social enterprise at the time.

When you look at companies that are slow to pay, I was looking at the facts from Xero saying that almost half of invoices are paid late. That creates stress. That creates uncertainty. If you’re financially on a knife edge, that can make or break things for you, and we don’t want that.

This is good legislation. I was surprised to hear Tama Potaka telling us to stop telling businesses how to run businesses. Well, I would happily do that if they actually paid their bills on time, if they actually did what was right. I’m not sure what this “war on mum and dads” is all about, but I think it’s a war on my vocal chords and my ears, actually, when Tama Potaka was talking.

This is what we are doing. It has been good to be a part of the select committee to work through this, to explore some of the options, to make some changes to ensure that we’ve got it right for the sake of small business and for the sake of all business in New Zealand. Of all businesses in New Zealand, 97 percent are small. They need support, they need us to walk alongside them, and we walk alongside them with this bill.

SAM UFFINDELL (National—Tauranga): Great to rise on a Friday afternoon to speak. I can see the excitement on the other side of the House. I might need a coffee, though, soon, Mr Bennett. I hope you would bring your small business back to Parliament. I’d be very keen to entertain that. I’m not sure whether this bill would’ve actually benefited you, because I’m assuming that the people that came along and paid probably—I don’t know whether any of them would’ve been people that would’ve been captured by this. Whether that would’ve picked up on that, I’m not too sure, mate. But this is targeted at business above $33 million.

I’ll just go back on a comment I heard from Naisi Chen, the third speaker today—

Naisi Chen: Naisi—it’s Naisi.

SAM UFFINDELL: —Naisi, sorry; it’s Uffindell as well, I’ll add that in there—saying that this side of the House doesn’t care for small businesses; we only care for big businesses. I would totally refute that, and I think that’s just another example of gaslighting by this Government. There’s a lot of wastage of gas. You know, you’ve closed the gas searching, but you’re using up a lot of it, and I think this is another example of it, because on this side of the House, we really do care about small businesses, because we understand and recognise that they are the engine of this country. As for saying we only care about the big end of town, I would like to mention that just last week you allocated $140 million to a very big Australian company.

DEPUTY SPEAKER: I didn’t allocate anything, Mr Uffindell.

SAM UFFINDELL: In going back to this bill, for a moment there, you know, we’ve heard the comments that this is not going to solve the problems that the Ministry of Business, Innovation and Employment (MBIE) has defined, and it is noted that it will add substantial compliance costs. That’s one of the reasons that companies out there, small businesses, are doing it so hard at the moment, that they have had an avalanche of costs put on to them.

There have been significant costs, and we could look at the cost of living crisis. People out there—you know, the retail, hospo, tourism businesses—they’re not getting the customers coming through. When I go out there and talk to people, and I do that every time I’m back in my electorate—I go around and visit the small businesses around the great electorate of Tauranga—they tell me that since about March this year, there’s been a real decline in people coming through their doors, and a lot of them are wondering whether it’s even worthwhile going on. That flows on: so they’re not getting the money to pay their suppliers, their suppliers aren’t getting the money to pay whoever it is or whatever their costs are, and it’s just an onward flow that we are seeing under this Government.

That’s before you take into account the significant pressures that small businesses are being placed under. They endured a significant amount of time in lockdown—for my colleagues in Auckland, where I am heading tonight. My mother spent a long time in lockdown—fortunately, she’s not a small-business owner, because if she was, she would’ve really felt the pinch, as a lot of them did. Then you add on to that the other costs they’ve faced around public holidays and additional sick leave, the minimum wage constantly rising, and looking at small businesses like they’re just people who have got endless pits of money and thinking that their job is to deny it from people. I totally refute that, because small-business owners aren’t rolling in cash. They don’t have an additional $2,000 or $3,000 a year to pay to meet the compliance under this.

And you look at what this compliance is going to do. Is it actually going to achieve what the intention of this is? I would significantly question that, I really would, because what you’re getting here is a snapshot. You’re getting two snapshots a year. People were looking at, what, accounts payable or receivable—and I think my colleague Andrew Bayly put it pretty well: are they going to go on to the MBIE website and look at a snapshot in time, which may have been 5½ months ago, and say, “Oh, that’s good. I’ve got a really good understanding of where my business is at and where my creditors are at, or the people that owe me money or whatever it may be—my suppliers.” I’m not sure that it will. In fact, I’d actually be pretty certain that it wouldn’t. An MBIE website that offers a snapshot in time from six months ago is probably not going to be the place that people will go to. In fact, I think Mr Bayly put it pretty well: there are other avenues out there that businesses can already exercise for $33 to get the information that they need, or they may just go and have a look at their own accounting software or, you know what? They might pick up the phone and just communicate to that supplier.

So I’m challenged to understand how this is actually going to improve the lot of small businesses. I’d actually say, as I already have, it’s going to make it a little bit harder for them, because they’ve got another regulatory regime that they need to comply with, several more thousand dollars a year. You know, you’ve got to allocate more time, more cost, and very little output at the end of it.

We note that Australia and the UK have recently implemented schemes like this. Australia did it with a higher threshold of $100 million—ours is $33 million—and Australia is now looking to walk that back, because they are finding out that it isn’t actually achieving what it intended to achieve. Actually, as Andrew Bayly said in his speech, on a lot of occasions it’s leading to slower payments. So, well-intended; worse outcomes. When you see that, you leave me with no option but to oppose this, and I’m glad all the rest of my colleagues have.

We also look at the operational issues around this. I mean, this doesn’t just spring up in a void; you’ve got to set up a new IT platform, you’ve got to hire staffers, you’ve got to keep the operational costs running. I think the initial start-up costs are about $3.5 million, and then you’ve got ongoing maintenance costs of this regime at anywhere between $1.4 million to $2 million a year—just more money dribbling out of this Government and more costs being piled on to businesses.

Glen Bennett: Who’s dribbling?

SAM UFFINDELL: Very good question. I didn’t bring a bib, but we could all get one soon. I will keep going, though. You’re not encouraging me to sit down when you make comments like that.

But we’re a nation of small businesses: 97 percent of our employees are hired by small businesses, and I think it’s really important that we enable small businesses to keep hiring these people. One way that you do that is that you don’t keep lumping them with additional costs. That’s, ultimately, what this bill is going to do, and it’s going to achieve very little to no positive benefits for speeding up the payments to these people. There are far better ways to do it. We have made our case pretty strong today. This reading will be passed through; we understand that, but the National Party will oppose it—so do I. Thank you.

Hon Dr DAVID CLARK (Labour—Dunedin): Well, Mr Speaker, you’d have to be in a pretty dark place to oppose this bill, I think—especially if you believe in markets, because markets are about the provision of information. That’s exactly what this bill does. This bill provides transparency. It gives the market an understanding of who pays their bills on time and who does not. You’d have to be in favour of opacity and against the disinfectant of sunlight to oppose this bill, in my view.

We know, from the last speaker, in fact, that the UK and Australia have already done this; the sky did not fall in. I think it’s kind of embarrassing to be from a party that speaks about the market and economics and to be opposed to something that creates good information so that businesses can make good decisions about who they choose to partner with. On this side of the House, we support the bill, we support transparency, and we’re against the kind of opacity that is being argued from the other side. I’m very pleased to support this bill to the House.

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

Ayes 75

New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Noes 39

New Zealand National 29; ACT New Zealand 10.

Motion agreed to.

Bill read a second time.

Bills

Fuel Industry Amendment Bill

Second Reading

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs) on behalf of the Minister of Energy and Resources: I present a legislative statement on the Fuel Industry Amendment Bill.

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

Hon Dr DUNCAN WEBB: Talofa lava, Mr Speaker. I move, That the Fuel Industry Amendment Bill be now read a second time.

Ensuring we get our regulatory settings right for our engine fuel markets is a key focus for the Minister’s work programme. As a country, we are currently experiencing higher than usual engine fuel prices driven by the Russia-Ukraine conflict. Although these are beyond our control, we can do more to promote competition. In 2019, the Commerce Commission released its retail fuel market study. The commission’s report indicated that fuel companies had been making persistently higher profits over the previous decade than would be expected in a competitive market; that there is limited competition in the wholesale markets; and that that flows through to the retail market. One of the commission’s key recommendations in that report was to create greater transparency by requiring fuel companies to publish wholesale spot prices at fuel terminals.

The Government implemented that recommendation, and the passing of the Fuel Industry Act 2020 saw the introduction of terminal gate pricing for wholesale suppliers to make easier entry at a wholesale level. However, the commission also recommended that a regulatory backstop be introduced to deal with the risk that fuel companies use the terminal gate pricing regime to coordinate prices. The backstop could also address situations where a fuel company could exert market power at a terminal—for example, where the terminal is isolated. The development of the backstop was put on a slower track to avoid holding up the other fuel industry reforms, as there are some complexities in developing an effective backstop. After experiencing high price volatility in 2022, now is the right time to introduce this regulatory backstop to give consumers confidence that increases in fuel prices are not being driven by unreasonably high margins.

The Fuel Industry Act has already contributed to more competition in New Zealand. The terminal gate pricing regime has supported expansion into new areas by low-price retailers such as Gull, NPD, and Waitomo. Gull has publicly stated that, without the Act, it would not be able to competitively source fuel to operate its South Island outlets and to provide competitive tension. The bill supports these trends by providing strong incentives for fuel companies to ensure that terminal gate prices are competitive and by providing insurance against commercial behaviour which chills competition and contributes to higher fuel prices. So, on behalf of the Minister, I want to thank the Economic Development, Science and Innovation Committee for their work and consideration of this bill, and I also want to thank those who took time to submit and provide their feedback.

This bill provides an incentive for wholesale engine fuel suppliers to offer competitive terminal gate prices. It does this by providing a process by which these prices could be regulated by the Commerce Commission after an inquiry and recommendation to the Minister. The Minister could then recommend to the Governor-General that an Order in Council be made declaring a particular terminal gate price subject to price regulation. The Commerce Commission would then be responsible for setting and enforcing a form of the price regulation. This would deter misuse of market power and ensure better competition in the wholesale market, which is expected to flow through to consumers at the pump in the medium to long term. This is a well calibrated process. It is not a return to the price regulation that was seen in days past. This is a new power for the Commerce Commission, and if the market works as it should and in line with what we expect, fuel companies should have every incentive to compete hard and avoid being regulated.

The bill was referred to the Economic Development, Science and Innovation Committee on 22 November 2022. The committee received six written submissions and heard two oral submissions, and I want to thank the select committee for their work on this bill and thank those who submitted. Six amendments to the bill have been recommended by the committee to address matters raised by submitters and advisers and also the excellent Regulations Review Committee. The first was to amend the test for price regulation. The bill currently states that the commission may make a recommendation that price regulation should be imposed on terminal gate prices only if it is satisfied that the relevant wholesale supplier has posted terminal gate prices that were not consistent with what would be expected in a competitive market. To make this test clearer, it has been recommended that the text be amended from “not consistent” to “above”.

The second is to reduce the maximum period of regulation from 10 to five years—this is a recommendation that’s been made—so that it will balance wholesale suppliers’ concern regarding future market conditions while ensuring the regime is effective in terms of improved competition.

Third: to make clearer that the Commerce Commission must consider investment incentives. This change has also been recommended, and it would make it clearer that, when the Commerce Commission sets the price regulation, in considering whether the Act’s purpose is promoted, in making that determination, consideration should be given to determining that the wholesale suppliers’ incentives to invest and meet end-user demands are taken into account.

Fourth: better information-gathering powers for the Commerce Commission. It’s been recommended that one of the Commerce Commission’s information-gathering powers from the Commerce Act should be more broadly incorporated into the Fuel Industry Act. This will allow the Commerce Commission to require comparative information from wholesale suppliers that are not subject to the inquiry and price-setting process.

Also, some better process requirements: two recommendations have been made in that regard—the first, to add a requirement for the Minister to specify a time frame by which the Commerce Commission must make a recommendation after an inquiry is triggered; the second, to clarify a requirement for the Commerce Commission to consult on draft price regulation.

So that was a great select committee process, as always—another great step to a competitive market for fuel in New Zealand. I commend this bill to the House.

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

TODD MULLER (National—Bay of Plenty): Well, what a load of blah, blah, blah we have just listened to this afternoon. I mean, really. I mean, what are we doing having a conversation in this House about additional powers for the Commerce Commission to regulate petrol prices? We have already had a Commerce Commission review that occurred in 2018 and 2019. There are recommendations. The key recommendation that came from that was this requirement to ensure that petrol companies had to advertise the daily price at which they sell petrol to competing retailers, because that was the piece that was missing in terms of forced transparency. So that got passed. We all supported it in the House. And guess what? Since that passed in 2020, there has been improvement in competition. There has been greater price disclosure. In fact, there has been significant growth of NPD and Waitomo around the country. There is not a problem here in terms of no competition; there is more competition, and there is more price disclosure and discretion.

You would think that the Government might actually say, “Well, actually, we’ve done that job; we’ll now turn our attention to”—I don’t know—“building a road, perhaps, or building a house.” It might actually fix law and order or do something that the rest of the country is actually screaming out for. Oh, no. Now, what we’re going to do is we’re going to have another process in which we’re going to tie up Parliament time and tie up select committee time to see if there is an opportunity for the Commerce Commission to have powers under law to set petrol prices. What absolute nonsense. We had six submitters—six submitters—[Interruption] And here they are screaming at the back, going, “Oh, but the petrol prices are too high.”

Yes. Let’s talk about why petrol prices are high. Half of it is product cost. Forty percent of it is your—not your taxes, Mr Speaker, although I’m sure you, like me, find it very, very irksome when you have to pay such a high petrol price. Half of it is product cost; the rest is excise tax and the carbon emissions trading scheme price. But this is their logic of it, right? You cannot argue on one hand, saying, “Oh, the reason we’re doing this is because the petrol prices are high.” Well, the reason for that is because the product cost is high and we have a very high tax regime, including 11c a litre more for those who have the privilege of crawling around in Auckland. But instead of actually acknowledging that that’s the reason for the petrol price hikes, this Government, of course, decides that what’s actually required is even more process, even more bureaucracy, and actually creating the power for setting prices, because regulating prices has always worked in this country!

We have this long history of Governments and products that have worked so well when some Minister and bureaucrat somewhere says, “Oh, I know the better market price than what the market’s showing; let me have a bit of that.”! I mean, sometimes I wonder: where did these guys go to school, Mr Bennett? Where do these guys actually get some understanding around how the market works and how it’s actually structured in New Zealand?

Anna Lorck: I’ve had a lecture.

TODD MULLER: Look, we’ve already had a lecture—it was Deborah Russell before, and I thought that tax response was fantastic! We’re all far more elucidated because of that response earlier!

But, in all seriousness, we have spent a huge amount of time on this in the House. It goes to select committee—we can’t even agree; it’s three all. We come back and the Minister gives—you know, if you were listening, you would try to follow—a sort of a broad assessment of why we’re doing it. We do not need to do it. The competition is clear. NPD and Waitomo have been significantly spreading throughout the country. The Fuel Industry Act 2020 sorted the issue and got the disclosure that was necessary. This is just a Government who doesn’t actually know how to get real things done but instead just obsesses and focuses on process and bureaucracy, because it makes them feel good when they’re in the middle of a bureaucratic process because it gives them a sense of progress. Well, the rest of the country knows that, on the things that matter, they are a failure, and in 140 days’ time, finally, we can chuck this lot out and get some decent Government. Thank you very much.

NAISI CHEN (Labour): Thank you, Mr Speaker. New Zealand is a country of 5 million people. To put that into context, it is the size of New South Wales, across the Ditch, our neighbour state. It is 1.5 percent of the population of the United States of America. It is 0.3 percent of the population of China and 0.4 percent of the population of India. Our population of 5 million means that we have a very small market and that often competition doesn’t happen, because of the sheer size of our market. And that is exactly what this study in 2019 by the Commerce Commission has found. Because we’re such a small market, industries such as the fuel industry, such as the building supply industry, such as the grocery sector industry don’t have a lot of competition in New Zealand. So that is why, when we implemented our first bill, the Fuel Industry Bill, we needed to make sure that there was fuel gate pricing.

What this bill has done here today is make the recommendations by the commission—those who actually go out there and do the market studies; they can actually recommend to the Minister whether or not our market is working, whether or not there is competition, and whether or not New Zealanders ultimately get a fair deal at the pump. This comes after this Government has reduced our fuel tax, reduced our road user charges, reduced public transport charges, and we need to be making sure that all Kiwis get a fair deal at the pump. That is why the Economic Development, Science and Innovation Committee has been working very hard and making sure that this bill has all the details we need to make sure there is competition in our fuel industry. That’s why I commend this bill to the House.

Hon DAVID BENNETT (National): Thank you, Mr Speaker. That last speaker, Naisi Chen, said that she wanted to bring competition to the market, and at the same time she’s saying that we’re too small a market and the Government has to dictate what the price is. So how does that work? How do you bring competition to the market if you, as the Government, dictate the price?

Hon Member: That’s not what it says.

Hon DAVID BENNETT: Well, that’s not how it works. That’s what they’re saying. Those were her exact words. Her last sentence was, “We need competition in the market.” Yet, at the same time, they’re passing a bill in which they dictate the price. So how does that work? How does it work?

Now, the Commerce Commission is one of the evils that we see in this country. The Commerce Commission has got everything wrong it’s ever done in the last 20 years. There has been no decision that that Commerce Commission has made that has been right. They will go and get huge budgets from the Government; they go off and do these silly tricks where they go down and look at things. They never actually come up with anything sensible, and the only times they do something is when they try and block business getting ahead in New Zealand. That is the history of the Commerce Commission in New Zealand. We should not be trusting them with this.

The Commerce Commission need a good shake up. They need it and they haven’t had it for 20 or 30 years, and they definitely need it. I don’t believe we should be empowering them any more than they are empowered now. They are a body that has not been shown to have any economic sense in the last 20 or 30 years. They have stopped many mergers and acquisitions that actually would have been good for New Zealand. They have actually stopped a lot of things that have been in the best interest of this country.

When we need them to actually act on something, they don’t do it. They walk away; they write a report and say, “This is too hard.” That’s the Commerce Commission in New Zealand. And bless their socks. You know, I don’t even know who’s in there now, but they need a bullet and they need to be sorted out and they need to be put into their place because the Commerce Commission has had a really bad history in New Zealand. I believe that this legislation is another attempt to do what is happening in this area.

Hon Kieran McAnulty: Your face says it all, Penk.

Hon DAVID BENNETT: Well, you can talk about that Minister over there that’s just signed off the racing legislation, hasn’t he? Yeah. It was metaphorical, too, and I apologise if anyone takes it the wrong way. But that member has signed off the racing legislation in the last week. We haven’t had an explanation, we haven’t seen that come to the—

DEPUTY SPEAKER: Well, let’s have an explanation of the bill then, shall we, Mr Bennett?

Hon DAVID BENNETT: This is a bill where the Government will have total control, effectively, in setting the price. If it wants to have competition, it doesn’t have total control on setting the price. It should enable competition to actually happen, and that’s one of the things that isn’t in this bill.

So, if the Minister promoting it, and the members of Parliament on the other side, want to push it forward, then they should actually do something about enabling competition in this bill. I’m sorry if I went too far in my comments earlier, but the reality is the Commerce Commission is not the body to do this. But, at the same time, Government regulation like this is not the right approach, either. So the National Party does not support this bill.

GLEN BENNETT (Labour—New Plymouth): Kia ora, Mr Speaker. I’m rising to support this second reading of the Fuel Industry Amendment Bill this afternoon. As someone who sat on the select committee and so was able to listen and learn and know a bit more about the legislation than the other Mr Bennett in the room, I’d just like to highlight, I guess, that for Gull, in terms of for them and the conversation that was had, they’re saying that without this Act it would be completely impossible for them to source and to operate their services in the South Island and to provide that competitive tension down there.

So, if a company like Gull is saying, “We need this”, I’m willing to sit up and listen. They have been disrupters in the market as we’ve seen Gull move its way around Aotearoa New Zealand over the last two decades. When they have moved into places and spaces—for example, New Plymouth several years ago—we see that it did challenge the fuel price within the New Plymouth market.

Being a member of the Economic Development, Science and Innovation Committee—it was a pleasure to be on it—I mean, it was so controversial that we had six written submissions and two oral submissions! Good legislation. No need to talk more on it. It’s clear. I commend this bill to the House.

Simon Court: [Walking into Chamber] Mr Speaker?

DEPUTY SPEAKER: We’ll indulge you, Mr Court, because it’s Thursday afternoon.

SIMON COURT (ACT): Thank you, Mr Speaker. I do appreciate your indulgence. One of the things about being an ACT MP is that there’s only 10 of us, and so that means we have to work much, much harder than any of the other people representing Kiwis. So, if I was late to the House here this afternoon to speak on behalf of ACT on this Fuel Industry Amendment Bill, you must forgive me. But I promise you I do come well prepared.

One of the problems that we have in New Zealand is that we’re a very small country of 5 million consumers at the end of a very, very long supply chain—very, very long supply chain. What that means is that, when we need petrol, diesel, or other liquid fuels like jet fuel, we’re dependent. At one point, it was the Marsden Point Oil Refinery, but now we’re dependent on imports. So we have to look at what is important to New Zealand—affordability of fuels; security of supply, of course—but also, what is the opportunity for businesses that supply into New Zealand to come to their own arrangements with customers so that they get the best value?

Now, when I drive around Auckland, I use an app called PriceSpy. What that tells me—

Hon Dr Duncan Webb: Gaspy.

SIMON COURT: Gaspy. PriceSpy is another tool that you can use to compare the price of consumer goods on the internet. And what Gaspy, or “Gasp-eye”—I’m not quite sure—

Hon Judith Collins: Gaspy, it’s called.

SIMON COURT: —Gaspy, I’m told—tells you is that across Auckland, there is a difference of around 40c a litre between retailers supplying petrol into the Auckland market. What that tells you is there is competition and that consumers who shop around can find a good deal.

Now, what this bill proposes to do is, essentially, establish a regulatory mechanism that would require those who wholesale fuel to New Zealand—so that is, the fuel comes in ships, it’s offloaded, either into fuel storage tanks or maybe taken by truck and trailer to fuel storage depots in other parts of the country—like Hamilton, for example; you know, a bit further away from the ports—and from there, it is distributed to retailers. What this bill proposes to do is to put up a sign outside the fuel depot where all the storage tanks are saying how much the petrol will cost that day.

If I was running a big construction business and I thought, “Crikey, there’s a depot down the road with some storage tanks where I can go and buy diesel at a certain price”, where else could I go and compare that? Well, in Auckland we have the Wiri oil storage terminal; that’s where fuel is stored in Auckland. There’s a few tanks scattered around in other places, like up the Tāmaki River. There’s no more fuel storage tanks down at the Port of Auckland anymore—they’ve all gone from Winyard wharf. So where is the competition in the wholesale market? Where is this practically able to be achieved if there’s only one place in town I can go and pick up diesel if I have a tanker? It doesn’t make any sense to introduce a wholesale regulatory system—or, potentially, force these businesses to publish wholesale prices—when there is no practical way of going and accessing a competitor’s product at a certain price. There is only one Wiri oil storage terminal in Auckland.

Then we think: well, how do businesses and consumers get the best price? Well, if you’re using a very large volume of fuel, if you’re running a commercial trucking business, if you’re running a construction business and you’re putting 200 or 400 litres of diesel into a whole fleet of diggers and bulldozers every day, then you can go to your fuel supplier, whether it be an ExxonMobil or an Ampol, Z, Chevron, Texaco, Waitomo fuels—whoever operates in New Zealand—and you can organise for bulk supply of fuel to your yards, to your depots, and use that in your machines. And I guarantee, if you’re buying $1 million a week, you’re going to get a much better price than if you’re buying 100 litres a month.

What ACT would say is: look, if there is a problem in terms of how much petrol and diesel costs when it’s imported into New Zealand, and if the Government thinks there is an excessive amount of profit being made by these fuel suppliers—when you look at, well, crikey, it can come into New Zealand at about a dollar something a litre but it’s being sold at $2.80—ACT would say the Government needs to look at itself, needs to look long and hard in the mirror, because almost half the cost of petrol at the pump is fuel excise duties, GST, and, of course, charges under the emissions trading scheme (ETS). Everybody who fuels up in New Zealand pays for their emissions—on diesel, petrol, whatever else they choose to use. Jet fuel—I don’t know if they use that in cars; maybe in places like Hamilton and West Auckland, where I’m from! They pay for their emissions—right?—under the emissions trading scheme. It’s somewhere around 18c, 19c, 20c a litre. It might be a bit less now because New Zealanders have found a way to reduce their emissions at a lower price and the ETS price has come down. But almost half the cost at the pump is actually cost imposed through regulation: fuel excise duty—that money taken from motorists at the pump—that’s supposed to be spent on roads, although only about a third of it is spent on capital projects, actually building new bridges and new capacity, new motorways. About a third is spent on operational expenditure, or maintenance of roads, and about a third is shandied off to spend on KiwiRail and bike bridges and all kinds of other things that our Green and Labour politicians like to boast about.

So, look, what ACT would say—it’s quite simple—if the Government was concerned about reducing the price of fuel and making it more affordable, it could do a couple of things. It could stop making stupid regulations that force companies to hold more fuel storage onshore and impose all of those additional costs on them—that are coming through another bill that’s been introduced to the House today: the Fuel Industry (Improving Fuel Resilience) Amendment Bill—which could require these companies to build tank storage all around New Zealand, even though I’m not sure if Labour realises we’re only a few days’ sail away from Queensland and other big refineries in Australia. It could stop punishing Kiwis by spending a whole lot of money on stuff like bike bridges over the Auckland Harbour—$100 million spent on designing and planning a bridge that will never be built.

Hon Julie Anne Genter: It’s not $100 million.

SIMON COURT: It’s not $100 million my colleague and transport planner Julie Anne Genter says, and she does agree with me, it is a total waste of money. We can differ on the nickels and dimes, but it’s a lot of money—it’s a lot of money. If they were to reduce their wasteful spending on transport projects that no one asked for and that aren’t needed, then maybe they could liberate us from the crushing burden of fuel excise duty—and maybe, if we take it one step further and we think about what it would look like to transform the road funding and financing system. In fact, it’s interesting: Julie Anne Genter and I have been getting on so well at public debates that I think it’s probably a good time to start an ACT-Green cross-party alliance on transportation planning! I’m pretty sure that we could do a deal. I’ll give Aucklanders two or four more lanes, and we’ll create an extra lane for Julie Anne to ride her bike when she comes to Auckland. I reckon that’s a pretty good deal! Even Chris Penk, who lives out west, where I’m from, agrees.

But here’s the opportunity: instead of beating up the fuel companies and telling them that they’re overcharging, and threatening to set prices, what the Government could do is say, “Look, we’re going to actually transition from collecting fuel excise duties at the pump to a road pricing system that’s fair, where users of the road network pay per kilometre and per tonnage and how much they’re actually doing damage to the roads if they’re running heavy trucks. We get rid of fuel excise duty altogether, except for the bare minimum. We transition to a system like that over five or six years.” That would give Kiwis time to adapt. That would also reveal the fact that a lot of the money being taken by the Government on fuel excise duty isn’t being spent on roads. ACT would show how you can actually reallocate funds from kilometres travelled back to the roads that need it. We think that’s a much better way. Thank you.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. The Green Party is supporting this bill. I, unfortunately, was not on the select committee that heard the submissions, and we don’t have a member on that select committee, but we did read through the report and the submissions. It was quite interesting to hear that fuel companies, like Gull, are supportive and think these are really important changes.

Just in reference to the debate that’s happening here in the Chamber this afternoon, I do think it’s worth covering some of the territory that the National and ACT parties covered in their speeches, because, I guess, they’re showing their true colours, which is that they’re quite happy to protect corporates profiteering and they want to blame the Government for price rises, even though the Government, basically, invests in things that benefit all of us. So, really, it’s a case of wanting to maximise private profit, in their case, and not social good and public good. They use this mask of pretending to understand economics, and claiming that economics is in favour of the approach that they’re talking about, when, of course, it’s not, because anyone who’s studied economics knows that one of the challenges for a market economy is monopolies, duopolies, and oligopolies. That’s exactly the reason why we need regulation and things like the Commerce Commission.

In fact, if you go way back in time to Standard Oil, it was broken up into multiple oil companies. They’re still able to profiteer and they’re still actually having excess profits at a time when their actions are directly responsible for the catastrophic climate events that are hitting many nations across the world, and that’s something that we need to change. And that’s something that, if you get outside of New Zealand—and I know those members have probably never been outside of New Zealand—it’s, basically, mainstream that people think that it’s not right that big corporates should be making massive profits for trashing the planet. That’s not good for the economy. We need a planet, to have an economy; we need a civilisation. All of that’s under threat from climate change. I guess that their world view is just so limited, but they’re, basically, on the side of big corporate profits and against ordinary people.

So why shouldn’t we cut petrol tax? Petrol tax is what we use to build our public infrastructure and to maintain it. So of course we think it’s OK—if the price of carbon is reflected truly in the price of oil, then the price of oil at the pump will rise, but if it’s going towards a public good, which means that people know that the Government is investing in alternatives that are going to make it possible to get around their community without having to rely on a car and oil, then that’s a good thing.

That’s precisely why it makes sense to use the National Land Transport Fund to invest in things like the lower North Island rail improvements, where there was a business case that the benefit-to-cost ratio was well above one; it was almost two. So you get a benefit from that. The majority of the benefits were to people using the roads. So I know it’s hard to understand a system where you don’t need to use the train to benefit from it. In fact, there were greater benefits happening for the people who use the roads, because other people were, then, not using the roads; they were using the train. The single-biggest imposition on people trying to drive a car is other people driving cars. So, if you can reduce the other cars on the road, that’s how you’re going to make the biggest difference to people who need to use a truck or a car to get somewhere.

So, yeah, to bring it back to this bill, this is an important role for the Government and for the public to take, to make sure that people aren’t being price gouged. We should be proud and happy to invest in our public infrastructure and taxes, so that’s why I was surprised to hear the National Party member being against the idea of—he’s for the fuel companies making excess profits, which, of course, we know they were, but he’s not for investing in our roads, in our road maintenance, and in our road safety; or better yet our rail network, which provides benefits to the road network and to the climate and to the people who use it.

So I think that’s fundamentally the difference. We need to call out the fact that the language of economics that’s being used to defend an approach that’s really about letting a small number of people make excess wealth and excess profit and get more than their fair share, rather than all of us working together for things that benefit us all. That is the fundamental difference. I hope that those watching this debate at home can see through the very shallow lines from National and ACT. Like, if they get into Government—

DEPUTY SPEAKER: Well, let’s just let the people at home know what’s in the bill, shall we?

Hon JULIE ANNE GENTER: Yeah. Well, what is in the bill, Mr Speaker, as we’ve been talking about, is some really important implementation of recommendations from the Commerce Commission that’s going to result in, hopefully, fairer fuel prices. But it’s important to acknowledge that, yes, some of the fuel price is fuel excise duty and tax, and that’s a good thing because that’s what enables us to fix the safety of the roads, to maintain the roads, and to build new transport infrastructure.

So it’s good when you’re paying the fuel price and you know it’s going towards something you will use or that may well benefit your community; that’s good. But do you want to pay it to offshore shareholders? No. You don’t want to have to pay more than you have to to offshore shareholders.

The whole point of the Commerce Commission is to try and make sure that we do have fair pricing. But the National Party, of course, are the defenders of the monopolists and the corporate raiders and they’re all for excess profit going into private hands. Privatise the benefit, socialise the losses—that is the approach of the right, and they will use an excuse of economics to defend it, when they do not understand economics in the least. They don’t share the values of public benefit, public good, all of us pitching in together, all of us working together to solve the climate challenge.

STEPH LEWIS (Labour—Whanganui): Thank you, Mr Speaker. It is my pleasure to rise and take a call on the Fuel Industry Amendment Bill.

I’m a bit confused. Does the National Party support transparency and want transparency, or do they not want transparency? Because surely if they were genuine about wanting transparency, they would support this bill—but they’re not. So I want to put it on record to the small-business owners and business owners, to the individual families struggling in Whanganui right now, that National are voting against a bill which would introduce greater transparency to the fuel market; which would mean that we would finally have an answer as to why we are having to pay 30c to 40c a litre more at the pump than towns 20 minutes down the road.

Because, to date, nobody can answer that. It’s not due to fuel excise and it’s not due to transport cost. It does not cost 30c to 40c a litre more to transport fuel to Whanganui than it does to Marton, to Turakina, or to Sanson. This bill will introduce transparency, which will finally require the companies to explain the differences and the variations in price between regions. Can you tell me: why does fuel cost more in Whangārei than it costs in Northland, yet the tankers go straight through Whangārei to get to Northland?

The answers that we are being given do not add up. That is why we need this bill to ensure that we have a competitive and transparent fuel market—where competition is failing in the market. Then we will finally have a mechanism to intervene. On behalf of my constituents in the Whanganui electorate, who are frustrated and fed up with paying high fuel prices with no reasons for it, I commend this bill to the House.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you, Mr Speaker. It’s been very hard to understand and follow—

DEPUTY SPEAKER: Sorry—a five-minute split call.

CHRIS PENK: Thank you. I can assure you that it won’t be all of that. It’s been hard to understand all the arguments being made across the House by the left-wing parliamentary colleagues of ours today. I’m not sure if that’s because I’m too dumb or too smart to understand them. But, in any case, it seems there’s a real lack of clarity between such basic concepts as profiteering or simply making a profit, which, funnily enough, is similar to the distinction between those who are merely politicking and those who are engaging in the relatively respectable profession of politics. Those who are interested, from a policy point of view, want to understand what the unintended consequences are of policy that might be well-intentioned—and I don’t doubt that it is—but which nevertheless will have negative effects for those, whether it’s in Whangārei or Whanganui, or Whangateau for that matter—completing my little alliterative triplet, and finishing in my own electorate, which is always a good place to be, and to which I look forward to returning very, very soon.

The concept of a command and control economy whereby people in this House—again, with the best of intentions—wish to make life easier by dictating things from Wellington but nevertheless end up undermining even their own arguments in respect of the value of competition—and, of course, freedom to compete between private market entities is important. Government does have an important role to play in some aspects of our national life, but setting the price where there is a competitive market that should, in the absence of pitfalls and barriers—and I mix my metaphors, I know—but with Government not interfering—

DEPUTY SPEAKER: Ms Genter, without commenting on the previous speaker, about the coming together of ACT and Greens, could I suggest that, if you want to carry on this conversation, you do get a little bit closer together, so that it’s not quite as distracting to the rest of the House. Sorry, Mr Penk. Carry on.

CHRIS PENK: Thank you, Mr Speaker. No need to apologise whatsoever. I thought we were going to have some sort of telegraph system. I wasn’t sure if it was going to be—

DEPUTY SPEAKER: I could see it was putting you off, Mr Penk.

CHRIS PENK: It was putting me off—that explains it!

Simon Court: They’re pretty off-putting!

CHRIS PENK: Ha, ha! That’s right.

Anna Lorck: Green and ACT—we’ve heard it today!

CHRIS PENK: Pardon me?

Anna Lorck: Green and ACT—

CHRIS PENK: Green and ACT? Well, I wouldn’t like to comment on any “coalitions of chaos” with which we are not involved, but that’s for them.

Anyway, suffice to say, that at this very moment, the geniuses that brought us the Credit Contracts and Consumer Finance Act and the unintended and adverse consequences associated with that are now telling us to trust them. It’s all good, they know what they’re doing, they’re from the Government, and they’re here to help! And, in the immortal words of Ronald Reagan, those are some of the scariest words in the English language. The bill, therefore, is to be resisted—opposed—and therefore I cannot commend it to the House.

DEPUTY SPEAKER: This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. on Tuesday, 6 June. Thank you for your work this week.

Debate interrupted.

The House adjourned at 4.56 p.m.