Tuesday, 1 August 2023
Continued to Wednesday, 2 August 2023 — Volume 770
Sitting date: 1 August 2023
TUESDAY, 1 AUGUST 2023
TUESDAY, 1 AUGUST 2023
The Speaker took the Chair at 2 p.m.
Karakia/Prayers
Karakia/Prayers
SPEAKER: Members, in celebration of Cook Islands Language Week, I’ve asked the Hon Poto Williams to say the prayer in te reo Māori Kuki Airani.
Hon POTO WILLIAMS (Labour—Christchurch East): Te Atua Mana, te akameitaki atu nei matou iakoe no toou takinga meitaki taau i riringi mai ki runga ia matou. Te akaruke nei matou i to matou tu tangata, te akamaara nei matou i te Ariki, e te pure nei matou kia arataki koe i ta matou uriuri anga manako, kia rave matou i ta matou angaanga i roto i teia ngutuare na roto i te pakari, te tuatua tika e te akaaka no te meitaki e te au o to matou basileia Aotearoa. Amene.
Visitors
Sri Lanka—Women Parliamentarians’ Caucus
SPEAKER: I’m sure that members would wish to welcome the Hon Dr Sudarshini Fernandopulle, chairperson of the Women Parliamentarians’ Caucus from the Parliament of Sri Lanka, and her accompanying delegation, who are present in the gallery.
Privilege
Conduct of Member towards Chairperson of Transport and Infrastructure Committee
SPEAKER: Members, I have received a letter from Rachel Boyack raising a matter of privilege: Tim van de Molen’s conduct towards the chairperson of the Transport and Infrastructure Committee on 29 June 2023. There are differing accounts of what occurred at the conclusion of the committee’s meeting. If the allegations are accurate, the conduct complained of could amount to threatening or intimidating a member acting in the discharge of their duty, or threatening a member on account of their conduct in Parliament. The Speaker’s role in such matters is to determine whether the facts alleged could, if true, amount to a breach of privilege or contempt of the House. The Speaker does not inquire into the veracity of the evidence presented, or conduct an inquiry into the allegation. That is the role of the Privileges Committee. I find that a question of privilege arises, and that question stands referred to the Privileges Committee.
Petitions, Papers, Select Committee Reports, and Introduction of Bills
Petitions, Papers, Select Committee Reports, and Introduction of Bills
SPEAKER: No petitions have been delivered to the Clerk for presentation. Ministers have delivered papers.
CLERK:
Government responses to:
the petition of Mahi for Ukraine on “Declaring Russia a Terrorist State”, and the
report of the Foreign Affairs, Defence and Trade Committee: Petition of Democracy for Myanmar Working Group New Zealand
2022 annual report for Te Pūkenga
statements of intent for the:
Electricity Authority
New Zealand Infrastructure Commission
New Zealand Police, and
Rau Paenga Limited
2023-24 statements of performance expectations for the:
Tertiary Education Commission
Electricity Authority
New Zealand Infrastructure Commission, and
Rau Paenga Limited.
SPEAKER: Those papers are published under the authority of the House. Select committee reports have been delivered for presentation.
CLERK:
Reports of the Economic Development, Science and Innovation Committee on the:
2021-22 annual review of the Crown Regional Holdings Limited, and the
2021-22 annual review of the Energy Efficiency and Conservation Authority
report of the Foreign Affairs, Defence and Trade Committee on the petition of Morteza Sharifi and Petition of Aida Tavassoli
report of the Petitions Committee on the petition of Anthony Gore
report of the Primary Production Committee on the briefing on Muka Tangata’s work plan
report of the Regulations Review Committee on the briefing on Animal Welfare Secondary Legislation
reports of the Social Services and Community Committee on the:
petition of the Retirement Village Residents Association, and the
Resale Right for Visual Artists Bill
report of the Transport and Infrastructure Committee on the Land Transport Management (Regulation of Public Transport) Amendment Bill.
SPEAKER: The bills are set down for second reading. The reports of the Primary Production Committee and the Regulations Review Committee are set down for consideration. No bills have been introduced.
Oral Questions
Questions to Ministers
Question No. 1—Finance
1. Hon JAMES SHAW (Co-Leader—Green) to the Minister of Finance: What unused revenue tools, if any, are available to the Government that would both increase allowances and enable better investment in public services?
Hon GRANT ROBERTSON (Minister of Finance): Kia orana, Mr Speaker. The answer to that hypothetical question is limited only by the member’s imagination. However, I would note that the implementation of any such tool is limited by what is practical and affordable.
Hon James Shaw: What is the effective tax rate paid by the wealthiest 1 percent of New Zealanders?
Hon GRANT ROBERTSON: If I recall the Inland Revenue research that was released earlier this year, it’s about 8.9 percent.
Hon James Shaw: And what is the effective tax rate paid by the average New Zealander?
Hon GRANT ROBERTSON: I am enjoying quiz time. I believe it might be around about 20 percent.
Hon James Shaw: And does he agree with the Prime Minister: “We don’t have a great money tree in the backyard that means that we can continue to indefinitely increase Government spending, we have to pay for everything somehow.”, and, if so, how much revenue did Treasury predict could be raised with a tax of 1.5 percent on net assets over $5 million?
Hon GRANT ROBERTSON: In answer to the first part of the question, despite extensive searching, no such money tree has been found, although looking at the transport policy produced by the National Party in the last few days, they appear to have found some magic money to the tune of about $10 billion.
Hon James Shaw: How much revenue did Treasury predict could be raised with a wealth tax of 1.5 percent on net assets over $5 million?
Hon GRANT ROBERTSON: Again, if I recall correctly—and enjoying the quiz that we’re going through at the moment—not including the family home, I believe about $3.4 billion.
Hon James Shaw: And what would the cost be of lifting the 45,000 children who are still currently below the material hardship line above that line, excluding household costs?
Hon GRANT ROBERTSON: Well, I don’t have that information with me. I’m very proud of the record that the Government has in terms of lifting children out of poverty—77,000 children, using the after - housing costs measure. There is always more to do when it comes to supporting our children to thrive. What we could not do and could not afford is tax cuts that aren’t funded and would lead to cuts in the services that those children need.
Question No. 2—Prime Minister
2. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does he stand by all his Government’s statements and policies?
Rt Hon CHRIS HIPKINS (Prime Minister): Yes, particularly the further $567 million we announced yesterday for immediate works on State highways in regions that are affected by the North Island weather events. That includes State highways in Tairāwhiti, Wairoa, Hawke’s Bay, Coromandel, and Northland. The funding for these roads is coming from the $6 billion national resilience plan that the Government allocated funding for in this year’s Budget. It’ll go to replacing or strengthening and rebuilding damaged bridges and improving road surfaces on major stretches of roads. This, of course, comes on top of the $525 million already provided for roading infrastructure to get those regions back on their feet after Cyclone Gabrielle and the Auckland floods.
David Seymour: Is the Prime Minister aware that Cyclone Gabrielle hit Hawke’s Bay and Tairāwhiti in February, and how is it possibly his go-to boast policy that he has managed, after six months, to announce they’re going to fund rebuilding the roads that were damaged?
Rt Hon CHRIS HIPKINS: I know the member clearly didn’t listen to the entirety of the answer. We’ve already given them $525 million for the road rebuilding; that was done within weeks of the events happening. We’re now adding another $567 million, because we don’t think they should have to put up with Bailey bridges indefinitely.
David Seymour: Does he stand by his statement that “we don’t have a … money tree in the backyard that means we can continue to indefinitely increase government spending”, and if that’s the case, how does he explain the last six Budgets, where his Government has increased expenditure by 70 percent for no measurable outcome improvements?
Rt Hon CHRIS HIPKINS: Well, yes, I do stand by my comments, in the first part of that question, and I utterly reject the second.
David Seymour: Can he, then, explain to New Zealanders in tangible, relatable terms, what actual outcomes have improved—not examples of where the Government spent more, but where the outcomes achieved have got better; 70 percent better?
Rt Hon CHRIS HIPKINS: In fact, I could go on and on about it, but I’ll give the member a few just to get him started. How about 77,000 fewer children living in poverty under this Government? How about an economy that’s grown 6.7 percent under this Government? How about the 12,000 additional public homes that have been put in place under this Government, after the number of public homes went down under the last National-ACT Government? We could talk about the share of renewable electricity being the highest in a very long time—in fact, possibly forever. We could talk about the fact that we’ve increased paid parental leave entitlements—that is thousands more Kiwi families enjoying extra paid parental leave. And if the member thinks that that’s not leading to better outcomes for those babies, then perhaps he needs to think again about how he measures the value of things.
David Seymour: Does the Prime Minister understand that he just explained the economy grew at a smidgen over 1 percent a year and he built 2,000 houses a year for six years in return for a 70 percent increase in public expenditure—is that what this Government calls success, and is that what they’re taking into the election?
Rt Hon CHRIS HIPKINS: Of course, the population has grown and incomes have grown during that time as well.
David Seymour: Is the Prime Minister now claiming that the population has grown because Government expenditure’s increased, or is he really saying that he’d like to hide from the fact that, after inflation and after population growth, the amount spent in real terms per capita is up 28 percent and he’s got nothing tangible to show for it?
Rt Hon CHRIS HIPKINS: No.
David Seymour: Does he stand by his various statements praising police, and will they receive a 14.5 percent increase in pay this year?
Rt Hon CHRIS HIPKINS: In answer to the first part of the question, I believe the police do an exceptional job on behalf of New Zealanders. In answer to the second part of the question, I don’t intend to get into bargaining in question time—no Prime Minister or Minister would ever do that.
David Seymour: What does it say for this Government’s economic management that they have borrowed an additional $121 billion over the last six Budgets and are now struggling to meet the arbitration recommended offer to pay teachers more?
Rt Hon CHRIS HIPKINS: With regard to arbitration, of course, the teachers would not be asking for such big pay increases had they had pay increases during the time of the nine years that the National Party was in Government, when their salaries actually went backwards in real terms. But in terms of the Government’s overall level of borrowing, I would note that one of the big contributors to that was supporting New Zealanders through a once-in-a-generation economic shock caused by a global pandemic and, during that time, the members opposite including the member himself were arguing we should’ve been spending more.
David Seymour: Does the Prime Minister also want to take the credit for spending $100,000 a day to store $531 million—that’s over half a billion bucks—of expired rapid antigen tests (RATs) after the Government, for months and months, in fact over a year, banned anyone else from importing them?
Rt Hon CHRIS HIPKINS: Well, the member can’t seem to get his story straight. He keeps complaining that we didn’t have enough RAT tests; now he’s complaining we’ve got too many of them.
Question No. 3—Cyclone Recovery
SPEAKER: Question No. 3, Tāmati Coffey.
TĀMATI COFFEY (Labour): Thank you, Mr Speaker. [Interruption] My question—[Interruption]
SPEAKER: Order! I’d like to hear this question.
3. TĀMATI COFFEY (Labour) to the Minister for Cyclone Recovery: What recent announcements has he made on support for cyclone-affected regions?
Hon GRANT ROBERTSON (Minister for Cyclone Recovery): The Government is providing a further $567 million to Waka Kotahi for immediate works on State highways in Tairāwhiti, Wairoa, Hawke’s Bay, Coromandel, and Northland. The funding will come from the $6 billion national resilience plan announced in Budget 2023 to support the building of infrastructure that is more resilient to the impacts of climate change. As I’ve said previously, the immediate focus is on building back better from the North Island weather events. Over time, the plan will address the severe infrastructure deficits that have been holding New Zealand back. I would also note that the investment announced yesterday is on top of the $525 million already provided to Waka Kotahi in the immediate aftermath of the cyclone. Connecting our community is critical to getting our regions back on their feet and that is why we are supporting it.
Tāmati Coffey: What else did the announcement say about building resilience in the transport infrastructure in cyclone-affected regions?
Hon GRANT ROBERTSON: This extra funding will be used to replace or strengthen or rebuild damaged bridges and roads in affected regions. It will also improve the road surface on major stretches of roads where potholes and cracks left after the weather events have made travel slow and frustrating for locals. Some specific examples include on State Highway 35 rebuilding the Hikuwai Bridge; repairs and rebuilding of bridges on State Highway 2 north of Napier; and the State Highway 1 Brynderwyn to Dome Valley section. In addition to this funding for State highways, the Government has already made a significant contribution to local road repairs in the regions which are normally the responsibility of local government. This amounts to around $210 million since February this year.
Tāmati Coffey: What other announcements has the Government made to support the regions affected by the cyclone?
Hon GRANT ROBERTSON: The Government has negotiated a cost-sharing package with Hawke’s Bay mayors and the regional council chair. This includes the cost of buying out high-risk residential properties in the region on a cost-sharing basis. The mayors have agreed to take the package to their councils and they will meet to discuss it this week. The priority areas of the overall package will be addressing category 3 property buy-outs, flood protection, and urgent roading and bridge repairs. As I’ve said previously, we are moving as quickly as we can in supporting councils with their locally led recovery. The agreements that we’ve reached with the region’s leaders will give the people of Hawke’s Bay certainty. Councils are now being asked to look at the package, ratify it, and consult with their communities as appropriate.
Tāmati Coffey: What work is the Government doing with other councils affected by the recent weather events?
Hon GRANT ROBERTSON: Negotiations with Auckland and Tairāwhiti on cost-sharing arrangements are progressing well and we’re hopeful that agreements can be reached in these regions shortly. Alongside these negotiations, the Crown is working through a process and support package for whenua Māori and communities affected in the regions that have a large amount of Māori land. Funding for this work sits outside the cost of the cost-sharing arrangements with councils. We are committed to working together with all affected communities, iwi, and councils to find solutions for recovery and rebuild. As I’ve said previously, we cannot meet all the costs, particularly as we know that there will be more extreme weather events like this. We are striking a balance between supporting affected communities without taxpayers having to bear all of the cost of that.
Simeon Brown: Is he satisfied with the political impartiality of all his cyclone recovery taskforce members?
Hon GRANT ROBERTSON: Yes, I am, and—
Hon Members: Ha, ha!
Hon GRANT ROBERTSON: Yes, I am. The cyclone recovery taskforce is doing an excellent job of making sure—
Chris Bishop: Oh yeah—yeah, yeah, yeah.
Hon GRANT ROBERTSON: Well, I’m interested, you know, that the members opposite want to impugn the integrity of people who have put their hands up including, I might say, one of their former colleagues.
Question No. 4—Prime Minister
4. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does he stand by all of his Government’s statements and actions?
Rt Hon CHRIS HIPKINS (Prime Minister): Yes, particularly our commitment to ensuring that New Zealanders in need have access to public housing. One in seven of the total public housing stock has been added by this Government. Year on year, we’re delivering the most public homes of any Government since the Nash Government in the 1950s, which is a stark contrast to what we inherited when we became the Government.
Christopher Luxon: Was former transport Minister Michael Wood right or wrong when he said the $30 billion Auckland light rail project was “a necessary investment”, and why after six years can’t the Prime Minister commit to a route or any other details?
Rt Hon CHRIS HIPKINS: Work is under way on planning for a route, including identifying the preferred route for Auckland light rail and including identifying the most desirable construction method, whether it should go over the ground or under the ground, and we’re awaiting the results of that business case process. I would note, for example, that some of the roading projects that National promised in its transport package that it announced yesterday, they’d also promised back in 2008, and in nine years in Government didn’t deliver them.
Christopher Luxon: Why after six years of Let’s Get Wellington Moving failing to deliver a single transport project is he still not even sure if it’s going ahead or not?
Rt Hon CHRIS HIPKINS: I reject the member’s characterisation of my comments.
Christopher Luxon: Was Carmel Sepuloni right or wrong when she said about crime in Auckland, “I wouldn’t say it’s that bad at all”?
Rt Hon CHRIS HIPKINS: The member should stick to full quotes, rather than partial pieces of them. If he wants us to start partially quoting him, we’re going to have a lot of fun with that.
Christopher Luxon: Was police Minister Ginny Andersen right or wrong when she said New Zealanders feel safer, when violent crime is up 33 percent and there are two ram raids in New Zealand every day?
Rt Hon CHRIS HIPKINS: The member is deliberately taking the member’s quote out of context.
Christopher Luxon: Was Grant Robertson right or wrong when he said that taking GST off food would mostly benefit supermarkets?
Rt Hon CHRIS HIPKINS: That’s a question that you might want to ask him.
Nicola Willis: Under the bus—under the bus again.
SPEAKER: Oh, quiet! I want to hear this question.
Christopher Luxon: Was Grant Robertson’s Tax Working Group right or wrong when it said that removing GST from food and drink would benefit higher-income households more than lower-income households?
Rt Hon CHRIS HIPKINS: I have no problems with what the Tax Working Group concluded. The report’s publicly available. Everyone can make their own judgments on that.
Christopher Luxon: Why is it that whether it’s tax or transport or, frankly, any other issue, he can tell the country what he won’t do, but he can’t tell the country what he will do?
Rt Hon CHRIS HIPKINS: I completely reject that. If the member paid attention during the Budget, for example, he will see a range of new initiatives in the Budget, including removing the $5 prescription co-payments, something the National Party said they’ll take away; adding 20 hours free early childhood education to two-year-olds, something the National Party has said they’ll take away; making public transport free for young children, and half-price for under-25s, something the National Party won’t commit to; providing healthy homes or insulation for 100,000 more homes, something the National Party don’t seem to know what they’re going to do. On this side of the House, we do focus, however, on making sure that the announcements that we make actually have money behind them—something the National Party still don’t seem to be able to do. I would note that in July 2017 the Labour Party released a comprehensive fiscal plan ahead of the general election, and yet it’s now August; nothing but crickets from the National Party.
Question No. 5—Housing
5. PAUL EAGLE (Labour—Rongotai) to the Minister of Housing: What progress has the Government made in rebuilding public housing in New Zealand?
Hon Dr MEGAN WOODS (Minister of Housing): I’m pleased to report that the Government has added more than 13,000 new public homes since October 2017. Of the 13,305 homes, 11,285 of these are new builds. In June 2023 alone, 1,107 public homes were added to the national stock. This is the highest monthly delivery of public homes by Kāinga Ora ever. To put our public house building programme in perspective, one in seven homes has been added by this Government in the last five years. I am proud to be part of a Government that is delivering the biggest public housing build programme per year since the 1950s.
Paul Eagle: How has delivery improved in the regions?
Hon Dr MEGAN WOODS: Yesterday, I had the pleasure of being in Masterton to welcome the return of new Government-owned public homes in the area for the first time in two decades. Along with the 21 Masterton homes and two new homes in Dannevirke, the developments represent the first step in a commitment to delivering a larger pipeline of housing projects in the region, with at least 80 new homes in the construction, planning, or feasibility stages. This Government has added almost 300 public homes across Northland since October 2017. This stands in stark contrast to the National Party, who, in the nine years in Government, reduced the number of public homes in Northland by 93. In Kerikeri, a community housing provider’s build-to-own development for 10 public housing places was completed in March this year. The homes in the area are in high demand and are managed by Habitat for Humanity Northland Region.
SPEAKER: Number one. First of all, that answer was far too long. It’s been a long time in this House that using a supplementary question from the Government to the Government to attack the Opposition is out of order. I will give the Opposition spokesperson two questions, if he wishes to use them.
Chris Bishop: Can she confirm that, after six years, the Government’s housing record stands at rents up $170 per week, a quadrupling in the State house waiting list, thousands of families living in motels, and hundreds living in cars?
Hon Dr MEGAN WOODS: What I can confirm is this is a Government that has admitted there is a housing crisis and has a plan to address it. That does stand in stark contrast to nine years under a previous National Government; that even when you accounted for the transfer of community housing providers (CHPs), they ended up with 1,500 fewer public houses than they started with. Not only did they flog off our houses but they also failed to build them. We would have over 20,000 more public houses in New Zealand today if we didn’t have a National Government between 2008 and 2017 who had a dereliction of duty when it came to housing; that would account to 85 percent of the waiting list.
Chris Bishop: How many of the promised 100,000 KiwiBuild houses have been built?
Hon Dr MEGAN WOODS: As the member well knows, there has been a reset of KiwiBuild, but what I can tell that member is vastly more than the less than 100 affordable homes that the previous National Government managed under their housing areas when they were in Government. It’s time for the National Party to start putting up some policies that are actually going to address a housing crisis, because we have not seen any.
Paul Eagle: How is the Government working with community housing providers in its public housing programme?
Hon Dr MEGAN WOODS: The Government is committed to partnering with community housing providers to deliver our public house build programme. We are seeing growth in the CHP sector, with the number of registered CHPs growing from 43 when we came into office to 74 providers today. Since October 2017, CHPs have supported the delivery of 7,444 homes—1,944 of these being new builds. We also have changed the funding settings for CHPs to support them to deliver new houses and focus on increasing supply in the regions through changes to the Operating Supplement cap and the introduction of early-stage operational funding.
Paul Eagle: What more does the Government have planned for public housing?
Hon Dr MEGAN WOODS: In Budget 2023, the Government announced an additional 3,000 public homes by June 2025. These additional homes build on the 18,000 homes we have committed to delivering by 2024. The updated public housing plan through to 2025 will have a focus on regional delivery as well as maintaining momentum of the current pipeline. At my request, officials are developing bottom-up delivery plans, working with community housing providers, stress testing the supply pipeline, and analysing existing demand data. Details of the plan will be released by early September.
Question No. 6—Finance
6. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he stand by all of his statements and actions on tax policy?
Hon GRANT ROBERTSON (Minister of Finance): Yes, in the context that they were made and undertaken.
Nicola Willis: Does he stand by his statement made earlier this year that taking GST off food would mostly benefit supermarkets?
Hon GRANT ROBERTSON: I stand by the statements I made in the context in which they were made.
Nicola Willis: Does he stand by his statement in relation to exempting food from GST: “other countries with more exemptions will know it becomes an absolute boondoggle to get through.”, and what exactly did he mean by “boondoggle”?
Hon GRANT ROBERTSON: I’m very pleased that the word “boondoggle” is getting a run in Parliament—one of my favourite phrases. I do, obviously, stand—as I said—by the statements in the context in which they were made. I’d also note for the member, there are a few things that have been called boondoggles over the years that turned out all right. The Sydney Opera House was one of those, and the Hubble Space Telescope.
Nicola Willis: Was he correct when he identified definitional concerns about the removal of GST from fresh fruit or vegetables: “you get into an argument about what’s the difference between beetroot and canned beetroot, and if you want to make a real impact on the lowest income people you wouldn’t cut the tax off fresh beetroot”?
Hon GRANT ROBERTSON: Again, as a former fruit and vege worker in a supermarket, discussion about beetroot is one that I am particularly pleased to have here. My father used to put beetroot on scones, which is not something I would support New Zealanders doing. I stand by the answers I have already given.
Nicola Willis: Was former revenue Minister David Parker correct to agree—in a report from 2013—that removing GST from fruit and vegetables would have “opened exploitable and confusing loopholes, and dirtied an otherwise clean tax”?
Hon GRANT ROBERTSON: In this House, I am responsible for my own statements. I stand by the statements I have made in the context that they have been made. What I do think is incredibly important about taxation policy is that you show how you can pay for it. If you can’t show how you can pay for it, as the member can’t, that means cuts to public services. That’s what is important in tax policy, and we do not have a funded tax policy from the National Party.
Nicola Willis: Would he support a tax policy to remove GST from fruit and vegetables?
Hon GRANT ROBERTSON: As I’ve said many times in this House, the Government has completed its tax work programme.
Question No. 7—Education
7. CAMILLA BELICH (Labour) to the Minister of Education: What progress has the Government made in improving school buildings and property since 2017?
Hon JAN TINETTI (Minister of Education): This Government has made huge progress on improving school property and buildings since 2017. We know that having warm, dry, and fit-for-purpose classrooms is vital for the educational outcomes of our kids. Since 2017, 98 percent of schools have received funding for property upgrades through the School Investment Package, 5YA, Ngā iti Kahurangi, and the National School Redevelopment Programme. Of the 14,686 projects which have been undertaken across these programmes since 2017, 50 percent are complete.
Camilla Belich: How has the school improvement package benefited schools?
Hon JAN TINETTI: The school improvement package was introduced to give schools the opportunity to bring forward their discretionary projects and enhance their facilities for students. Of the 2,054 schools with school improvement package funding—or SIP projects—more than 90 percent of schools have had at least one SIP project completed.
Camilla Belich: How is the Government supporting schools with buildings and property affected by the North Island weather events?
Hon JAN TINETTI: Following the devastating weather events earlier this year, the Government provided immediate funding for the repairs to over 500 damaged schools. We have also committed to return all schools impacted by the Auckland flooding and Cyclone Gabrielle to their pre - weather-event state through the cyclone recovery package. We know that this has been an incredibly unsettling time for our young people, and this will ensure our schools and communities have some certainty over their futures.
Camilla Belich: How does this support wider investment in education?
Hon JAN TINETTI: Having fit-for-purpose classrooms is an important foundation for education. We are also providing healthy school lunches, free period products, and supporting school attendance. We are taking action to improve the Curriculum and ensuring that NCEA is providing students with the skills they need for a successful life and, as I always say, a life full of choices.
Nicola Grigg: Given those answers, can she explain why, despite a 2019 announcement from the then education Minister, Chris Hipkins, that Ellesmere College in Leeston would have a $30 million rebuild to be completed next year, that school has now been advised that this project has been pushed out to 2028 due to a “significant shortfall of funds”?
Hon JAN TINETTI: The member made an assertion at the beginning of that statement that had nothing to do with the Ellesmere College projects.
David Seymour: How long does it usually take the Minister to reply to correspondence from her office, and when can my constituents at Victoria Avenue School expect a reply from this Minister in relation to my letter to her about the parlous state of their buildings, which are leaking, sliding down a hill, and flooded due to varying issues that they face? When can they get a reply, Minister?
Hon JAN TINETTI: If the member actually contacts my office, we’ll be happy to give him a time for that reply.
Rawiri Waititi: Given that capital works project funding was granted in 2018 for Ōpōtiki College, which is a decile 2D school, which was also at the same time that Tauranga Boys’ College, a decile 6 then, and Lynmore Primary School, decile 9, were also granted funding under the same scheme—both Tauranga Boys’ College and Lynmore Primary School have had their projects completed since funding was granted in 2018, but Ōpōtiki has not had any projects completed under this funding grant. Why has the Ministry of Education and you, as the Minister, not prioritised the completion of upgrades and rebuilds for Ōpōtiki College?
Hon JAN TINETTI: Ōpōtiki College has actually got quite a number of complex issues that are within it, and we are working through that, but if the member would like to have that conversation with me—I know the member wants to meet with me after question time—I’m really happy to have that conversation, and let’s find a way forward.
David Seymour: Point of order. I seek leave to table emails and records showing that I’ve followed up with the Minister’s office not once, not twice, but three times over the last two months, trying to get her to respond.
SPEAKER: Leave is sought for that purpose. Is there any objection? There appears to be none. They may be tabled.
Documents, by leave, laid on the Table of the House.
Hon Michael Woodhouse: Point of order. In the supplementary question that Nicola Grigg asked the Minister, the Minister’s reply was that the question contained an assertion that was incorrect. Would it be appropriate for the Minister to point to the assertion that was incorrect—not explain why it wasn’t, but which part of the question she disputed?
SPEAKER: To be frank, I’m not sure. What I will do, as we’re still on the same question, is I’m going to give her an extra supplementary, and the member can use it and I’ll listen a lot more carefully to it.
Nicola Grigg: Thank you, Mr Speaker. Can she explain why, despite the 2019 announcement from the then education Minister, Chris Hipkins, that Ellesmere College in Leeston would have a $30 million rebuild to be completed next year, the school has now been advised that this project has been pushed out to 2028 due to “significant shortfall of funds”?
Hon JAN TINETTI: Ellesmere College is sitting on some land that is unstable. That was unknown about at the time—
Hon Gerry Brownlee: No, it’s not. That’s complete rubbish.
Hon JAN TINETTI: Having said that, this is my understanding of what I have been told. Therefore, the costs have ballooned. If the member would like to put that in writing, a more fulsome answer can come to her.
Question No. 8—Education
8. ERICA STANFORD (National—East Coast Bays) to the Minister of Education: Does she stand by all her statements and actions?
Hon JAN TINETTI (Minister of Education): Yes, in the context they were given and taken.
Erica Stanford: How can she stand by her actions when they have resulted in a 10.3 percent decline in the number of Māori student leavers with NCEA level 2 under her watch, comparing 2022 to 2017?
Hon JAN TINETTI: Students sitting NCEA last year faced turbulent and disrupted teaching over the last few years. Globally, we are seeing the impacts of COVID on student achievement. New Zealand’s results are in line with international trends. I would note, though, that after five years in Government, the National Party saw results in line with what we saw in 2022 after Labour’s five years in Government, which also saw students navigate through a global pandemic.
Erica Stanford: Does she agree with the Ministry of Education, who said, “Between 2017 and 2022, the proportion of Māori school leavers with NCEA level 2 or above decreased by 10.3 percentage points. Year-on-year increases occurred between 2012 and 2017, but since then, there have been year-on-year decreases.”?
Hon JAN TINETTI: What I can say is that we are seeing a number of young people who are leaving for other opportunities such as employment, apprenticeships, or travelling overseas. All of these have increased. We are seeing a record number of apprenticeships, and I would also point out that leaving school is not the end of a person’s academic opportunity. A large proportion of young people, including our Māori leavers, are leaving school before 17 to further their education.
Erica Stanford: What would she say to Māori parents when, under her Government, only 58 percent of their tamariki are leaving school with NCEA level 2, which the OECD says is the minimum qualification young people need for successful labour market participation?
Hon JAN TINETTI: They might be leaving school with that but, as I’ve already pointed out, we have a record number that are going into apprenticeships. We’re already pointing out that we have these young people who are continuing their education in other ways. They’re also leaving school to go into work because we’ve got high employment levels or we’ve got record numbers that are leaving to go overseas.
Erica Stanford: Is the Minister saying that she’s accepting of the fact that only 58 percent of Māori students are leaving with NCEA level 2 because they’re going into work and they’re going overseas, when the OECD says very clearly that the minimum qualification needed in New Zealand is level 2 for successful labour market participation?
Hon JAN TINETTI: What I am going to say is that we want to ensure that when kids are leaving school that they have the knowledge that they need to thrive. We are making certain that the qualification process has minimum literacy and mathematic qualifications, which has never been done before. We are making certain that, from next year, we are bringing in a new mandatory assessment from year 10 to give students, parents, and employers the confidence that school leavers have foundational maths and literacy skills, which is something that that side failed to do.
Question No. 9—Finance
9. DAMIEN SMITH (ACT) to the Minister of Finance: Does he stand by his statement that “GST is a comprehensive tax which makes it very easy to administer and people in the room who’ve been in other countries with more exemptions will know it becomes an absolute [boondiggle] to get through”, and does he support expanding exemptions to GST in New Zealand?
Hon GRANT ROBERTSON (Minister of Finance): I do stand by that statement in the context it was made, and with the word “boondoggle”. In answer to the second part of the question—
Erica Stanford: “To-ma-to”, “to-mate-oes”.
Hon GRANT ROBERTSON: —the Government’s tax policy—well, that’s the thing, isn’t it? The Government’s tax policy for this term has been set out clearly, and we’re not making any changes of that sort.
Damien Smith: Does the Minister agree with the findings of the GST background paper produced by the Tax Working Group in 2018 that exempting items such as food and drink is purely targeted towards achieving distributional goals and has a disproportionately large revenue impact, and does he support expanding exemptions to GST in New Zealand?
Hon GRANT ROBERTSON: As I just said in my answer to the primary question, the Government’s tax policy for this term has been set out clearly and we are not making any changes of that sort.
Damien Smith: Would the Minister agree that a boondoggle is a project that is considered a waste of both time and money, yet it is often continued due to extraneous political motivations, and does the Minister agree that providing tax exemptions on goods sold by supermarkets whilst simultaneously seeking to address the high excess profits of those supermarkets would be counterintuitive?
Hon GRANT ROBERTSON: In answer to the first part of the question, I’ve already mentioned a couple of projects that have been called boondoggles that have been successful. Another one, for the member’s edification, was the attempt to land people on the moon, which was called a “moondoggle”, and it actually turned out all right in the end.
Damien Smith: Does the Minister acknowledge the various court cases which have occurred in countries which do have different rates of GST on different food items—including whether smoothies should be counted as liquefied fruit salads, and if juice cleanses can be considered meal replacements in the UK—and does he think that determining which tax rate applies to individual food items would be a good use of funds in New Zealand?
Hon GRANT ROBERTSON: As I’ve said twice now and in my primary answer, the Government’s tax policy for this term has been set out clearly and we are not making any changes of that sort.
Question No. 10—Immigration
10. LEMAUGA LYDIA SOSENE (Labour) to the Minister of Immigration: What reports has he seen on the reopening of our borders?
Hon ANDREW LITTLE (Minister of Immigration): Monday—which is yesterday—marked one year since our border fully reopened following the restrictions imposed due to the COVID-19 pandemic. Since then, we have seen demand to visit New Zealand far outstrip initial expectations, showing that our reconnecting New Zealand strategy has been a huge success. Since the full reopening on 31 July 2022, we’ve approved over 2.1 million people to visit, study, or work in New Zealand. This includes over 1.7 million visitors, over 48,000 international students, more than 75,000 accredited employer work visas being issued, and over 60,000 working holiday visas being issued. This is a real vote of confidence in New Zealand as an attractive destination for workers, students, and tourists, and shows that despite international economic headwinds and higher costs associated with travel post-pandemic, we can be proud of our reopening to the world. In this respect, I acknowledge the work of my predecessors the Hon Michael Wood and the Hon Kris Faafoi.
Lemauga Lydia Sosene: How do these figures compare to visitor numbers before the pandemic?
Hon ANDREW LITTLE: Figures from Stats New Zealand show that net migration figures have rebounded to the sorts of volumes we were seeing prior to the pandemic. In addition to this, Immigration New Zealand has just recorded its busiest June ever of incoming visitor visa application volumes, with more than 46,000 visitor visa applications approved. This follows the busiest ever May experienced. The Government is, of course, monitoring volumes to ensure that our small country and labour market can fully absorb those who wish to come here, and deal with community pressures effectively.
Lemauga Lydia Sosene: How are we ensuring that we are getting the workers we need into the country?
Hon ANDREW LITTLE: These strong migration figures reflect in part the responsiveness we built into the work visa system. The job check process ensures that accredited employer work visas are only able to be granted if a New Zealander is not able to be found to do a given job. Obviously, during a period of near record low unemployment, this will be an easier threshold to meet. However, when unemployment picks up, we would expect these numbers to drop as more New Zealanders become available for work. These changes have been made in part to ensure we are attracting the highly skilled people we need, and the OECD has recognised our success in this area by naming us the most attractive country in the world for skilled migrants.
Lemauga Lydia Sosene: Does Immigration New Zealand have the processing capacity to keep up with strong interest in visiting and working in New Zealand?
Hon ANDREW LITTLE: I am confident that they do. After a tricky initial period with a new IT system and demand for visas massively outstripping expectations, visa processing figures have now settled and, for the vast majority of applicants, I am confident they will receive a timely decision. The Government will continue to monitor visa processing figures closely to ensure that these high standards are maintained.
Question No. 11—Transport
11. SIMEON BROWN (National—Pakuranga) to the Minister of Transport: Will he commit to continuing and delivering Let’s Get Wellington Moving and Auckland light rail?
Hon DAVID PARKER (Minister of Transport): Wellington deserves a comprehensive transport network that moves people across the city. As the Prime Minister has said, the problem with Let’s Get Wellington Moving is that it hasn’t been moving fast enough. We’re not dumping the programme, but we are in discussions with Wellington City and regional councils as to how the programme can be progressed faster. Regarding Auckland light rail, as I told the member last week, work is ongoing. Final investment decisions on Auckland light rail are yet to be taken, and I’m not expecting them until after the election. We will be saying more regarding our transport priorities for Auckland, Wellington, and the rest of the country in the coming weeks. When we do announce our priorities, they will be properly costed and properly funded.
Simeon Brown: Can the Minister express confidence in Let’s Get Wellington Moving, and, if not, why not?
Hon DAVID PARKER: Yes, but it does need to speed up.
Simeon Brown: After six years in office, what does the Minister mean by “speed up”?
Hon DAVID PARKER: I would say adding to the progress that we’ve made across the country. You know, we’ve invested $16 billion in transport initiatives, both on the public transport and the roading front. We’ve also invested heavily in rail. We’ve finished off projects that were started by the last Government but not properly funded. We funded billion-dollar cost overruns for the likes of the City Rail Link in Auckland. We funded shortfalls of underfunding on Transmission Gully. We’ve cleaned up so many messes from the prior Government. We’re determined to show the public of New Zealand that if people are going to make rash promises as to their future roading programme, they should show how they’re going to fund them.
Simon Court: Would the Minister ask users of the current State Highway 1 and Wellington residents if they’d be prepared to pay a toll to get a tunnel built through Mount Victoria quicker than Let’s Get Wellington Moving could, and would the Minister welcome private sector financing to fund toll roads, as set out in ACT’s policy to supercharge toll road delivery?
Hon DAVID PARKER: In respect of whether roads are built by the private sector through public-private partnerships or funded directly by the public sector, irrespective of which of those two choices is taken, you still have to fund the full cost of the project, and the problem with some of the announcements that we’ve heard this week is that they’re billions of dollars out. In respect of propositions to toll, I find some propositions hard to fathom given that we proposed the tolling of Penlink but the National Party says that they’re going to not do that.
Simeon Brown: How many metres of Auckland light rail track have been delivered so far as part of the Government’s $29.2 billion light rail plan, which was promised to be delivered by 2021?
Hon DAVID PARKER: As I said, final investment decisions have not been taken on that project, and therefore no money’s been spent on the laying of tracks yet.
Simeon Brown: Does he stand by the Prime Minister’s statement in question time just a few moments ago when he said, “Work is under way on planning for a route, including identifying the preferred route for Auckland light rail … including identifying the most desirable construction method”, and how many more years are required to plan for this route?
Hon DAVID PARKER: Yes, I do, and one of the examples of why that’s necessary is that the geology of the area differs. Some parts you could tunnel through and you would encounter lava throws that would put up the cost of the project probably by more than the cost overruns that we’ve seen for the City Rail Link. We’re determined to avoid those sorts of cost overruns by proper planning and investigation in the first place.
Question No. 12—Tourism
12. GLEN BENNETT (Labour—New Plymouth) to the Minister of Tourism: Kia orana, Mr Speaker. What recent reports has he seen regarding New Zealanders’ support for tourism?
Hon PEENI HENARE (Minister of Tourism): Kia orana, Mr Speaker. Last week, I received research conducted by Tourism New Zealand showing that 89 percent of New Zealanders agree that tourism is good for New Zealand. This number shows that Kiwis understand the fundamental role that tourism plays in our country. And this Government has been clear in providing support to our regions, boosting our economy, and ensuring tourism is a key part of our national identity.
Glen Bennett: What are New Zealanders’ views on how tourism impacts the economy?
Hon PEENI HENARE: Ninety-two percent of New Zealanders agree that tourism has a positive impact on the economy, and they’re right. International visitor spend in May 2023 was up 14 percent from pre-COVID May 2019 levels, and spend from all international visitors totalled $3.2 billion in the March 2023 quarter. It’s fantastic to see that New Zealanders recognise tourism’s positive contribution to our economy as the sector rebuilds from the impacts of COVID-19 and supports New Zealand’s recovery. That’s why the Government has been hard at work developing international ties to continue to bring overseas tourists into New Zealand. We’ve already announced new flight paths between China and New Zealand, and we’ve also announced new technology partnerships that will enable New Zealand to be promoted as a travel destination to a significant consumer base.
Glen Bennett: What are New Zealanders’ views on how tourism impacts regional communities?
Hon PEENI HENARE: Fewer New Zealanders now perceive the level of tourism in their community as being too high compared to November 2022, and there is still a high 37 percent of New Zealanders who would like to see more tourism in their communities. Communities recognise that tourism provides jobs and also that it can positively affect social wellbeing in connection with culture. Tourism New Zealand is working hard to attract visitors who want to experience New Zealand in an authentic way that contributes positively to New Zealand’s culture, society, nature, and economy. We continue to support destination planning at a regional level with a recent investment of $5 million to help develop a well-managed, sustainable visitor destination that can adapt and change depending on the region’s needs or opportunities from a social, economic, cultural, and environmental point of view.
Glen Bennett: How is the Government addressing some of the concerns expressed by New Zealanders regarding tourism here in New Zealand?
Hon PEENI HENARE: Some New Zealanders believe there are negative impacts from tourism, mainly around specific things that affect them in their region, but also the environment. This Government is listening; there’s considerable work at central and local government levels to ensure that the tourism sector contributes both positively and innovatively to all communities. This includes the Tourism Environment Action Plan, which is looking at ways that tourism in Aotearoa New Zealand can protect and restore the climate and environment, making sure tourism is regenerative into our future.
House in Committee
House in Committee
SPEAKER: I declare the House in committee for the Appropriation (2023/24 Estimates) Bill, the Natural and Built Environment Bill, and the Spatial Planning Bill.
Estimates Debate
In Committee
CHAIRPERSON (Greg O’Connor): The House is in committee for consideration of the Appropriation (2023/24 Estimates) Bill, for further consideration of the Natural and Built Environment Bill, and for consideration of the Spatial Planning Bill.
The Standing Orders provide for 11 hours of debate on the Estimates. The Business Committee has determined to organise the debate by portfolio, so there will be no sector-specific debates. All Votes are available for debate, but only specific Ministers will be available each day to speak to the indicated portfolios only. The Government has indicated that the Minister of Immigration, the Minister of Education, the Minister of Housing, and the Minister of Health will be available today. Each debate will be led by a call from the chairperson or member of the committee that considered the Estimates most closely related to the Minister’s portfolios.
This debate expires after 11 hours, at which point questions will be put that the Votes stand part of the Schedules and on the provisions of the Appropriation (2023/24 Estimates) Bill. The time for the debate has been allocated to parties on a proportional basis, and may be taken as parties see fit during the debate. New Zealand Labour has five hours and 43 minutes, New Zealand National has three hours and nine minutes, ACT New Zealand has 55 minutes, the Green Party of Aotearoa New Zealand has 50 minutes, Te Paati Māori has 11 minutes, Dr Elizabeth Kerekere has six minutes, and the Hon Meka Whaitiri has six minutes.
The Estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. A compendium of the reports of select committees on the Votes is available on the Table.
The question is that the Votes contained in the Estimates of Appropriation for 2023/24 stand part of the Schedules.
Members, we start with the Minister of Immigration. The Minister is available for the next hour.
Immigration
CAMILLA BELICH (Chairperson of the Education and Workforce Committee): Thank you, Mr Chair. It’s a privilege to take the first call as chair of the Education and Workforce Committee to look at the Estimates in relation to Immigration.
The Education and Workforce Committee did examine the Estimates in relation to Immigration at a hearing with the Minister of Immigration, and we have compiled a report as part of our Estimates for Vote Labour Market.
The Vote and the Estimates for Immigration are quite considerable, although a smaller percentage of the overall Vote. I think it’s about $542.5 million that is estimated for spending in relation to the Immigration space. This is actually a decrease from the appropriations from the previous 2022/23 year, when there was a slightly higher amount that was estimated to spend. So that’s an interesting observation for members to note.
We did cover a number of areas during our examination of the Estimates. The main areas that we looked at were assessment and processing services, which were about 68.9 percent of the appropriations; integrity and security of New Zealand’s immigration systems; settlement and integration of refugees and other migrants; services for the attraction of migrants; and regulation of immigration advisers.
Now, members will be aware that these are significant Estimates for Immigration, but additionally, the Immigration portfolio is also bolstered by fees and levies which are charged on visa applications. This was a slightly different type of revenue that came in during the COVID-19 process, but we were advised during the Estimates in this area that there was a slight deficit at the end of June 2023, but there is an expected surplus of just under $19 million at 30 June 2024. We were also informed that we expect to see these counts trend towards zero, which is in line with the Auditor-General’s guidelines on best practice in this area.
During our Estimates hearing, we covered a number of important matters that were significant to members of the committee within these Estimates, and a number of those were part of the pathways to residence that could allow migrants to stay in New Zealand.
We discussed a number of those important pathways. The first one is one that is active from October 2023, and that was the skilled migrant category pathway. This has been changed recently, in June 2023, and those announcements were made by the Minister of Immigration, and they include having an acceptable job offer and six points, and there’s details in the reports as to how that can be accrued.
Additionally, we looked at the Green List pathway. This is a pathway which will open on 29 September 2023, and that’s a list of in-demand jobs that it’s obviously important that we get people to come and perform in New Zealand.
Additionally, we looked at the care workforce and transport sector agreements pathway. Again, this is another pathway which is looking to have applications open on 29 September 2023.
We also had a look at amnesty for overstayers. This is an issue that was raised by members of the committee, and the Minister at the time, the Hon Michael Wood, stated that he considered the issue was “important” and said he was working towards reaching a decision “as soon as possible”.
We also looked at Pacific Island nations; obviously, a very important area for immigration in New Zealand—and, historically, with that special relationship. The Minister said the Government was paying “special attention” to the relationship with the Pacific Islands.
Another matter which I thought would be important to highlight, given the recent weather events, was the Immigration response to the severe weather that we have had recently. So we did ask the Minister during our Estimates hearing about how the Immigration system was helping those areas recover, and the Minister said that the Government had recognised the high labour needs within the areas affected by cyclones and so had introduced the cyclone Recovery Visa, which allowed employers to sponsor people to come into those areas and to assist with recovery. We understand 1,300 applications for this visa were received.
I look forward to hearing the questions from other members in relation to the Immigration Estimates—obviously, a really important part of our “building back better” for New Zealand—and I look forward to hearing the Minister’s responses to those questions.
ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. I am keen to explore the Minister’s views around the Accredited Employer Work Visa and the system that we’ve got at the moment and how well it’s working.
My first question is that, during this briefing process, our select committee learnt from immigration officials that only 25 percent of businesses seeking accreditation and then being accredited were going to be checked by a team working inside Immigration New Zealand. My first question is: does the Minister think that only 25 percent of businesses being checked for accreditation is acceptable? Does he think that that might lead to businesses exploiting the system and exploiting migrants? The reason that I ask that question is that we have seen, in recent times, an explosion of exploited migrants in New Zealand. In fact, there was a news item saying that there had been a sixfold increase in the number of people being exploited. Given this Government’s commitment to try and stamp out exploitation, it seemed that the opposite is happening when you get people like Anu Kaloti from the Migrant Workers Association saying that she has been inundated with migrants on both visitor and work visas coming to her because they had been exploited, scammed, and were desperate for help. So the question comes back to the system that we run in accrediting businesses, which was supposed to have the intention of stamping out migrant exploitation. But, when only 25 percent of those businesses are going to be checked, according to officials at the Education and Workforce Committee, that is potentially problematic.
The second question is: what number have been checked so far? Immigration said 25 percent. That’s their aim. Can I ask the Minister: how many have been checked so far? The reason that’s important is we know that businesses were supposed to ask for reaccreditation after a year; that’s been pushed out for another year, so now we have a 24-month period of businesses potentially not being checked and not having to reaccredit themselves, leaving a much wider scope for them to potentially work in cahoots with overseas operators to scam people into the country. The reports that we’re hearing, because of this lack of oversight, are that migrants overseas are paying upwards of $15,000—I’ve heard up to $40,000—for a “job token”, because that’s what they believe they have to do, then coming into New Zealand, finding that the job doesn’t exist, finding themselves in a pretty desperate situation, then working under the table or going on to a migrant exploitation visa, and then being exploited on that visa, which we found in a meeting last week. Many who were on migrant exploitation visas were actually working under the table. So the question is: is that a robust process?
The reason, again, I ask is because I met with 18 Chinese migrants last week who were in this very difficult situation, who had been scammed and are now being exploited. Every single one of the immigration documents they gave me with the company name that they were supposed to work for. I looked up; none of them, not a single one, had a website, had contact details that I could find online, or anything about their business other than being registered with the Companies Office. That’s all that existed online. I couldn’t find out anything about those businesses.
So my third question is: does the Minister find it acceptable that companies are being accredited in a number of days—without a website, without any contact details, without any company history, and without having to give any documentation to Immigration New Zealand—and then sitting there for two years without having to be reaccredited? And very unlikely will it be that they get checked by Immigration New Zealand, given that only 15 percent are being checked for accreditation by the Accredited Employer Risk Management and Review team. Then the follow-up question is: does the Minister believe that these holes in our system are leading to an explosion of migrants who are paying many, many thousands of dollars for visas to then be scammed and find themselves being exploited in this country—the very thing that this Government says they want to stamp out? Thank you.
Hon ANDREW LITTLE (Minister of Immigration): Mr Chairman, thank you, and I thank the member for her question. I thank her for her recent interest in migrant exploitation, because it differs markedly from what she said just earlier this year in an interview with Newshub, when she said that “We need a [work] visa process that is streamlined, that cuts all the bureaucratic tape and the cost out.” So it’s good that that member has radically changed her position to accept now that, if we are to have good immigration processes and eliminate, or do our best to, eliminate migrant exploitation, what she preaches to the media and, for example, to outfits like The Platform, they’re actually not going to be good for people.
So the rules around the Accredited Employer Work Visa are that, first of all, the employer has to be accredited. They have to supply information to Immigration New Zealand. They have to demonstrate that they are in business and have been in business for at least a year. They have to provide information. The benefit of that is that, in a way that we didn’t have before, we now actually have source information to go to in relation to employers about whom complaints are made of migrant exploitation.
The regime in place at the moment is that a total of 15 percent of accredited employers are subject to various forms of audit or checking. It differs depending on the sector. So 100 percent of franchisees are examined or audited in some form or another in the court in a single year, and 30 percent of high-volume employers of migrants are also checked on each year, and then to make up the full 15 percent of all accredited employer visas, there’s a different cycle for others. That is a level of auditing and checking that we never had before; we were reliant almost entirely on a complaints process.
Even in spite of that, the other thing we’ve done is to radically improve and make more accessible the complaints process. And that explains, in the media report last night, which was factually incorrect in a number of respects but factually correct in others—but that’s Newshub these days, I guess. But it did note that, for example, in the 2021-2022 year slightly over 900 complaints had been made. The member in her dissertation just now talked to a sixfold increase in migrants being exploited. That’s not correct. It’s a significant increase in the number of complaints being laid and it’s not sixfold. And then in the 2022-23 year, again, just over 900 complaints being made. Of those, roughly half are processed through a website now that wasn’t in existence two years ago. Because in putting together a revamped immigration system and knowing (a) we need labour from overseas and we want to support employers who need labour from overseas, but (b) we want to do what we can to mitigate the risk of migrant exploitation, we put in place that mechanism.
In addition to that, for those who do suffer exploitation in work, we have a number of other visas they can very quickly move on to, which Newshub failed to report last night—in fact, erroneously reported last night. They can move on to the migrant exploitation protection visa or, if they are dismissed, particularly under the 90-day rule, which some have been, they can go instantly onto the dismissed worker visa. That gives workers in those situations an extra few months with the support of Government agencies to secure new work and it doesn’t have to be in the original sector that they were employed into. So those measures are in place, and that is starting to make a big difference.
In terms of their numbers, 516 post-accreditation checks of employers have taken place. There’s just under 1,500 currently in progress. This is across a total of 27,000 accredited employers and that is the way that the system works. But I’m confident that the way the system is set up—it’s in its second year—the processes are being tested and the ability for Immigration New Zealand to respond to complaints of exploitation is now better and more effective. And we’re providing support to those who, unfortunately, find themselves a victim of that type of approach from rogue employers.
Dr JAMES McDOWALL (ACT): Thank you, Mr Chair. On that same vein regarding migrant exploitation and the Accredited Employer Work Visa, I’d just like to get the Minister’s reaction in response to a question I made in June 2021. I asked the Hon Kris Faafoi: how can he be certain that the new scheme will not increase migrant exploitation—over two years ago—and the response was, from the previous previous Minister, “Because the new system will prevent migrant exploitation happening.” So, in light of that, does he think now, with two years of hindsight, the system has worked as intended given the media reports and the increases in migrant exploitation, and, if not, will he consider removing wage rules that drive inflation and wage recycling and also the tying of visas to employers, which ACT at the time two years ago called to be dropped?
Hon ANDREW LITTLE (Minister of Immigration): In that question, that member has exposed ACT’s core philosophy, which is that they don’t actually care about exploitation; they want labour as cheaply as possible. The system we have in place is to ensure a level of pay for overseas workers that creates an incentive for New Zealand employers to make sure that they have exhausted the domestic market for that labour and ensures that workers who come from overseas can be sure of an income that allows them to live with some sort of dignity.
So, going back to the question that the member posed more than two years ago about how certain the Minister at the time could be that there won’t be an increase in exploitation, I think, even if the Minister didn’t state it at the time, what was understood is we expected that reported migrant exploitation at that time was hugely understated. There was a huge under-reporting of migrant exploitation because a lot of migrant workers, particularly when English is a second language, find it difficult to find a place to go and raise a complaint. They are somewhat diffident or they lack the confidence to do so or they are simply fearful about the consequences. That’s why part of the new regime is a system that makes it easier to make complaints about exploitation—that not only makes it easier to make complaints but has a kind of safe harbour for those workers to go to, with those two other visas that can apply that they can be put on to very swiftly so that they can then, with support, get under way the process of finding alternative employment.
So I think, to respond to the member, what we are seeing now is reported levels of migrant exploitation that are, in fact, what they always were; it is just now more transparent because of the system that we’ve put in place, and we now have more effective ways of dealing with it.
ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. I would remind the Minister that it is possible to have a streamlined system with a lack of bureaucracy and red tape and still reduce migrant exploitation. Despite what he says, we can have the best of both worlds. In fact, migrant exploitation prior to the Accredited Employer Work Visa (AEWV), as most people in the industry and the sector agree, if you’d listen to them, is far worse now than it has ever been. But my question to the Minister is—he made the claim that businesses who are applying to be accredited must supply information. They must provide information that they have been in business for a year and have good financials. People inside Immigration New Zealand have been stating very clearly that of the people that they have been checking—this is the Accredited Employer Risk Management and Review (AERMR) team, which I’m sure the Minister’s aware of, that have done these 516 post-accreditation checks out of 27,000. They have found that most of them have not provided any details, have not provided financials, have not provided any evidence that they have been working for 12 months.
So while the Minister says it should happen, the point is that because Immigration New Zealand has been under so much pressure to get things done so quickly, they have not been following those rules—if they are rules. I know, and the Minister may know well, that most of these businesses are getting their accreditation through in just a number of days, which looks good for the Government, but, in fact, when you delve down into it, they are not providing the information that they’re supposed to. And now, for two years they have licence to bring in migrants at the cost for the migrant of tens of thousands of dollars. When they arrive here, they say, “I’m sorry; there’s no job for you.”, or employ them for a week or two and then say, “Your job is over.”, and then bring in more migrants. Has the Minister been contacted by any immigration lawyers from big immigration law firms in the last few weeks who have made these claims and advised him of exactly this, and has he responded to them? So that’s a question.
The other question is: is he aware of the fact that the AERMR team are now finding that most of the businesses that they are checking have not provided that information at all? And is he concerned that the 99 percent of businesses who have not been checked at all yet may be in this very same boat—or many of them may be—where they have not provided any financial information or any documentation, and they’re now given a licence for two years before they have to be reaccredited to bring in migrants, make a whole lot of money, dismiss them, and then bring in new migrants? It just goes round and round and round—tens of thousands of dollars for each migrant, like I say.
The second question to the Minister is around the new visas that have been set up to help migrant exploitation. So the migrant exploitation visa, which many migrants who I spoke to are on—and they say to me that the problem with that visa is they can’t find work. They are forced to work under the table. They are, effectively, being exploited on an exploitation visa, and then it is very difficult for them, in the current circumstances—and there are thousands of these people in the country who have been bought in and been exploited—to find a job for $29.66, the median wage which they’re required to do to get themselves back on an AEWV visa. Many of these migrants I spoke to are having their migrant exploitation visas run out in the next month or two. What is going to happen to them, Mr Little? Because they have spent and have huge debts overseas for tens of thousands of dollars. Migrants from all over the world have these huge debts. They’re trapped here. They’re on a migrant exploitation visa. They can’t get themselves onto an AEWV because no one will employ them at $29.66, or they were brought in with no skills anyway, so they’ve got nothing to do. They are going to become illegal, and then they’re going to be ripe for even more exploitation.
They are in very, very dire circumstances. The Minister needs to take this seriously. It’s been reported every single day. It is worse than we have ever seen. All of the big law firms, all of the immigration agents, Anu Kaloti, the whole of the Opposition know that this is as bad as it has ever been—much, much worse. The Minister just doesn’t seem to be understanding the problem and taking it seriously.
Hon ANDREW LITTLE (Minister of Immigration): What I struggle to take seriously is that member Erica Stanford’s hyperbole and exaggeration, and she has a strong track record of saying things that just turn out not to be factually correct. She did it last week, and she’s doing again.
This Government takes very seriously the need for an immigration policy that achieves a number of critical objectives. One is to meet the labour market gaps that we have. A year ago, that member was haranguing the Government for not moving fast enough to get more workers in the country to fill the gaps; indeed, her colleagues were doing the same. They did not care. They did not care about processes that were about checking and auditing, and her claims about wanting streamlined processes with no bureaucracy are just cant—that is all they are. It is meaningless waffle from people who do not understand and do not care about exploited workers. So we focus on systems that give us the best chance of giving us not only good information but the processes to respond effectively to it.
The other thing that member is doing is conflating two things. She’s conflating the exploitative and horrific behaviour of the dreadful, parasitic people offshore who entice tens of thousands of dollars out of people to get work in New Zealand with what happens in New Zealand. We don’t get to control what happens offshore with those exploitative, parasitic agents who are doing that sort of thing. Now, you know, we could work with good information and work through authorities here to work with countermand authorities in other countries, but we don’t get to regulate what happens there. What we do is we regulate what happens here, and what we do for those who do suffer the ignominy and the horror of exploitative behaviour from employers here is have means to respond, including, for those accredited employers who behave in that way, removing their accreditation and striking them off.
The member, again, comes back to “We must have streamlined processes, but not cause any inconvenience to employers.” So we have an auditing process because, out of 27,000 accredited employers, not every employer is exploitative. There are some pretty darned good employers who follow the system and follow the rules, including public sector employers and plenty of private sector employers too. The biggest complaint I get—and I heard a very wealthy immigration consultant on Newstalk ZB last week saying, “What is the matter? Doesn’t the Government want migrant workers to come here?”, because he also was very ignorant about what’s happening too, but Newstalk ZB doesn’t care about that, necessarily.
So we’re dealing with a whole bunch of people making wild, extravagant claims about the system when, actually, the system is responding. We have a system that gathers complaints, and it is gathering those complaints. We have a number of Immigration New Zealand personnel whose job is to make sure that accredited employers comply with the rules, that those who don’t have their accreditation taken off them, and that those who are the victims of that exploitation get visas to stay in the country and they’re assisted to get other work.
So these big, powerful lawyers that the member talks about—I’ve heard what they’ve been saying publicly. But it’s not what she’s saying, and I’m confident that the teams that we have in place in Immigration New Zealand, not just to respond to complaints, but to do the checking of accredited employers are doing that work and doing it effectively.
RICARDO MENÉNDEZ MARCH (Green): Thank you, I’d like to turn my attention to the issue of an amnesty for overstayers, which the chair of the Education and Workforce Committee talked about. The previous Minister of Immigration, when we were quizzing him about this, talked about having news soon. So I wanted to ask: when are we expecting news around whether the Government will do an amnesty for overstayers? Is the Minister expecting to announce something before the election? And if the Government is actively considering an amnesty for overstayers, whether any consideration has been given to pausing deportations of overstayers who do not pose a risk to public safety, or a national security risk? Otherwise we risk announcing an amnesty, with a whole cohort of overstayers who then would have been deported with no ability to access it. So I’m hoping for some answers into when we are expecting news, whether it’s before the election, and then any other considerations that have been given.
On the issue of exploitation, I wanted to ask about the Minister’s confidence around increasing the numbers of completed investigations for migrant exploitation. We’ve seen a huge number of increase, and yet over the years the completed number of investigations per year has actually stayed the same, meaning that, actually, as a proportion of the cases that are now being reported, we’re having less and less investigations being completed. So what confidence can the Minister give migrants and members of the public that there will be greater capacity to complete investigations of migrant exploitation?
Hon ANDREW LITTLE (Minister of Immigration): Thank you, Mr Chairman, and thank you to that member for those questions. Firstly, on the point about an amnesty for overstayers—I note that member and his party have raised that—I can say that it is a question that is under active consideration by the Government. I can also say it’s highly unlikely that there will be a decision or any action before the election. I do just want to make this point about amnesties—and the reason why there is a very careful balancing exercise required is that thousands of people come to New Zealand every year under the immigration system that we’ve got, they come under the rules that we’ve got, and they adhere to those rules. There are some who come here, they come under the system, and, for a range of reasons, often quite innocent, they find themselves outside of those rules. We have to make sure that the system that we’ve got and the system rules that we’ve got have integrity. The reason for that is that we are a small country, and the reality is that we cannot absorb everybody who would like to come here and stay here. So we have to have a set of rules, we have to manage it, and we have to make sure everybody adheres to those rules. So when we think about an amnesty, we have to think about the signal that we’re giving to people if they think, “Oh, gee, this is a Government that just routinely gives amnesties; if we stick around long enough, we’ll be OK.”
So we take some time and consider very carefully issues of immigration amnesties for those who find themselves irregular or irregularised because of either the passage of time or the expiry of their visa and the fact that they haven’t sorted that out, or, as in some cases too, particularly if they’re children of those who have come here under visas originally, visas have expired, the family is still here, and that person who was a child at the time they came here, they’ve done nothing wrong, they’ve lived their life, they’ve relied on their parents and caregivers to comply with the rules but haven’t necessarily done so. So we have to think carefully about all those sorts of things. We don’t like the fact that there are some in this situation where they have the sword of Damocles hanging over them, there’s uncertainty about their immigration status, and we think very carefully about that.
In relation to the threat of deportations, I think I can assure the member that the advice I’ve had from immigration officials is that they do think very carefully about enforcement in those circumstances and think very carefully about the justice of the particular case.
So, on the issue of an amnesty, as I say, it is under active consideration, but don’t expect anything before the general election.
On the issue of exploitation and completed investigations, I repeat—sorry, the figure I gave before was post-accreditation checks—the number of completed investigations down to the end of the most recent financial year, so 30 June 2023, was 145 completed immigration investigation on exploitation. That compares with 93 the previous financial year, 71 the previous financial year, and then much smaller numbers for the kind of two years of COVID. But those numbers are getting up. We now have about 300 people in Immigration New Zealand responsible for the checking and investigations, so I’m confident that we have resourced that in a way that means that we can give it our best in terms of investigating migrant exploitation.
Dr JAMES McDOWALL (ACT): Thank you, Mr Chair. I’d just like some clarity on the topic of the Active Investor Plus Visa. With regards to the weighting of funds, because, as I’m sure the Minister is well aware, one of the purposes of this is to try and get direct investment which weights $1 to $3. So in theory, we could have a—I imagine ideally the Government would want a lot of $5 million applications that New Zealand Trade and Enterprise (NZTE) considers good investments. The problem with that is that based on the figure that I received in an oral question last week, the average amount is $15 million per application so it would seem—unless that’s incorrect or slightly misleading—that every application is not being weighted, so they are not direct investments, not managed funds. So I’d just like to clarify that with the Minister to determine if that is indeed how the system is going, because if it is, then it sounds like it’s not working very well at all. The follow-up to that is that I would ask why NZTE seemed so ill-prepared for their significant role in this visa given that their advisory panel didn’t meet until February 2023 to decide what an acceptable investment was, which was five months after the visa was actually launched.
Hon ANDREW LITTLE (Minister of Immigration): Mr Chair, I thank the member for that question. I wasn’t around for his question last week, so I’m not quite sure the particular content of either the question or the answer given. What I can say is that of the 31 applications received since applications opened since August last year, three are fully and finally approved and 14 have been approved in principle. As the member acknowledges, there is a weighting, so depending on the nature of the investment, the title of the visa is “Active Investor”, so the aim is to get investments that generate business activity that could be—as opposed to putting money in a bank account and generating interest, which tends to benefit probably more people offshore than they do here.
It could be the person, the visa holder taking their money and setting up or purchasing a business and actively running it, and using their entrepreneurial skills and management skills to generate wealth and activity locally. That’s actually what we would like most. Or, it could be those who might be a passive investor of a business that is employing and generating activity, and the weightings are given accordingly. I’d have to check the data that underpinned the answer to the member’s question last week to see whether that average of $15 million is the weighted average of investments, or the actual dollar value of investments.
As the member knows, the aim is to get investments of value for the purposes of the policy—not the dollar investment, but valued for the purposes of the policy of $15 million. On the on the grounds that I’ve just specified. So a $5 million investment that the visa holder actively manages themselves, and employs people, and what have you, will be valued at $15 million for the purposes of the application. Whereas the passive investor would require $15 million to get there. So that may not directly answer the member’s question, but I hope that it helps.
CHAIRPERSON (Greg O’Connor): Erica Stanford. Can I just invite the member—I noticed when she sat down last time there were a number of questions and comments. If she—and other members, as well—wanted to have a more interactive with the Minister then I’ll be able to allocate questions accordingly. But the members can use their time how they like; it is a timed debate. That’s just a piece of advice from the Chair.
ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. A couple of quick questions: can I ask the Minister in the chair, with the post-accreditation checks, how many accreditations have been taken away—removed? Of the 516 that have been checked—out of 27,000—how many have been removed? He mentioned that they could be removed, how many have been removed?
My second question is: are all employers who are applying for accreditation providing documentation? Given that the Accredited Employer Risk Management and Review (AERMR) team is finding that many of them haven’t, what is his expectation? And if his expectation is that not all employers are providing the documentation, i.e., the 12 months of operation or the financial stability, what percentage are providing that information, according to some of the post-accreditation checks that have been done?
My third question is around those agents overseas, and the question is: is he aware that they are working in cahoots with employers here, because of this system that allows companies to be accredited with very little checks and jobs that are being advertised for no skill, no qualification, and therefore nothing to verify at Immigration New Zealand when the migrant applies for their visa? So the whole reason for the explosion in offshore agents acting in a nefarious way is because of this system that allows them to do that; when there are very little checks going on and those what I call “zero-zero contracts”—no skills, no qualification—job ads being done. Is he aware of that? And what plans has he got to work in the Accredited Employer Work Visa system to try and stamp that out? Is it around checking more businesses who are applying, or stamping down on jobs that require no skill, no qualification, or doing more checks and more verifications of migrants when they apply for their visa?
RICARDO MENÉNDEZ MARCH (Green): Thank you, Mr Chair. Just on the issue of exploitation, I guess I wanted to check whether the Minister agrees that tying work visas to a single employer is a contributing factor to exploitation and, if so, whether any work around this practice is under way or considered in the future as part of preventing exploitation, as well? I wanted to also ask about the parent category visa and particularly with the processing times for that visa specifically, and what are the Minister’s goals for the number of parent visas that are going to be processed in this coming year? Particularly for those people that have been waiting for a substantial amount of time, who at the time of application their parents would have been in good health but by the time the visa is finally now being considered and they have to sit medical checks then their health may have changed, whether any consideration’s being done around making sure that those delays don’t then contribute to creating additional barriers for, you know, parents who through no fault of their own had to wait several years to have that visa being pulled up? So—thank you.
Hon ANDREW LITTLE (Minister of Immigration): Thank you, Mr Chair. To Erica Stanford’s questions about post-accreditation checks. First of all, how many have been removed: I don’t have that number and officials haven’t been able to provide it to me. I know that a small number have been removed because I have seen some periodic reporting of accreditation having been removed from a small number of employers. The second question is, are all employers providing the documentation? They have to provide information, make declarations, and provide information to Immigration New Zealand in order to be accredited, and so the relevant information in order to be accredited is being provided. And the third question which relates to the relationship between employers and—I think the question relates really to rogue employers here and the relationship with dodgy agents overseas. It is not a requirement for employers seeking accreditation here to disclose their relationships with either agents or other nefarious operators offshore. And that would be a step too far, I would have thought. But if as a consequence of regular conduct it becomes clear that an employer here has relationships with people offshore who are aiding and abetting the exploitation of people here, then the employer here will be in the gun. So that is the check and balance on that.
In relation to the questions from Ricardo Menéndez March, first of all the question about time: the accredited employer visa to the employer. The Accredited Employer Work Visa was a process to allow employers here to employ from offshore. So they get accredited, they get the approval to be an employer who can employ from overseas, or least to employ a visa holder. The role or roles into which the employer wants to employ those workers is checked off as being one for which the employer has failed to—after reasonable efforts—get a New Zealander to occupy, and then the employer is entitled to recruit offshore and Immigration New Zealand then provides that worker with a visa to pick up that job. It would defeat the purpose of the exercise—which is an immigration system tailored to meet labour market needs—for the visa not to relate to the particular employer who’s gone through the effort of getting accredited and getting the job checked out and recruiting the worker. So we don’t intend to change that aspect of the scheme.
But the safeguard against exploitation is that if something does go wrong—if the worker is dismissed, then they can go on to a dismissed worker visa. If they are the victim of migrant exploitation, they can go on to a migrant exploitation protection visa. Moving to those visas can happen reasonably swiftly and so they are afforded that level of protection. So we don’t intend to change that. In relation to parent visas, the member will know that there is a cap on those—2,500 of those parent visas per year. So the process at the moment is taking some months to process those. But they are oversubscribed—that is the reality. I’ve just been given some information about the time, so as of 24 July this year, so just slightly more than one week ago, there had been just over 1,400 invitations to apply for those visas as a result of applications made onshore, and that started in November last year. Of those, 968 applications have been submitted and 107 have been decided.
So there’s still some in train to get decided, but we know that that is an area of great stress for many migrant families here who want parents protected to come here. We’ll work within the cap, we have the processing under way, and we’re doing the best we can to meet those families’ needs.
ERICA STANFORD (National—East Coast Bays): Thank you. I’ve taken your advice, Mr Chair; I’ve got a number of quick questions, but I’ll do one at a time and seek the Minister’s response. The first question is around his previous answer to my question when he mentioned that it is his expectation that all employers are providing information or declarations, and that potentially is where the nub of the issue is. Is it the Minister’s understanding that businesses, when they apply for accreditation, are providing actual documentation to prove that they have been in operation for a year and have good financials, or is it his understanding that all they have to do is to sign a declaration to say that, yes, they have been operating for 12 months, and, yes, they are financially stable?
Hon ANDREW LITTLE (Minister of Immigration): The advice I’ve had is that the employers have to provide a declaration in relation to the standards that they have to meet, which includes employment standards, and about their business. So if they do that, that is then the basis on which any subsequent check or audit is taken. I remind the committee that, for franchisees, 100 percent of franchisee businesses who are accredited employers are checked each year; 30 percent of high-volume employers of migrant workers are checked each year; across the total cohort of 20,000 accredited employers, 15 percent are checked. If any of those employers have made declarations that turn out to be incorrect, then there are penalties on that employer. So it is not in their interests to be misleading Immigration New Zealand. Where the cases of gross exploitation have been discovered, to date, accreditation has been removed, and enforcement action is in train for those particular employers. That is the system as we have it.
ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. This is a much better way of operating; thank you for your advice.
I guess, my next question after that is—so what we understand now is that businesses don’t actually have to show any evidence by just signing a declaration. So this is a very high-trust model, Minister, where the businesses just have to sign to say, “Yep. I’m good. I’ve been operating for a year and I’m financially viable.”, and then they will be picked up, as I understand it, in a post-accreditation check of which we’ve only done 560 in the first year, out of 27,000. So you can see, I think, Minister, where we’re coming from, in that if you are a business who wants to work in cahoots with an overseas agent to make tens of thousands—in fact, hundreds of thousands—of dollars by exploiting migrants, bringing them into the country, pretending you have a job for them, and then letting them go and get more in, your chance of getting picked up is slim, given that you haven’t had to have provided any actual documentation to Immigration New Zealand to check, you’ve just signed a declaration, then only at the moment—what are we on one-point-something percent; 1.9 percent of businesses have been checked in a year, and we know that they don’t have to apply for accreditation again for another year.
That gives a business who would like to take part in this pretty awful behaviour two years to run, at which point they can disestablish their business, re-establish as something else, and carry on. Can the Minister understand how this system has created a huge hole in our border for those people who wish to exploit migrants, and that’s exactly why it’s happening?
Hon ANDREW LITTLE (Minister of Immigration): I reiterate the points that I have already made. Of the 27,000 employers who have been accredited, they make their declarations—they don’t just make their declarations; they have to go through other processes too in order to achieve accreditation. So they also have to demonstrate that they have attempted to employ New Zealanders in the role, and if they’re able to demonstrate that they’ve gone through that process and cannot employ anybody, they then have to recruit an overseas worker on the basis of the relevant wage, which is higher than the minimum wage—the median wage, usually; or with sector agreements, that can be slightly adjusted. But that’s the basis in which that employment takes place.
I just remind the committee and, indeed, that member, of her own words only a year ago, criticising the Government for not moving fast enough to fill the labour market gaps that we demonstrably had, following the opening of the borders, and the winding down of the impact of the pandemic. We had a labour market that was in desperate need of many workers, but we needed to have an immigration system that had enough checks and balances and safeguards to allow New Zealand employers to employ, to fill the gaps, to meet the needs, to get output going and productivity going, but also allow good, effective enforcement action. We then further assisted, of course, by the passage of the worker protection legislation just recently, which gives Immigration New Zealand more power to get information from employers, to investigate allegations of migrant exploitation.
So the system as a whole was set up on the basis that most employers—most employers—try to do the right thing, and I say that as a former union official! Most employers try to do the right thing. There are rogue employers. We’ve always had rogue employers; we had them 10 years ago. I remember the heaviest prosecutions that took place—not many of them, unfortunately—prosecutions of hideous conduct that took place, where workers had their passports removed from them, where they were required to sleep overnight in the place where they worked, working seven days a week, and we had a very haphazard enforcement system. The system that we’ve set up now, in terms of collecting information, getting information about the employers, knowing where those workers are going, and a system for those workers to make complaints, as evidenced by the increase in complaints—nearly half of all complaints now come through a channel that was not in place two years ago. So it tells you that migrant exploitation was real before, it’s real now, you started to get a feel for the real value of it.
But that is the nature of Labour Governments, because we don’t seek to sweep things under the carpet; we actually want to know what’s going on and we set up systems to make sure we know what’s going on. That is the difference between members in the National Party, who shout and scream a lot but don’t actually mean it—because they want streamlined processes with no bureaucracy for employers, but then they turn up here, complaining about migrant exploitation. They want to have it both ways. We want a system that has integrity. We want to have a system that generates the information about what’s actually happening, and that’s what we’re getting and that’s what we’re doing. That’s why we now have 300 people dedicated to dealing with claims and allegations of breaches of accredited employer rules or migrant exploitation, and the system is working as it is intended.
ANGELA ROBERTS (Labour): Thank you, Mr Chair. I’d like to ask the Minister about the response that Immigration New Zealand has made in the wake of Cyclone Gabrielle and Cyclone Hale. We know that those events across the North Island resulted in carnage, the destruction of property and infrastructure, and loss of life. We know that the scale is not something that we’ve had to deal with in rural communities very often—usually, there’s a flood and we, you know, get on our tractor and we go clean out our neighbour’s fence lines—and we know that the significant labour needs required to respond has been high and complex.
I’m just curious about what the plans are for the cyclone Recovery Visa that was set up. Is it working as intended, and if you can explain some of the types of workers that are coming in to help with the recovery, Minister?
Hon ANDREW LITTLE (Minister of Immigration): I’m happy to answer Angela Roberts’ questions in that respect. So I think the fact that we were able to get a Recovery Visa up in place as quickly as we did demonstrates how agile our system can now be, in the same way that we did with the Ukraine visa last year and that we’ve done with other special category visas.
So with the Recovery Visa, I think there’s roughly 2,800 applications for those visas—about 1,400 were granted. A significant number have been applied for in more recent months, but they’ve actually been declined. That tells you that, actually, the oversight of these applications—and it’s about ensuring that the applications have an authenticity and a genuineness about it—that we’re not just taking anybody who comes. It’s got to be related to particular work related to the recovery.
The advice I’ve had from officials is that, in more recent months—the last couple of months—some of the applications have had the appearance of, using their words, “a try-on”. And we don’t like try-ons; we like authentic applications. But that has allowed roughly 1,400 workers to come into the country to assist farmers, horticulturalists, and others for the work needed for recovery—for recovering their productive land.
So that visa is still open, and it is under review about how much longer we keep it open for. It is still open, but we will keep a close eye on that. The sort of workers that have come through there have been a whole range, actually, from the semi-skilled labourers and what have you to the skilled—carpenters, electricians, and others—who have come here to assist in doing work that is needed to support the recovery from Cyclone Gabrielle.
Dr JAMES McDOWALL (ACT): Thank you, Mr Chair. I just wanted to quickly clarify the previous issue that I was raising around the Active Investor Plus Visa and the investment amount. Because the oral question that I put—and the Associate Minister did it on behalf of the Minister—was on notice, obviously, and it was for “unweighted”. In the response, it was specifically, the Minister, on behalf, said, “unweighted”.
Now, when you average it out, it’s $15 million an application. Now, the reason that’s an issue is because, as the Minister knows, ideally, you’d be getting lots of $5 million investments that New Zealand Trade and Enterprise is happy with and the Government is happy with. But it seems like it just isn’t happening. So with that in mind, it would be good to—if we could go back and check that question at some point to make sure the information was indeed unweighted and correct, and, if it was, what’s happening?
Hon ANDREW LITTLE (Minister of Immigration): I’m happy that the member has repeated that question. I have now, since, had confirmation that the member is correct: the average $15 million value is unweighted. So the thesis that I think the member is trying to establish looks like it is almost certainly correct, which is that most of the applications relate to the higher cash amount, which means that the level of involvement of the investor is not necessarily applying their management skills, but it will be applying their entrepreneurial skills, even if only as a joint investor or a partner in an investment or a “sleeping partner”, as the commercial world refers to it.
So it is attracting that investment. That is certainly a more active mode of investment than we were seeing for many years previously, which was a lot of people were getting a visa, bringing millions of dollars here, and putting them in Government bonds, putting them in term deposits and things like that, which was not generating employment or generating wealth locally in the way that we want to with this investor class.
The Active Investor Plus Visa gives rights and a pathway to residency, so we want to make sure that New Zealand is getting out of that what we need to, which is investment that generates wealth, as opposed to just sitting in a bank account.
ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. In light of the answers to the patsy question that the Minister gave in question time today around wanting to see more skilled workers in New Zealand, I’d like to read him out a quote from the “Immigration Reset: Setting the scene” speech which says, “Increasingly, [the] temporary workers [previously coming into New Zealand] are at lower skill levels—nearly half of all Essential Skills visas approved in 2019 were at the two lowest skill levels.” So my question to the Minister is: with the new Accredited Employer Work Visa (AEWV) system that’s been in place for a year, and given his desire to bring in more skilled workers, what is the percentage now of those AEWV workers being on skill levels 1 and 2?
Hon ANDREW LITTLE (Minister of Immigration): Mr Chairman, thank you for that. To the member, I cannot quantify what that is in terms of skill level, but the whole reason for setting a minimum income level, median wage level, is to incentivise employers to employ higher skill levels than would otherwise be the case. That is an objective of this scheme, and one of the concerns that this Government had picked up from many people over many years in the years previously was we had an immigration scheme that allowed a lot of unqualified or semi-skilled people to come here where that was not necessarily where the need was. It is about focusing employers here on filling skilled gaps that we just cannot fill locally.
I know that that member, when I look at the comments that she made to The Platform in April this year, is not concerned about that, and she thinks there shouldn’t be a wage threshold or an income threshold.
Erica Stanford: It’s nice that you listen to me!
Hon ANDREW LITTLE: And so—well, the member thinks that I listen to her; actually, she goes and talks to The Platform. I have to tell that member—to her considerable regret, I’m sure—that I don’t listen to The Platform. I do note what she said to The Platform, which was this—and I quote—“I’ve been saying for a long time is we’ve got to get rid of this median wage rubbish about, you know, you have to earn almost $30 an hour to be able to work in New Zealand, which means in some cases you’re going to be paid more than the Kiwi standing next to you. That’s just got to go.” So we know what the National Party wants to do. And—
CHAIRPERSON (Greg O’Connor): The time for the Minister’s time in the chair has come to an end, and we now make room for the Minister of Education. Thank you, Minister.
Education
CAMILLA BELICH (Chairperson of the Education and Workforce Committee): Thank you, Mr Chair. It’s a pleasure to take a call in this Estimates debate for Vote Education, as chair of the Education and Workforce Committee. We did have the Minister come and have a hearing with us at the Education and Workforce Committee to cover the three Votes that this Estimates covers: Vote Education, Vote Education Review Office, and Vote Tertiary Education.
Now, this is a significant Estimate for the Government in terms of the amount of money that this Estimate seeks. I think the overall amount for the three Votes is $21.5 billion, which is a considerable amount of money. But as you will see, I’m sure through the next wee while, as we look at what’s covered in the Estimates, it’s of incredible importance to New Zealand.
So we looked at three major areas at the Education and Workforce Committee, and they were: early childhood, compulsory sector, and tertiary education. I thought it might be helpful to the committee, as part of this debate in my role of going through this report, to just outline some of the summaries of the appropriations that are sought under these Estimates for Vote Education.
So we had a total of $11,586 million for educational services, primarily for schools, including teacher salaries in early learning providers. And this is aside from teacher salaries, school operation grants, early learning subsidies, and other significant costs, including curriculum support and professional development in schools and early learning sectors, and school transport services. A total of nearly $3,578 million for services to the Ministry of Education, including the delivery of school accommodation, including depreciation and capital charge, and learning support services being the most significant costs. We had $2,004 million for capital expenditure to the Ministry of Education, mainly related to school sector properties. And $104 million for other educational services, mainly for funding to proprietors of integrated schools. We had $77 million for capital expenditure in schools and $59 million for allowances, scholarships, and awards for students, teachers, and trainees. So a significant investment sought in these Estimates by the Government.
I thought I would just also go over some of the key comments made during our Estimates hearing in Vote Education. So the first area we looked at was early childhood education. We did cover the significant—over $1 billion—expense into the 20-hours free of early childhood education for two-year-olds, which was announced in this year’s Budget, obviously expanding that 20 free hours to two-year-olds from the current three- to five-year-olds. So that was a significant matter that was discussed during the Estimates.
We also looked at school attendance, which is a matter which is raised within our committee regularly. And we heard from the Minister on the progress that has been made in that area and also that schools are working hard to increase the attendance of school students. We also heard from the ministry that regular attendance was a foundational aspect for student achievement and that there’s been significant progress in schools that had a concerted effort in this area, and one that we noted was in Northland.
We also looked, in the compulsory sector, at NCEA and the curriculum. We know that NCEA is being updated and we heard from the Minister on that. Obviously there’s expenditure associated with these two curriculum changes. We also heard about some schools opting out of NCEA level 1. I understand that this has always been optional, but none the less it was covered in our hearing.
We also looked, just quickly, at upgrading small and remote schools, alternative education, Pacific and Māori education, tertiary student enrolments, and funding. We talked about Te Pūkenga, we talked about other rogue entities, and also immigration settings in relation to education. So overall, we covered a wide variety of key issues within the Vote Education area, including the significant Estimates made by the Government. I look forward to hearing from the Minister in relation to her thoughts, and members’ questions on the Estimates as presented to the committee.
PENNY SIMMONDS (National—Invercargill): Thank you, Madam Chair. Early childhood education (ECE), the early childhood sector, and particularly the home-based providers—the Minister will be aware that over 50 home-based providers closed between January and May this year. I’d like to know what the Minister plans for this sector and whether she has made any provision for increases, given that home-based ECE is limited to a ratio of one to four but when the children turn over two years old, home-based get a reduction, a significant reduction, yet they can’t increase their ratios in the way that centre-based provision can. So what provision is she making for securing home-based providers and provision in the sector?
Hon JAN TINETTI (Minister of Education): Madam Chair, thank you, and thank you for that question, although it’s a little bit premature in some respects, because we’re well aware of the issues and I think everybody’s well aware of the issues that home-based are facing at this point in time. I will say that my Associate Minister, the Hon Jo Luxton, has had some really good discussions with members from the early childhood education community over the short time that she has been Associate Minister and in that role.
We have sought advice from home-based around home-based and what we can be doing there. We’re currently working through that advice. We do not want to leave home-based so that they are feeling unsupported, but we also want to make certain that we get it right within the context of the total provision and the total network within the country.
We absolutely understand the importance of them within the network, which is one of the reasons why we are committed to this work and working through it with some urgency as well. I know that’s a little bit frustrating, but I will say to the member that when we do have that advice and when we have made those decisions and we are able to go public on them, she will be one of the first to know.
PENNY SIMMONDS (National—Invercargill): Thank you Madam Chair. Just the rate of closures of home-based provision—as I said, over 50 in the five months at the start of this year—the home-based sector is concerned by the end of the year there may be no home-based provision that isn’t cross-subsidised by centre provision. So is the Minister able to give some sort of indication of timing and amounts of funding? Because the word we are getting from the home-based providers is that by the end of this year there will be none left.
Hon JAN TINETTI (Minister of Education): Which is why we’re working in some haste through the advice that we have been given. We do know that closures do happen for a variety of reasons. We have also made certain that we’re looking into those variety of reasons. It’s not just around the funding, although that is a main reason as well. But we are making certain that we are not causing unintended consequences in the decision making that we are taking at this time.
PENNY SIMMONDS (National—Invercargill): The pay parity funding for the centres, in particular the early childhood education centres—much has been said within the sector about how the paucity of pay parity funding from the Government is likely to increase fees, or is likely to increase or make the ratios worse in the sector. Can the Minister give some more certainty to the sector around pay parity funding so they can be sure it’s not going to impact negatively on either the centres or families with children in the centres.
Hon JAN TINETTI (Minister of Education): So, thank you, pay parity is very important, that we acknowledge that a teacher is a teacher no matter what sector they are working within. It is something that this Government has been committed to right from its outset. We are absolutely committed to achieving pay parity between certificated teachers in education and care services, and the kindergarten teachers, as the member has said.
Of course this does reflect the action 3.4 in the Early Learning Action Plan. So one of the aspects that the Government set out to do first was to work through that Early Learning Action Plan so that we were making certain that we had targeted responses in the early learning sector to some of their biggest issues. But also to make certain that we’re putting the young person at the centre—to make certain that we’re well remunerating those well-qualified teachers within those centres, because we know that they make a huge difference to those young children.
So Budget 2023—and I’ll just get my figure here—provided $321.6 million over four years to education and care services through a third opt in funding rate, and that is the third of the opt in funding rates. It disperses this funding through new funding rates, full pay parity rates for education and care services that attests to paying teachers with relevant qualifications and experiences at least the kindergarten teachers’ collective agreement steps 1 to 11. At the time, those rates were $51,358 to $90,000, but of course, we do know that there has been a collective agreement in the kindergarten teachers’ agreement that has been settled since then. And paying in that too, back then it was paying managers a minimum salary of $94,175. These full pay parity rates matched the kindergarten funding rates and will be available from 1 November 2023.
So we can tell, and we have been in contact with—the Ministry have been in contact with the sector to ensure those people that are going to be in those parts of the sector that are going to be opting in to that level, that those rates will be available, and they have those rates with them now, as in they know what they are.
PENNY SIMMONDS (National—Invercargill): So the options that are being put to the centres by the Ministry, have they got figures in them to allow the centres to model the impact on them at this stage?
ERICA STANFORD (National—East Coast Bays): I’d like to go back to some of the answers given in question time today around the achievement of Māori students in NCEA level 2. The Minister claimed today, as an excuse for this, that many Māori students, or many students, are leaving for work, for further education, for apprenticeships, or they’re travelling overseas. My first question to the Minister is: what kind of employment does she expect that a child without NCEA level 2 will be able to go into? And what sort of future will they have in the job market without NCEA level 2?
Hon JAN TINETTI (Minister of Education): I wouldn’t say it was an excuse, as the member Erica Stanford has just said that to be. That is the reason why young people are leaving at this point in time, and we do know that we have high employment rates at this point in time. Of course, we know that the pandemic has put this stress on families, and we know that different demographics haven’t had an even experience during the pandemic, as well. This isn’t just in this country; this is across the globe. This is something that my counterparts in other OECD countries have highlighted as one of their key issues that they are also facing as well.
We also know that an education is really important for a young person to be able to make choices. If the member had listened carefully to the question before that question in today’s question time, that was my last statement: I said, as I have always said, education gives choices, and choices are important for people to be able to have different pathways in life, as well. At no time am I ever saying that it is acceptable when young people leave school without NCEA or without qualifications.
We also know that there are other pathways, and I also pointed out to this House today that the NCEA in school is not the only way that those young people can get those qualifications. We know that Youth Guarantee funding has been increased to enable people to reengage and get those qualifications. That is one of the reasons why this Government has increased that Youth Guarantee funding: so that, when they are leaving school, those pathways haven’t been closed off for them; that they are able to enter in.
I know that the member also goes visiting, like I do, into some of those areas. I’ve seen some amazing opportunities recently for young people. In fact, I was at one on Friday where young people were very excited about the increase in opportunities for them to carry on with their education and to get those qualifications. I’m really proud of the fact that, yes, we know that there are people who might be leaving without it, but we’re putting those opportunities in place so that we’re not taking those choices away; that those young people will have those choices available to them throughout their education lifespan.
ANGELA ROBERTS (Labour): Thank you, Madam Chair. I’d just like to turn your mind, Minister, to some of our students with the greatest challenges with alternative education. There have been some initiatives that we’ve reflected on like Te Tupu, and I’m just curious about how that’s impacting on decisions about how we better support our alternative education. Many of us, like you said, have had experiences with some amazing places. In my own area, Ngā Wānanga a Maui Potiki are doing amazing work, but they’re all doing it on a shoestring and I’m just curious about the resourcing and other supports that are going in as you try and support those students.
Hon JAN TINETTI (Minister of Education): Thank you for that question. It’s something that was actually traversed when I attended the select committee as well, because alternative education is another pathway for our young people. It is something that I believe—people will have heard me say this before—that not always does a schooling environment suit all our young people, or our young people need further support to be able to access the schooling environment. Te Tupu is a really interesting one because, as this member knows, alternative education is something that’s traditionally started at an older age group, and yet we have been seeing increasingly a number of younger people—younger age group children; intermediate and primary school—who were disengaging or who were at risk of disengaging from their schooling environment, and that’s really difficult if you can’t get to them and turn that around.
So Te Tupu was set up by my predecessor the Hon Tracey Martin in Napier. I think she called it a prototype rather than a pilot, and, basically, what it did there was from year three up, schools came together and they identified young people who might be at risk of disengaging. They came into this programme for a set amount of time, but it was a wraparound, so it has a whole lot of NGOs and different organisations that are part of the management group. Those young people are having huge success when they’re going back into their schooling environment because they’re have this wraparound and they’ve had kind of the pre-teaching, in some respects, that they didn’t get before of how to experience the school environment. So Budget 2023 has put some more funding into extending that. It won’t look the same throughout the country because we expect that there will be regional differences, and, of course, the funding won’t be for a full roll-out, but it is starting to work that through in a co-design in different areas.
We’ve also increased the per-student funding rate into alternative education. Alternative education had had very little funding put into it over time. It was only in the last couple of years that we started to increase that funding, and it’s gone up to just over $16,000 now per student. Now, that’s probably only bringing it back to where it should have been years ago, so there is more work to do in this area and more discussions to be had with different peak body groups, particularly iwi—I’m going to say here—because the majority of children and young people in alternative education are Māori, and so we’ve got to make certain that we are getting something that works for them. A lot of work has been done, but I think the pandemic has taught us different ways that we might be able to reach these young people as well.
So I’m really excited about the opportunities that we have in this space. I think that we have to create a system that works around the young person, and not always expect that the young person has to work around the system, so that we can actually support that young person to understand how systems work through something that truly works for them. So the money has been increased, and the providers are really liking that, but we’ve got more work to do in that space.
ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I want to ask the Minister of Education about the science curriculum—the leaked draft science curriculum. I asked her in the Chamber a little while ago why it didn’t include chemistry, biology, and physics, and her answer was: “The member is wrong; the final curriculum will include chemistry, physics, biology, and other core science topics. That is not in question.” I just want to get the Minister to elaborate on that. Does that mean that those topics will be as they are at the moment? So you do physics, you do biology, and you do chemistry, and, within each of those disciplines, you learn many things—I’m sure; I never did them, so who knows? But the point is that I would like the Minister to just let us know whether or not the draft curriculum that we’ve seen is not going to be the final curriculum and that, actually, the final curriculum will include physics, chemistry, and biology as stand-alone subjects that young learners will get scaffolder learning through?
Hon JAN TINETTI (Minister of Education): Firstly, it wasn’t the draft curriculum; it’s called a fast draft. It’s almost a draft of thinking. It’s a way that a lot of different places will put out thinking to start with to see whether it’s going to resonate with the sector or not. The draft curriculum is scheduled to be released later this year, but I also want to make sure that we’re getting that right as well—and clearly there was some feedback.
But can I just go back to what the member was saying. There was almost a thought there that nothing had to change, and that’s not what the evidence shows us. The New Zealand Council for Educational Research 2019 analysis for the Ministry of Education shows that, in the current curriculum, science concepts are unclear, and it is hard to see how learning would deepen. The OECD 2015 report: 15-year-olds have low awareness of science concepts associated with climate change and sustainability. The National Monitoring Study of Student Achievement data shows that achievement in science drops from years 4 to year 8, where only 20 percent of students achieve at or above curriculum expectations. Otago NCEA data 2023: science pathways through senior secondary show that the success rates for those who do sciences year 12 to 13 are low and are dropping. That tells me that there needs to be work done on the curriculum and that we can’t have it that we’re just keeping the curriculum in its form at the moment. In fact, every science teacher that I have spoken to and every scientist that I have spoken to—including the Prime Minister’s Chief Science Adviser—have all told me that we can’t just expect to keep the same, because we are not going to have and produce the science expertise that we need in this country.
Indeed, the final science curriculum will include chemistry, physics, biology, and other core science topics. That is not in question. How that looks, I am not going to presuppose the work that the experts in the sector are working on at this moment, and are working through a new curriculum and are testing different options between themselves and looking at it to make certain that we’re getting that right. They are making certain that the feedback that has come back from that first thinking is incorporated into that next step, and I think that’s really important, and that’s why we want to take the time to get it right.
ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. So in the draft that wasn’t a draft, could I ask the Minister of Education: what was the feedback that was received and how was it received? As she said that she’s aware of the feedback and how it’s been received. I’m just keen to know how it was received and what the feedback was when those core topics were stripped out and replaced with earth system, biodiversity, food, energy, water, and infectious diseases.
Hon JAN TINETTI (Minister of Education): I think that the member will have seen some feedback that came through in the media, and that’s no different to what I’ve seen. People were concerned that those core science topics might be not covered if we went too far in one area of looking at context only and the context. But the context is important. So it’s a mixture of both. And what’s been received—I’m not really certain what the member’s getting at; are you meaning how the ministry received it? It came through in the normal way of how it was—
Erica Stanford: How was it received? Like, as in what was the feedback?
Hon JAN TINETTI: Just exactly what I’ve said—
Erica Stanford: Terrible.
Hon JAN TINETTI: —so exactly what I’ve said—no, I wouldn’t say that at all, to that member; I would say that there was a feeling that we were probably here and we’ve gone too far here and we’ve got to find a place in the middle. That’s exactly why we do the testing: to get this right. If we don’t do the testing and test it out with the sector, which I have seen happen so many times in education, that would be one of the worst things that we could do. We are not prepared for those kids to be guinea pigs like they have in the past in many other initiatives that I have been privy to—one of those being national standards. I’m not prepared as Minister to lead that sort of environment in our education system, and that’s why I will make no apologies for taking a document such as the science thinking out for testing.
ERICA STANFORD (National—East Coast Bays): For all of the science teachers, the heads of departments, and principals that have contacted me—many, many, many of them who are very concerned—I have one simple question for the Minister that they’re all asking: can she confirm that a student wanting to sit NCEA will be able to pick a topic called “chemistry”, a topic called “biology”, and a topic called “physics”?
Hon JAN TINETTI (Minister of Education): The member is conflating NCEA and the curriculum. The NCEA subjects have been quite explicitly put out there to the sector, for the sector to know what they are. They know what’s going to be expected. They are there to see right now. So you cannot conflate the two. Yes, they are interrelated, and we have had that discussion in the Education Committee, but to say that is going to then determine what the NCEA subjects are is not quite correct.
What I will say is that we do have to make certain that our young people have the broad science knowledge that underpins good scientific experiment, hypothesis, and learning, and that is really important, which is why I understand that the ministry will use the feedback they receive from teachers to build on the draft curriculum, and I expect that the basics will be more explicitly covered in the next version of that draft.
CHRIS BAILLIE (ACT): Thank you, Madam Chair. Just to change the subject a little bit, we all know how important attendance is for achievement. We talk a lot about truancy and kids not attending. Yet we still have to wait until November for term 2’s attendance data. I wondered whether any work was being done to improve the receiving of that information. A month or two ago, we talked about technology not being available to some schools and that is a reason one of the over 200 schools that don’t present the data—that technology unavailability was a reason for not putting the data in. I wonder if that is still the case.
Hon JAN TINETTI (Minister of Education): Interestingly enough, that’s a question that I’ve asked officials about; why it takes so long with that data—the term 2 data. The member knows this too: July is one of the critical and key points for data collection on attendance. Because of that, there is a lot more work to go through. This is the answer that I was given this week: because of that amount that has to be done from the July return, then it does take them a lot longer to do that work, because they’re also working through 2024 rolls. All of those things come from that data, which is why it takes that long to work through that.
LEMAUGA LYDIA SOSENE (Labour): Thank you, Madam Chair. Kia orana, Minister. We know the impact on families around the motu to do with cost of living issues, because we know children that are hungry can be a major impediment to learning. Minister, can you outline please the importance or evidence of extending the Ka Ora, Ka Ako Healthy School Lunches programme, and how this ties into supporting families through the cost of living crisis?
Hon JAN TINETTI (Minister of Education): The Healthy School Lunches programme is something that I am incredibly proud of, that this Government is making a difference to those young people. I do go around schools, in many cases—I know members in this Chamber all go around too—and see and hear exactly the same stories back of the difference it is making to young people.
One of the key areas that I hear is that food security in those schools is no longer an issue; that young people don’t get anxious about the fact that they don’t have lunch in their bags, that they don’t get anxious and cause issues around the lunch time, because everybody is getting that. They don’t feel ashamed. Someone that has been in schools—I know that we used to provide lunches, but, of course, we could only provide to those young people that didn’t have them. It was always this tension, because you knew that young people felt that sense of shame as well, that they didn’t have a lunch. This is a great way to know that those young people don’t sense that emotion and that shame any more.
One of the key areas that I love hearing is that afternoons are no longer a dead time for learning; that young people have that food in their tummies, and that afternoon is actually just as important for learning time as what the morning is. I just think that the amount of time that we’ve given back to kids for their learning, just through this, is worth it alone. So it is helping families. Recently, in the last recess, I had a mum come up to me at another event that I was at, who said to me, “You’ll never know the difference that that’s made to my family. I’ve got money now that I can spend on providing dinner.” I had a teacher who came up to me—at that same event—and said, “I’ve got kids now who come and say to me that they don’t have to decide who has dinner at night time, because they don’t have to spend that money on providing lunches, that they can provide it for dinner, and the difference that that’s making is immeasurable for those families.” You know, these are kids that are excited about being at school, and excited about their learning, but their families are excited because they’ve got more disposable income to use in other areas to support their families as well.
PENNY SIMMONDS (National—Invercargill): Thank you, Madam Chair. Minister, the Tertiary Education Commission’s development and delivery of an IT system to deliver the unified funding system—I wonder if you could tell us: has it finally been scoped, costed, and a time frame given for that, and, if so, how much has been spent already and what proportion the $7.85 million is of it?
Hon JAN TINETTI (Minister of Education): I’ll get back to the member with that information.
TAMA POTAKA (National—Hamilton West): I’ve got three questions, Madam Chair, for the Minister: one on achievement, one on attendance, and one on establishment.
Now, the year on year of performance of Māori students in NCEA 2 improved between 2011 and 2017. It went from 53.1 percent to 68.9 percent and now it’s regressed to 58.6 percent. In addition, the university entrance achievement by Māori in 2021 was only 19 percent and I’d like to know from the Minister—the achievement question—what messages is the Minister giving to iwi and Māori leaders on how the education will improve the achievement by Māori students—those young mokopuna and cherished tamariki.
ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. It’s good to see some questions being asked around the school lunch programme. My question for the Minister is: why was it in this Budget that the healthy lunch programme was only funded for one more year, given all of her comments that she just made around how great she thinks it is?
Hon JAN TINETTI (Minister of Education): I’ll come back to the member over there too; I’m just finding the figures as well, so I will come back to that. But I just wanted to say I was quite open about this at the time of the Budget and I was quite open in the select committee about it as well. We had competing initiatives in this Budget. It is a big investment and so we were able to fund it till the end of 2024, but it is something that I continue to keep working on and advocating for.
TAMA POTAKA (National—Hamilton West): I’m up to my attendance question now. Now, Māori attendance at school—regular attendance at school—in term 4, 2022, was 38 percent. In term 4 of 2022, 38 percent of Māori kids went to school regularly. There have been some minor improvements since then, but not enough, in my view. Just what messages is the Minister giving to iwi and Māori leaders about how she will ensure there will be improvement in regular attendance by those young people?
The final question in my triplicate is around establishment. So Māori are desperate for performance at school, by schools that generate and facilitate outperformance by young Māori children. And the best outperforming school for university entrance with a majority of Māori students is a school known as Manukura in Palmerston North—a great school. Now, the Manukura principals are taking up residence at a phenomenal school called St Stephen’s School in Bombay. What is the Minister doing to give capital expenditure and operating expenditure support to the re-establishment of St Stephen’s School in Bombay?
ERICA STANFORD (National—East Coast Bays): Just staying with the healthy lunches theme, I’m just wondering—I mean, the Minister gave some really great anecdotal evidence of people that she had talked to on her visits, which we all get. I’m interested in the evidence. What evidence does the Minister have since the start of the healthy lunch programmes as to increases in attendance, increases in achievement of those students in school—actual data.
CHAIRPERSON (Hon Jacqui Dean): Order! Order!
Hon Jan Tinetti: We couldn’t hear. Can you start again please?
CHAIRPERSON (Hon Jacqui Dean): Thank you.
ERICA STANFORD: My question was: what evidence and data does she have to support the healthy lunch programme in terms of achievement and attendance?
Hon JAN TINETTI (Minister of Education): I will have to just get what’s happening with St Stephen’s. I remember reading some work about that, but, of course, it comes under the Hon Kelvin Davis, so I will have to look through that.
Attendance is something that we’ve been aware of for quite some time—or Government, I should say, because this is the big “we” here. We’ve been aware that attendance for Māori hasn’t always been easy to encourage. I know that, going back to mine, again, that when the attendance services were taken and made into bigger entities that that became even harder to establish those relationships, and we know that establishing relationships is really, really critically important with Māori, and so we’ve been working with peak body groups in that area. I know that with the re-signing of contracts, I think it’s almost tripled the number of contracts that we have signed, because we have made those attendance services closer to schools. What I will say is one-third of attendance services are being led by iwi.
I do know that when I’ve visited—and I’m sure that the member has had the same experiences—different places around the motu, where services in any of the education sector are being led by iwi, we’re seeing some really good results. That’s why a number of those contracts—as I say, one-third—have been signed over to iwi, and I’m really looking forward to working with them further to have those results.
The lunch programme—we have had three evaluations so far and they are all positive. We continue to refine the programme. Again, I just want to connect the two questions there, because some of the best examples that I have seen in the lunch programme have also been led by iwi. There’s one, in particular, that really stands out for me, and that is Victory Primary School in Nelson and the work that the iwi have done down there to lead that programme and the difference that it has made to young people’s attendance and engagement in that particular school.
Now, they’re not the only ones, and that’s what we’re gathering through the evaluations to show whether it is making a difference or not. As the member who asked the question about attendance and engagement with the lunch programme knows, I very much always say that I’ve always been an evidence-based practitioner, and it’s really important to me that evidence is collected and that we do see it. If we see that there are some anomalies, I want to know why those anomalies exist, and so that’s been something that I’ve been really clear about. But some of the best engagement that we have seen, and the best attendance that we have seen is because of the work that we’ve seen in those iwi-led lunch programmes, but they’re not the only ones. It seems to be also, I will say, where young people are having a voice and having agency in the delivery of those programmes as well. I think those of us, and there are a few people in the House that I know have been educators, across both sides of the Chamber here—we know that when there is learner agency we do tend to see better results and stronger results, and that is something that I want to follow up with as well.
TAMA POTAKA (National—Hamilton West): Hamilton West is a beautiful place and there’s some great schools over there, and I think the Minister would have visited a couple of those schools. A couple of Hamilton West-specific questions. Melville High School and Melville Intermediate School are going to combine soon into a facility called Mangakōtukutuku and they’ve been living in prefabs that are 60 years old. There was an indicative commitment to help with the capital expenditure support to actually refurbish all these classrooms—60-year-old prefabs—and just wondering where we got to, where the Ministry has got to with actually supporting Mangakōtukutuku to get new classrooms and not live in 60-year-old prefabs?
The other topic that I just wanted to mention or ask about was the establishment of a new school in a suburb called Glenview or Peacocke in Hamilton, because that place is absolutely booming and we’ve got massive transport issues carrying kids all over the city, from those suburbs, to get to school. Thank you.
Hon JAN TINETTI (Minister of Education): Just going to see—because they’re quite specific questions so I’ve got people looking at those. But I just wanted to go back to your question about St Stephen’s. The Government has considered one application from St Stephen’s, and any further application may be considered, and we need to take into account the costs and other factors as well, so that’s where we’re at with St Stephen’s at this point in time.
I just wanted to touch on that last part of that question, not that I’ve got a specific answer to that just yet about Peacocke—
Tama Potaka: Glenview and Peacocke.
Hon JAN TINETTI: Glenview and Peacocke. Look, Hamilton is one of our growth areas that have been identified, so that will be work that will be going on. The good part I’d say—the good factor about what’s happening in that property space and those growth areas is that we have identified where those growth areas are. So there’s a—it’s a plan.
It’s not just a hit and miss. It’s looking at exactly where those growth areas are, but that those two specific areas we can come back to you on.
ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I just want to finish up on the school lunch question, because I asked quite a specific question and got a long answer, but not actually the answer I was looking for, which is around the data. What data and evidence is there to suggest an improvement in achievement and kids turning up at school?
The Minister mentioned that there are three evaluations done, and she mentioned one particular programme. I want to know, overall, in those evaluations—given that we’ve been running now for a wee while—is there any evidence to support that kids are achieving better or turning up to school more regularly because of the school lunch programme? So “data”, as she likes to talk about, as she likes to follow—like we all do. What do those evaluations say? Has she seen anything else that suggests that overall there is a lift in achievement or attendance because of the school lunch programme?
Hon JAN TINETTI (Minister of Education): You asked about the evaluations and the data that we’re collecting, and I did talk about those three evaluations, but the different evaluations that we’ve done are focusing on different areas. I will talk about the 2022 evaluation and the 2023 evaluation.
The 2022 evaluation showed that the young people at those schools are happier, healthier, and have a higher quality of nutrition, which means that when they’re healthier, they, again—you know, those of us that have worked particularly in those areas that are low socio-economic areas know that when those young people get sick, they get very sick, and so attendance becomes really difficult and really patchy in some of those areas. But what is happening is that they are having healthier outcomes because of the high-quality nutrition, and they are happier, so they are wanting to be more engaged in their schooling and their learning as well.
The 2023 evaluation showed that there are improved outcomes for Māori learners through the iwi-led initiatives, which is why I linked the two answers before—because we are seeing that those iwi-led initiatives are showing improved outcomes for our Māori learners.
CHLÖE SWARBRICK (Green—Auckland Central): Well, in mid-2001, the then Victoria University of Wellington Students’ Association (VUWSA) president sent out a press release titled: “Student Debt Set to Cripple New Zealand”. That association president lamented, “The current generation of politicians are mortgaging the future of our country. The burden of this will not only be felt by students who graduate with large debts, but also by the future taxpayers of New Zealand who will be left to clean up the mess … If we are to get this debt under control fees must come down and access to living allowances will have to increase”. That is a quote from then VUWSA president, now Prime Minister of this country, the Rt Hon Chris Hipkins.
The reason that I raise this is that parliamentarians may be aware that this afternoon, on Parliament’s lawn, there was yet another rally to stop the cuts at our universities. I want to acknowledge the Minister for the work that we’ve both engaged in over the past few months, and particularly what led to the announcement of the $128 million, if we were actually to have seen student enrolment figures at the level that they were once projected to be. But the Minister will be well aware of the fact that there are still universities across this country that are making substantive proposals with regard to staff cuts. So that is my first question to the Minister: what kind of engagement is she having with those tertiary institutions about what options may be available to them to retain those staff or to work through a pathway over the next year whereby these cuts slow down and we can make more strategic decisions?
I’m also aware that, if not this Minister, former Ministers of Education have commissioned advice on, for example, a universal student allowance and the cost of its provisions, particularly, I’d note, with the advocacy of us doggedly chasing that bone, as the Greens in the Education and Workforce Committee. To that effect, I guess, thinking about a universal student allowance, and obviously the fact that approximately a third of students get access to it at present. And just kind of the intersection with that issue around student enrolment figures and the flow-on impact to the tertiary funding that is being received. Where is the place of students and what kind of engagement and meaningful evidence has been collected on student hardship to try and understand how that is then impacting students’ ability to actually be enrolled in their study in the first place, and therefore, through the bums on seats funding model, the funding that these tertiary institutions are then getting access to?
So just to make that really clear: the key kind of issues that I’m interested in here are—noting that the Minister has worked really hard to get that $128 million reallocation—there are still substantive job cuts that are being proposed, so what can be done and what work is the Minister undertaking to ensure that those do not progress? Secondly, what is the role of students and understanding of students’ needs when it comes to this funding model at present? And has there been any investigation of dealing with student poverty to then deal with student enrolment figures? And then thirdly, I guess, dovetailing into that all nicely: where is the review at that was promised of the tertiary education funding model?
Hon JAN TINETTI (Minister of Education): Just before I come to those, I’ve got another couple of answers that I said that I would come back on. So with the unified funding system, the initial tactical implementation was completed and up and running on 1 January 2023. The strategic long-term solution is on track for 1 January 2025. Under 20 percent of the budget has been used so far. Now, Peacocke: two sites have been identified. Currently negotiating with developers. I can’t say any more than that because it is commercially sensitive.
Can I also thank the member there for her engagement in this and her advocacy for students in the tertiary sector—a long-time advocate—and someone that I enjoy having discussions with about because of your understanding of the sector as well and of the students’ needs. Just what I was saying before: when I talk about agency, I talk about agency at all levels. And I think, when we encourage and engage with the young people—I’m going to say young people; they’re not all young people. But when we engage with them, the learners, we also know that we’re getting that input and it’s going to work for them, because we’re having them.
Look, I’ve met with the hierarchy of New Zealand Union of Students’ Associations. We’ve had initial discussions just at a ministerial level. It’s not me that’s working through that next stage but I will say that the higher education review officials are currently arranging engagement with the students as well. Those terms of reference are going to come back in by the end of the year. So, basically, taking time to get that right. I know it’s a rushed situation because there’s pressure on it, but at the same time we don’t want to get a situation that doesn’t encompass all of the solutions that we need to see [removes glasses]—I’ll take those off so I can see you properly—to help identify everything. This is an opportunity. I don’t want to get to the end of it and then we hear “Oh, look, why didn’t we think about this at the time too?” So the member is also going to be very important in that part of the discussion.
You talk about the tertiary institution cuts. So one of the aspects that you will know at the time when we made the announcement about the $128 million, which understandably became the big focus at the time that that was it, but in my head the more important parts—or just as important parts—were the review, but also the fact that we were looking at network provision across the network to make certain that we weren’t losing that provision and that was unduly impacting upon students in different institutions as well. So that advice is about to go through to Cabinet around that, so I can’t discuss that here. But we’re very, very close to being able to look at where we’re at with that and if there’s any follow-up that’s needed to make certain that those learners have that provision that’s there and that we’re not losing that across the network. So that’s where that’s at.
CHLÖE SWARBRICK (Green—Auckland Central): I thank the Minister, the Hon Jan Tinetti, for those considered and thoughtful responses to that line of questioning. I guess, just to dig into this stuff a little bit more, it’s really interesting to hear about that advice that is being commissioned and going up to Cabinet with regard to network provision—and there I’m assuming that it’s about the kind of course provision that’s available and the diversity of that course provision, but also, hopefully, the capacity and the skillset in this country to deliver those courses, and their geographical distribution, of course.
I guess, just to that effect, if we can be crystal clear on what that paper may be capable of actually achieving. Is it the case, given those cuts that are presently on the table, that there is the potential here for the Government to step in and to, for example, issue some kind of, for lack of a better term, moratorium on those cuts, to delay them, or to provide some other form of funding model, whether that be through, I don’t know, leveraging or changes to the way that the Tertiary Education Commission is able to issue debt or otherwise? Is there any hope for those students and those staff who gathered on Parliament’s lawn today to have a kind of quite dramaturgic funeral for the tertiary education sector? Is there any way that they can meaningfully engage with that process? And is there potential of more support or more engagement or a creative solution here coming down the pipeline?
Hon JAN TINETTI (Minister of Education): I know this is going to be a bit frustrating, but I can’t get in front of the advice that is coming through to me. I can’t go into it, other than to say that I have engaged with the Victoria University of Wellington Students’ Association president and executive as well, and my door is open to them, and continue to engage to just hear first hand. But can I also once again thank the member Chlöe Swarbrick for the advocacy, for bringing those through—and I quite mean that: I really do appreciate what you’re doing in that space, too.
CHRIS BAILLIE (ACT): Thank you, Madam Chair. Minister, the arbitration panel for the Post Primary Teachers’ Association (PPTA) dispute has come back with a recommendation of 14.5 percent, which is, I understand, going to be taken to Cabinet. Do you have an idea of how much that is going to cost and where that’s going to come from? How will that settlement affect the recent NZEI settlement, if at all?
The panel wasn’t terribly complimentary about the ministry’s negotiating skills. I just wonder whether you think the ministry may have the lost confidence of the PPTA—or if teachers, even, have lost confidence in the ministry?
Hon JAN TINETTI (Minister of Education): Now, once again, there’s not a lot I can say about that, because that will have to go through and be taken through to Cabinet decisions, but that is currently being worked through.
What I can say is, the member asked about consequences to the NZEI negotiations. Anything that changes in the unified base scale at the secondary has an impact on the primary, which then has an impact on kindergarten collective agreement rates. So there is parity from the secondary, basically, down, in that respect.
I’m not sure that I agree with the member’s characterisation of what the arbitration panel is saying, which is something that I’ve been saying to the unions and to the ministry, and the ministry agrees with us, which is we, possibly once we get through this period, need to look at whether negotiation processes, as they stand at the moment, are fit for purpose for 2023 and beyond, and are there better ways that we can be doing this? Because this is something that I think both sides agree with—is that they want to sort this out without the need for getting to the point of industrial action or the prolonged nature of it. It is a traditional way that has been negotiated, but many unions are changing the way that they are negotiating, and we will have those discussions with the union. The unions are well aware of that going forward, after we’ve got this through and we’ve got these settlements signed.
But that’s as much as I can say on those because of the fact that it does have to go through to Cabinet.
PENNY SIMMONDS (National—Invercargill): Thank you, Madam Chair. Thank you, Minister, for giving a little bit of information about the unified funding scheme (UFS) IT system, but I note you didn’t give a total cost. However, I just want to check with the Minister: are you intending to continue running a dual funding scheme or are you intending to roll out or extend the UFS to degree and above - qualifications?
TAMA POTAKA (National—Hamilton West): One final question: I’ve had the great chance to attend a unit for teen parents, and in that unit for teen parents there’s some real concern about housing and the dangers that most of those teen parents have living in emergency housing. And I’m wondering whether or not there’s any evidence gathering that’s undertaken across all the teen parent units in the country around the state of play of their housing situation, especially for young women who are 13- and 14-years-olds living in emergency—thank you.
Hon JAN TINETTI (Minister of Education): Can I just go back to your—I’ve just found some information on the Melville site. So Melville School: there is an establishment board of trustees (EBOT) in place for the new combined school. The new site will be taken over in January 2024, working with the EBOT on the master plan property, which will inform future property and funding needs. So that’s the establishment board of trustees, is what we’re saying there.
CHLÖE SWARBRICK (Green—Auckland Central): Just with the final few minutes as democratically allocated to me by the Greens in our process for Estimates, I was just wondering, as others have, in pointing out issues in the state of the school buildings at their local schools, if I could just address with the Minister, given this opportunity in the committee to do so—the Minister may be aware of quite a lot of correspondence both with her office as the new fulsome Minister of Education, but also with the former Minister, around issues with the school building portfolio at Richmond Road School, in my electorate of Auckland Central. There’s quite substantive issues there and I want to acknowledge principal Whaea Jacqui for all the work that she’s done, as well as the board of trustees. But I was wondering if the Minister could enlighten the committee or give us any insight or information into just what the hold-up is there. It appears as though the challenge has been a kind of changing of the chairs and the guard constantly with Ministry of Education officials at the front line, which has made it really difficult to get a foothold on how things are progressing with the master plan and requisite investment.
Hon JAN TINETTI (Minister of Education): I have to come back to the member on that one, but can I talk about the higher education funding review; you talked about the dual options there—we will consider a wide range of options, but it won’t be a carbon copy of the unified funding scheme or the review process. So, you know, we haven’t got a set idea there at this point in time.
Housing
CHAIRPERSON (Hon Jacqui Dean): Members, we now have the Minister of Housing. The Minister is available from just before 5 to just before 6.
ANGIE WARREN-CLARK (Chairperson of the Social Services and Community Committee): Thank you, Madam Chair. It’s my pleasure as the chair of the Social Services sand Community Committee to lead off this debate for Vote Housing and Urban Development for the 2023-24 Estimates. The Hon Dr Megan Woods, the Hon Barbara Edmonds, and the Hon Marama Davidson appeared before the select committee to discuss the Vote. Thanks to the Ministers, respective board chairs, chief executive officers, and officials for appearing and responding to written and oral questions.
The Minister of Housing is responsible for all appropriations under Vote Housing. The Ministry of Housing and Urban Development, or HUD, administers the Vote. HUD is responsible for the strategy, the policy, funding, monitoring, and regulation of New Zealand’s housing and urban development system. Kāinga Ora—Homes and Communities, or KO, manages the public housing estate and their tenancies. KO is also responsible for planning, coordinating, and undertaking housing development to create a mix of public, affordable, and marketing housing, and it administers the Infrastructure Acceleration Fund.
The most significant change to the Vote is the $5.24 billion increase to the borrowing capacity of KO. In November 2022, the Government announced that KO would no longer be able to borrow money directly from the private market to build and renovate public housing. We asked what analysis had been undertaken of the forecast debt being taken on by KO. The Minister informed us that KO is undertaking very long-term financial planning, looking 60 years ahead to ensure its financial stability.
As at March 2023, there were 24,000 applicants on the housing register. This is a 7.7 percent decrease from March 2022. Budget 2023 proposes funding of $1.76 billion to purchase and provide public housing and related support services. The Minister noted that one of the consequences of previous Governments’ selling public housing assets was the loss of affordable rentals on the market. The Government is working with community housing providers, iwi, and councils to increase the supply of affordable rental housing. This is critical to reducing the public housing wait-list.
The Government aims to have a supply of 81,000-plus public homes by 30 June 2024. The Minister told us she is confident that the Government’s target will be met. She highlighted that through its housing delivery system project, KO is currently averaging 105 days to build new houses. The Minister explained that this is half the time taken for a standard construction. KO is ultimately aiming to reduce construction time to 65 days.
Over the last five Budgets, approximately $1.1 billion has been allocated to Māori housing. We heard that this funding has increased capacity for Māori to build houses through Māori housing providers. This includes preparing Māori community housing providers to prepare their own land for development.
We also heard that about 1.5 percent of KO homes are fully accessible and that it has retrofitted nearly 8,000 homes to make them more accessible. Building contracts from 2021 are being completed now, and she expects the proportion of fully accessible new builds to increase.
We heard that the Housing Acceleration Fund provides $3.6 billion between years 2021 and 2026 to upgrade infrastructure for housing development. We asked whether these infrastructure upgrades helped to prevent the flood damage in early 2023. The Minister told us that Kāinga Ora ensures that its developments account for necessary infrastructure upgrades so that public housing built on flood plains would be more resilient during severe weather events.
The Social Services and Community Committee recommends that the appropriations for the year ended 30 June 2024 for Vote Housing and Urban Development be accepted. Thank you.
CHRIS BISHOP (National): Thank you very much, Madam Chair. We had a good session in the Social Services and Community Committee, and I thank the chair of the select committee for that update.
I’ve got a number of questions which we’ll canvass in the first hour, but I just want to pick up on something that the chair of the committee said. I think she said that we heard from the Minister that by 2024, the aim was to have 81,000—I think she said 81,000—
Angie Warren-Clark: Approximately—yeah.
CHRIS BISHOP: —approximately 81,000 people in public housing.
Angie Warren-Clark: No, 81,000 houses.
CHRIS BISHOP: 81,000 houses?
Angie Warren-Clark: Yes.
CHRIS BISHOP: OK—all right. Well, I was going to ask, if that’s true, why—well, actually, I can ask that because I’m just looking at the Budget documents which we’re examining, which is Vote Housing and Urban Development, at page 111 of the Estimates of Appropriations for the social services and community sector, and the number of tenancies subsidised by income-related rent subsidy (IRRS) will be at least—the Budget standard for 2022-23, so the year just gone, was estimated to be 75,500. The estimated actual was 74,700. The Budget standard for 2023-24, which is the year that the member is talking about, is 77,500. That’s quite a disparity between the 81,000 mentioned by the member and what the Budget actually appropriates. So maybe an initial question for the Minister is: is that 81,000 figure correct, because this the purchase of public housing provision, non-departmental output expenses, and the number of tenancies subsidised by an income-related rent subsidy. So anyway, perhaps we can hear a little more about that.
The other thing I wanted to raise just as an initial starting point was in relation to the emergency housing reset, which was funded in Budget 2022, and it provides, from memory, over $300 million for that. Now, my figures might be slightly out of date, but I asked the Minister a written question around this maybe six weeks or eight weeks or so ago. Very little of that money has so far been drawn down, and the answer I’ve got says that $620,000 has been spent on the reset in the early stage and another $1.6 million contracted. But that was a year or so ago that it was announced—in fact, it’s over a year or so ago, or at least the money was appropriated a year-or-so ago. We had to wait till the end of last year to find out exactly what was happening.
So I suppose there are two questions. The first question is around the IRRS purchase provision, and then the second question is around the emergency housing reset and just what’s happening with that, because not a lot of money has so far been drawn down. A lot of money has been appropriated, but not a lot of money has been drawn down. That’s just an initial starting point. Thank you, Madam Chair.
Hon Dr MEGAN WOODS (Minister of Housing): Thank you, Madam Chair. I’d like to acknowledge my three colleagues that are in the House and who will also contribute to this debate, I’m sure. We are very much a housing team. The Hon Barbara Edmonds, the Hon Marama Davidson, and the Hon Willie Jackson are incredibly passionate and dedicated Ministers of housing also, and I’d like to thank them for the work they do.
In regard to the question that Chris Bishop, the member who’s just taken his seat, has posed around the number 81,000 by 2024, in terms of the number: yes, that is correct. The chair of the select committee was correct. At the moment, just for the member’s edification, as of 30 June 2023, we had 79,539 homes, but of course houses and publicly funded houses are two separate things. One, we’re talking about a physical count—roof count—of houses; the other, we’re talking about households that are attracting income-related rent subsidised (IRRS) funding.
It is not uncommon for Kāinga Ora tenants to move in and out of IRRS eligibility at any given point. It may be seasonal work that underlies that in terms of their income and where that sits. So, of course, there will also be houses that are vacant because they are undergoing repair or retrofit. Also, the people that I’ve talked about that are earning enough, of course they’re earning enough to not attract—the IRRS is not a fixed point in time. It can differ over a period of over a year or over a matter of months for people.
In terms of the emergency housing reset, the member is correct. On 12 December 2022, Cabinet agreed to improvements to the emergency housing system. That was the reset and redesign work, and that is providing a pathway to achieving the Government’s long-term vision, with 10 actions over 12 to 18 months. This is obviously a package of work that has a large intersection with Minister Davidson’s work stream, with her being the Associate Minister that is responsible for the Homelessness Action Plan and for the work that the Government is undertaking to address homelessness.
We have seen very much the need for this work to be place-based. We have identified the need for us to be working with local councils, local community groups, and local iwi to make sure that we’ve got those emergency settings fit for purpose for the places that we are working in. So developing regional delivery plans is absolutely critical to getting those alternatives to the emergency housing special needs grant accommodation right, and then, of course, those points that have been identified are Hamilton City and Wellington, where we know that there is need for us to do that. But we are determined to make sure that we are doing that in a way that makes sense for those regions.
CHRIS BISHOP (National): I thank the Minister for those answers. This raises a slightly interesting issue, which is what is the Government’s intention when it comes to tenancy reviews, because the reality is there are around 2,500 people in Kāinga Ora houses—and, indeed, in community housing provider houses too, actually—who pay market rents. They earn enough that they can afford to pay market rents.
From memory, I have an answer from the Minister from, I think, a year or so ago saying that tenancy reviews had been paused during COVID—which I think is fair enough—and that no decision had yet been made on restarting them. I think it is true that between 2018 and 2019, there was a process of tenancy reviews. So I wonder if the Minister could give us an update on tenancy reviews and what the Government’s intention is in relation to them.
Hon Dr MEGAN WOODS (Minister of Housing): Thank you. That is work that the Government is undertaking at the moment about how and where you’d restart those tenancy reviews, and you can look to particular cohorts within that. Obviously, that was work that did need to stop during COVID for a number of reasons, not least of all the capacity of the Ministry of Social Development (MSD) staff in terms of the fact that we had a number of calls on our MSD staff and reviewing tenancies wasn’t the highest priority during that.
But Ministers, including the Associate Minister for Social Development who has responsibility for the waiting list, the Hon Priyanca Radhakrishnan—we have been talking amongst Ministers around how it is that we’d get that process of the tenancy review started. For us as Ministers, that is absolutely critical, because if we have tenants who are living in Kāinga Ora homes and earning too much to qualify for the income-related rent subsidy, they of course, by legislation, are not eligible to apply for the accommodation supplement, so the family could indeed be worse off than if they were in the private market and were eligible for an accommodation supplement. So this is work that is under way at the moment.
CHRIS BISHOP (National): Thank you to the Minister. This is a slightly more local matter, which I raised in the Parliament last week to the Associate Minister Priyanca Radhakrishnan. It goes to Ministry of Housing and Urban Development (HUD) funding for homelessness support services, and it may be that the question is better directed at the Hon Marama Davidson. It goes to the Wellington homeless women’s shelter, which I think Ministers and members will be well familiar with. They have told me that they applied for funding for four more beds through HUD and that their funding request was declined on the basis that HUD doesn’t fund homeless facilities or homeless shelters that have communal facilities, and it just struck me as very odd. I mean, the Minister has made reference to the dire need for emergency housing in Wellington. We’re all familiar with that, and the stats speak for themselves.
So I was very surprised to hear that from the Wellington Homeless Women’s Trust. Is that actually HUD policy and, if so, why is that HUD policy? If it is HUD policy, will the Minister seek to change it, because the reality is that communal facilities are common in many shelters around the country, and if that’s the new policy then I think, frankly, we’re going to have some difficulty. Given that $100 million or so was appropriated in last year’s Budget for the Homelessness Action Plan and given they’ve only asked for four more beds, can we get that money out the door and provide those services?
Hon MARAMA DAVIDSON (Associate Minister of Housing (Homelessness)): Madam Chair, thank you very much, and thank you for the question. It was alerted to me as well as to the member, and it’s something I’m seeking advice on. What I do know is that all current transitional housing situations that do still have the communal shared spaces of course will be honoured. So I’m just making that clear that we are not going to wind down or remove current communal transitional housing places, and that, yes, I am seeking further guidance and clarity from the Ministry of Housing and Urban Development (HUD) around this proposed new way of working. About the funding that’s available for transitional housing, I was proud that in both Budget 2022 and Budget 2023, we were able to, for example, extend more supported housing and rangatahi transitional housing. But I’m seeking further advice from HUD officials around the proposal. It’s an operational matter—yes—but I am seeking advice.
What I do want to speak to genuinely—and Minister Woods has already touched on this—is that we absolutely need to see more community-led and community-supported housing initiatives and leadership. I am proud that the Government—even just today—has been continuing to announce and lead more places available.
But I really want to acknowledge the work of the Wellington Homeless Women’s Trust. I acknowledge the unique support that they offer to women in the community, particularly, and it’s fantastic. I want to understand more broadly—not just within transitional housing funding and criteria—how we can support and see more of this community leadership to help us all resolve the homelessness problem.
TAMA POTAKA (National—Hamilton West): Now, this Whai Kāinga Whai Oranga kaupapa, it’s a beautiful kaupapa. He ataahua te kaupapa, ataahua rawa. [This initiative is beautiful; just amazing.]
We’ve heard of about 1,018 homes being contracted through $213 million of funding, and that’s come through the written questions and some of the oral parliamentary questions that I’ve asked and had answered by the Associate Minister. I’m just trying to understand what are the ownership arrangements for each of those homes, how many will be sold to individual whānau, and, if they are sold, are the moneys received recycled through Whai Kāinga Whai Oranga? Of those that aren’t owned, what are the arrangements that attach to those? Is that income-related rent subsidy - funded and entity-owned, like one of the four iwi prototypes?
Hon WILLIE JACKSON (Associate Minister of Housing (Māori Housing)): I thank the member Tama Potaka for the question, and I understand that he has made a commitment to Māori housing, particularly before he came to Parliament. So I certainly understand his support and his commitment.
A lot of what the member talks about, though, is still being worked through by the various entities. We’ve got, as he well knows, four very, very strong entities in the North and on the East Coast. We’ve got Ka Uruora in Taranaki, led by Jamie Tuuta; Toitū Tairāwhiti, with Willie Te Aho, and our lady down there, Annette; Ngāti Kahungunu, led by Bayden Barber; and Te Pouahi o Te Taitokerau.
Some of the questions that the member asked are on some of the strategies that these trusts are traversing and working through. There’s a lot to take into account. As he knows, there are a lot of obstacles in front of Māori housing providers, so the absolute intricacies on how they roll things out are not finalised. The reality also, as he knows, is that 63 house are built, but the target is 1,000, as he also knows, but within that there are multiple strategies that are being worked out in terms of whānau, in terms of ownership, and in terms of iwi and who moves in, and the different protocols around that. So much of what’s been put forward is fear from that member, but there’s still a lot to be worked out.
TAMA POTAKA (National—Hamilton West): In that Whai Kāinga Whai Oranga kaupapa there’s a repairs programme which, actually, I absolutely applaud. That’s a great programme, fixing up houses that are falling over all the way in far-flung places like Te Tairāwhiti and the Whanganui River.
But the Whai Kāinga Whai Oranga prototypes are with four different iwi-led organisations, which are, effectively, start-ups in the housing space. I wanted to inquire with the Minister and Associate Minister whether or not there was an attempt to activate Whai Kāinga Whai Oranga, and also with those existing iwi—particularly, urban iwi in Auckland—and Māori groups that are already involved in building housing en masse, where I think that there’d be more opportunity to accelerate the numbers of houses that are built for iwi and other communities by iwi and Māori builders.
Hon Dr MEGAN WOODS (Minister of Housing): I’m pleased to say that through the sterling leadership of Minister Jackson, we no longer need to do prototypes. Actually, we have moved beyond prototypes and we can just get on with the mahi of, for the first time, there being a Government commitment—and a billion-dollar commitment—to sit behind that, around how it is that we address issues around Māori housing. In terms of where that will spread to throughout the country, there’s a lot of work under way in various locations, and there are different capacities in different places, ranging right from being incredibly good commercial property developers in some iwi organisations, through to what can be done in papakāinga housing and on whenua Māori.
One of the things that I think the member asked in his previous question—just to add to the very full answer that Minister Jackson gave—is that at the moment, there actually isn’t the provision of income-related rent subsidy public housing within the Whai Kāinga Whai Oranga developments, as far as I’m aware, because the aspirations of those iwi and those groups that have come to us are actually to do things differently than that. That is not what they have sought to do.
We are looking at how it is that we can service Māori communities right through from the work that Minister Davidson is leading in homelessness. But the clear aspiration of so many groups we talked to is “What can we do to enable homeownership?”, and that is also a very important string to the bow. What we have in here is the progressive homeownership scheme that is ring-fenced for Māori, because if we’re going to shift rates of homeownership for Māori and for Pasifika, we do need to have dedicated funding pathways, and that is exactly what this Government has done. So affordable rentals are very much what is being seen within a number of the prototypes, but homeownership sits at the heart of the aspiration of many of these communities, and that’s why I’m proud to be a member of a Government that for the first time in New Zealand’s history is backing just that aspiration.
BROOKE VAN VELDEN (Deputy Leader—ACT): Thank you, Madam Chair. I wish to raise an issue about the Government’s debt and Government loans. In the Estimates, it suggests that this year, the Government will give over $5 billion in loans to Kāinga Ora, which is money to build.
I want to turn to an article that came out a year ago, and it said that this Minister, under the Government, was “warned not to grant any future Budget bids to … Kāinga Ora for a time, after fears of unsustainable debt levels. A leaked document from the Ministry of Housing and Urban Development showed spiralling construction costs cause a debt blowout at Kāinga Ora, with fears that”—
Chris Bishop: It’s public—it’s not leaked. It’s been public for a year.
BROOKE VAN VELDEN: —“the Government will be unable to completely repay the increase in debt over the next 60 years.”
Is it acceptable, Minister, that this Government, with a warning about increasing debt levels, has signed off on $5 billion of loans to Kāinga Ora, when we know that it’s unsustainable?
Hon Dr MEGAN WOODS (Minister of Housing): Look, I’m happy to take a short call on that. I do actually agree with the Opposition member Chris Bishop that it’s very hard to call a document that’s sitting on the department’s website “leaked”. I don’t think there’s anything particularly furtive about that document, and that is somewhat of a misrepresentation of that document as well.
But I do just want to address this issue of the lending for Kāinga Ora, because it did change, and it was discussed at this Estimates hearing that of course the debt was transferred back into the net core Crown debt. The reason for that is actually the ability to get a better interest rate so that we can save money for the Crown by bringing in and structuring the debt in the way.
I just want to put some perspective into the comments that the ACT spokesperson for housing has just brought in about that Kāinga Ora’s borrowing of $5.2 billion, added to what it is already—in terms of its existing debt, it will be around $9 billion. Now, this is obviously a large debt, but I want to put this into the perspective of what the balance sheet of Kāinga Ora is. This is an organisation that owns an awfully large amount of property and an awfully large amount of houses, and it has $260 billion in total assets.
So if we have a look at the debt-to-equity ratio of the organisation, we can see that, actually, it is in a very good health, at 3.5 percent. If you stacked Kāinga Ora up against the similar agencies globally that you’d put it against in terms of debt-to-equity ratio looks like, you’d actually see that Kāinga Ora still has a lot of headroom if you put it next to its comparator agencies.
In terms of the document that the member is talking about, she’s actually talking about a very long-term piece of planning that I kicked off as Minister by saying: what does the financial future of Kāinga Ora look like in 50 or 60 years? How do we manage the long-term financial sustainability of an organisation that for too many years has been a political football in terms of its funding? We haven’t seen the adding of public housing, we haven’t seen the maintenance of the existing asset base, and one of the things that I know is that our operational costs at the moment within Kāinga Ora are higher than they would have been if the previous decade had actually had a maintenance programme on its homes. The cost of maintaining an unrenovated retrofitted house is far higher than maintaining one that has been retrofitted or, indeed, that has been redeveloped and is a new build. You carry a far greater operating burden on your balance sheet as an owner of property in those circumstances.
Also, one of the things that I wanted to address in looking at that financial sustainability piece is the way that Kāinga Ora, or Housing New Zealand, was treated as a cash-flow machine. There was over half a billion dollars’ worth of dividends that were extracted from the organisation between 2008 and 2017, so not only was there nil investment; there actually was an extraction of half a billion dollars’ worth of money that could have been reinvested back into redeveloping or maintaining or building new houses. But it wasn’t; it was put in to pay for other things in the consolidated account.
That’s why, as a responsible Minister of Housing, I was keen to look at what the financial sustainability of that organisation looks like over that 60-year time horizon. But I do acknowledge that this set of accounts that we’re seeing in this Budget is the first time that we’ve seen the transfer of that debt back into net core Crown debt, so it looks a little bit different.
TAMA POTAKA (National—Hamilton West): I really enjoyed those comments around the aspiration for ownership, particularly across whānau Māori, and using the progressive home ownership (PHO) pathway—that specific Māori PHO pathway. I’m interested to understand how many whānau Māori eventually accessed and used the PHO pathway for homeownership? That’s the first question.
The other one is a pivot towards the income-related rent subsidy (IRRS), which is quite a topical one, and it was mentioned in the select committee recently. There are 27 of 81 community housing providers (CHPs) which are Māori CHPs, but only two of them have around 100 or more IRRS places. I’m wondering what are the messages that the ministerial team—the tag team—are giving to those Māori CHPs in order to access greater numbers of IRRS places, because they’ve had to go through that quite strenuous process of becoming CHPs.
Hon Dr MEGAN WOODS (Minister of Housing): I’m happy to take a first crack at that, and I’m sure Minister Jackson will want to follow up. The reason why those by Māori, for Māori community housing providers (CHPs) have such low numbers of income-related rent subsidy (IRRS) places is because they didn’t exist until our Government was elected, because ours was the first time that we actually had backed the aspirations of Māori organisations to have these by Māori, for Māori solutions.
In fact, in our first few years in Government, we spent a lot of energy, time, and resource building capacity for a number of very strong iwi and Māori organisations to actually become CHPs so they could be in this position. So I want to see those numbers grow. I wish it had been done the decade previously, by a previous Government—that we had had Māori aspiration backed in that way, rather than just left and nothing done about it. So we do want to see that grow.
In terms of the progressive home ownership (PHO) numbers, Minister Jackson may be able to fill us in on the detail, but I’d just like to reiterate the conversation that we had at select committee. We could have filled the PHO numbers by having by Pākehā, for Māori solutions. We could have had existing community housing providers be the providers that offered those progressive home ownership options for Māori. We could have had a number of organisations that wanted to do it, and we could have taken them up on that offer. But, instead, what this Government has been committed to is working with our Māori providers to build the capacity for them to be the organisations that work with their communities to fulfil that aspiration.
So I think we know that in order to build the capacity in the CHP sector so that we could get the hundreds of houses that that receive IRRS funding, we had to be prepared to put in the work. I commend the work that Minister Jackson is doing to work with those organisations to make sure that we can have these solutions, which make sense in our communities.
Hon WILLIE JACKSON (Associate Minister of Housing (Māori Housing)): Can I just tautoko what our Minister of Housing has said. I commend her, plus other Ministers and this Government, in terms of what we have been attempting to do over five years.
As that member Tama Potaka well knows, as he’s been very involved—and I commend him again. Over the years, he has been trying very hard to get our people into the game—and that’s what you’re saying, Minister. We have not been in the game. We’ve had community providers who’ve been shut out altogether, so that member quite rightly points to the minimal amount of providers. But it’s hard for our providers to even get the status to get the credibility, so I just am so proud of the work that this Minister has done and that this Government has done in terms of actually going down the path of a by Māori, for Māori strategy.
I re-emphasise the Whai Kāinga Whai Oranga strategy as one of the most brilliant strategies we have ever seen in terms of housing and Māori housing in the history of this Parliament. I say that because in past years—I’ve just come on as a Māori Housing Minister in the last year. But in past years, Te Puni Kōkiri (TPK) was always separate in terms of our Ministry of Housing. So Te Puni Kōkiri used to just do repairs, fix up this, and fix up that; we had Ministry of Housing who were doing their thing; and we just did not have a coordinated and comprehensive strategy.
The Whai Kāinga Whai Oranga strategy brings together the two entities, and why is that good? It’s because you have Māori officials working with their Pākehā colleagues in terms of the Ministry of Housing and Urban Development helping them out in terms of the intricacies with regards to housing Māori, because in terms of housing Māori, you’re not just talking about a house; you’re talking about a community, you’re talking about whakapapa, and you’re talking about whānau. So Whai Kāinga Whai Oranga in 2021, when we came up with $700 million in terms of investment—it was absolutely unprecedented.
The member asks quite appropriate questions, but at the same time he must remember what we’ve already put in place, and we want to build on that. So we built on that $700 million by adding another $200 million in the latest Budget in terms of Whai Kāinga Whai Oranga, which is about getting our people into houses all around the country, but we’re not just looking at the repairs side of things, which was the case very much with TPK.
I’m proud of the coordinated, comprehensive strategy we now have, and we want the flow-on to happen into the areas that that member quite rightly points out. So I thank him for his question. Kia ora.
ANGIE WARREN-CLARK (Labour): A question to the Minister in the chair. During our report back and during the hearing, we heard in relation to an imminent announcement in Auckland that was coming. I would be interested for you to talk to us about that, Minister, but I would also be really interested to know about the difference in this model that is being delivered. So I’m interested about the development in terms of its size, in terms of its services, and I’m also interested in the community engagement and the process around that and perhaps around how the community is looking towards this launch. Thank you.
Hon Dr MEGAN WOODS (Minister of Housing): Well, I think there’s two developments in Auckland that are quite different and worth just giving a little bit of information about. One that I think is a particularly exciting development is at Highbury Triangle. This is a very large development of several hundred apartments, but it is dedicated housing for our older New Zealanders—for people that are in the position of needing to rent in their retirement—and how is it that we can provide warm, safe shelter for these people. It’s four stories, I believe—just off the top of my head—but it has lift access, so all of the units within this are universal design so that it is suitable for our elderly population.
I think it is incredibly important that when we think about our public housing as our population ages, we think about how we make it fit for purpose for those older New Zealanders. I’d just like to put a plug in for a similar development in my own electorate, in the Wigram electorate. This was opened a couple of weeks ago. It’s a 20-unit development. It has solar panels on the roof. It is 20 units. It’s three stories, but, again, has lift access so that all of them can be of a fully universal design. But five of those units also have an extra bed—they’re one-bedroom units, but five of them have an extra bedroom for any carers that need sleepover capacity for the over-50s for whom the complex is reserved.
Angie Warren-Clark: Over 50s?
Hon Dr MEGAN WOODS: Yeah, I know—frightening as that is to the chair of the select committee. So we can see that there are new ways of thinking about public housing and how we can make this really fit for purpose for our communities.
I think that once you start building at scale, like this Government is—when you are building the most public houses and adding the most public houses of any Government since the 1950s—you can start thinking about exactly the kind of housing that your community needs.
The other one, of course, is Greys Avenue, which is a housing development that has been going on in that part of Auckland for some time now, and that is going to have intensive, wraparound support for those tenants that will be there. It very much echoes a complex that Ministers Edmonds and Davidson and I were at this morning in terms of the opening here in Wellington of a development in Rolleston Street. It’s an 80-unit development, and 20 of them are intensively supported housing with live-in support for care workers. So we can start to think about how it is that we do those things differently.
CHRIS BISHOP (National): Thank you very much, Madam Chair. My question is actually for Minister Davidson around the Homelessness Action Plan. We had an exchange in the House a couple of months ago or so, in which we were talking about the $100 million appropriated in Budget 2022. Very little of that money has been spent, and I want to know from the Minister what is the barrier in getting the money out the door. I can see she’s rising to her feet, but just give me 30 seconds, Minister, to make my point, which is that I know, as she does, that we are passionate about ending homelessness in New Zealand.
The Minister’s basic point a while ago seemed to be that the programmes had to be designed, that it was very important that we do bottom-up initiatives, and that people have got to be involved in the design of them, and that’s all well and good and that’s important to some extent. But a year later, people actually just want the money out the door, and there are variety of different programmes that are working well already. I think of VisionWest Community Trust, and I think of the Wellington Homeless Women’s Trust, which we’ve had a discussion about. So what is the barrier in getting the cash out the door to families and communities that need it? That’s the first point that maybe the Minister can respond to.
Hon MARAMA DAVIDSON (Associate Minister of Housing (Homelessness)): I do genuinely thank the member for that question because it allows me to reiterate, once again, that the three initiatives that haven’t yet fully contracted out are brand-spanking-new initiatives that are a completely different way of working from what this Government has ever seen and they do absolutely rely on a relational way of working between the Ministry of Housing and Urban Development and the community leadership group.
What I would impress upon the member is to not think of equating the progress with the actual contracting system of Government. So for all of the work that needs to be happening behind He Ara Hiki Mauri, which is that the actual funds have already been devolved out to Te Matapihi and Arohanui ki te Tāngata—so those are Māori and community housing networks working together—that has been devolved out, and then, from there, they are leading the design and the authority to then further contract out the services. They are still designing that, but that heads of agreement has already been signed and it is sitting with the Māori authority—the Māori organisation.
With the supported housing and rangatahi youth space—oh my goodness, we have never done this before. I am closely connected with the providers, who are going to be delivering this completely new service in a completely different way, and the progress is absolutely happening in the way it should be happening. I have met with those providers who are already tagged for being able to do this work, and just only a few days ago, so I’m closely linked in. We are working with those with rangatahi expertise who are going to deliver the supported rangatahi part of the Budget.
With the outreach part of the Budget, we have actually already announced and contracted in, for example, the member’s community, at Kōkiri Marae, and also Whangārei. So the work is happening, and they have been helping us to continue that work.
Then, with the rangatahi transitional housing—my goodness! Again, we’ve been able to—actually, because that was an already existing initiative, we’ve been able to almost fully make sure that that Budget funding is either provisionally allocated or contracted, or has been spent already. But that’s, again, because it is an existing initiative that is set up, ready to go.
I’m really proud that a Government is attempting and doing new ways of working. The work for those three new ways of working is happening. We need to not confuse contracting money and spending money to equate with “the work isn’t happening”. The work is absolutely progressing, and it is going to be delivered by the community, who have designed it. I think this Government needs to be really proud of that progress.
CHRIS BISHOP (National): Well, we can agree to disagree. But, with respect, contracting’s one thing, but getting money out the door is another thing, and, actually, the work doesn’t happen unless you spend the money. So anyway—
Hon Marama Davidson: No, I disagree.
CHRIS BISHOP: Well, work’s fine, but unless people are actually being paid to look after people who are in need, then there’s not a lot of point in doing it. So anyway, I’d just make that as an aside.
My colleague Tama Potaka has some other questions, but I just wanted to ask the Ministers generally: what work, if any, is being done on housing for prisoners who leave prison? I think one of the great disgraces of New Zealand public policy is that people who leave prison far too often go into insecure housing, and that is a big contributor and driver of their ending up back in prison. The wider issue of course is we need to build more houses—that of course is fundamental—but clearly there is a massive social need around prisoners who finish their sentence and exit prison and who, unfortunately, far too often end up in emergency housing motels, sometimes with people they’ve been in prison with. They’re placed in vulnerable situations in which they’re subject to temptation and they end up committing crime and end up back in prison. The cycle repeats, and it’s a disgrace.
I think there is a need for the Crown, for central government, to step up and provide more support there. So I’d just ask Ministers what work or what programmes, if any, are specifically targeted—not just generally homelessness, but specifically targeted—at easing that transition from prison back into the community?
Hon MARAMA DAVIDSON (Associate Minister of Housing (Homelessness)): Look, I am so pleased to hear the member pushing for and recognising the needs of people coming out of prison, and can I also add to the member’s radar, for example, returned overseas offenders. So I want to highlight the Homelessness Action Plan actions, where we have been able to add more support for, particularly, women leaving prison—now, that was of one the actions, which is 26 women supporting 26 women—and also returned overseas offenders, 41 of them.
Can I also add to the member’s radar that transitioning out of acute mental health units is another of those areas where I welcome the members’ collective support to build public mandate that we need to get more housing for these very groups of people who are actually, more readily than not, dehumanised and are rejected from having support in housing. But we should look at this as criminal reoffending prevention, we should look at this as violence prevention, and we should look at this as health or disability prevention, or mental illness prevention. I do agree with the member that we absolutely need more of that specific support, and I hope he continues to prioritise that among his own colleagues as well. But I did want to give the member those updates on where we have made progress in those areas.
Hon Dr MEGAN WOODS (Minister of Housing): Just to add to that, there’s obviously the very important work that’s happening under the auspices of the Homelessness Action Plan in relation to women prisoners. But there is also within the emergency housing review a cross-agency group that not only brings in the Department of Corrections but also brings in the Ministry of Health, which I think is critical. We need to be thinking about mental health and addiction as well as corrections.
But I would like to see this as an area where we could develop a little bit more of a multipartisan conversation about this, because I think all too often there is a demonisation of the rehousing of people and how they reintegrate back into the community. I think that’s something that we see all too often in our communities, and it’s something that I strongly believe as a local MP it is our job to leadership on, rather than stirring up those embers of hate that can be there that do stop people successfully reintegrating, whether that is from mental health, that is from addiction, or indeed, if that is someone building a life outside of prison.
But housing also has the ability to be part of that rehabilitation for our prisoners. I think this week we’ve seen that wonderful story coming out of Rolleston Prison in Canterbury, and I know that I’ve been there with Minister Davidson to visit some of the young men that are learning a trade in prison so that when they get released, they’re actually going to be part of solving our housing crisis. They won’t just be a statistic in the housing crisis; they’ll actually be people with the skills and the qualifications and the trades that actually will be building houses for other people to be warm, safe, and dry in. So that is work that I would like to draw the House’s attention to, because I think it is something we can all celebrate.
Hon WILLIE JACKSON (Associate Minister of Housing (Māori Housing)): I want to thank that member for that observation and for that question. It’s really important, that type of question, that type of challenge, for all of us in the House.
Under the previous Key Government, my own organisation had set up houses for prisoners and it had support, and I want to acknowledge that because it was one of the hardest things that I had ever done as a community CEO. As you know, Tama Potaka, at our marae at Ngā Whare Waatea, we had Zac Wallace, who was a former inmate—a long-time inmate—and his wife, Deidre Nehua, who ran the strategy in terms of reintegrating these prisoners back into society, and we had whole streets, Mr Bishop, who would turn on us because we were trying to reintegrate these prisoners back into society.
It was a major kaupapa and it remains a major kaupapa for our organisations. My mother was a Parole Board member for 20 years, and it was one of her major commitments in terms of the reintegration of these prisoners.
I think that it transcends a party, so I think that all parties can come together on this. I thank the member for his observation and the question.
Hon MICHAEL WOOD (Labour—Mt Roskill): I’d be keen to ask the Minister a brief question about the large-scale programme work, which is a significant part of the investment profile in the Estimates and a key part of providing more houses across our public and market provision. What I’m particularly interested in in my question is the fact that within the large-scale projects (LSPs), the Government is not just building houses; it is redeveloping whole communities. One of the questions that people often have is, well, what about the infrastructure that goes alongside that and whether it is going to be sufficient to deal with the various challenges that we face, and I wonder if the Minister could talk to us a little bit about what we are seeing in terms of the performance of those LSPs that are substantially complete or a long way along the track in respect of the extreme weather earlier this year and the performance of the infrastructure that was put in there. I think that’s important in terms of looking ahead as these developments go forward, to ensure that people have confidence that they’re going to be up to scratch to face those challenges.
Hon Dr MEGAN WOODS (Minister of Housing): Thank you, Madam Chair, and I thank the member Michael Woods for the question. So our large-scale projects that are happening across several suburbs in Auckland and, of course, in Minister Edmonds’ own suburb of Porirua are areas where not only is Kāinga Ora investing in the upgrade of infrastructure but central government is directly also—for the first time, really, since the 1970s—through the Infrastructure Acceleration Fund, going in and doing quite large-scale upgrades of the infrastructure in these communities and neighbourhoods. Indeed, in the electorate of the member who asked the question, in some of the shovel-ready projects, some of those early projects were stormwater upgrades in Roskill that had already been completed, and we’re seeing the benefits of that and we certainly did in the floods earlier this year.
I think if we look at Northcote, if we look at Roskill, and we look at Māngere and at how those areas performed in those devastating floods, we can see the proof of the pudding. We had Northcote, which had been an area where the town centre had traditionally flooded and would have in an equivalent event in Auckland, but we saw that it had drained within 15 hours. The retention of the water in the stormwater provisioning that was there meant that that was a community that didn’t suffer the same consequences. Likewise, in parts of Roskill where we’ve done those upgrades—and the member will be well aware of these in his own electorate—we saw the ability of the infrastructure to cope with that extreme weather having been sufficiently improved, and likewise in Māngere as well.
So we need to be thinking several things when we’re making decisions about where it is that we build our houses. When we’re building for climate change, we need to think about what we’re building and we need to think about where we’re building it. But in terms of where we’re building it, we need to think about that ability of the existing infrastructure to cope or we need to think about what we need to be investing to ensure that we are upgrading it, and of course we also need to be ensuring that we know that we’re not building on sites that are going to become increasingly untenable as we continue through the decades of this century.
TAMA POTAKA (National—Hamilton West): Three questions—a couple of them are related, and one of them is pretty random. I asked a question before in the education session that actually was tied in with housing, and that’s around the teen units at various high schools. These young mums are between 13 and 17 or 18 years old, but many of them are living in very exposed housing situations—very dangerous housing situations. In the one that I visited, they were saying, basically, that 80 percent lived in emergency housing, and of that 80 percent, about 60 percent of them were at risk. So I’m wondering what priority the Government is giving to those young mothers across teen units throughout the country around their housing needs—that’s the first one.
The second one is that the reports on emergency housing special needs grants that are issued by Ministry of Social Development acknowledge that, stating that there are about 7,500 adults and children in emergency homes right now, or who receive those sorts of grants. But there’s actually nothing reported on the stats for Rotorua, and I wonder, given the hype and the concentration on Rotorua, when will those stats be made available.
The third and final one is around Kāinga Ora and the many and various majestic developers that are out there that are building on behalf of Kāinga Ora and building to the needs of Kāinga Ora, and we had the situation last week where some of those homes were, unfortunately, set afire, set ablaze. I’m just trying to understand, through the Minister or the Associate Ministers, whether or not you’re comfortable with the level of risk assessment vis-à-vis community stakeholder engagement on where and how those projects are being built.
Kia ora. Three questions—thank you, Minister.
Hon Dr MEGAN WOODS (Minister of Housing): I’m happy to address them. In terms of the issue around youth homelessness, that of course is an absolute focus of the work that Minister Davidson is leading around how it is that we can have facilities that are catering towards youth homelessness. I visited in Hamilton some wonderful new developments that are catering very much—well, only for youth in transitional housing and how it is that we can set these young people up. They’re often young women, as you say, with children. We can set them on a path to have sustained tenancies throughout their lives, though my hope is that they can even one day move into a position where they can consider homeownership as well.
We see likewise that our Government has backed Sue Bagshaw’s Youth Hub development in Christchurch, which is going to be a game-changer. So in youth homelessness, for the first time, having specific facilities to deal with that very real issue has been a focus for our Government.
In terms of Rotorua, I draw the member Tama Potaka to this very useful dashboard, which is published monthly and has been for about six or seven months now. It is published on the Ministry of Social Development website, I believe, and it gives exactly the data that the member is looking for. So this is something for a period of time—
Chris Bishop: It excludes Rotorua.
Hon Dr MEGAN WOODS: No, it is just about Rotorua, Mr Bishop. It is the Rotorua emergency housing report, which goes into various aspects of it. So that is just about Rotorua, for those that are desperate for the data on Rotorua, and we’re producing this for a very real reason, which is because we want to chart and measure the progress that we are making in Rotorua by taking a very place-based approach.
In terms of the consultation that Kāinga Ora does with its communities, I think we can see that it differs from development to development, depending on the development. Where it’s a large-scale project, we set up site offices and we spend months and actually, indeed, years working with local communities around what that development looks like. What we see is that sometimes Kāinga Ora will buy a development off the developer after it’s built. In terms of how it is that we deal with communities depends on the nature of what the development is and the way in which it’s coming on stream.
But, again, I reiterate, just as we did in the previous discussion, that if all of us wanted to solve a housing crisis, every person in this House has a job to do of showing leadership around the need for public housing to be placed somewhere. I get too many letters from members of this House complaining about public housing coming to their neighbourhoods, and it’s always something that brings despair to me.
CHAIRPERSON (Hon Jenny Salesa): We have two more minutes for this debate. If anyone else has any comments or questions—
CHRIS BISHOP (National): Well, I’ve got one more question. A very quick question: has the Minister sought some advice on the Auckland Future Development Strategy, which—I know it sounds like quite a random question. But I think there’s quite a degree of concern from many in the community that the strategy—which is, basically, going to constrain Auckland’s growth—is going to have quite negative effects on house prices and, therefore, rents and affordability. It’s been slipped through a little bit surreptitiously. There’s not a lot of consultation going on and there’s quite a degree of concern about it, so I just want to put that on the Minister’s radar and ask if she is she aware of it. Has she sought some advice on it, and what are they going to do about it, if anything?
Hon Dr MEGAN WOODS (Minister of Housing): We have what in another country would be called a city deal with Auckland. We have these in six places around New Zealand where we have set them up, where we have set up these growth partnerships that bring together multiple arms of Government, as well as iwi and councils in local areas. We often look to make those sub-regional. So, in the case of my own home town, it is greater Christchurch. We’re bringing Waimakariri and Selwyn into that conversation as well.
So it’s not a matter of seeking advice and hearing about plans. This is an ongoing relationship that we have with Auckland City through our Urban Growth Partnership in terms of working through those issues. I think that our Government has managed to move the model beyond hearing about things from councils, seeking advice, and then going back to them, because we have looked to establish partnerships and to work in concert.
A big part of a partnership is, actually, that you don’t have to agree on everything, but then you can work through to find solutions, and that is exactly what we’re doing. We’re doing it in Tauranga through the Smart Growth partnership, we’re doing it along the Auckland-Hamilton corridor, we’re doing it in Auckland, we’re doing it in Hamilton, we’re doing it in Christchurch, and we’re doing it in Queenstown. I think that in six years, the fact that we’ve set up, essentially, what other countries would call these city deals and that they’re well under way and that we have actually managed to group together funding so that we can start to have conversations across the various arms of local government, central government, and iwi about how that works is of benefit.
CHAIRPERSON (Hon Jenny Salesa): Kia orana, members. That concludes our debate on housing. The time has come for me to leave the Chair. I will resume the Chair at 7.30 p.m., after the dinner break. Ka kite anō.
Sitting suspended from 6 p.m. to 7.30 p.m.
Health
CHAIRPERSON (Hon Jacqui Dean): Members, the sitting is resumed for the Estimates debate. We now have the Minister of Health, and the Minister is available from 7.30 until 8.30 p.m.
Dr TRACEY McLELLAN (Chairperson of the Health Committee): Thank you, Madam Chair. Kia orana. It’s a privilege to make some opening comments as the chair of the Health Committee, as we consider the Estimates for Vote Health and the various appropriations that come under that umbrella.
In 2023-24, total appropriations sought by Vote Health are $26.51 billion. Two appropriations, in particular, cover most of the health services across New Zealand, accounting for nearly 80 percent of the funding. The proposed allocations are delivering hospital and specialist services, with funding requested of $12.72 billion, and delivering primary, community, public, and population health services, with funding of $8.16 billion.
We heard from the Minister of Health, the Hon Dr Ayesha Verrall, on 28 June 2023, and there were various areas of interest that members asked questions about that largely revolved around five or six themes. We asked the Minister to take us through those themes. One of the themes that I think is worth mentioning, in particular, is removing prescription co-payments. We asked the Minister whether she expects that initiative to improve health outcomes, particularly for people on low incomes and particularly in winter, so there was plenty of information on that. The Minister did explain to us that, essentially, removing the $5 co-payment, the rationale behind it was about saving money to the health system as well as saving people from harm, and the fact that it was evidence-based, and there was plenty of information to go on. She added that there was very strong evidence that the decision, ultimately, will benefit both people’s health and the health system.
Now, somewhat related to that, we also heard about the changing role of pharmacists, who are, obviously, at the heart of this initiative as well. It has been quite a game-changer, I think, for a lot of those pharmacists, who, often, are small businesses, because the large pharmaceutical outlets who haven’t previously charged for the co-payment were able to use that as a loss leader and disadvantage those community pharmacies.
So the Minister noted—which is quite interesting—that 98 percent of New Zealanders live within 20 minutes of a pharmacy, and highlighted the various different ways that their role has changed through the COVID experience in so far as being able to pick up immunisations, rapid antigen tests, and various other bits and pieces, and Te Whatu Ora had ensured that there was certain funding available to increase that. It was all part of what the Minister described to us as the 2023 winter health plan.
Another big part of what we heard about through this Estimates process was about primary and community care. The Minister acknowledged that there were some general practice workforce issues. We looked at GPs, in particular, and she was able to tell the select committee that the Government had recently announced 50 additional places for medical schools, and also that there was an expectation that those medical schools would expose those trainees to more general practice and, certainly, Te Whatu Ora also backed that up by saying that they had funded several initiatives that affected general practice in general, so to speak.
We learnt that with regard to mental health, that the ring-fence for mental health was maintained. We heard that the total ring-fencing funding for 2023-2024 is $2.3 billion nationally, and Te Whatu Ora explained how it had maintained that ring-fencing from the previous sort of district health boards.
We asked various questions about the progress on the restructure of the health system, which was an integral part of this. There was talk about efficiencies that were maintained and various other issues to do with setting up those localities.
The other, I suppose, major theme was about the health capital envelope, and this proposed funding for this multi-year appropriation is $989.54 million, with a total of $5.45 billion over the five years. So there were several questions asked from members about that, and, likewise, the increased funding for Pharmac in this Budget, so the 10.5 percent of the national pharmaceuticals purchasing appropriation, which actually brings the total to $1.31 billion. So I look forward to hearing questions from members, and look forward to the Minister’s answers to those questions as we go forward. Thank you.
Dr SHANE RETI (National): Thank you, Madam Chair. We asked a range of questions in the Estimates hearings to hold this Government to account for the projected spending of public funds. We asked why dozens of performance measures were discontinued from Budget reporting, and we highlighted ophthalmology wait times and cardiac wait times that will no longer be reported. Effectively, the Government said that it will only report these internally and not for public scrutiny anymore. The verbatim phrasing is “reporting of these metrics continues at a district level and is internally circulated.”
The question would have to be: why is it a good thing to remove these from public scrutiny? This was at Budget document level as well, not just at a quarterly dashboard level. Why is it a good thing to remove ophthalmology targets? There were actually cardiac targets as well. How is any of that a good thing? In fact, dozens of targets were removed, and I can’t find a good answer as to why this is good. So they’re still collected. They’re internally reported—well and good; that’s great for internal consumption, but what about that public reporting back to the public? I don’t think we got an adequate explanation for that.
We asked how many contractors and consultants transitioned from the Ministry of Health into Health New Zealand, because we’ve been very concerned with both the number and the cost of contractors and consultants, particularly with the Public Service Commission reporting around about $150 million, if I recall correctly, of consultant and contractor fees through Vote Health in the last year. So we were particularly interested to find how many had transitioned—at that July 1 transition time, how many had moved from the Ministry of Health into Health New Zealand.
The answer that came back was an astounding 990 consultants and contractors who had transferred across. When we look at the Ministry of Health in that calendar year, they had roughly 1,700 fulltime-equivalents, so that means roughly every third person at the Ministry of Health was a consultant or a contractor. A 2:1 ratio of staff to contractors and consultants—not clear how that can be a good thing. Really need to see the value that they would bring to that. I have seen some documents talking about how that might need to be addressed around contingent, as I believe, consultants and contractors, but looking back at how that money was spent, I think that still needs a large degree of accountability.
We asked about Nelson-Marlborough and Hawke’s Bay hospitals and where they were in progress, and maybe the Minister can give us some guidance, because if we look through the approvals process for large upgrades like that, the Capital Investment Committee is always an important part of that approval process, and so it’s concerning to find out that the Capital Investment Committee has been disestablished. So this is a committee of external people with external domain expertise over many years, and in several parts of the pathway with the initial business case, it goes to Capital Investment Committee and back. With the detailed business case, it goes to Capital Investment Committee and back. Now, with that the committee is disestablished, the questions I have to ask around that are: when was it disestablished, why was it disestablished, and what replaces it? I think those are very important discussions that arise from the discussion we had around Nelson-Marlborough and around Hawke’s Bay Hospital—we were very interested to know what progress it had, particularly with the recent announcement on Nelson-Marlborough. So a large circle of query around the Capital Investment Committee.
We asked about the promise in 2020 that the Government would deliver an extra 4,000 more people in the Te Ara Oranga methamphetamine programme pathway. We checked whether this was incorporating the existing pathway in Northland, which is well established—one of the best meth pathways in New Zealand, in my mind—or whether this was on top. In written question No. 31310, the Government made it very clear that the 4,000 promise was on top of those being delivered in the Northland programme. So when the written questions returned from the Estimates and the answer was that there is 1,845 people who have gone through the Te Ara Oranga programme, the vast majority of that—everything short of about 100—must have been through the Northland programme. That was not the promise; the promise was 4,000 on top of the Northland programme. Murupara is the only clinic I can see that’s been enabled; they project between 100 to 200 people progressing through Te Ara Oranga. So I want to put that back on the table that that question has not been well answered. It looks like 1,845 new people through Te Ara Oranga, all in Northland; only 100 towards that 4,000 promise. It would be useful if the Minister could address that. Thank you, Madam Chair.
RICARDO MENÉNDEZ MARCH (Green): I want to turn my focus to the issue of oral health, and I acknowledge that, for many of our communities, accessing decent dental care services remains out of reach for them because they’re inaccessible. Some of the figures that the Minister of Health has provided in written parliamentary questions show that there has been consistent—around 13,000—discharges where the primary diagnoses was diseases of oral cavity, salivary glands, and jaws over the last few years. So my question is around what initiatives the Government is working on to reduce the incidences of these diagnoses and to improve people’s oral health and whether Te Whatu Ora’s relatively low number of fulltime-equivalents (FTEs) working in the public healthcare system, when it comes to dentists and the oral health workforce, needs bolstering and whether the Minister is comfortable with the fact that the majority of the provision for oral health services sits within the private sector. There’s such a low number of FTEs within that workforce there. So any strategies that the Minister can illuminate on improving people’s oral health would be welcomed.
Dr SHANE RETI (National): Thank you, Madam Chair. During the Estimates, we asked about the number of staff at the Māori Health Authority. We were interested in this because the previous Minister of Health struggled to give an adequate answer, in my view, to multiple written parliamentary questions, and yet this is a question we ask of every entity: what is your fulltime-equivalent (FTE) growth like? The first time that we got a really good look at that was when the briefing to the incoming Minister (BIM) came in in February and it was identified that there were 220 since February 2023, that there were 227 fulltime-equivalents. When we asked this question in Estimates, the answer we got was 321—that was subsequently corrected in written parliamentary question No. 20630 to 388 FTEs, or 400 headcount. That’s quite a substantial change; almost a doubling from the BIM in February of 227 through to the projected final headcount of 388. While we talked about those numbers, there needs to be some explanation to that and how many of those projected FTEs at establishment are vacant spots. I understand there could be a hundred of those places still vacant. In that same brief, it would be useful to know if there’s actually a financial officer permanently appointed.
I have a number of issues around the Māori Health Authority, not an increase in confidence with the recent announcement of new board members. Effectively, half the board—remember, in legislation, there can be up to five to eight members of the Māori Health Authority board—jettisoned and another four brought in. Sharon Shea, Dr Sue Crengle, Lady Tureiti Moxon, and Dr Chris Tooley, as far as I can determine, have been jettisoned. Thank you for your service. One year—just one year—later, and four new people have been brought in. That needs some scrutiny, some explanation, as well, I think. But one year later, half the board gone—why is that?
I suspect some of those answers are in the Ernst & Young report that the Minister will not release—if she’s prepared to put a time frame on that, preferably this side of the election, then we will know what she knows or what the sector is telling me. So I come to that point that the Ernst & Young report may well address some of these issues, and that was received on her desk on 5 May. Some of the things we know that it’s likely to go over, which are part of the Estimates, include the fact that the statement of performance expectations that was tabled in November 2022 did not include the full financial intonation required to meet the Crown Entities Act 2004. So there are financial issues with the Māori Health Authority that I believe that document may well explore, and I think it should be in public domain.
We asked about why the 20 mobile dental caravans that had been previously promised had never eventuated, and we’re asking this question again today. It was a very firm commitment in the previous Minister’s hands, which sits inside this purview. We were assured—in fact, the comment was: “Just wait. There’s still more of the parliamentary term still to come.” Well, no, there’s not; there’s about another three weeks, or another 11 or 12 sitting days, maybe, and that’s it. I just can’t see 20 mobile dental caravans on the horizon. So it would be useful to know about that.
There are parts of information technology in the Estimates that need some serious scrutiny. If the Minister wants to explain exactly what Hira is supposed to deliver in a concise sort of way—this is a multi-hundred-million-dollar project. I’ve looked at it many times and I understand the interface that it’s trying to have with multiple different providers. I understand that it’s to enable patients to get access to their own information. All of that sounds like a flash personal health record to me. Why we are spending hundreds of millions of dollars alludes me somewhat. So it would be illuminating to have the Minister expand on that large part of the IT budget.
In the same breath, the southern digital transformation—again, hundreds of millions of dollars. Exactly what that is doing, one presumes it’s associated with the Dunedin Hospital build. My understanding is that there were five options and we chose the gold-plated option. I’m happy to be corrected on that but I would also be happy to understand that better—to understand its progress, how it is doing with the triple constraint of time, scope, and cost, because for hundreds of millions of dollars in the Budget, I think it’s reasonable to expect some report back on that. We did look to touch on that in Estimates, but it’s certainly appropriate to put that on the table here as well tonight. Thank you, Madam Chair.
BROOKE VAN VELDEN (Deputy Leader—ACT): Thank you, Madam Chair. I want to talk about safety. This year we have found that the safety of staff in our hospitals has been appalling. The number of assaults has more than doubled in the past year in our hospitals, and I have had conversations with people who work in hospitals who say, “Look, I don’t actually want to get paid more, I just want to feel safe when I turn up to work and walk down my hospital wards,” and people don’t feel like they have the ability to do their jobs and do them adequately because they’re fearful of being assaulted or threatened when they’re in the hospitals.
I’m curious whether there’s been any funding allocated in these Estimates, or any analysis done on how much money—extra—the Government should be spending or allocating in this Budget towards improving the safety and wellbeing of people in our hospitals.
Dr SHANE RETI (National): Thank you, Madam Chair. The previous speaker raised the question of the winter preparedness—I say again that the Government’s first speaker, Tracey McLellan, raised the question of the Winter Preparedness Plan, and I think that does bear some scrutiny in as much as that its purpose, amongst other things, is to decompress hospital emergency departments (EDs), and yet what we know is that Greymouth hospital is at 100 percent capacity in their general ward, Oamaru Hospital had to close their ED overnight on Monday, and send patients to Dunedin and Christchurch—that’s right, this was the Pegasus clinic last week that had to close, which is a primary care clinic, and one would imagine some of that overflow went to ED as well.
So the Winter Preparedness Plan is supposed to relieve some of the pressure on EDs. I’m not seeing it. I’m not feeling the love from that plan, not seeing huge benefits to that, yet this is part of what the funding in Budget 2023—not part. It’s a substantial amount of about $189 million, if I recall correctly, and it’s supposed to be reducing the capacity and the load on these emergency departments, but even here today in these past 48 hours, we’re not seeing that. Could this possibly be because the Winter Preparedness Plan, apart from the Telehealth component, is only for the eight hotspot EDs in the eight hotspot areas?
So for example, the scope extension of pharmacy to minor ailments, which I’m supportive of scope extension—I think there’s a role for that—but it really needs explanation as to why it’s just these eight regions. Because what we have is we have pharmacists from Waikato and from Rotorua saying, “What about us? It’s not like we’re an area that’s extremely well served and have a well-healed population, and yet we’re completely missing from that part of the Winter Preparedness Plan.”
I think that’s a really, really good question to raise. I have no explanation as to why this was not ubiquitous across the whole country. I think it probably should have been, and so I’d like to see the explanation for that, given the substantial sums of money in the Winter Preparedness Plan.
To follow on with another point that the first speaker raised around the “strong” evidence for co-pay relief, I think that needs some challenging. One study that the small numbers were questioned both by the authors and by the reviewers does not a summer make. I also think that the fact that 145,000 people were not able to pick up their prescriptions in the previous financial year, I think it was, due to cost which is being held out as one of the reasons for this wide-ranging policy. I think there are questions around that. It’s been called a small number by a number of commentators. I get that 145,000 is some, but in the context of all the prescriptions, it’s not a lot.
Secondly, when you probe into that—and that data was done by the Health Quality and Safety Commission (HQSC)—and say, well, how many of those had community services cards or were SuperGold card holders, because that that’s the alternative policy that we are proposing, the reply is, “Sorry, we can’t tell you that, we don’t have that much granular data.” Well, that’s kind of not useful. That doesn’t let us have that contest of ideas. It starts with what’s been quoted as a smallish number anyway, and so I want to just contest this idea that the evidence is strong.
There is some evidence, and let’s remember the primary outcome of the Otago study in question failed. The primary outcome was actually decreased length of stay. It was a failed outcome. There were some small pockets of pathology that benefit, but if you read the report, it was a failed primary outcome. It did reduce the number of people that went to hospital. That is fair. So it did achieve that goal and that that’s a desirable goal, don’t get me wrong, but let’s not presume it was overwhelming or “strong” evidence that the Government has put forward for the co-pay reduction. It’s still struggling to map that concept that wealthy people will get the same co-pay relief as those who are most vulnerable. It’s just a principle that doesn’t make it over the line. It just doesn’t get there.
I personally don’t need to pay for the co-pay and I’m happy to pay for it and I know there are a large number of New Zealanders who feel similar. So I want to contest that this is a strong policy and put up a contest of ideas that in fact it should be for the most vulnerable—those with community services card holders and SuperGold card holders is what I’m proposing, and unfortunately the data is not held by HQSC to actually look at what that number of 145,000 is.
So, you know, we don’t seem to be able to go any further down that path at the moment, but I think it’s an important point to make. Again, if the Minister could explain, to come back to my first point, why it is only eight regions, eight hotspots in New Zealand who are benefiting from the Winter Preparedness Plan—apart from Telehealth; I understand that has extended further. That would be useful. Thank you.
Hon Dr AYESHA VERRALL (Minister of Health): Well, there you have it: an argument against targeting on the one hand and an argument for targeting on the other—total absence of logic in the last part of that question. We saw the fig leaf being wheeled out, didn’t we? We saw the fig leaf of, “Well, I’ve read the study and one endpoint said this and one endpoint that.” and that’s the warming us up for the cuts that National are going to make to the very effective and popular policy to make medicine free—to make sure, as the member said, that we keep people out of hospital. Going back to the first part of his question, it was “How do we keep people out of hospital?” Well, there’s one way.
We also have the winter plan, and, yes, many of the initiatives are targeted. There are a wealth of targeted initiatives in our health system, and the first year of the winter plan, the first time our country has had a comprehensive winter plan that spans across pre-hospital, hospital, and post-hospital care—that first time, yeah, we did decide to approach it in a targeted way. We will be reviewing that and see if we cannot make improvements in the future.
There have been some very successful parts of the winter plan. I’m told the minor ailments scheme in pharmacies is going exceptionally well. Thousands of visits there, lots of people making use of it. Sometimes when people do come to hospital, they have been to the pharmacy, so they’ve had the basics already done. The kid with fever has already had their paracetamol, and that means that they actually are in need of coming to hospital at that point.
I contest the idea that every single output that was measured in the health system is actually the appropriate measure to take with us in perpetuity. It may not be. We are trying to change our health system to reorient its priorities to have a greater emphasis on equity, to have a greater emphasis on keeping people well in their communities, and that will mean that in trying to get a broad, representative set of indicators of performance, we will need to make changes. It’s quite a complicated thing to pick the appropriate indicators and work on that is ongoing at the moment, and the appropriate vehicle for resolving that will be through the Government policy statement process, which will be concluded over the coming six months.
In terms of questions about dental care, I thank that member for that question. I’m very proud to be part of a Government that’s taken the step to depoliticise fluoridation and make that an official decision. That is one of the most impactful measures we can have on young people—on all people, actually, but particularly young peoples’ oral health and dental care. The changes we made have the potential to take our fluoridation rate from 50 percent up to 80 percent of people having access to a water supply that is fluoridated. The decisions that underlie that are now taken by the director-general and involve local authorities.
In addition, part of the child and youth wellbeing strategy involves other aspects of looking after young peoples’ oral health. In some poorer communities, we are providing families, via community health providers, toothbrushes, toothpaste, and education on proper dental hygiene there. Then, in addition, the really important change was to the emergency grants for dental care, which has resulted in a $30 million increase, I’m advised, in hardship grants that have been paid out.
On the matter of consultants in the Ministry of Health, there were a lot of consultants in the Ministry of Health as the pandemic wound up. So of the 990 contractors in the Ministry of Health, 574 moved to Te Whatu Ora. They were data and digital contractors. So 184 were in COVID vaccination. Clearly they were going to be on a contract and not long-term permanent staff in most cases, and 89 were also in other parts of the COVID19 response.
I think the member who asked the question about Te Aka Whai Ora staffing numbers received a letter from the chief executive of Te Whatu Ora—and it was not via written parliamentary questions—an apology for the mistake made there, which was an honest mistake—[Bell rung]—about the number of staff reported at select committee.
CHAIRPERSON (Hon Jacqui Dean): Does the Minister seek another call?
Hon Dr Ayesha Verrall: No, Madam Chair.
RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. Seeing as the Minister talked about dental grants, I guess I wanted to get her perspective in terms of the overall public health outcomes of changing the non-recoverable amount—whether she’s got any views about whether the exclusion of check-ups and molar extractions actually serves to improve the oral health of our communities, and people lack single services because for some reason the Ministry of Social Development has decided to exclude check-ups. I wanted to test, you know, seeing as the Minister mentioned it, whether she’s got any views as the Minister of Health about whether that’s counterproductive to the grant actually meeting its full potential.
Then I know the Minister talked about fluoridation as a key component in the prevention and wellbeing of people’s oral health, and I acknowledge that, but I guess I wanted to get a sense about what other initiatives, if any, are happening to actually address when somebody actually has ill oral health—and obviously the goal is that doesn’t happen, but when it does happen—and we’re seeing those hospital discharges figure representing that it has remained steady over time at relatively high numbers. What initiatives is the Government putting in place to bolster both the workforce and the public health system, or anything else beyond toothbrushes to improve the oral health of our communities?
SIMON WATTS (National—North Shore): Isn’t it remarkable to have a Minister that’s standing up and seems quite angry, a little bit, with our spokesperson in terms of the questions that were asked. I think what the health sector really needs from the Minister is someone who is listening to the crisis which they’re facing out there and the stress that their staff are facing day in, day out.
Why is it today, Minister, that at Waikato Hospital we’ve got pretty much every ambulance in the region ramping and waiting up to four hours because of the bed block at Waikato Hospital today? And this is a daily occurrence across this country in terms of the blockage within our secondary care hospital units, not only in emergency departments (EDs) but right through the patient flow journey within those hospital units, which are blocked. The system is blocked and the symptomatic signs of the ambulances banking up at the front door is systematic of a system that is broken. So what does the Minister say in regards to all of those ambulances that are ramping today? What does she say to those patients calling 111 that have an inability to get an ambulance because all of those ambulances are parked up waiting to offload their patients into ED departments across this country? What are the clinical and adverse patient incidents that have occurred as a result of the delay in treatment or the delay in collection of critically ill patients across the country as a result of these delays?
All of these questions are not new factors and it’s interesting the Minister refers to how well the winter plan is going. Well, I’ll tell you what, Minister, winter happens every year. This is not the first year winter has occurred, but yet after six long years of this Government, you continue to fail to be able to make improvements in regards to the health system. You say that we are making progress, but the facts do not indicate that.
I’m addressing—from the Minister: what are you doing around capital investment upgrade, particularly in the Auckland region? How are you getting on with Waitakere Hospital? How are you getting on with Waitakere Hospital and the fact that that hospital supports a population of Wellington and does not even have ICU or high dependency unit capability and deals with the scale of complexity that is West Auckland, and yet you’ve known about the requirements and infrastructure upgrades for that hospital for years and have failed to do anything of any substance. I can see you smiling, thinking that this is some sort of joke, but it’s not, Minister. These are reality and facts that our communities are facing across Auckland.
When are we going to see plans around a new northern hospital? When are we going to see plans around a new southern hospital? Because six years on, we’ve still not seen any tangible progress in regards to the growth within Auckland and the additional services required. When are we going to see that? All we seem to see is more moving of the deck chairs in a reform programme which, by all accounts, including those within the system, has failed and continues to fail and will be a legacy of you and your work in this area.
BROOKE VAN VELDEN (Deputy Leader—ACT): I have had conversations with people who have really severe illnesses and some people who don’t have a severe illness, but they want their medication to be funded and their medications are not funded by Pharmac. They’ve raised the issue of the pharmaceutical co-payment and the fact that the Government has now decided to put aside $700 million over four years to reduce the $5 co-pay and they’ve said, “Please take this to the Minister and ask: did the Minister consider at any point that it would be good for our society for our medications to be funded currently on the options for investment list at Pharmac? We would be so happy to pay a $5 fee.” Did the Government consider at any point that that money could be better used to reduce the waiting list of the options for investment list at Pharmac so that people could have access to new and modern medication that would have a $5 charge? And did the Minister consider at any point whether or not that would be more beneficial for some New Zealanders to be able to have access to these medications at all, rather than reducing a $5 fee for a lot of people who can already afford medications?
We’d also like to know what other cost-benefit analysis the Minister did to show what other options could be on the table to help those people that she has considered to be the most vulnerable who cannot afford a $5 co-pay. Did she actually have any other suggestions on the table rather than reducing the $5 co-pay for all people who can afford a $5 fee, because a lot of people have said to me “I would prefer that I was still being charged a $5 fee if it meant somebody else would actually have access to newer, modern medications.”
I want to turn to the issue of the general practice 13 percent pay increase that was allocated in the ACT Party’s alternative Budget. We’ve had conversations with a lot of people who work in general practice who say that they’re stretched, they’re under resourced, and they can’t cover their costs. How did the Government determine that a $5 capitation increase would be sufficient for general practice when the GPs themselves have said that they need a 13 percent GP capitation increase? What analysis was done and why does the Minister believe the Government’s increase is acceptable when the general practice clinics do not?
Dr SHANE RETI (National): Thank you, Madam Chair. We’re just wondering if the Minister in the chair, Ayesha Verrall, is going to answer the questions around the 20 mobile dental caravans—she talked about dental—whether she’s going to answer the questions around Te Ara Oranga, the promised 4,000 extra consultations. The written parliamentary question around the number of fulltime-equivalents in the Māori Health Authority is No. 20630—I just want to clarify that. We really just want to know, both my questions and my colleagues’, whether the Minister has any intention of answering them tonight in this debate, which is the purpose.
Let’s also put the Capital Investment Committee, which was reasonably asked and described, into that mix as well. I understand that a number will be extremely surprised that it has been disestablished, as was I an hour ago. So I think it’s a reasonable question to ask. When was it disestablished, why, and what replaces it? This was a very important pathway to millions and millions—literally, billions of dollars. Now we find out it’s disappeared. So really it’s a question: is the Minister going to answer the questions in this debate or not?
BROOKE VAN VELDEN (Deputy Leader—ACT): I completely agree with Dr Reti. I would really like to know what expenditure was set aside for staff safety in hospitals. We know the number of assaults has doubled in our hospitals in the last year. When I have people in hospitals coming up to me saying, “I don’t feel safe when I’m at work, and I don’t actually want a pay increase; I just want to feel safe when I’m doing my job.”, and they don’t feel listened to by this Government—why the Minister won’t answer that question.
We need to know what the Minister has done to listen to these concerns, because it’s genuinely fearful for people turning up to work, and if people are fearful of turning up to work in our hospital systems, that doesn’t give us faith that more people will want to join that profession. We need to know people are going to be safe when they’re at work, especially when they’re helping some of the most vulnerable people at the most vulnerable points of their lives. How much money has the Government put aside, in addition to what they had before, to make sure that there is security, to make sure that there is safety, to make sure that people are not being assaulted when they’re in the hospitals?
Hon Dr AYESHA VERRALL (Minister of Health): As discussed in the select committee debate, this is an area of a profound concern for Te Whatu Ora and for myself. I am aware that for a long time there has been absolutely unacceptable behaviour directed towards staff from members of the public and that does make them feel threatened at work, and that is absolutely not appropriate. There is a considerable presence of security in our hospitals. Te Whatu Ora has over 800 fulltime-equivalent staff in security, and also in some districts there would also be external contractors providing that service. There is a renewed priority put on that work, and that’s why Te Whatu Ora has engaged with unions on that matter to decide collectively what additional work can be done to address that. I know, in some hospitals that I’ve visited, efforts to make sure that waiting rooms in the emergency department are more proactively managed and there’s more support for the people waiting helps address some of the frustration that might be behind some of the unacceptable behaviour there.
In terms of some questions about capital, the Southern digital transformation project is for modernising the information technology in Dunedin Hospital. That includes some of the infrastructure required for the build, such as cabling, but it also includes transformation in terms of digitising notes and other clinical systems—for example, room bookings—and potentially regionalising those systems as well.
We also at the committee discussed the approach to medicines of this Government, and I think this Government can be very proud of the comprehensive approach we’ve taken to improving access to medicines. We have lifted the Pharmac budget by over 40 percent. There have been hundreds of new drugs or indications for drugs funded as a result of that change. While it is easy to have a go at Pharmac because not everything is available through it, there has been a substantial access to medicine through that effort.
In addition, we are also making sure that the benefits of that technology are equitably shared, and that is part of the rationale for the co-pay policy. It is not just a matter of having one approach to our medicines policy but having an integrated approach. The importance of being able to lift people’s access to medicines through that co-payment is one of the priorities of this Government, and it’s fantastic to see how warmly welcomed that policy is by the public.
We did discuss the reasons for the uplift for community services, including general practice being 5 percent. Traditionally, and this financial year, the uplift has been based on the annual statement of increase. That looks at capital cost, supplies, and workforce costs, and it was based on that—that was 4.9 percent; the 5 percent uplift was in addition to that. It is the highest uplift that has ever been given to primary care and community services.
Dr ANAE NERU LEAVASA (Labour—Takanini): Kia orana, Madam Chair. Kia orana to the Minister, the Hon Ayesha Verrall, as well. I just thank the Minister for answering some of the questions, especially on the Winter Preparedness Plan. It is the first of its kind—the investment into 193 additional front-line clinical staff, which will be funded in Budget 2023, but also to see the investment of an extra half a billion dollars for primary and community care—obviously, I will still push for our community providers there—and also to see the $5 co-payment gone, which will definitely help, and has helped, many of my community members in South Auckland.
One of the focuses I want to speak about is around our young people and how the extension of school-based health services supports the physical and mental health of our young people. Looking at Cyclone Gabrielle and the affected areas there, how will the roll-out of the successful Mana Ake programme to our primary and intermediate schools in the Hawke’s Bay and Tairāwhiti areas make an impact to support our tamariki in those areas? Thank you.
Dr LIZ CRAIG (Labour): Thank you, Madam Chair. I’d actually be interested to hear a little bit more about the funding in Budget 2023 to reduce waiting lists and also to standardise access to healthcare. There were some recent announcements around cataract surgery. Being from down South, I hadn’t quite realised just how many more points those residents in the Southern region needed to get cataract surgery than some of those further North. So I’d just like to hear a little bit more about what investments in Budget 2023 are being put in place to ensure that we can get equity around the country in terms of cataract surgery—also, though, looking then at how that approach could be used to look at other equity issues, in terms of reducing the postcode lottery for other elective surgery and other interventions. I’d be really keen to hear more about that as well.
Hon Dr AYESHA VERRALL (Minister of Health): Just circling back to make sure I’ve dealt with all of these questions on the list, I can reassure Dr Reti that the Capital Investment Committee was disestablished as part of the transition to the new health system, but its function is carried over to a subcommittee of the Te Whatu Ora board. It includes board members as well as external experts.
In response to the question about cataracts, that has been a persistent inequity in our health system and one of the ones that has really been illustrative of the inequities that existed when we had 20 district health boards. Literally, in Dr Liz Craig’s part of the country, and in Canterbury, people would have to be legally blind before they were able to qualify for publicly funded surgery for their cataracts, whereas in other parts of the country surgery could be done much earlier, because that was just the difference in how the DHBs chose to, or had to, allocate their funds. So being able to allocate some of the funds that were prioritised to wait-lists towards the initiative of getting over 3,000 additional cataract operations done has meant that, over time, we can progressively bring that threshold back to the place where it is the same across the country, because that is fair and what every citizen and taxpayer in New Zealand should be able to expect.
These situations actually exist across all of our wait-lists. There are variations across the country, in various different access criteria in different districts, so there is an opportunity to go through each of them and identify opportunities for standardisation. I know officials at Te Whatu Ora are working on that, and they’ll progress that as opportunities present themselves. Of course, the other important thing with wait-lists with that allocation of funds—$118 million—is to make sure that we continue to push for wait-list reductions. I’m very pleased to report that I have been advised the wait-lists are reducing in all parts of the country, and that challenge of moving through with the ultra-long waiters is going incredibly well—for example, all people waiting over three years have had their surgery. They’re working through people who have been waiting for a second year. Te Whatu Ora’s target is for no one to be waiting for longer than one year, and at the end of this year, other than for orthopaedics, where that will take a little longer—but there is a similar plan for that, and those plans correspond to targets for each part of the country. Those targets have been allocated and are monitored week by week.
RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. I’m just hoping to circle back to oral health and, I guess, to put to the Minister whether she thinks that the oral health of our communities is suffering because of the cost barrier to access treatment, including check-ups—which the Minister touched on about the dental grant and the access to the dental grant in this year’s Budget—and whether the exclusion of check-ups is actually contributing negatively to the oral health of our communities. Then, to go back to my previous question, I also wanted to get an understanding that beyond fluoridisation and initiatives that may provide targeted free toothbrushes, for example, what else is the Minister doing to reduce the cost barrier that many of our communities face to access treatment and have good oral health?
Hon Dr AYESHA VERRALL (Minister of Health): I thank the member Ricardo Menéndez March for reminding me of his question. Yeah, indeed, the purpose of the hardship grants is for treatment and a check-up is not included in that. However, I agree with the member’s point that it is beneficial to have them because that allows early treatment. However, I’m not sure, were we to do that, whether the hardship grant would be the right mechanism for achieving a check-up which is a regular preventive part of one’s healthcare. Indeed, I am aware that cost is a barrier to accessing that, and one that I am concerned about.
I also thank the member for the question about health of children in schools and particularly in those cyclone-impacted areas. The Mana Ake programme is a well-tested programme—it grew out of the Christchurch and Kaikōura earthquakes—for mental health support for those little children who themselves and their families and their parents have gone through a disaster. One of the things that we learnt in Christchurch and from disasters around the world is that those mental health impacts can come on three years afterwards, so the response to a disaster is phased. The Mana Ake funding was in the extreme weather events pre-Budget announcement, and now Te Whatu Ora is working to set up Mana Ake in collaboration with the Ministry of Education, and further work with schools in Hawke’s Bay and Tairāwhiti. In general, the whole system works on having very strong relationships with the local community, between the kaimahi from the health system and education, and those relationships are being developed now. As I said, this is not part of an emergency response. It is about building the resilience over the months and years that follow, and that is the reason why that does take some time.
SARAH PALLETT (Labour—Ilam): Thank you so much, Madam Chair. This has been a really interesting evening’s conversation. My stepmother’s just had cataract surgery, although not here—in the UK—so I’m aware of the importance of that particular piece of work. Minister, I would just like to talk a little bit more about the focus that this Government has on high-quality health infrastructure which we’ve seen, and I was curious to hear a little bit more about the recent announcement of funding for the Nelson Hospital. I’d just love to know what this means in terms of a stronger health system for the people at the top of the South Island, but also to follow up on what the Minister was talking about with regard to disaster preparedness.
We’ve seen from the North Island weather events that there’s obviously a really clear need to have a plan in place to reduce the devastation of future natural disasters, and you were talking, Minister, about the effects of the Canterbury earthquakes on mental health. But I just wondered how the planned hospital would support people in the wider Nelson area and Wellington region, as well, should the worst happen and a significant earthquake occur on the Alpine Fault line?
Hon Dr AYESHA VERRALL (Minister of Health): Thank you, Madam Chair. I will refer to the earlier question about health infrastructure in general and also in Auckland, and I just think it’s really exciting. I visited with Shanan Halbert, the local MP, Tōtara Haumaru, the new build for elective surgery on the North Shore: 150 beds, and eight theatres and endoscopy suites. It’s looking really good, and the opening is just months away. So that’s a very exciting facility there, and it’s part of that process to make sure that we separate our planned care from acute care so that we can keep planned care going, whatever the pressures are that we have on acute care.
I’m very proud that this Government has prioritised funding on health capital and hasn’t cut it back just when our times have got difficult, because these are such long-term projects that you really do require continuous investment. That is the only responsible way to be able to make sure our country gets the hospitals our people need.
With respect to Nelson Hospital, that is a very exciting development for the people of Nelson. We were able to announce the move to phase one of that project, with over $70 million for the detailed design to be funded and for studies on the site. There are issues with resilience with the existing building, and so the plan for this one is for it to be built to IL4 standards so it can continue to operate if there was a serious earthquake. The building proposed is for an acute services block that would contain the emergency department—an enlarged emergency department—theatres, of course, surgical, medical, and maternity; and then refurbishing and strengthening existing buildings on site to make sure that other services, including community health and other ancillary and support services such as rehabilitation, are available there. Indeed, it would be a very important building for the region, and I’m very pleased that our Government is able to take a significant step in the development of that building.
SORAYA PEKE-MASON (Labour): Tēnā koe, Madam Chair. Minister, recently, sadly, I found out that my youngest sister was diagnosed with breast cancer. Fortunately, it was caught early in the piece, and she went through the process, but she kept it so herself. She’s the sort of person who wanted no pity, and we found out later when she was on the mend, which was great news. But nevertheless, of course, like with anyone in any whānau, it’s a very concerning matter when it comes to any kind of cancer.
So my question is around explaining, please, in terms of the Government’s major upgrade of the breast-screening register, how this initiative improves the uptake of screening appointments, Minister. In addition, please, with regard to Budget 2023’s $118 million in funding to reduce the waiting lists, how does it help New Zealanders to access the cancer treatment more quickly? Kia ora.
Hon Dr AYESHA VERRALL (Minister of Health): I thank that member for her question. The upgrade of the breast-screening register is an incredibly important initiative. It is dated, and that means that there are risks in terms of the ability to keep making sure the service is properly provided and for the security of the system. That work is under way, and I believe it is next year that that project will be completed.
The important thing about that project is that many of the things that you’d think your health information system should be able to do, you can’t currently do with the breast-screening system. So, for example, I know that members of this House ask quite logical and reasonable questions about breast-screening coverage and about who is and who isn’t screened, but that cannot be extracted from the register as it currently is, which is frustrating and it stops us from being able to improve the system.
The second thing that is a problem is that many of the more sophisticated outreach tools that we used over COVID—for example, text messages or emails that incredibly cheaply helped get more people to be aware that their visit was due—will be able to be done with the new system, which we can’t currently do. So that is a huge advance, as well. So those opportunities to make sure people who should be screened are being screened to improve the equity of the breast-screening service are incredibly important.
The $118 million for action on wait-lists in Te Whatu Ora’s budget—one of the key priorities for that is implementing the response to the task force report. Now, all cancer surgery is highly prioritised in all of our hospitals, so that goes without saying. But challenges over COVID meant that some people who had surgeries that could have been deferred were having to wait far too long, and that money is going towards making sure that theatres are efficient and that we’re doing all of the work to be on top of how many operations we need to do to catch up, and then doing the catch-up and, in some cases, outsourcing.
CHAIRPERSON (Hon Jacqui Dean): Would some member like to move that the committee report progress?
Hon DAVID PARKER (Attorney-General): I move, That the committee report progress.
Progress to be reported.
Bills
Natural and Built Environment Bill
In Committee
Debate resumed from 27 July.
Clauses 1 and 2
CHAIRPERSON (Hon Jacqui Dean): Members, we come now to the Natural and Built Environment Bill. When we were last considering the bill, we had finished debating Part 12. We come now to the debate on clauses 1 and 2, “Title” and “Commencement”. The question is that clauses 1 and 2 stand part.
Hon SCOTT SIMPSON (National—Coromandel): Well, thank you, Madam Chair. For people who are watching at home, on television, or listening on their wirelesses, we are in the final stages of what is known as the committee of the whole House analysis of this very substantial Natural and Built Environment Bill. It runs to over 900 pages, and we spent quite a bit of time last week doing a clause by clause analysis. I have to say that I think it was a very useful discussion and debate.
But, as you have said, Madam Chair, we come now to what is a bit of a quirk of the parliamentary system, and that is that the first clauses of a bill are the last clauses to be debated in the committee of the whole House. So we come to clause 1, which relates to the title of the bill. Clause 1 says, “This Act is the Natural and Built Environment Act 2022.” So I am immediately compelled to ask the Minister for the Environment whether they are going to change that to 2023. So, if he might like to answer that question, that would be useful. Or is this, indeed, a piece of retrospective legislation that the bill is in place? I’m referring to Supplementary Order Paper 389, which I think is still the most current one that I have, page 32. So if the Minister can just clarify for us what year he intends the bill to take effect and why it’s listed as 2022 and not 2023. I’d appreciate his comments on that, please.
Hon DAVID PARKER (Minister for the Environment): I’m just checking with officials, who are checking with the Parliamentary Counsel Office. But I think that was the date of the bill when it was being introduced, and that’s one of the drafting things that they just tidy up on the final print of the bill.
Hon SCOTT SIMPSON (National—Coromandel): So is it the intention of the Minister for the Environment to introduce a Supplementary Order Paper to correct the error in terms of the year that the bill is set out for in clause 1?
Hon DAVID PARKER (Minister for the Environment): The Parliamentary Counsel Office have confirmed that it isn’t a mistake; it’s the House style.
Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. So coming back to the title, the “Act is the Natural and Built Environment Act”. I wonder if the Minister for the Environment could give us some background and insight as to the history of the naming of the bill. We’ve heard, at some length, why a lot of the bill was put in place as a result of the Randerson committee’s work, but there were a number, I think, of alternative names for the bill suggested at various stages of the development of this legislation, and I’m wondering if the Minister could give the committee of the whole House a little bit of a potted history as to how we’ve come to this title, what its genesis was, and what the rationale for it is, in terms of the wording of the bill.
Hon DAVID PARKER (Minister for the Environment): It’s not a loaded name. It’s not like Operation Enduring Freedom or some of the loaded names to programmes that some other jurisdictions use. The custom in New Zealand is that legislative titles are generally descriptive of the content of the bill, soon to be Act. This, at different stages, was the “Natural and Built Environments”—plural—“Act”, but having regards to the definitions of “environment” as including both the natural and built environment, in the definitions clause, there was a drafting change at the Environment Committee to the singular.
Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. The power of the select committee never ceases to amaze—that we could go from the plural to the singular!
I meant to say, in the first call that I took when I was giving a little bit of an introduction as to where we are at with this bill, that here in the National Party, on this side of the House, we oppose this legislation in its entirety. It is our intention, should we have the opportunity and privilege of leading a new Government in October later this year that we will repeal this legislation in its entirety before Christmas.
Hon Eugenie Sage: And replace with what?
Hon SCOTT SIMPSON: And then we will replace it with some reasonable and workable legislation that doesn’t have the same kind of hiccups and problems that this bill does.
I want to come back, Madam Chair, because I know you will want me to, to debating clause 1, which is the title of the bill. Now, at the Environment Committee, there was only one submission on the title, and the submission proposed that the title of the bill should be the “Natural and Built Environments Planning Act”. I’m keen to ask the Minister why that suggestion wasn’t taken up and what his objection to that suggestion from the submitter was.
Hon DAVID PARKER (Minister for the Environment): The Environment Committee didn’t believe it was necessary, and neither do I.
BARBARA KURIGER (National—Taranaki-King Country): Thank you, Madam Chair. I actually wanted to ask the Minister a question around the commencement. So the commencement clause compared to the title clause is rather long because it’s a bit like an initiation process around how the bill gets introduced. But I just think for the purposes of the public, it’s worth knowing that, you know, the bill—a lot of it will come into force once the Government puts it through. But then it says, “One or more Orders in Council may be made under this section”—this is clause 2(4)—“appointing different dates for the commencement of different provisions and for different purposes”, and (5) “An Order in Council may bring different provisions of the Act into force on different dates for different districts or regions of local authorities; or any area of New Zealand specified in the order.” So I just thought it was worth actually having a conversation tonight in the House for those that are actually watching out there, that the Minister—because it is a rather long and protracted commencement, once it actually begins, it takes a while before it comes to fruition. Thank you.
Hon DAVID PARKER (Minister for the Environment): The member is correct that some parts of the new Act come into force in parts of the country—in fact Parts 1 to 9 in large part come into effect on the date after the Royal assent is given. So Parliament gives it its third reading and then it goes to the Governor-General who gives the bill the Royal assent on behalf of the King. At that point, most of the legislation comes into effect, but there are some parts that are turned on region-by-region, and some parts that are turned off under the Resource Management Act (RMA) region-by-region. The reason for that is to avoid some of the transitional problems that we had with the bringing to effect of the RMA after the Town and Country Planning Act, where we had two systems operating side by side throughout the whole of the country for a long period of time. Here, the new system doesn’t turn on in full and the old system turn off in full in any region until after they’ve got their first plan in place. That’s been done on a region-by-region basis, probably three regions for a start, and the rest to follow. That’s the effect of the different timing of the eventual repeal of the RMA.
SIMON COURT (ACT): Thank you, Madam Chair. Minister, thank you for your always fulsome explanations of the policy and legislation that you’re proposing.
I just firstly want to come back to the definition of “environment” in the title. If we look at the definitions, “environment”, actually, is quite complicated, it’s quite convoluted. It includes “the natural environment”, “people and communities and the built environment that they create”; “the social, economic, and cultural conditions that affect the matters stated in paragraphs (a) and (b)”—that’s “natural environment”; “people and communities”, the stuff they build—“or that are affected by those matters”.
Minister, I put it to you that it is the most all-encompassing yet incredibly confusing definition of “environment” that will potentially—in fact, quite likely—lead to a whole lot of confusion in the way that plans are made, in the way that resource consent decisions are made, and in the way the judiciary interprets plans made under this bill—or Act, when it’s passed.
So Minister, would you care to explain, in terms of the title, the “Natural and Built Environment Bill”, how some of the conflicts between the natural environment—I assume that means flowing water and growing trees and the blowing wind and the hot sun that we might feel, although it’s been a rare thing in Auckland in July, I can confirm that. How are decision makers meant to reconcile “the natural environment” and their understanding of that, in terms of the title of the bill, with the things we want to build in the environment that might break the natural environment or somehow damage it in some way?
And how, if the word “environment” in the title encompasses so many aspects—in fact, all the aspects of life on earth: social, economic, and cultural conditions that affect the natural environment, people and communities, and the built environment that they create. How is a decision maker looking at the title of the bill, trying to understand how to make decisions about the environment, meant to interpret what the title means, Minister?
Hon DAVID PARKER (Minister for the Environment): Those matters were discussed in the debate on Part 1 of the debate. The title doesn’t affect the definitions that are in Part 1. That debate has already been held.
STUART SMITH (National—Kaikōura): Thank you, Madam Chair. I want to talk about the commencement dates as well. I just wonder, Minister, given that the National Party and our ACT colleagues don’t support the bill, why wasn’t it considered to have the commencement, instead of the first provisions, come into force on the day after Royal assent? To have that date be a week or two weeks or a month after the election when, effectively, you have a referendum on it. Given it’s so close to the election and the National Party has quite clearly said that we will repeal and replace this immediately, before Christmas, why won’t the Minister do that? Because, quite frankly, has there been any assessment of how much work is likely to be done prior to the election and all of that work being for nought, effectively, before Christmas? Actually, I would have thought, perhaps, 1 January might have been a good commencement date—something like that which would have been a practical approach to this legislation. Putting aside all partisan views, what is the best for New Zealand? And given that we have a referendum on the bill, and, ultimately, we all in this House have to accept what the results of the election are, whether we like it or not, why wouldn’t the Minister not put that into this bill? I know he’s put a lot of work into it, and I know that officials have done a lot of work.
Hon Scott Simpson: He sees it as his legacy, that’s why.
STUART SMITH: Well, yes, but it might be like the Titanic was a legacy as well. So I’d like to hear the Minister’s response to that.
Hon DAVID PARKER (Minister for the Environment): Born to rule members of the National Party think they should be able to change what Parliament decides even before they win an election, and they’re not going to win it.
Hon SCOTT SIMPSON (National—Coromandel): Well, thank you for the concession that the Minister, the Hon David Parker, has predicted the outcome of the election already! That’s reassuring for those of us on this side of the House.
I want to pick up on the points that my colleague Stuart Smith was making about the progress of this legislation, the timing of it, and the timing for implementation. I want to spend just a minute or so going back in history. The Minister will well recall the process by which the existing Resource Management Act (RMA) came into effect. Those of us of a certain age remember the 1990 general election—Labour lost that election. Sir Geoffrey Palmer had done quite a lot of work on a resource management planning statute: it had got to a first reading, it had been to select committee, it had had a second reading, but the election of 1990 intervened. At that point, a new Government—Jim Bolger’s Government—came into office and one Simon Upton was appointed as the new National Party environment Minister. Now, my understanding and recollection of the history is that what happened then was that that bill—that had not actually passed before the election, and this is the point that Stuart Smith was making, I think—had, effectively, become a referendum. It was part of the election campaign. It was debated hotly throughout that election period. And, although I was far too young to be actively involved in that campaign, there were many, many other people—probably who still sit in this Chamber—who were.
So my question to the Minister about commencement is: why has he not thought it a wise and useful process to actually leave the final passing of this legislation, which he seems so determined to pass before Parliament rises on 31 August, and adopt a process that wasn’t dissimilar to that that occurred with the passing of the original, principal Act that this bill seeks to replace? Was that something that he considered, in terms of timing? Was that process of trying to achieve what was, ultimately, a cross-party, bipartisan approach—because that legislation was ultimately passed, and the Minister probably remembers the detail better than I do. But my recollection was that the RMA actually passed with the support of both National and Labour after the 1990 election and the change of Government. So I’m interested to know whether the Minister considered that kind of option in terms of his commencement options. And, if he did, why did he reject that option as a potential pathway for trying to achieve a more bipartisan, consensus approach?
Hon DAVID PARKER (Minister for the Environment): There have been many years of complaint about the Resource Management Act. The last Government said that they wanted to get rid of it. We’ve got on and replaced it. Those who call for delay, I might describe as very negative, wet, and whiny.
SIMON COURT (ACT): Thank you, Mr Chair. Minister, in one of your comments this evening, you’ve referred to the issues with implementing the Resource Management Act. So when it comes to the commencement date of this bill, which you’ve pointed to mostly be on the day that the bill achieves Royal assent, you also mentioned that one of the purposes of the commencement date and the provisions applying from that date are to avoid the transitional confusions that occurred with the Resource Management Act operating at the same time as the Town and Country Planning Act.
But, Minister, isn’t it correct that once this bill becomes law and the national planning framework is then developed, essentially, under the direction of a future Minister, that decision makers still operating under the Resource Management Act or looking at consents that were applied for before this bill becomes law will have to have at least one eye on the horizon about how our national planning framework and instruments such as the national policy statement for freshwater, indigenous biodiversity—goodness me—the national policy statement for urban development, all these other instruments that might be carried over. But also, what else might be in a national planning framework, Minister?
So won’t it actually continue to cause confusion for decision makers about resource consents, about plan changes, and so on if this bill is passed and all of the conflicts that this bill is designed, apparently, to resolve between the things we build, between the effects on the environment of building and operating infrastructure between the need to potentially disturb wetlands to do earthworks housing and so on—aren’t all those conflicts unresolved until the national planning framework is developed and implemented? And doesn’t that create a phenomenal amount of uncertainty for decision makers until it is resolved?
So while the commencement date of the bill might be the date after it receives Royal assent, all of the problems that the Randerson panel, which identified the problems, and this bill, intended to solve—those conflicts between the natural environment, the built environment, how you allocate natural resources, how you address and minimise effects on the environment through development—remain unresolved, Minister, and just create more confusion.
Hon DAVID PARKER (Minister for the Environment): The national planning framework, how it’s put together, how it relates to the Resource Management Act, and those transitional provisions were debated as part of Part 3.
Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. This is not an ordinary commencement clause. Usually, in a bill, the commencement clause says something like “The Act will come into force on the day after Royal assent.”, or something similar to that. This is a very complicated and multifaceted commencement clause. Yes, clause 2(1) says “The following provisions come into force on the day after Royal assent”, but it then goes through to categorise and sectionalise whole groups of clauses and parts of this bill. I’m not going to go through each of those, but let me just advise people who are listening or watching tonight that clause 2(1) goes through from paragraphs (a) through to (l). So there are lots of moving parts and different time tables for this.
I want to refer specifically to clause 2(2C), where it says, “Section 803 and Schedule 13 come into force on the earlier of (a) a date appointed by the Governor-General by Order in Council made on the recommendation of the Minister for the Environment” and then (b) says “2 years after the date on which this Act receives the Royal assent.” So this is a subclause that gives the Minister of the day quite a bit of discretion about timetabling. But then it goes on in clause 2(3) to say “The rest of this Act (except for provisions commenced under subsection (6)) comes into force on a date appointed by the Governor-General by Order in Council”—again—“made on the recommendation of the Minister for the Environment.”
So I’m wondering whether the Minister can give us some indication as to what his thinking is about the timetabling that will be made by Order in Council, triggered by his recommendation, in those two subclauses. If he could give us some insight into that, I think it would be helpful not only to the committee of the whole House but also to people watching. Ultimately, it will give some indication and a degree of clarity, I think, to people who are going to have to work with this legislation, albeit for a very short period of time.
Hon DAVID PARKER (Minister for the Environment): Clause 803 relates to the coming into force of Schedule 13, which relates to the powers of the Environment Court that are reconstituted in a very similar way to the current constitution under the Resource Management Act (RMA), but under the new Act, because the RMA eventually disappears, and therefore if they were constituted in the future, under the RMA, that would lapse. So that’s provided by that subclause that the member referred to, to be two years after this bill receives Royal assent or an earlier date if things are moving ahead faster, if that occurs through Order in Council.
Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair, and thank you, Minister, for that clarification, that is useful. One of the criticisms of this entire piece of legislation is that it has the potential to create uncertainty, judicial uncertainty that’s going to require judicial interpretation, and uncertainty about time frames, and uncertainty for people who have to implement it, and uncertainty for people who are trying to get developments done or to use the legislation to achieve the goals and objectives and desires that they seek to bring about.
So clause 2(5) in Supplementary Order Paper 389, I think, relates to a potential for even greater uncertainty. I want to just read out what subclause (5) says. It says, “An Order in Council may bring different provisions of this Act into force on different dates for—(a) different districts or regions of local authorities; or (b) any area of New Zealand specified in the order.” It’s my contention that that lack of certainty and clarity about which parts of the country, which districts, which regions are going to have the legislation come into force as opposed to other parts of the country where the legislation’s going to be in force already, that that is only going to add to the confusion. Now, I think that the Minister will probably point to the history of the implementation of the existing Resource Management Act (RMA), which was done by one king-hit, and there were undoubtedly issues and problems with that.
But to have a commencement clause, as clause 2(5) indicates, that creates a very clear distinction that some parts of the country are going to have this bill in force on different dates to other parts of the country—different regions, different districts, different local authorities—my contention is that that’s only going to add a high level of uncertainty, confusion, and potentially cost to a developer, for instance, that may want to do a building development in one part of the country where the new provisions of this legislation have come into effect and are in force and are in play, and might want to build another development in another part of the country that is still operating under the old RMA.
So if the Minister could give us some idea about how he sees that timetabling—I know that, for instance, already, I think that there are two regions that have been singled out for, essentially, being the guinea pigs for commencement of the legislation—that would be helpful to have some insight about why they were chosen, what the purpose was, and about the staged and staggered implementation of this legislation. Thank you.
Hon DAVID PARKER (Minister for the Environment): The first point I would make is that if people were worried about uncertainty, they would be worried about an Opposition, who, if elected, promise to repeal this, then repeal the Resource Management Act, but haven’t specified how they will fix it; whereas this fixes the system and allows the country to move forward.
In respect of clause 2(5), that matter was well considered by the Environment Committee, and the select committee agreed that the system should turn on region by region, rather than every region at once. The reference at subclause (5)(b) is included in order to cover parts of New Zealand that aren’t actually covered by district or regional council. There’s the occasional offshore island that’s, effectively, managed by either the Department of Conservation or the Department of Internal Affairs.
SIMON COURT (ACT): Thank you, Mr Chair. Minister, just further to the Hon Scott Simpson’s question about the progressive time frames for implementation. Now, we have heard from local government representatives that they’re very, very concerned about how they should prepare for the commencement of this legislation. Should they in fact prepare to lose staff who might be co-opted onto a planning entity? Because what the legislation provides for is for those planning entities to hoover up staff from local government, from regional councils and district councils—and that might include planners; it could include legal advisors, geographic information system and other technicians.
People who work for councils now, and those councils are entirely dependent on them for their business as usual activities, such as processing resource consents, comparing applications with existing plans, or gathering information and uploading it onto planning documents. Minister, local government entities and their representatives—Taituarā and Local Government New Zealand—they raised this point that on the day of commencement, they are not sure what resources they will need to provide, what costs they’ll need to allow for, whether those costs will be recoverable, Minister, or whether this creates yet another central government - imposed unfunded obligation on local government.
So Minister, could you please give the House some assurance that those local government organisations—which still need to process resource consents against existing planning documents, potentially for years—that their human resources, that the people who work in those local government organisations, will have some certainty about their futures and that those organisations will have some certainty about whether their resources will be poached, whether they’ll face excessive costs?
But just to your point, Minister, if you’re concerned about the fate of this bill and what might come next, I can assure you that ACT’s solutions for building New Zealand and conserving nature provide some comfort to many, many people in New Zealand, including businesses who are worried about their private property rights being eroded by this legislation that is tabled here tonight, Minister.
CHAIRPERSON (Greg O’Connor): Mr Court, are you inviting me to rule on relevance?
SIMON COURT: Oh, Mr Chair, absolutely not.
CHAIRPERSON (Greg O’Connor): It sounded like it.
SIMON COURT: So Minister, my question is, what are local government supposed to do? What are they supposed to know on a given day about their resources; their costs? How are they supposed to plan for this? Could you give me some assurance, please, Minister.
Hon DAVID PARKER (Minister for the Environment): Those matters were debated as matters of substance arising from other parts of the bill, but as the member well knows, the bringing together of plans within a region through a regional plan is actually modelled on the legislative model that was applied to bringing the Auckland councils together in Manukau, Auckland centre city, Waitakere, and North Shore. That was of course overseen by the Hon Rodney Hide as the then ACT member and Minister.
STUART SMITH (National—Kaikōura): Thank you, Mr Chair. It is after 9 o’clock and we’re just getting into our work—just getting into our work. I would like to begin, though, by acknowledging the work that the officials put into this. I mean, it must be a substantial part of their lives tied up in this bill. It’s only a pity that, should we get the opportunity to after the election, it’ll be gone by lunchtime, but, yeah.
Hon Eugenie Sage: And replaced with what?
STUART SMITH: And repealed, yeah. I’m sure that all members will be looking forward to that debate when it comes around, should we have the privilege of doing that.
But I would like to focus on the commencement clause 2(6), “An Order in Council may be made under this subsection on the recommendation of the Minister for the Environment and the Minister for Māori Crown Relations: Te Arawhiti and, in the case of the Gisborne region, also on the recommendation of the Minister for Treaty of Waitangi Negotiations, that brings into force on 1 or more dates provisions to enable the regional planning committee composition process set out in Part 1 of Schedule 8 to be initiated for any region or regions.” Quite a complicated little piece there, and I’d really like the Minister in the chair, David Parker, to explain why we have to have all of those people lining up to get this enacted. It goes over the page, into (7), but I think the Minister—well, I’d like to hear it from him how this is going to work, because it sounds quite complicated to me, sounds like it’s going to cause a lot of angst and, I suspect, delay. How are we going to get all those people lined up to actually agree to bring this into force, and then what happens practically on the ground to get these things up and running? So, looking forward to hearing the Minister’s answer to that.
Hon DAVID PARKER (Minister for the Environment): There are various bespoke Treaty settlement arrangements that apply to how resource management plans are put together around the country. Those were adopted by Governments led by National-ACT or by Labour over the years, and some of them are different. The legislation allows those arrangements to be transitioned into the new system, and subclauses (6) and (7) allow that to happen. Members will note that subclause 7(c), which applies to both of those subclauses that I’ve referred to, says that in any event, even if those processes haven’t been completed, after two years have elapsed, those provisions come into force two years after the Act has received Royal assent.
SHANAN HALBERT (Junior Whip—Labour): I move, That the question be now put.
STUART SMITH (National—Kaikōura): Thank you, Mr Chair. Just a quick one. In clause 2(7)(c), as the Minister said, if two years have elapsed since the date on which the Act received the Royal assent, it would come into force anyway. Why not just have that part of the clause? Why have all these complicated other variances where it could come in at different dates along the way in different regions? Why not just have it all in two years after the date of Royal assent? It would be a lot simpler, those people in the region would have certainty, they’re not left hanging waiting for whether the Minister for the Environment, the Minister for Māori Crown Relations, or in the case of the Gisborne region, also the recommendation of the Ministry of the Treaty of Waitangi negotiations. Wouldn’t it be better just to have a date cast in stone at the beginning? I think that would be a far simpler thing, so why is that Minister?
Hon DAVID PARKER (Minister for the Environment): No, we didn’t think that, and neither did the select committee. The reason for that is there are actually very—there are a lot of Treaty settlements that are actually very, very simple and they have statutory acknowledgements which are very easy to transition into the new system, and that won’t take anything like two years.
Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. Throughout the debate on this mammoth bill, we’ve been conscious that it is but one part of a three-legged trifecta in terms of legislation. We are soon to start—probably tomorrow morning—the debate on committee of the whole House for the Spatial Planning Bill: that’s sort of the sister piece of legislation that goes with this Natural and Built Environment Bill.
But in the commencement clause—clause 2—of this bill, there is no mention of the third leg of the legislative framework that the Minister has in place, which relates to adaptation. Now, throughout the entire process of select committee on both this bill and the Spatial Planning Bill, we’ve been kind of blindfolded—trying to find our way through this—because we haven’t had access to the third leg of the trifecta, which is the adaptation piece.
So I’m keen to know from the Minister why there is no reference in the commencement clause of this bill relating to the potential impacts, and presumably the intended benefits, that are supposed to come from that adaptation climate piece; why there’s no mention in this commencement clause of that; and is it still his intention—as I understand he has publicly stated on a number of occasions and I think the climate Minister has made the same promise—that that adaptation piece of legislation will be introduced to the House before the House rises for the election on 31 August?
Hon DAVID PARKER (Minister for the Environment): Of course the commencement clause relates to the commencement of this bill, not other bills. The commencement date for the Spatial Planning Bill is in the Spatial Planning Bill, and there’s no reference to any other bills in the commencement of this bill because this is just the commencement clause for this bill.
TAMA POTAKA (National—Hamilton West): Thank you, Mr Chair. Just to the Minister on clause 2(7)(b), which is quite a touching part to my heart, being involved in Mana Whakahono ā Rohe and joint management agreements up and down Waikato and Tāmaki-makau-rau: what are the expectations of iwi to change the Mana Whakahono ā Rohe and/or joint management agreements, and has there been any consideration given to resourcing iwi in order to do this?
Hon DAVID PARKER (Minister for the Environment): The intention is that those agreements be transitioned from the old Act to the new.
GLEN BENNETT (Labour—New Plymouth): I move, That the question be now put.
CHAIRPERSON (Greg O’Connor): No one is seeking the call, so I’ll go to the question.
A party vote was called for on the question, That clause 1 be agreed to.
Ayes 72
New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Kerekere.
Noes 47
New Zealand National 34; ACT New Zealand 10; Te Paati Māori 2; Whaitiri.
A party vote was called for on the question, That the amendment to the amendments be agreed to.
Ayes 72
New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Kerekere.
Noes 44
New Zealand National 34; ACT New Zealand 10.
A party vote was called for on the question, That the amendments as amended be agreed to.
Ayes 72
New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Kerekere.
Noes 44
New Zealand National 34; ACT New Zealand 10.
A party vote was called for on the question, That clause 2 as amended be agreed to.
Ayes 72
New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Kerekere.
Noes 47
New Zealand National 34; ACT New Zealand 10; Te Paati Māori; Whaitiri.
A party vote was called for on the question, That the amendment to the amendments be agreed to.
Ayes 44
New Zealand National 34; ACT New Zealand 10.
Noes 72
New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Kerekere.
Amendment to the amendments not agreed to.
Clause 1 agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Minister’s tabled amendment to clause 2 on Supplementary Order Paper 389 be agreed to.
Amendment to the amendments agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Minister’s amendments to clause 2 set out on Supplementary Order Paper 389 as amended be agreed to.
Amendments as amended agreed to.
Clause 2 as amended agreed to.
Bill to be reported with amendment.
Bills
Spatial Planning Bill
In Committee
Part 1 Preliminary provisions
CHAIRPERSON (Greg O’Connor): Members, we come now to the Spatial Planning Bill. We begin the debate on Part 1.
Hon DAVID PARKER (Minister for the Environment): It might assist the debate if I briefly explain that the purpose of the Spatial Planning Bill is to provide for regional spatial strategies that assist in achieving the purposes and system outcomes of the Natural and Built Environment Bill that we’ve just referred to, and promote the integration and the performance of functions under that bill, the Land Transport Management Act, the Local Government Act, and the Water Services Act. The regional spatial strategies sit between the national planning framework and Natural and Built Environment Act plans, and they will assist with, amongst other things, the timely and cost-effective provision of infrastructure.
BARBARA KURIGER (National—Taranaki-King Country): Thank you, Mr Chair. I just wanted to ask the Minister, the Hon David Parker: one of the confusions that came around with this bill, the Spatial Planning Bill, was around integration and how local government, local communities, local hapū and whānau would have their say. I noticed that in Part 1, clause 4, it talks about the regional spatial strategies promoting integration, but then it goes on in (a) and (b), and further down to (i), to talk about integration with the Land Transport Management Act 2003, the Local Government Act 2002, the Water Services Entities Act 2022, and then, in clause 7, it talks about iwi and hapū responsibilities in relation to te taiao and that “this Act must recognise and provide for the responsibility and mana of each iwi and hapū to protect and sustain the health and well-being of te taiao in accordance with the kawa, tikanga (including kaitiakitanga), and mātauranga in their rohe or takiwā.”
So I’m actually seeing how this bill is talking about integration but I’m just wondering, for the purposes of explaining to New Zealand listeners out there tonight, how this actually integrates on a democratic level with the Natural and Built Environment Bill, so that they can see how, when they have a view in their local community, it has its way into the spatial planning and then has a way back down into the spatial planning. Thank you.
Hon DAVID PARKER (Minister for the Environment): Thank you to the member Barbara Kuriger for that question. The regional planning committee that puts together the regional spatial strategy is the same committee that is appointed for the Natural and Built Environment Bill—soon to be Act—plans, with one difference, and that is that, at the request of local government, central government have agreed there should be a central government representative on it, in part to make sure that central government can be brought to the party; to make sure that the likes of land transport plans can be better integrated with regional planning.
Hon SCOTT SIMPSON (National—Coromandel): Point of order, Mr Chair. I’m just seeking clarification, really, that this bill, the Spatial Planning Bill, will be taken part by part, and not as a whole. I don’t know that we made a decision on that.
CHAIRPERSON (Greg O’Connor): Well, I haven’t had a motion or a request to the contrary. So, at the moment, it is part by part.
Hon SCOTT SIMPSON: Would it be helpful to move—
CHAIRPERSON (Greg O’Connor): The member is welcome to—
Hon SCOTT SIMPSON: The Minister is not objecting.
CHAIRPERSON (Greg O’Connor): So you are seeking to have it heard as one—
Hon SCOTT SIMPSON: Well, I just want confirmation that it is. But I think the Minister is indicating that it will be.
Hon David Parker: If the member wants to seek leave for the debate to be heard as one part, we’d be happy with that.
Hon SCOTT SIMPSON: Yes. I seek leave, Mr Chair, that the bill be taken part by part.
CHAIRPERSON (Greg O’Connor): Well, that is the status quo until there is a move to the contrary. We remain with the status quo.
Hon SCOTT SIMPSON: Thank you. That’s good to know, Mr Chair. So we’re in Part 1 of the bill, and I wanted initially to start speaking about clause 3. At the Environment Committee, there were a number of submissions about why some parts of this bill explicitly referred to portions out of the Natural and Built Environment Bill and other provisions weren’t explicitly referred to, and I’m particularly talking about the concept of te Oranga o te Taiao, where it was explicitly referred to in this piece of legislation while other elements of the Natural and Built Environment Bill have not been. If the Minister could advise the committee of the whole House why that was the case, I’d appreciate it.
Hon DAVID PARKER (Minister for the Environment): It was thought desirable to align the purposes of the two Acts to avoid confusion.
SIMON COURT (ACT): Minister, in looking at the purpose clause, at clause 3(b), the purpose of the bill is to “promote integration in the performance of functions under the Natural and Built Environment Act 2022,”—they’re rather presumptuous, considering it hasn’t been passed yet, but we’ll assume that that’s the convention of the House in the way the bill is written—“the Land Transport Management Act 2003, the Local Government Act 2002, and”—another recently passed Act—“the Water Services Entities Act 2022.”, which established four water services entities—four entities. Now, Minister, the current Government has a bill before this House, the Water Services Entities Amendment Bill, which changes the number of entities from four to 10.
So, Minister, given that the purpose of this bill is to promote integration between land transport, local government, and water service entities, how does the Minister see the integration working when he’s told the House that instead of 67 districts and territorial authority plans and I think it’s maybe 14 or 15 regional council plans, there will be just 15 plans, and yet there will be 10 water service entities whose geographical regions do not coincide with the 15 regions envisaged by the Natural and Built Environment Bill, or Act—as it’s referred to in the Spatial Planning Bill, or Act, as it may become?
So how does the Minister see the integration working when there’s not four, but now 10 water service entities, and when at least one of those entities—entity D, which includes a large part of the South Island—coincides with the rohe or takiwā of Ngāi Tahu, which also includes Seddon and Murchison, Minister, whereas the regional council boundaries and the regional planning boundaries envisaged by this bill actually include Seddon and Murchison in the Tasman-Marlborough District? It doesn’t appear that it’s going to be easy to integrate all of these different regions and these different infrastructure functions and planning functions, so, Minister, would you please explain how you see this working in practice?
Hon DAVID PARKER (Minister for the Environment): Well, if there is a smaller number of water services entities to integrate with compared with a larger one, it will still work. It will work either way.
I’d also make the point that in respect of some local government boundaries, they reach over more than one regional council, with a case in point being the Waitaki District, which rests in part south of the Waitaki in the Otago Regional Council area and in part north of the Waitaki, which is in the Environment Canterbury regional council area. Both Acts enable that to be properly catered for.
CHRIS BISHOP (National): Thank you, Mr Chair. I want to ask the Minister a question about clause 5, “Tiriti o Waitangi”, “All persons exercising powers and performing functions and duties under this Act must give effect to the principles of te Tiriti o Waitangi.” I want to know from the Minister what that actually means in practice, because it’s a change from “have regard to”. “Must give effect to” is strong language, and I want to know what the practical effect of that is going to be for communities trying to plan their regions.
Hon DAVID PARKER (Minister for the Environment): Hopefully, in the end, it’ll end up with less inconsistent practice across the country. When the Resource Management Act was passed, the “take into account the principles of the Treaty” clause was intended, according to the debates at the time, to ensure a role for Māori within their area to express their views and have that properly taken into account. It didn’t roll that way in practice, and, therefore, as a consequence, we’ve had a lot of complex and varied bespoke Treaty settlement arrangements, including those passed by that member’s party, for the Waikato River Authority, the Taranaki planning committee, and for a myriad of other different formulations—and we would hope that there is less need for bespoke arrangements in the future.
As to the meaning of it, there’s lots of jurisprudence around the Conservation Act. In reference to the meaning of “te Tiriti o Waitangi”, it actually refers to, in effect, both versions of the Treaty—te reo version and the English version.
CHRIS BISHOP (National): Thank you, Mr Chair. I want to ask the Minister about clause 7, which follows on from “Tiriti o Waitangi”. Interestingly, the heading note for clauses 5 through 7 says “Tiriti o Waitangi and other matters”, which sort of makes it out like clause 7 is just another matter, which I think is an interesting form of phraseology. “Iwi and hapū responsibilities in relation to te taiao”—it does strike me that the breadth of this of this clause is large, and worryingly large, I think. “All persons exercising powers and performing duties and functions under this Act”—all persons—“must recognise and provide for the responsibility and mana of each iwi and hapū to protect and sustain the health and well-being of te taiao in accordance with the kawa, tikanga (including kaitiakitanga), and mātauranga in their rohe or takiwā.”
Now, I want to know from the Minister if he’s concerned about the potential for judicial review as a result of the breadth of this clause. “All persons exercising powers and performing duties and functions … must recognise and provide for the responsibility and mana of each iwi and hapū”. I’ve just read it out, and members of the public listening can read it out for themselves and read it.
The possibility of legal action to judicially review the people exercising these powers, claiming that they are not recognising or not providing, or they might be recognising and providing, but they’re not providing for the responsibility and the mana of each iwi to protect—which, as we’ve noted in the Natural and Built Environment Bill debate, has a particular strong meaning in resource management law—and sustain the health and wellbeing of te taiao in accordance with the kawa, tikanga, and mātauranga in their rohe or takiwā.
Now, the potential for judicial—
Hon Scott Simpson: Intervention.
CHRIS BISHOP: —intervention; Scott Simpson’s right. Or, at least, it’s not even so much about the judicial intervention; it’s about the potential for judicial review to stymie the quite legitimate aims and aspirations of spatial planning I think is extraordinary. I do really worry, Minister, about this provision. I think we are going to see endless litigation and judicial review of this. So I just wonder if the Minister is also worried about it; and if he is worried about it, what he’s planning to do about it, and if he’s not, why not?
Hon DAVID PARKER (Minister for the Environment): This clause, as explained to me by officials, is recognising the responsibility of iwi and hapū to protect the environment. The Māori world view is that they don’t just have obligations to themselves; they have obligations to protect the environment, and this is what that gives voice to.
CHRIS BISHOP (National): Well, just to follow up on that, I mean that doesn’t really answer the question, to be honest, but it says iwi and hapū responsibilities in relation to te taiao, but that’s not what the actual words of the clause say. It says, “All persons exercising powers and performing duties and functions under this Act”. So everyone is affected. Although the heading of clause 7 says “Iwi and hapū responsibilities”, it’s actually about everybody: “All persons exercising powers and performing duties and functions under this Act must recognise and provide”—so it’s everyone. Everyone who does anything or anyone who exercises any power under this Act and performs a duty—and the Act imposes a variety of duties, which we’ll get into, and functions. This is a clause with extraordinary breath.
It’s everyone exercising powers and performing duties and functions is subject to a range of obligations. It’s “must”, not “may”. They “must”. They “must recognise and provide for the responsibility and mana of each iwi”—each iwi—not a general commitment to Te Tiriti or the Treaty, not a general kind of commitment to, you know, engage with Māoridom or the Māori world view, leaving aside that issue, which the Minister doesn’t really expand on. It’s each iwi and hapū: “…. to protect and sustain … in accordance with the kawa, tikanga (including kaitiakitanga), and mātauranga in their rohe or takiwā.”
The odds of someone not doing this, frankly, are high and the odds of someone turning up to court and saying “You, Mr Decision Maker” or “You, Mr Regional Council” or “You, Mr Regional Planning Committee”—
Simon Court: Or Mrs.
CHRIS BISHOP: Or Mrs—thank you; a very good point, thank you, Mr Court—“you haven’t done this. You haven’t recognised and provided for the local iwi, each local iwi or local hapū to protect and sustain te Taiao. You haven’t done that.” The odds of that happening, I would say, are frankly reasonably high—reasonably high.
Simon Court: I’d bet on it—I’d put money on it.
CHRIS BISHOP: I’d bet on it, says Simon Court—I’d bet on it. [Interruption] Well, look, I’m not Kieran McAnulty. I’m not a betting man—I’m not a betting man.
Hon Scott Simpson: Kieran McAnulty is.
CHRIS BISHOP: Kieran McAnulty is. He’s not in the House, but I reckon he’d have a wager. He’d have a wager on it, I reckon.
Hon Scott Simpson: He’s the TAB guy—he’s the TAB guy.
CHRIS BISHOP: Yeah—oh, I apologise. I know what you’re about to say, Mr Utikere. It was in jest—it was in jest. But, anyway, we’re away from the point. But it’s a serious issue—it’s a serious issue. The odds of this happening are high, as I said just before, and invite the Minister to address it.
The potential for judicial review as a result of this clause is huge, is massive. And we’ve had enough litigation, frankly, through the Resource Management Act. We need less of it, not more of it—
Hon Rachel Brooking: That’s right.
CHRIS BISHOP: —and has the Minister—well, “That’s right.” So you see the Associate Minister’s agreeing with me. So has the Minister or indeed herself—
Hon Member: She always agrees with you, Bish. She always agrees with you.
CHRIS BISHOP: Well, she doesn’t always agree with me. I wish that was true. Has the Minister considered—
Hon Member: She might even be voting National this year.
CHRIS BISHOP: Because we would—I don’t think she’s voting National. We would support a Supplementary Order Paper (SOP) to narrow the scope of this clause. I’ll say that on the record. We would support an SOP advanced by the Government if the Government realises that this clause is too large and wide in its scope. We would support an SOP that would narrow it down in the interests of good government—in the interests of good government because that’s what we’re all about on this side of the House.
Stuart Smith: We’re here to help!
CHRIS BISHOP: We’re here to help, that’s right.
Hon Scott Simpson: Here to help.
CHRIS BISHOP: Chris Bishop and Scott Simpson are here to help. So if the Government wants to move an SOP—in fact, I might draft one up now. I might draft one up now
Simon Court: Sounds good.
CHRIS BISHOP: Yep, Simon Court’s saying he’ll support it. The Greens, I don’t think will. I’ll go and have a chat to Eugenie Sage, but I don’t reckon she will—
Hon Scott Simpson: It’s worth a try.
CHRIS BISHOP: —but she might; you never know. But if the Labour Party wants to get on board with good government, we invite them to join us. Thank you.
Hon DAVID PARKER (Minister for the Environment): In the view of the Government, clause 7 assists with the interpretation of clause 5. Without clause 7, clause 5 would be without guidance.
In addition to that, further guidance is provided in clause 24 of the bill, which says that “The regional planning committee must have … regard to the following, to the extent relevant to the regional spatial strategy” and that includes, at clause 24(2)(c), “any planning document that is—(i) recognised by an iwi authority or a group that represents hapū; and (ii) [is] provided or available to the committee before the strategy is adopted”. So there is some further form given to that further down in the more specific provisions in the bill.
In addition, one of the ways in which certainty is removed as to whether you listen to the right people is that there are specific clauses in both the Natural and Built Environment Bill and the Spatial Planning Bill that say that the councils involved can rely upon the list of entities who have got a relevant interest which is maintained by Te Puni Kōkiri, which at the moment, is an incomplete list that cannot be relied upon. That becomes a code so that if the local authorities rely upon that list at the time that they’re putting together the spatial plan and someone else comes along later and says, “You should have listened to me as well”, it’s too late if they weren’t on the list—although the list can be updated for the future.
SIMON COURT (ACT): Thank you, Mr Chair. Minister, I think it’s really important that we tease out what are some of the practical implications of this clause, clause 7. But before I get to my questions on clause 7, I just want to ask you to reflect on clause 5 because you’ve just stated that clause 7 is necessary to help decision makers—“All persons exercising powers and performing functions and duties under this proposed Act” need clause 7 to help them interpret clause 5.
But Minister, isn’t it true that in response to a question, a written question I’ve asked you on another matter about transport, when I’ve asked what are the principles of the Treaty of Waitangi to which you referred, you said those principles and whether people agree with them or not, this was your answer: “The principles include the principle of partnership, active protection, and mutual benefit”, according to the answers you’ve given me. So wouldn’t having those principles—which you clearly understand, and which you referred to having been derived from other jurisprudence, other legislation even—be sufficient to help decision makers understand what you mean by give effect to the principles of Te Tiriti o Waitangi in clause 5?
Hon DAVID PARKER (Minister for the Environment): Thank you, Mr Chair. The phrase “the principles of the Treaty of Waitangi” is used in a lot of legislation. The alternative is to refer to the Treaty of Waitangi directly. The view of the courts has been that the reference to the principles is more practical and more able to move with the circumstances of the day. I don’t think there is much—well, if there is controversy with the use of the phrase “the principles of Te Titiri o Waitangi”, then that criticism can be made to many, many other statutes, including those that were passed by the last National-ACT Government.
SIMON COURT (ACT): Minister, that’s fascinating; because now I’m concerned, as other people may be, that while you accept there are principles—which are defined in other legislation and which might help decision makers or those exercising functions and duties to interpret what that means—clause 7 potentially creates significant confusion. Because in addition to the principles of “partnership, active protection, and mutual benefit”—which you’ve described to me are the principles in replies to written questions on transport—people exercising powers, performing functions and duties, now must recognise and provide for responsibility and mana of each iwi and hapū to protect, uphold, and sustain the wellbeing of te taiao, and that’s “in accordance with kawa, tikanga (including kaitiakitanga), and mātauranga in their rohe or takiwā.”
Minister, this creates the opportunity—as Mr Bishop pointed out—for a whole lot of judicial review and challenges to decisions. Minister, I want to offer you a practical solution, and maybe it’s something that we could put in a Supplementary Order Paper (SOP) and that we might be able to get agreement on. In fact, Minister, you might wish to propose it as a Government SOP, which is the responsibilities that decision makers should have to consult with iwi or hapū or even down to individual marae—where plans and projects affect their private property—should actually be specified here, rather than in these general terms.
I give you an example: if we can turn back time, and we can imagine the thinking of those decision makers in Auckland who decided in their wisdom to locate the Māngere waste water sewage treatment plant and the oxidation ponds for that plant right in front of a marae back in the 1960s. They wouldn’t do that these days, because would be obliged to take account—and not just the environmental effects but the effects on private property owners who would border that coastal area. But in Auckland, there are around about potentially up to 20 iwi and hapū who claim mana whenua in the Auckland region, and my experience of seeking feedback from those groups for infrastructure projects in a role that I previously held at Auckland Council is that many of them were happy to give examples of what would be acceptable and what wouldn’t, and inevitably, those examples matched up almost perfectly with what would be acceptable or not for any private property owner affected by an infrastructure development or a planning rule over their private property.
So, Minister, wouldn’t it be far more practical to replace this clause 7 with, “Persons exercising powers, performing duties and functions should consult with iwi, hapū, and potentially down to individual marae, to seek their feedback on planning provisions which affect their private property and the exercise of their rights—including potentially their rights; the customary rights such as to collect seafood and shellfish”—just like the people who were on that marae in Māngere who used to collect seafood and shellfish before a waste water treatment plant was built right in front of their property. Shouldn’t clause 7 simply say, “consult with the people affected, get their feedback, and incorporate that into plans and primarily with respect to effects on their private or potentially collectively owned property”, Minister?
Hon DAVID PARKER (Minister for the Environment): I’m reading from the Local Government (Auckland Council) Act 2009. The purpose of that Act, at section 3(f), reads: “to establish arrangements to promote issues of significance for mana whenua groups and mataawaka for Tamaki Makaurau.” Seems that it’s OK if the ACT Party does it, but it’s not OK if we do it.
STUART SMITH (National—Kaikōura): Oh, thank you, Mr Chair. I did raise this clause or a similar clause in the Natural and Built Environment Bill. I would like to go back to it. This is a different bill. I have to ask the same question I did in the Natural and Built Environment Bill, which is there is a principle in the law that everybody should be able to know the law. But under clause 5, “All persons exercising powers and performing functions and duties under this Act must give effect to the principles of te Tiriti o Waitangi.” But we don’t know what those principles are—the Minister’s admitted that earlier—so it’s not possible for someone to know the law.
So does the Minister agree that it’s not possible to know the law in this case? How does that make this a workable proposition? I think it’s incredibly confusing. We should have one law for all and it should be able to be known by everybody. But it can’t be when the principles are—as I recall under the Natural and Built Environment Bill at select committee when the officials were asked about what the principles were, they said, “Oh, they’re evolving.” Well, that’s not a very satisfactory answer, given that this is law we’re writing here.
This is law that New Zealanders will have to live with under almost everything that they do. How is it possible to know the law? We are creating a massive rod for our own back. It’s going to have an incredibly deleterious effect on our economy, quite frankly. It’ll be good for some, but even the legal profession don’t like this, because they also have clients that they have to present, and how can they do that when they don’t know the law? It’s not possible to know the law.
So was this actually considered when the Minister gave instructions to officials to write this legislation? Was there any work or advice that came back from officials that this would be an unworkable provision, and, if so, why did the Minister persist with it? I think we deserve to understand the rationale for this provision in this and other legislation. Simply saying that the courts say this is better than referring to the actual Treaty, instead they want to refer to the principles, that’s not a good enough answer. Just because it’s been done that way, doesn’t mean it’s right. So, Minister, we’re all eagerly awaiting your response.
Hon DAVID PARKER (Minister for the Environment): Those are the same words that are in the Resource Management Act that that member’s party failed to repeal over nine years and in many other Acts that that member’s party over the years have supported. Indeed, I read out that part of that section 8 of the Reserve Management Act, which says decision makers “shall take into account the principles of the Treaty of Waitangi”. So the concept of the principles of the Treaty of Waitangi is frequently used in the statute. The change here is not to the reference to the principles of Te Tiriti o Waitangi or the Treaty of Waitangi but the duty to give effect to them rather than take into account, and there are precedents for that on the statute book.
If only we listened to everything that the National Party did, we’d be great! Well, I’m afraid I disagree with that simplistic and incorrect proposition.
TAMA POTAKA (National—Hamilton West): Thank you, Mr Chair. As a former student of these matters—and a practising lawyer and manager of a Resource Management Act (RMA) team—I’ve had some great challenges in understanding the RMA framework and working through it, and it’s been a process of evolution, particularly with terms like “kaitiakitanga”, which weren’t in the legislation until the 1991 RMA legislation.
It’s taken some 30 years to get a little bit of jurisprudential evolution of how those terms should be interpreted, and they’ve still got some uncertainties in RMA practice. You know, particularly in a place like Auckland—which our colleague Simon Court mentioned before—you’ve got 19 iwi, many of whom have different practices or protocols in relation to the exercise of their kaitiakitanga. There’s sometimes an overlap and there’s sometimes a contrast, and RMA practitioners, along with developers, have to manage those contrasts and those overlaps.
Well, in this legislation as drafted—the draft legislation—not only do we have kaitiakitanga; we have now introduced these other terms: mana, kawa, mātauranga, and tikanga. Minister Parker, you’ve referred to the nexus between clauses 5, Te Tiriti o Waitangi clause; and 7, the “Iwi and hapū responsibilities in relation to te taiao”, but one of the challenges that you face when you put in words and phrases like “mana” and “kawa” and “mātauranga” is none of those three terms actually appear in Te Tiriti o Waitangi, and, deliberately, mana was excluded from the drafting of Te Tiriti o Waitangi because it was of such a depth and breadth that it was inappropriate, hence we have a different type of term, and that’s known as “tino rangatiratanga”.
So when we start opining on that term “mana”, you’ve got a breadth and a depth that some people think it might mean “power” but it has multiple faces, and so we don’t get a sense from reading this drafting whether or not we are talking to mana whenua, mana moana, mana atua, mana tangata, mana wahine—which I get reminded of at home on a regular basis—and my personal favourite, mana rangatahi. When we draft words like “mana” into legislation like this, it can take quite a number of distinct pathways which may not have been intended by us as legislators, and it certainly won’t be interpreted easy by those that sit on the judicial benches. Again, the potential for judicial review just on that term alone is significant.
Now, tikanga: tikanga has had some gravity in the interpretation of the common law, and it has been referred to in a couple of pieces of legislation, like the RMA and I think also the wānanga sections of the Education Act, tikanga and mātauranga Māori. But, again, they create all sorts of interpretation possibilities, which we can be curious around but without further clarity or interpretational guidance within the legislation, I fear, given the context in which I’ve operated and as a person who continues to hold a practising certificate, that it gives too wide a berth to the judiciary and to practitioners, and also to random men and their Māori, to run decision making down to doing nothing.
One of the questions that I’d like to pose to the Minister is: what is your definition of kawa—because there is no definition of kawa in this drafting—and how does kawa distinctly differ from mana and tikanga? I think with that sort of question, if we get a credible response, we’ll be in a far better position to say, actually, this is looking really interesting and it’s something we can interrogate further.
GLEN BENNETT (Labour—New Plymouth): I move, That the question be now put.
JOSEPH MOONEY (National—Southland): Thank you very much, Mr Chair. I’ve just got quite a short question, Minister, and it’s just in regards to clause 5. I’m curious about why it says, “All persons exercising powers and performing functions and duties under this Act must give effect to the principles of te Tiriti o Waitangi.” It does not say “the Treaty of Waitangi”. Is there a particular reason why it only says “te Tiriti o Waitangi” and not “the Treaty of Waitangi”, or is that a matter of no moment to the Minister?
Hon DAVID PARKER (Minister for the Environment): It’s a matter of considerable import, and it is dealt with in the Natural and Built Environment Act (NBEA), which refers to the definition as set out in the Treaty of Waitangi Act, which makes reference to both te reo Māori and English versions, and that is carried through into this bill by the definitions clause—section 7 of the NBEA—which says that if there is a definition which is also in the NBEA, unless there’s a different definition in there, the NBEA definition applies. So, in fact, the definition refers to both “te Tiriti o Waitangi” and “the Treaty of Waitangi”—as the Treaty of Waitangi Act does.
Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. I’m hoping that the Minister will take the opportunity to give a considered response to my colleague Tama Potaka’s very worthy dissertation and good questions, because I thought that Tama Potaka asked some very pertinent points that I think are deserving of a response from the Minister.
I want to go back to clause 3(b) and clause 4 in this Part 1. The Minister, in an earlier contribution in the debate, made it clear why the water services entity legislation was not included at that point. But at select committee, there were a number of submitters who thought that it would be good to include the Climate Change Response Act 2002 in clauses 3(b) and 4. I’m keen to know from the Minister why that option wasn’t taken and whether he would consider doing so at this late stage.
Hon DAVID PARKER (Minister for the Environment): Clause 3(b) lists what are essentially infrastructure management statutes: the Natural and Built Environment Bill, the Land Transport Management Act, the Local Government Act, and the Water Services Entities Act. The zero carbon Act and related legislation is much broader and touches, amongst other things, those Acts, but also a lot of other things, so we thought the list is best left as in clause 3(b).
SIMON COURT (ACT): Thank you, Mr Chair. Minister, I don’t feel that the committee and people listening at home have received a sufficient explanation as to why clause 7 is required. My parliamentary colleague Tama Potaka raised a very good question: what is the meaning of “tikanga”. This clause 7 will apply to all people subject to the plans made under the Spatial Planning Bill should it become law—all people; not just iwi and hapū. It will apply to all. If we look at the precedence of the clauses here, before we get to the clauses about how plans are made and what matters must be taken into account, we have this clause 7.
So, Minister, I want to ask you: do you consider, do officials consider—since they’re offering you assistance—whether beliefs and principles of a spiritual nature, which might be encompassed by kawa or tikanga or mātauranga, do they take precedence over people’s private property rights, over the right to use their land, and over those who would be developing infrastructure or pretty much anything, a quarry, any type of building, a distribution centre, a road network that links customers to goods? Will upholding or providing for the responsibility and mana of each iwi and hapū, in accordance with clause 7, take precedence over the needs of communities to provide for their infrastructure?
Minister, how could it be that beliefs and principles of a spiritual nature, which cannot possibly be law, a way of life that a group of people in our society believe wholeheartedly but which cannot possibly become law that applies to the rest of New Zealanders—how is it possible that in clause 7 here, these concepts are incorporated in a way that would mean anyone exercising powers, performing duties and functions, under this bill must have regard for these spiritual matters when they’re making decisions about planning, resource management, and environmental matters? Minister, would you care to explain how on earth this has happened?
Hon DAVID PARKER (Minister for the Environment): “Tikanga” is defined in the Natural and Built Environment Bill and carried through, and there’s also carry-over from the Resource Management Act.
In respect of the focus of these legislations, it is on the physical, not the religious. That is made clear by the scheme of both bills.
TANGI UTIKERE (Chief Whip—Labour): I move, That the question be now put.
Motion agreed to.
CHAIRPERSON (Greg O’Connor): The question is that Simon Court’s amendment to Supplementary Order Paper 390 set out on Supplementary Order Paper 398 be agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 390 be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 72
New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Kerekere.
Noes 44
New Zealand National 34; ACT New Zealand 10.
Amendments agreed to.
A party vote was called for on the question, That Part 1 as amended be agreed to.
Ayes 72
New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Kerekere.
Noes 47
New Zealand National 34; ACT New Zealand 10; Te Paati Māori 2, Whaitiri.
Part 1 as amended agreed to.
Progress to be reported.
House resumed.
Report of Committee of the whole House
Report of Committee of the whole House
CHAIRPERSON (Greg O’Connor): Madam Speaker, the committee has considered the Appropriation (2023/24 Estimates) Bill and reports progress. The committee has also further considered the Natural and Built Environment Bill and reports it with amendment. The committee has also considered the Spatial Planning Bill and reports progress. I move, That the report be adopted.
Motion agreed to.
Report adopted.
ASSISTANT SPEAKER (Hon Jacqui Dean): Members, the House is suspended, and I will resume the Chair at 9 a.m. tomorrow for the extended sitting to consider members’ orders of the day.
Sitting suspended from 10 p.m. to 9 a.m. (Wednesday).
TUESDAY, 1 AUGUST 2023
(continued on Wednesday, 2 August 2023)
Bills
Companies (Directors’ Duties) Amendment Bill
Third Reading
ASSISTANT SPEAKER (Hon Jenny Salesa): Mōrena. The House is resumed for the extended sitting.
CAMILLA BELICH (Labour): I move, That the Companies (Directors’ Duties) Amendment Bill be now read a third time.
It is a pleasure to take a call on this bill. This bill has had an unusual journey to this, its third reading. It started with a common misconception articulated in this House that directors have a duty at all costs to return a profit. These narrow views about the role of business in our society serve no one. Just like it is often said that no person is an island, it is also true that no company operates entirely on its own, without effect or regard to the environment or the community around them. Many businesses recognise this and act responsibly with consideration not just to the profitability of their company but also to the environmental impact, the true nature of their supply chain, and the people who live and work nearby or who are impacted by the business that they carry out. This is along the same lines of a lot of other work that has been done in this space. For example, the modern slavery announcement that was made by the Minister Carmel Sepuloni last week, looking at the integrity of our supply chains and how as businesses within New Zealand or operating in New Zealand they have the responsibility to do better and to make sure that there is no exploitation in the work that they do. This bill is along similar lines and looks to the future of conducting business responsibly. I commend the businesses who are already undertaking these kinds of assessments and conduct in their work.
What is achieved, then, by this bill, is to provide clarity and security to those directors who were, until the passage of this bill, unsure or unclear about the scope of their duties. It doesn’t require directors to consider environmental, social, and governance matters. It doesn’t increase compliance costs. It doesn’t create new duties, and I want to be clear about that. This simple but important bill clarifies a small but significant point that profit is not the only factor important to responsible businesses. This bill is so straightforward that I can outline again, for the benefit of the House, exactly what it does. It adds a new subsection into clause 131 of the Companies Act. After the passage of this bill, 131(5) will state “To avoid doubt, in considering the best interests of a company or holding company for the purposes of this section, a director may consider matters other than the maximisation of profit (for example, environmental, social, and governance matters).” That is the entirety of the change that this bill introduces. It clarifies the best interests of a company could or may be to consider other matters other than the maximisation of profit.
This bill was further strengthened by the Supplementary Order Paper (SOP) I introduced at the committee stage outlining that environmental, social, and governance—or ESG—matters could be considered. I felt that this clarification was needed in order to provide context for the type of considerations directors may take into account. ESG matters are mentioned in section 129 of the KiwiSaver Act 2006 when dealing with responsible investor statements. So this concept has precedence already in New Zealand law and it is my view that it will continue to be used by the business sector when looking at factors other than the maximisation of profit. Members will also be aware that the United Kingdom has also introduced a similar change to their Companies Act in section 172, all the way back in 2006.
Now, members opposite will no doubt say that this law isn’t needed, that companies can already act responsibly taking wider ESG factors into account. And while companies could do that, the law in this area was not as clear as it could be on this point. This law provides the clarity needed. Members opposite have also accused us of virtue signalling, and I want to unpack that a little bit. “Virtue signalling” is a derogatory phase that implies that the only reason one is undertaking an activity is to be seen to be good. This bill actually clarifies and affirms the right of directors to actually do good. It gives confidence to action, not just signals of good intentions, as alleged. It is good for companies to feel they can consider more than their financial bottom line if they want to. It is necessary to have clear law for it to be accessible and useful to the general population. This bill enables both these things to the benefit of our legislative regime.
On the other hand, some members and submitters to the select committee wish we had gone further and made these considerations mandatory. Although I have sympathy for this view, I think that because of the substantive policy work involved with this type of change it is best suited to a Government bill—if there was will to go ahead with this type of change—rather than a member’s bill. But I want to recognise those submitters who raised those concerns in the select committee process, and those across the House who engaged in this matter, especially my colleague Ricardo Menéndez March, who put an SOP up on that matter in the committee stage. So I thank them for their interest in the bill and their engagement with it, but I think that this bill, as it is written, strikes the most appropriate balance.
I want to thank Duncan Webb—who first put this bill in the biscuit tin—for this idea, for his support, and for his courage to improve and clarify the law in this area. I also want to thank Rachel Brooking for her leadership of this bill throughout the select committee stage. I also want to thank the Economic Development, Science and Innovation Committee; you may have crossed half this bill out, but I think the bill we have before us today, that is about to become part of our law, is better and stronger for your attention. I also want to thank the chair of the Economic Development, Science and Innovation Committee, Naisi Chen.
To the submitters on this bill: you may not have supported this bill—some of you may have wanted it to go further—but I hope you know that we listened to your concerns and considered the feedback, and your submissions had an impact on the final bill that will be passed in the House today. I also want to thank Alana Belin from the Parliamentary Counsel Office for her assistance with the drafting of this bill.
Having good law, especially in relation to the conduct of business, will help New Zealand businesses to grow and will assist individual company directors to have the confidence to have a more holistic view of the impact of their activities in the world around them. I therefore commend this bill to the House.
ASSISTANT SPEAKER (Hon Jenny Salesa): Meitaki maata. 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 third reading of the Companies (Directors’ Duties) Amendment Bill. That speech reminded me almost of the valedictory speech—there were so many people thanked by the member. That’s what came to mind as she was speaking. I’m concerned that she feels that way, but none the less I feel that this bill should be consigned to the dustbin. This bill is a waste of Parliament’s time. This is a vainglorious bill, originally proposed by the Hon Dr Duncan Webb, and what on earth was he doing? I think it was an absolute mistake for the current member Camilla Belich to take this bill over from Dr Webb. It is a shocker. It is a waste of Parliament’s time, and I will explain why. We have repeatedly pointed out why people think it is a waste of time.
I want to take members back to why this bill original arose. It actually arose as a result of Mr Robertson writing a totally inappropriate letter to the directors of Air New Zealand, as a major shareholder in terms of representing the Government’s shareholding in Air New Zealand, and setting out in a page and a half a letter specifying and imposing his views—his personal views, although framed as the Government’s view—of how the Air New Zealand board should operate should it take the additional money that was provided by the Government during the COVID crisis. And it was wrong. That intervention by a shareholder on the board, an independent board—and it should have been an independent board. All boards should be independent and should operate in the best interests of all their shareholders, not just one and certainly not the dominant shareholder—Mr Robertson inappropriately did.
I think that out of that, Dr Webb suddenly had this brainwave that he had to therefore make sure that every board in New Zealand operated according to the same framework that Mr Robertson set out in his letter. It is wrong. It is actually wrong. And the reason why is the bill replaces a definition. Clause 4 inserts subsection (5) into section 131, and it states, “(5) To avoid doubt, in considering the best interests of a company or holding company for the purposes of this section, a director may consider matters other than the maximisation of profit”, and it goes on to talk about environmental, social, and governance matters.
The thing is—and this is what I find staggering listening to members from the Government, and I include members from the Greens, although they seem to pop in and out from Opposition to being part of the Government—that absolute lack of commercial nous about how boards operate and how companies operate. I would suggest to the members that boards always do take into account a range of factors. The first and primary factor is, of course, maximisation of profits, because unless companies survive and continue to operate, then they go bust and then people lose their jobs and a lot of money is lost. That is always the primary objective and that is always an important consideration. But it is wrong to conclude or suggest, which I seem to repeatedly hear from the Government members, that that is the only thing that boards take into account. It is not. And the reason is that they can take into account much wider aspects and certainly environmental, social, and governance aspects because it’s the right thing to do. It’s the right thing to do for their companies.
The second thing, the reason why they do it, is that often their customers demand it. And so there’s already an influence on those companies because to be successful, you have to deliver products and goods and services to your customers at the right price and the right time, all those sort of things. Of course, the strong push from consumers now is a very important driver of business activity. And no director is stupid enough not to have regard to customer expectations or demands.
The third thing is that many of their staff advocate for those types of considerations, and we’ve seen that increasingly over recent years. Those are the issues and the drivers that all directors take into account when managing their businesses. [Interruption] Here we go. I see the Labour members—of course, they’ve all sat on many boards!—saying, “Oh, that’s wrong. He doesn’t know what he’s talking about.” Well, actually, I think they’re wrong, and I’ll tell you who else thinks they’re wrong.
Hon Damien O’Connor: Go and read about your mates at Pike River.
ANDREW BAYLY: The Legislation Design and Advisory Committee thought you were wrong, members over there. It thought you were wrong, Mr O’Connor, and what it said was it recommends that this bill was not necessary and that the bill as introduced could have unintended consequences, and we strongly agree.
I’ll go on a little bit further for the benefit of Mr O’Connor, who seems very active in this conversation. Because the bill does not—[Interruption] This is what they wrote, Mr O’Connor, and this is what the office of the select committee wrote—because the bill does not does not permit or prohibit any activity, it will not have any legal effect. The lack of a legal effect brings into question whether this bill or legislation is necessary.
That is why it’s a waste of time—that’s the first point. It goes on to say, Mr O’Connor, that the committee could consider whether there are more appropriate mechanisms for giving effect to a particular policy goal. And the Legislation Design and Advisory Committee—not one of those shonky little committees that you normally don’t have regard for—considers that there is at least a possibility that the addition of specific environment, social, and governance factors—which, of course, is in the Supplementary Order Paper the member put forward—as considerations of directors could encourage the evolution of judicial review into the realm of individual director decision-making, a suggestion the courts have always been clear to avoid or at least to attempt to.
That is why this is a dangerous piece of legislation. It is not necessary. Company directors already have regard for it. It’s a waste of Parliament’s time. Worse than that, it potentially could have legal ramifications, which are an even worse prospect. I know this bill is going to pass because we’ve got a Government that is blinded by this, but I hope it doesn’t lead to adverse impacts for companies, because although Labour members have this view around directors, those companies employ lots of people, and when companies fail, they lose their jobs, and that is the type of adverse outcome that we may see out of this bill.
Everyone seems opposed to it other than Labour members who think it’s a good thing because they’re slavishly following some bill that should have been thrown out years ago and should never have been allowed to go through their Labour caucus. It just shows how lacking in commercial nous the Labour members are.
ANGELA ROBERTS (Labour): Thank you. Good morning, Madam Speaker. It is a pleasure to rise and take a call on the Companies (Directors’ Duties) Amendment Bill. We’ve already heard in previous sessions about Gordon Gekko and his call that greed is good, and that is around about the time I started studying business. I’m very, very aware of the capitalist model that I was taught about in the 80s, and the wonderful thing about this bill is that it actually is a liberating bill. It is an enabling bill for those of us who appreciate that business has a part to play in the way that we deploy our resources in our economy. This bill liberates us.
You know, many of us know that directors have—one of their core jobs is to be compliant, make sure their companies are compliant; more than 10 Acts that they have to be responsive to. To codify the idea that profit maximisation doesn’t have to be the only thing that drives you as a company director is a fabulous thing. It is appropriate to consider issues other than profit maximisation. It’s really disappointing to hear the other side of the House look at business in such a blunt and simplistic way that the only way that a company can succeed is by maximising profit, and if they’re not maximising profit, then they’re going to completely collapse and there will be hundreds of people made unemployed. That is such a lazy way to look at companies. Absolutely it is a lazy way to look at companies. We’re hearing those words from the other side of the House. Companies are able to pat their heads and rub their tummies at the same time. They can be successful and profitable, and they can look at the greater good.
The young people that we represent here, because they cannot be here for themselves, will be pleased to know that we are enabling companies to better consider intergenerational impacts. For those of us who live in Taranaki who are dealing with legacy pollution issues every day, we know that when a company can actually say, “You know, there’s a piece of legislation that says it’s all right for us to not have to maximise our profits today, because we want to make sure that our whenua, that our water, that our oceans are clean for the future generations.”, this is an enabling piece of legislation.
We know that modern corporate governance theory has moved beyond profit maximisation, when I studied it at university, those of us who are supporting not just companies but we’re on boards of directors all over the place where we are considering the greater good. As company directors, they have to make sure that they determine purpose, that the culture of a company is one that helps them to make a profit. That’s fine, but to able to say, “Look, it says in the law it’s OK to do that.” I think is a really great way to support a cultural shift that we need to happen. If we’re going to rely on capitalism to save the planet, best we help give them the tools to make that shift.
This is a simple little bill. It is a small but mighty little bill. It is really important that we aren’t just seen to be doing better but that we are enabled to do better. We have to ensure that our corporate partners are able to join us in making a great future for this country, and because of that, I commend this bill to the House.
SIMON WATTS (National—North Shore): A small and mighty bill—well, what a way to start the morning, under urgency, than going through the Companies (Directors’ Duties) Amendment Bill, which is a complete waste of time. Ten days of Parliament left and the member of Parliament gave to me the most unnecessary bill that I ever did see, and that is what we’ve got on the table.
The member referred to Gordon Gekko. Now, has anyone ever heard of Gordon Gekko? That is as good as it gets. Well, I tell you what, Gordon Gekko was a fictional villain. And I tell you what, there are a few fictional villains that are standing up here today, talking a big talk about this bill, and if Gordon Gekko—as I understand from my deep research I undertook from listening to the prior member’s speech—had a saying, “Greed is good.” Well, I tell you what, these Labour members are saying—their fictional villain status is around “waste is great.” That, I think, personifies what is a bill coming up under the auspicious idea of Dr Duncan Webb; an epiphany that he had at one point in time. I do feel sorry for the good member, Camilla Belich, in regards to taking on this bill because what a hospital pass; what a hospital pass to take this bill.
No one believes that this is going to add any value. For the prior member to say this bill is going to help young people, it’s going to help the environment—where in the bill? The only thing that this bill—this bill is a solution looking for a problem. It is well meaning but it is misguided and that is the great shame around the opportunity cost. Where this Government, this morning, could be passing legislation that could truly deal with some of the most significant issues our country faces today, they have decided to use this Parliament’s time to pass this bill, which is unnecessary, misguided, and not supported by many, many stakeholders across this country.
This bill will result in unintended consequences and implications on directors and probably end up—the only ones who will benefit are lawyers with more legal fees and more court action around the indecisive aspect that this bill will bring.
I’m not going to waste any more time in regards to this bill. It is a bill that is destined to the waste bin, as Andrew Bayly has noted. We strongly oppose this bill and it is the last thing that I think is necessary at this point.
ARENA WILLIAMS (Labour—Manurewa): Kia orana, Madam Speaker. It’s a pleasure to stand and speak to this bill in the name of my colleague Camilla Belich, and I thank her for her work in shepherding this through its final stages. This debate has been interesting; I’ve enjoyed the contributions of the members opposite, as well as my colleagues on this side. I’m going to be a lot more boring and give us all a bit of a lecture on how companies work and why they’re important, because that’s something that we haven’t actually talked about this morning.
Andrew Bayly: Oh, that’s a good start!
ARENA WILLIAMS: So, Mr Bayly, you will be aware that there is no magic to the duties of directors. They’re all written out in the Companies Act, and companies are special because they’re simple to set up, they’re easy to understand, and there is a long history of using what is essentially the Companies Act over many common law jurisdictions, and a standard form constitution of companies. That’s why they’re useful.
They’re also useful because they have limited liability attached for the directors, and that’s what makes them special in character. The legal nature of them is that we design a special set of rules that the public can accept, that directors might have the benefit of, so that they can make business decisions which effect their company in a way which grants them social licence, so that they are not personally responsible for the debts that their company incurs if something goes wrong.
So it’s really important for Parliament and for parliamentarians, who are elected democratically, to every now and then look at those companies directors duties and the rules which create them, and say, “Is there social licence here for these directors to operate in this way? Is it fair for the directors to sit around the table and have this special power that we don’t afford anyone else in any other situation of commercial dealings, or of contract making, or of agreement making of any kind?”
I would say, yes, it’s appropriate for Parliament to say that these directors may—“may”, not “must”—be able to consider things like environmental concerns, things like social concerns. That has the effect of having around the boardroom table an opportunity for directors who want to advance those things within their companies. They might be companies that are set up for a specific social purpose, a specific environmental purpose that we’re seeing a rise of around the world, which are called B companies. They are not charities. They do not operate in a way which is within the very strict definition of what a charity is based on a definition from the 1200s about what is charitable work and what is poverty. These are companies which want to have a wider social focus, and it’s right for Parliament to be able to enable now what social expectations are out there in the big wide world in our Companies Act. That’s why this is useful. It’s a small change, but it goes a step towards doing that.
I think one more point I’d like to bring to this debate is that it’s useful for companies to need to actively tell their shareholders what to expect from them. So when we find a document like a constitution, or like a shareholders agreement, which is usually not made public, that’s the place for the company’s directors to be very clear with their shareholders what they will deliver, what things they will take into account. This companies law is different from that. It’s about creating a baseline for what those directors may do, and what they may be held accountable for.
So when we have a baseline which is permissive, as my colleague Angela Roberts said—which is empowering, you can then have these further agreements where you’re very specific about those things that you take into account. That’s why the committee heard that this will not have a widereaching legal effect, because usually those agreements between shareholders, or that constitution which is mandated and required, will deal with those things that the directors will take into account. So they will not be bound to take into account things that they don’t expect to, and we don’t expect them to.
So it’s a good bill. I’m proud of my colleague, Camilla Belich. She was very nice in her opening speech, and we’ve all been a bit mean to her. So well done, chick.
DAMIEN SMITH (ACT): Ah, we heard the magic words, today, of Baycorp—Baycorp. Let me tell you what Baycorp did to our great hero of the United Kingdom Nigel Farage. The last CEO on the board signed off on, “Some people won’t fit our environmental, social, and corporate governance (ESG) principles.”—and this is the UK NatWest via Coutts bank—and they closed down Nigel’s private business account and his personal accounts and then went through all their customer base saying, “Do you have political views? Are you green enough? Listen to Baycorp.” Anyway, three days later, the new CEO of NatWest and Coutts bank apologised for the application of these bad ESG principles to one of the greatest democratic heroes in the United Kingdom. This is what happens when woke stakeholder capitalism is allowed to penetrate the use of companies and business accounts.
If you look at Rabobank and its partnership with Silver Fern Farms, well, sustainability loans, ESG, the road to Paris—there’s not actually anything in here about banking any more; it’s just about, “Have we got our green agenda sorted out so we can send this to Government and maybe extract more money for boilers or for other activities like electric arc furnaces, which we’ll give to Australian shareholders?” And you can see the Government’s getting suckered in that area by companies coming in who have this money in their CAPEX and say, “Oh, if you want us to move faster on the ESG principles, we need $750 million; we need $150 million.”, and the Government just rocks up and gives it to them. And that is taxpayer money.
How dare you people insult the directors and businesses of this country. They pay your wages, they pay taxes, they take risks every day to go and make a profit, which is not a bad word, to go and help run this country. And while they’re out there worrying about their bills every night and paying GST and meeting and paying bills on a Thursday, you’re all sitting having chardonnay across the road. So chardonnay socialism, stakeholder socialism, this is going to stop. I’m telling you right now; we’re going to stop it, and we’re going to make sure that every law firm in the country understands what you’ve done today, because this bill has been rejected by every law firm and by the Economic Development, Science and Innovation Committee. It’s a rubbish bill, and Duncan Webb should be ashamed of himself, and I don’t know why Camilla Belich took this on.
Now, I’m a bit concerned about the ex-Minister of Revenue the Hon David Parker today. He’s got his mask on. Maybe he’s worried about being infected with these ESG principles, because it is a virus that’s taken hold around the world, and it shouldn’t be allowed. Directors are not stupid. They’re already doing this in their boardrooms. They’re already allowing their customers to experience green benefits. And if a customer doesn’t like it, they can just go and not buy the product. If you want to buy a share in a company—and being a capitalist, you can go and buy a share in a company and you accept the responsibilities. Read the prospectus. If somebody’s promoting environmental policy and you’re happy with it, good stuff. Let the free market take its place in these principles and not shoehorn them into some sort of stupid bill that actually doesn’t make any sense, isn’t mandatory, and will lead to big corporations in this country dictating how business runs their day-to-day life. And it’s not fair and it’s not proper.
This bill was supposed to give more weight to environmental, social, and governance factors around directors’ duties, and it failed to achieve select committee endorsement at its first run. Now, what does that say about this bill? What does it say about this bill?
Dr James McDowall: It’s a shocker.
DAMIEN SMITH: It’s a shocker, and it’s unnecessary, and it’s a shame on the Labour Party for bringing this in. It’s just purely ideological, and we need to recognise that fact in the House today. You can’t run a country based on your political ideology and your whims of social environmental standards, which are already set out there. The road to Paris is a long road, but it’s actually distorting and making New Zealand uncompetitive. It’s not going to work, and we need to line up with our trading nations and be competitive on a like-for-like basis, and none of these other countries are adopting these principles. In fact, they’re going backwards, so why should we take on this leadership position where we will actually now not reap the benefits of this type of legislation?
Whether it’s Rabobank or whether it’s the New Zealand Bankers’ Association telling me, “Oh, there’s no ESG loans, but we have sustainability loans.” Well, it’s the same bloody thing.
Hon Member: Yeah, I know.
DAMIEN SMITH: Yeah, same thing. This actually says if you want to be a farmer, you get differential rates, so you take on our Paris Accord principles. Well, what that means is that a mid-range farmer is disadvantaged because they have to pay higher interest rates. If you’re a corporation, you get cheaper money. Now, that’s a distortion in the market, and that’s behaviourally driven by something which is intangible and doesn’t make sense for the New Zealand economy.
Now, I’m not an anti-environmentalist. I actually am a pretty sensible person when it comes to those principles. But I don’t want people being cancelled who don’t have the same political views in business and getting their accounts closed like Nigel Farage. I don’t want corporations and banks dictating to me when I run my business, “What is the interest rate?” That’s the free market that sets that.
To finally conclude, I remember the first time I started my first company. It was a joyous moment. I had my accountant explain to me what my directors’ duties were. I suppose nobody over there has ever started a company. Maybe they have; I don’t know. But you’re actually trained in what you have to do and be responsible for, and that includes environmental factors as well. When you meet payroll on a Thursday, you pay your GST, you pay your taxes, you deserve some respect from this Government, you deserve to get legislation which makes sense, and this should never have come to Parliament and it should never be passed into law. We at the ACT Party believe that woke capitalism—or whatever you want to call it on your side of the fence—or business that is driven by ideological agendas are not going to work longer term, and you need to take that under consideration when you’re promoting this to directors and when you’re promoting this to shareholders.
I don’t care about the big corporation and its agenda. What I do care about is the sustainability of New Zealand and making sure as a nation we stay productive, we stay in the world’s intelligent economies and we have a network of laws that actually make sense—it facilitates business and people coming here to invest in this country. This is another example of legislation which continues to position us as the Shaky Isles in terms of investing. What are you going to get when you get to New Zealand? Are they going to close you down, in oil and gas? Are they going to let you operate a steel furnace? Are you going to have to get your boilers replaced 20 years in advance and come to the Government to get the money? We’re just a soft touch now for getting these things through, and it has to stop, we have to reduce debt, we have to reduce the size of the Government, and we have to be efficient with taxpayers’ money. Thank you very much.
IBRAHIM OMER (Labour): Kia orana, Madam Speaker. I rise in support of the Companies (Directors’ Duties) Amendment Bill.
The previous speaker, Damien Smith, has been talking a lot about capitalism and been claiming that probably they are the ones, the only people who understand capitalism. Well, there are good aspects of capitalism, but blindly being dependent on capitalism got us in the mess that we are in today—it created classes, created inequalities, made very few rich people richer and hard-working people poorer. Just to put it out there.
This bill is all about striking the balance between maintaining the ease of doing business and protecting New Zealanders from illegal activities, something that the speakers on the other side of this House are missing. We know it’s quick and simple to establish a company or limited partnership in New Zealand, which is great for business, for doing business, but also opens doors for criminals to take advantage. For example, the Pandora and the Panama Papers highlighted some key vulnerabilities which need to be addressed, and New Zealanders deserve to know who they are doing business with.
While the bill that’s going to crack down on global and domestic criminals who use business to hide money laundering, tax evasion, and the financing of terrorism will be introduced later in the year, these changes we are making sit in line with the Government’s national security priorities to help identify threats, risks, and challenges to New Zealand security and wellbeing. It will also help bring us in line with other jurisdictions. It will include changes to rules around the financial beneficial owners to make it easier to see who owns and controls a company. When searching for the company on the register, it can be difficult to see the complete picture of the company’s ownership structure. The new measures would make it a requirement to provide secure, accurate information about who the beneficial owner is.
As the previous speaker indicated, there are a lot of entities who spoke against this bill, opposed this bill, but also a lot of others who support it as well. The Council of Trade Unions, for example, said that “The nature of work is changing, which means that the way businesses operate are also going to have to change. This Bill helps to ensure that New Zealand heads in the right direction on these counts.” It’s a good bill. I commend it to the House.
RICARDO MENÉNDEZ MARCH (Green): I’m going to play the smallest violin ever to the poor company directors who the ACT Party thinks are being victimised by a bill that simply clarifies that they may consider—may, not even must; but that they may consider—things other than maximising profit. I mean, this is like not even a socialist bill, honestly; it simply clarifies what company directors may do. So I really, really enjoyed listening to the theatrics of National and the ACT Party, who were talking about how this bill would victimise those hard-working company directors. And to put it on the record, despite what the ACT Party member may have said, actually it is the workers who create the profits for those company directors. The company directors depend on those workers, and actually, yes, this bill will enable the few company directors who do want to actually consider things other than maximising profits to do so without having to worry about whether the law is clear enough.
Submitters and some of those who supported this bill did say that we should have gone further and that we should have made it mandatory for company directors to consider other things other than maximising profit. I do want to commend the different members who have shepherded this bill, and particularly Camilla Belich who brought forward a Supplementary Order Paper to add further clarification about what it is that company directors may consider. But the Green Party once again reiterates our call that for this bill to actually have teeth, the language should have been “must”, and unless we actually start twisting capitalism’s arm, we’re never going to actually unshackle ourselves from what has been a broken system that has done nothing but increase wealth inequality and the concentration of power in the hands of a few. The Green Party supports this bill, but calls on the Government to have more ambition and for their backbenchers to be more ambitious in the bills that they put forward. Kia ora.
NAISI CHEN (Labour): Thank you, Madam Speaker. It’s a great pleasure to have had this bill in the Economic Development, Science and Innovation Committee during the select committee stage, and for me, it was really interesting hearing the different stakeholders that came in and submitted on the bill. Some of the people who were, I think, obviously, the natural supporters of the bill, as we would anticipate, would be the environmental groups and some of the different legal entities, but then some of the companies as well who themselves have gone on a journey of really following their environmental, social, and governance (ESG) commitments and making sure that their directors are no longer faced with a potential risk of being caught out under this phrase.
As I read the bill for the first time—and, obviously, it was in quite a different form than it is now presented to the House today—I was reminded of my colleague Rachel Boyack. I remembered when Rachel first came into caucus one day, holding her soy-printed collateral and showing that off and saying, “Yes, it does cost a little bit more, but I think it shows our campaign’s commitment to the environment.”, and I think of that and I think it’s similar. When we look at companies and they choose to spend a little bit more on something that is much more environmentally friendly, will they be caught out under this Act—have they acted in the best interests of their company? Those are the moments that I think about in terms of being out there in the real world, where we actually want company directors to have that faith and to have that reassurance that we want to encourage them to do something that is not only profitable and good for their bottom line but also takes all other matters into consideration.
I do disagree with the ACT member who said that this bill puts New Zealand up as an anomaly. The United Kingdom has its Companies Act 2006, which also kind of gives the same provisions in terms of allowing company directors to consider ESG matters. I think about the social enterprises. That is now—in a woke term—trending at the moment and is making sure that companies are set up, not even for the purpose of profit, but the profit-making is for another, bigger purpose in our society and community. I want to make sure that this bill enables more and more social enterprises, so that our charity sector can really look after themselves and be self-sustainable as well. So that’s why I commend this bill to the House.
ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call Nicola Grigg—five minutes.
NICOLA GRIGG (National—Selwyn): Thank you, Madam Speaker. Look, like my colleagues and other parties on this side of the House, I’m opposing this bill, obviously. It is a pointless bill. Look, I have to say I feel for Camilla Belich; this really is a hospital pass that has been given to her. But if we look at the purpose of the bill, it allegedly makes clear that a company director, in acting as the mind and will of the company, can take actions that consider wider matters other than the financial bottom line. Can someone explain to me what is wrong with a company making a profit? What is wrong with considering the financial bottom line? That is the question that the Government members have failed to answer.
This Government seems to purport that making a profit in New Zealand is suddenly a cardinal sin. And yet, if you ask any person on the streets of New Zealand, most of them hold business in high regard, because it is business that employs people. It is business that allows people to earn money, to feed their kids, to pay their mortgages, to send their kids to school, to live a purposeful life. There is nothing wrong with business. It defies logic that the new section being added to the current legislation is “To avoid doubt, in considering the best interests of a company or holding company for the purposes of this section, a director may consider matters other than the maximisation of profit”.
Again, what is wrong with considering the maximization of profit? This is a typical daily occurrence within a business operation. Of course they account for profit. Of course they account for the wellbeing and safety of their staff. Of course they account for environmental implications and impact. This is a typical “we know best” piece of legislation from Labour. It is a typical command, control, centralise piece of legislation from this Labour Government. It is typical arrogance displayed towards business owners who go out on a limb, who take a risk, who want to employ other New Zealanders to ensure their wellbeing, to ensure their financial gain, to ensure their children are fed and housed and clothed.
This is a piece of legislation that is once again coming down hard unnecessarily on the businesses of New Zealand. It is totally pointless. It is a solution looking for a problem. It is well meaning, but it is totally misguided. It has not identified a problem to solve. In fact, if one were to actually look at the Companies Act 1993, it already states this bill’s intention. The Companies Act 1993 states that a director of a company “must act in good faith and in what the director believes [is] the best interest of the company.”
So, again, I put to the House: this is a pointless bill. It is yet more regulation on businesses that are already struggling enough after six years under a Labour Government. We oppose this bill.
ASSISTANT SPEAKER (Hon Jenny Salesa): I call on Jamie Strange for five minutes.
JAMIE STRANGE (Labour—Hamilton East): Thank you, Madam Speaker. I think we need to bring a little bit of clarity to this debate in the House here. The bill makes clear that a company director, in acting as the mind and will of the company, may take actions that take into account wider matters other than the financial bottom line. This is not command and control. This is not disregarding the bottom line. This is saying, “May also take into account other matters.”
Now, in terms of clarity, I thought I’d have a look at the Oxford Dictionary to see what the word “may” means and actually compare the word “may” with the word “must”, because it sounds like the Opposition are a bit confused; I think the Opposition are believing this is “must”. This is “may” take into account. So “may” means “expressing possibility”.
So, if the House will indulge me, let me give a little anecdote. Somebody visits someone’s house. They knock on the door: “May I come in?” “You may, if you wish.”
“May I have a cup of tea?” “You may, if you desire.”
“May I have a scone?” “You may, if you are hungry.”
And, finally: “May I depart?” “You may, but please return again.”
The word “may” is very different to the word “must”. The word “must”, in the Oxford Dictionary, is defined as “something is necessary, often involving a rule or a law”. This piece of legislation does not use the word “must”; it uses the word “may”. So hopefully that brings some clarity to this debate, because I sensed there was a little bit of confusion there. Hopefully that anecdote was helpful. I commend this bill to the House.
TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Speaker. Well, that last contribution was about as useful as the bill itself. We’ve got a piece of legislation here before the House that, quite frankly, sums up the Government’s approach recently: it’s a total waste of time. It’s a real—well, it’s a solution looking for a problem, quite frankly. We have, now, another example of dilly-dallying around when there are really critical issues that should be getting addressed by the Government at the moment, and frankly, the country is suffering because of it. We have already a set of rules in place that enable our directors to act appropriately in regard to carrying out their duties on behalf of the companies they’re involved with. There’s nothing that, at the moment, requires this change to occur, and, quite frankly, we’ve seen many businesses already looking at a range of aspects that are in the best interests of their business, and that is as it should be. It is not necessary to put in this extra caveat that requires them—or gives them, to the previous speaker Jamie Strange’s point—that they may consider other aspects outside of profit.
Businesses operate in this fashion already, and I think this really highlights one of the key aspects from the Government, where they clearly lack a good understanding of what it means to operate around a board table and of how businesses operate, because these sorts of considerations are absolutely critical sitting around the board table. Of course the numbers are considered, but a whole range of factors are considered from a director’s perspective in their role on a board, determining the future or decisions for a particular entity that they may be involved with.
What we’ve seen—and, actually, one of the previous speakers said this as well—is that companies are already going on this journey. And that’s exactly right; they don’t need this legislation to be able to make the right decisions for their business, for their communities, and for the environments that they are operating in. I think that’s the fundamental flaw from this Government: that they think they need to control the narrative, they need to tell businesses how to operate for businesses to succeed. We have a fundamentally different view. We absolutely disagree with that position. We have confidence in the business sector in New Zealand. We back them to go out every day and perform, and they do that day after day. Despite the increasing burden of regulation, the additional red tape, and the additional costs of compliance being imposed on them day after day by this Government, the business community continues to perform.
Now, profit, as we’ve heard, seems to be a dirty word on that side of the House, and it’s certainly not, because you can’t be green if you’re in the red. That’s the saying that we use in the food and fibre sector a lot because everyone that I’ve come across cares about the environment. They want to do the right thing for their communities, for the environment, and for their employees, and that’s how it should be. But to do that, you have to be a successful company, you have to be generating profits, and you have to be succeeding in your industry. We seem to have a Government intent on putting burdens and controls in place to dictate how that should or should not occur. Ultimately, what that’s doing is it’s undermining the ability of those businesses to perform and to succeed for them and therefore for their communities, their employees, and the environment around them. And that’s the sort of mind-set that simply is not working, and it’s been borne out over the last six years under this Government—this lack of trust that the Government has in the business community in New Zealand, and in the people of New Zealand, it seems, such that they feel the need to impose an onerous level of control across all manner of areas. It is simply unacceptable and, frankly, disrespectful to that community as well. We are a great country, we can continue to be better, we need to up the game, but at the moment we’ve got a Government intent on pulling our business sector down.
We fundamentally disagree with that approach. Pieces of legislation like this epitomise the Government’s approach to a lack of trust in the business sector and the need to control and influence everything, and, frankly, we disagree with it. It’s another socialist approach that, quite frankly, doesn’t fit, and the problem with socialism is that eventually you run out of other people’s money to spend. This is the problem that we’re seeing here when our business community is struggling time and time again, getting more and more impositions put on them by a Government that simply doesn’t seem to understand. [Interruption] They’ve woken up over the other side of the House now. We, quite frankly, do not accept that this is an appropriate piece of legislation. We do not support it. We are committed to backing our business sector, backing this country to get back on track and succeed like we know that it can. Thank you.
INGRID LEARY (Labour—Taieri): It’s a real privilege to get the final word on this small, mighty, and, I believe, really important bill because it is not a brainwave from Dr Duncan Webb, as has been described; it’s actually something that the business sector and social enterprise sector have called for for years. What it does is it bridges the gap between the current business models of profit and not-for-profit, because the world as we understand it now is quite different from when the Companies Act was introduced in 1993. To suggest that there is no problem is to suggest that we have infinite resources and that we have no issues around inequality.
Social enterprise is a word that I would use instead of “B companies”. It is companies that look at social profit as one of their considerations. There’s a whole spectrum from socially motivated companies through to those that simply take that into account. What this legislation does mean is that instead of those companies then being forced to be a not-for-profit, they can continue to operate with the savvy and the fiscal discipline of a profit-making company but taking into account things that exist in the circular economy, taking into account environmental, social, and governance considerations.
I think we have a duty as a Government in this environment of climate change and of inequality to provide incentives and nudges and certainly this bill does this but not in a way that requires companies to take these matters into account. It certainly isn’t mandatory, and I would never go so far as to suggest that. I think the Greens are dreaming if they think that is able to be achieved because that really does open a Pandora’s box; the not-for-profit sector is better for that. What it does, as many of my colleagues have said, is it means that company directors are no longer in the straitjacket of having to put profit maximisation first. We can see that regardless of what the Opposition say, that does come into account sometimes in the risk mitigations that companies take where they take shortcuts—we’ve seen that with oil spills, with all sorts of issues where the profit has come at the cost of the environment—but also there’s an assumption from Andrew Bayly that consumers always do the right thing. They may want to but many of our people are struggling with the cost of living and they will go for the cheapest option regardless of what they think is the right thing to do, so I think it’s inaccurate to say that consumers are always motivated and act on those motivations.
There are also assumptions from people around the role of the law in this, that the law is somehow devoid of politics—that’s a different jurisprudence than I follow; that’s why I left the law. Everything is political, and to suggest that there are unintended consequences that haven’t been thought through by the law firms, I have to look at who their clients are and who pays their bills. What this law does, as Angela Roberts said, is it’s an enabler. Currently, companies are in a straitjacket and, where there is profit and social profit—these are no mutually exclusive so, yes, companies can take that into account. But where they are mutually exclusive, what this does is it enables company directors to actually have regard for these other very important factors that were not appreciated as being so important back in 1993.
It is a great bill; it is a game-changer. I commend it to the House.
A party vote was called for on the question, That the Companies (Directors’ Duties) 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 44
New Zealand National 34; ACT New Zealand 10.
Motion agreed to.
Bill read a third time.
Bills
Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill
First Reading
Debate resumed from 26 July.
NICOLE McKEE (ACT): Mālō e lelei, Madam Speaker. I stand to speak to the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill. I would like to begin by congratulating the member Stuart Smith of Kaikōura, for getting his bill pulled from the ballot box and for having such a good bill that ACT are really looking forward to supporting it along its journey.
I note that I may be speech number three, but we already have one of the chardonnay socialists from across the other side of the House agree with the bill, and, hopefully, we’ll get more on board with this one, the cellar door tasting bill. You know, this is about where multiple bottles of wine are opened for shot tasting, usually at about 30 millilitres per shot, and they hope that they can sell enough to be able to compensate for the free tasting. Being a consumer, I was initially confused with the debate that was had the other day about on-licence and off-licence requirements. As a consumer, you know, I just rock on up to the wineries and go about having the tasting without really thinking about what effect it may have on cost for those wineries. As Stuart Smith had actually pointed out, there’s over 600 small wineries around New Zealand. In fact, I think he even went about to tell us there were 28 within electorates that obviously need supporting, and I thought that was very well done. Stuart Smith actually gave MPs a big list of all of those electorates, and I think that those that operate their businesses would appreciate that he’s actually pointed out, to the members that they represent, who they are.
I’d never actually thought about the legal requirements of the winery at the cellar door and the licensing requirements and on-licences that were needed for the sale and consumption of alcohol on premises. So that’s for hotels, it’s for pubs, nightclubs, and restaurants—they all have the on-licence. But an off-licence is for selling for the consumption at a different place. So that’s where the bottle shops, the supermarkets, and the grocery stores come in. So, I could see the confusion when we were looking at what’s actually happening at the cellar-door wine tasting experiences. The wineries need an off-licence to sell their wine to consumers in order to take them home and they give away their wine in those 30 millilitre lots for tasting because they don’t have an on-licence in which to sell it. Further to that, it appears that the off-licence is only available under limited circumstances, with certain requirements needing to be met. I got confused just trying to get my head around what those requirements were and when you need the on-licence, when you need the off-licence, and what cancels one or the other out. So good on you, Stuart Smith, for looking to cut the red tape and the regulation, and for looking to bring back common sense for small businesses. Good on you also, Stuart Smith, for looking at ways to cut the financial waste from those small to medium enterprises’ pockets, because ACT can also support that too.
We’ve heard from the member that the wine growers have a $2.41 billion industry. This is substantial. How do we help it to grow? We support the businesses to grow it. Wine is New Zealand’s sixth-largest export product, after all. So ACT agrees with the member’s bill where he defines samples as needing to be at 40 millilitres. It means there are 18 samples out of a 750 millilitre bottle, and charging for those samples will help the SMEs—or small to medium sized enterprises—to recoup their expenses. Good host responsibility is an essential part of any alcohol bill, and it’s there within this bill. The person serving these tests or tastings still need to be a duty manager and they still need to abide by the Sale and Supply of Alcohol Act.
Again, with over 600 small wineries around New Zealand, many of which have been hit with the adverse weather events, this is a good way of being able to support them to boost their business. But there is one aspect that I’ve already been lobbied about, and it’s whether or not we could bring certain distilleries or craft breweries into this as well for wine tasting. Perhaps that’s an aspect that we could speak about at the Justice Committee table. So we support this bill and we thank Stuart Smith for looking at ways to cut red tape and support our businesses so they too can thrive in New Zealand. Thank you, Madam Speaker.
RACHEL BOYACK (Labour—Nelson): Thank you, Madam Speaker. It’s a pleasure to take a call on the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill. Can I begin by congratulating my neighbour from across the hill in the mighty Marlborough winemaking region. So congratulations to Stuart Smith, and it’s been a pleasure to engage with you, Stuart Smith, around this bill. I’ll definitely be supporting this bill to go through to select committee and probably further than that. My view is that any of us who have wineries in our electorates or our region should be taking a good look at the benefits that this bill will bring, and I’m going to talk to those in a moment.
In the Nelson region, we have around 150 years of winemaking in our region, and I know people will often talk particularly about Marlborough and about Hawke’s Bay, but I’m very proud of the work of a number of our businesses. Now, my colleague Damien O’Connor will probably call me out for claiming some of the wineries that are actually in his electorate, not mine, but I like to claim them. There are a couple close to me—Waimea Estate—that have provided wine into the region for a very long time, and our region is known for the pinot noir that you can find out at Neudorf, made beautifully by the wonderful team there, Tim and Judy and Rosie Finn. But my favourite are our aromatics, and probably the top wine in Nelson—if I was going to choose one, and it’s very risky to do this—would have to be the Seifried gewürztraminer; it is a fantastic drop. So if you haven’t tried that one, I do encourage you to do that.
But just to the bill—to the bill. Where I’m going with this is that in Marlborough and in Nelson, we have a number of cellar doors that operate and trails where people can cycle around and visit the vineyards, visit the hops in my region as well and have samples. So it’s very well marketed in Marlborough, and you often see, when you’re driving around Blenheim, people biking from vineyard to vineyard, and it’s an important part of the tourism experience in the top of the South Island to do that, and in other parts of the country.
I’ve had representation made to me about supporting this bill from winemakers who’ve come to see me at the Saturday market. The specific issue they’ve raised with me is that it’s very difficult for them when people come and they’ve biked from one vineyard to the next and, essentially, are getting wine for free. They feel quite uncomfortable doing that, both from a business point of view but also from a host responsibility and a harm reduction point of view.
They’ve raised with me the harm reduction issues of, essentially, just providing sample after sample after sample and that, actually, if people were required to pay for that sample, which is what used to happen—so back in the day, it used to be quite straightforward to go to a vineyard that had an off-licence and have a sample and pay for it, and that should be the expectation. If you’re having something from a business that is alcohol, you should be paying for it. I personally feel very uncomfortable that people are able just to go in and have a small wine sort of for free. I don’t think that’s right.
So that is the main reason why I’m supporting this bill, why I encourage other members to support this bill. It makes sense to me, from both a business perspective, but, more importantly, from a harm reduction perspective. I’m sure there will be some things that need to be ironed out in select committee. That’s what the process of select committee is for.
The previous speaker, Nicole McKee, I think made a very good outline of all the ins and outs of how on- and off-licences work, and I’m not going to repeat all of that, but it is confusing for people, and I think that what we can do with these bills is actually work through to try to get less confusion, so that it’s more clear what people need.
But we want people to be coming back to New Zealand as tourists and visiting regions like Marlborough, like the good region of Nelson Tasman, the sunniest region in New Zealand—always a controversial thing to say in the House.
Glen Bennett: Very.
RACHEL BOYACK: You’ve been stealing our sundial, I think, Mr Bennett, or perhaps someone from Marlborough has been. But it’s an excellent bill, I think. I appreciate the representations made to me by vineyards. I’m happy to hear from them further about things that could help improve the bill, and I commend it to the House.
CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. Tēnā koutou e te Whare. As is custom, I just wanted to shout out to the member in charge of this bill for the luck of the ballot, the luck of the draw, as it were, and having the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill drawn.
Just to cut through the suspense, the Greens will be supporting this bill, and to outline why that is—it’s been incredibly frustrating over the past few years, in this place, as we’ve debated a number of pieces of law on liquor and alcohol regulation. Frequently we are operating in false absolutes when we are debating that. The Greens are consistent. I’d argue that we are the only party that is consistent on drug regulation in this country. Because, just to actually unpack some of the sentiments that were outlined by my ACT Party colleague Nicole McKee around kind of red tape and the operation of those who operate within markets, when you’re talking about substances, whether those substances are alcohol, cannabis, tobacco, or otherwise, you have a spectrum of regulatory approaches. At one extreme you have criminal prohibition and at the other extreme you have a complete legal, unregulated free market. At both ends of those extremes you end up with the maximisation of harm because, whether it is criminal entities or commercial entities, in those environments and markets—whether they are legal or the black market—you are incentivised to exploit vulnerable communities to shift as much of your product as is possible to make a quick buck. So we pull away from those extremes through a process of sensible regulation.
The things that this bill does is, firstly, allowing wineries to charge for samples without getting a separate on-licence—so they already have that licence. And the second is fixing an anomaly, and that’s a really important point to make, that this is an anomaly that exists within the law which means that wineries with restaurants currently have to create a new business for their cellar doors in order to obtain an off-licence by adding a new category for on-licences available to wineries holding an on-licence. I’ve heard from other members that there has been lobbying with regards to the potential expansion of this to other alcohol trading businesses and I’d just actually like to make the point, as expressed by my Labour colleague Rachel Boyack, around how, actually, when you are looking at interventions with regard to how to reduce harm for certain substances one of the main mechanisms that we have available to us is pricing. So that’s perhaps one of the fascinating ironies in this proposed bill, is that we actually have a potential for reduction of harm through the ability to charge for these samples. I would just love to see some more logical consistency from the National Party on that point in particular.
But prima facie this is quite a straightforward, quite a simple, and quite a sensible piece of law. I’m not going to pretend it’s going to change the world with regard to harm reduction and it’s definitely a bit of a long bow to propose that that is the case. But none the less, I’m looking forward to those submissions at select committee.
As I do have the floor, I would like to make the point again that I would implore all members to have some logical consistency when it comes to approach to substances on these issues of harm reduction, because we have the ability to disempower that black market where, in the words of the ACT Party member, actually no red tape exists. Drug dealers do not check ID, they will up-sell young people to ever more harmful substances, and in that black market we have unknown people consuming unknown substances to unknown consequences and no ability to intervene in that potentially problematic use. So the best way to ensure that we reduce that harm is through sensible regulation. And to that effect I’d say that we’re well overdue for some meaningful investigation of whether our sale and supply of alcohol laws are actually living up to what they say on the tin.
But the Greens support this. I’m looking forward to watching it progress through the House and select committee process, and encourage all to submit at the select committee.
TANGI UTIKERE (Labour—Palmerston North): Kia orana, Madam Speaker. It’s a pleasure to take what will be a brief call on this bill, and in doing so can I acknowledge the member who has had the luck of the draw, Stuart Smith, in having this bill drawn in and for bringing it to the House. On this side of the House, we are treating this as a matter of conscience. However, I can inform the House that I intend to support the member’s bill through first reading, and probably likely beyond that.
In Palmerston North, we do not have any wineries within the electorate; as Mr McKelvie and Mr Tuiono will know, the closest one is actually in the Pohangina Valley and has been for quite some time. It doesn’t mean, however, that Palmerston North is boring for its lack of wineries. In fact, I think at many of the cafes in Palmerston North you would find Mr Smith’s electric wines on the menu, and I’m sure if you looked hard enough you’d probably even find a Spanish wine there as well.
The point of this particular bill is that it does allow for a little bit more consistency and some ease when it comes to those establishments and locations that are effectively identified or defined as a cellar door operation, and that the bill also identifies a definitional aspect around that as well. But it also does permit the payment of some money in exchange for sample consumption. So this is just one element that I think makes a lot of sense, it’ll obviously go to select committee if it clears the hurdle today. But many of these establishments do have a restaurant or cafe on site, and it just makes logical sense to tidy up this anomaly. I am happy to support this past first reading.
IAN McKELVIE (National—Rangitīkei): I’d better fill the gap, Madam Speaker. It’s a pleasure to take a call on the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill in the name of my colleague Stuart Smith. As the last speaker—the previous speaker Tangi Utikere—said, we in the Manawatū struggle a little bit for our wine, and if I ever need advice I go straight to Stuart Smith and he sorts it out for me.
I wouldn’t, however, refer to wine as a substance. I think it’s much more of a tonic or a food or whatever, but certainly not a substance. I think that to refer to wine as a substance is almost an insult to the winery. As the previous speaker said, in the Rangitīkei, we have actually—[Bell rung]
ASSISTANT SPEAKER (Hon Jacqui Dean): Oh sorry, no—wrong button. Carry on—carry on.
IAN McKELVIE: Can I keep going, Madam Speaker—can you give me another minute? Give me another minute!
In the Rangitīkei, in my time in Parliament, we’ve had three very small wineries operating, and I think there’s probably about one and a bit left now. There’s a very good reason for that: we grow great meat in the Rangitīkei. I suppose, when you think about the wine trails of Marlborough and Hawke’s Bay, in particular—and probably Nelson and Waipara and Canterbury—we could well have a meat trail in the Rangitīkei. I mean, I think that’s something that I might think about when I leave this place in a few weeks’ time—I could start up a new kind of business.
But I think that the real point of this is that wine is certainly a very successful industry in New Zealand, but it has a different cause, I guess, in that it’s a very good tourist attraction. I liken it in some ways to the thoroughbred industry, because if you think about the thoroughbred industry around the world, horses are an attraction for people to travel round the world. Wine has the same impact, and to allow people to travel through those wine trails—I’m no expert on this, as you can tell, but I’m an expert on taking Stuart Smith’s advice. To allow people to travel through those regions and sample wine at various establishments is very sensible, but the issue with this bill—and it corrects an anomaly, as Chlöe Swarbrick so eloquently put it. It corrects an anomaly in the law which enables those cellar doors to, effectively, charge people for those samples that they’re taking.
Now, some of us had the opportunity to travel to South America a little while ago, and, of course, Chile and Argentina, particularly, are very large wine producers. Chile is a huge wine producer, and we had the opportunity to go and visit one of these cellar doors in Chile. They had a—
Hon Member: Terrible!
IAN McKELVIE: There was very good meat there, actually, so that’s another point in my favour—very good meat there. But the interesting thing about it was that they were charging for samples. They had a cover charge at the start, and then they charged you for any extra samples you took, so the opportunity was there in that country for it to work very well. So I’m pleased to see support right round the House for this bill. It’s very sensible.
The other point I wanted to make is that this is yet another alcohol bill coming through the House to amend a piece of the Sale and Supply of Alcohol Act, which points clearly to the fact that this whole area needs to be reviewed. I think this is the third bill we’ve had in the House in the last few weeks with respect of the sale and supply of alcohol, and for us to continue to have to put these bills through the House without having an opportunity to review in its entirety the Act in New Zealand, then I think it just points strongly to the fact that we need to review that.
Another interesting point was made earlier that when you go round, even some of our wineries are producing gin sampling and all sorts of things like that. In fact, in the Wairarapa, there is a winery that also makes very good gin, and I think that the opportunity for this kind of tourism industry in New Zealand is significant. As I think one of the earlier speakers referred to, it also refers to our small breweries, our small gin operators, and we’ve even got some pretty good whisky made in New Zealand nowadays, which is a huge improvement on what used to come out of your area, Madam Assistant Speaker Dean, actually, many years ago. It was pretty average—you had to pour it into a Johnnie Walker bottle to be able to drink it. Anyway, I won’t refer to its name, but that’s as true as I stand here.
So I’ve got no problems with supporting this bill. I think it’s a very good little piece of legislation. It’s exactly the reason we have members’ bills coming through this House, and I think that to get a bill drawn that actually changes something that will make a significant difference to a very important industry in New Zealand is pretty important. I congratulate Stuart Smith on that, and I also welcome the support right around the House for this bill.
STUART SMITH (National—Kaikōura): Well, thank you, Madam Speaker. It appears no other Labour speakers want to take a call, so I will round things up and thank all those members for their support. I also acknowledge those members within the Labour caucus that are treating this as a conscience matter. It quite rightly should be a conscience matter if people feel that way. We don’t feel that way within the National Party, on this particular bill anyway, but I do acknowledge their right to have their view.
I think it’s been highlighted quite well—Rachel Boyack, my neighbour from across the hill, very proudly spoke about the wineries that are within her electorate. I think that is what the wine industry has on its side, that, actually, those small businesses—and sometimes large—bring an extra thing or an extra colour to their tourism offering, and a great part of the community. I think this bill goes a long way to helping those businesses operate within the law but in a much more simple way.
I take Chlöe Swarbrick’s point about alcohol and the laws around that, but I also thank her for her support. As she quite rightly knows, she’s got a number of cellar doors in her electorate, on Waiheke Island, and as most of the members will know—who read their email, anyway—the number of electorates that have wineries within them is quite surprising. I was surprised at the extent of that.
So I’ll take no more time from the House, but I do thank everyone for their support, and I commend the bill to the House.
ASSISTANT SPEAKER (Hon Jacqui Dean): Members, I have determined that the subject of this vote will be treated as a conscience issue. In this case, I know that there are members who want a personal vote, and I am prepared to accept one. So this is the process that we’re going to follow: I’m going to put the question, you will vote, I will then announce the result, and at that stage any member can ask for a personal vote.
A personal vote was called for on the question, That the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill be now read a first time.
Ayes 105
| Allan (P) | Henderson (P) | O’Connor S (P) | Smith D |
| Andersen (P) | Hipango (P) | O’Connor G (P) | Smith S |
| Baillie | Hipkins (P) | O’Connor D (P) | Sosene |
| Bayly | Kerekere (P) | Omer (P) | Stanford (P) |
| Belich (P) | Kuriger (P) | Pallett (P) | Strange |
| Bennett D (P) | Leary (P) | Parker (P) | Swarbrick (P) |
| Bishop (P) | Leavasa (P) | Peke-Mason | Tirikatene (P) |
| Boyack | Lee | Penk (P) | Tuiono (P) |
| Brooking (P) | Lewis (P) | Potaka (P) | Twyford (P) |
| Brown (P) | Little (P) | Prime (P) | Uffindell (P) |
| Brownlee (P) | Logie (P) | Pugh (P) | Upston (P) |
| Cameron | Lorck | Radhakrishnan (P) | Utikere |
| Chen | Lubeck (P) | Reti (P) | van de Molen (P) |
| Chhour | Luxon (P) | Roberts | van Velden |
| Clark | Luxton | Robertson (P) | Verrall (P) |
| Collins (P) | Mahuta (P) | Rosewarne (P) | Walters (P) |
| Court | McAnulty (P) | Rurawhe (P) | Warren-Clark |
| Craig | McClay (P) | Russell (P) | Watts (P) |
| Davidson (P) | McDowall | Sage | Whaitiri (P) |
| Dean | McKee | Salesa | Williams M (P) |
| Doocey (P) | McKelvie | Sepuloni (P) | Willis (P) |
| Eagle (P) | McLellan (P) | Severin (P) | Wood (P) |
| Edmonds (P) | Menéndez March (P) | Seymour | Woodhouse |
| Genter (P) | Mitchell (P) | Shaw (P) | Woods (P) |
| Ghahraman (P) | Mooney | Simmonds | |
| Goldsmith (P) | Muller (P) | Simpson (P) | |
| Grigg (P) | Nash (P) | Sio (P) |
Noes 9
| Bennett G | Henare (P) | Tinetti (P) | |
| Davis (P) | Kanongata’a (P) | Webb | |
| Halbert | Ngobi (P) | Williams A |
A party vote was called for on the question, That the Fair Trading (Gift Card Expiry) Amendment Bill be now read a first time.
Ayes 109
New Zealand Labour 62; New Zealand National 34; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.
Noes 10
ACT New Zealand 10.
Motion agreed to.
Motion agreed to.
Bill read a first time.
ASSISTANT SPEAKER (Hon Jacqui Dean): The question is, That the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill be considered by the Justice Committee.
Motion agreed to.
Bill referred to the Justice Committee.
Bills
Fair Trading (Gift Card Expiry) Amendment Bill
First Reading
MELISSA LEE (National): I move, That the Fair Trading (Gift Card Expiry) Amendment Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill.
At the outset, I’d like to acknowledge my parliamentary adviser over the last eight years, Matthew Stephens, who worked hard with me on the development and progression of this member’s bill, and the countless New Zealand consumers who are suffering under the weight of expired gift cards, in dire need of relief and trade reform in this part of the New Zealand economy.
Today, I rise to present the Fair Trading (Gift Card Expiry) Amendment Bill, which aims to bring about fairness and consumer protection in the gift card industry. It seeks to extend the minimum expiry date of gift cards for three years, ensuring that all New Zealanders have a fair opportunity to utilise the full value of their gift cards.
The idea for this bill was first sparked with my colleague the Hon Jacqui Dean in 201718, when she served as the Opposition spokesperson for small business and I was chairperson of the then Commerce Committee, which is now the Economic Development, Science and Innovation Committee. The bill was subsequently entrusted to me in 2020 after a brief spell under the custodianship of my former parliamentary colleague Jo Hayes. After the random authority of the biscuit tin ballot, it was drawn from the ballot in November last year, to be debated in this House today.
Gift cards have become a popular choice for many Kiwis, offering convenience and flexibility for both gift-givers and recipients. However, the current situation allows for unreasonably short expiry dates on these cards, causing approximately one in five recipients in our country to lose the full value of their gift before they can redeem it.
According to research, an estimated $10 million a year is lost on expired gift cards, which is simply unjust, in my view. From books to baches, to barbecues and restaurants, Kiwis are missing out on the opportunity their loved ones have provided them due to the paucity of time they have to utilise them.
Some research indicates there is currently about $267 million of gift cards throughout New Zealand that are unused. The frustrations and sometimes tears and anger at the inability to use a gift card when you’ve thought and considered for weeks how to utilise it for special purchases or being completely unable to utilise it due to the time scope involved must end. By extending the minimum expiry date to three years, we ensure that individuals have ample time to utilise their gift cards, reducing the frustrations and disappointment caused by premature expiration.
Furthermore, this bill contributes to the economic wellbeing of New Zealanders by preventing the loss of funds due to expired gift cards, and more money stays in the pockets of consumers, stimulating the economic activity and supporting local businesses. It removes uncertainty across the economy by ensuring businesses, small and large alike, know how long they have to maintain gift cards as a liability in their accounts. It also ensures we get better consumer outcome for all, more holidays, more special moments, and more exciting products purchased that will make New Zealand families happier.
This House today is not alone in considering the regulation of this small and vital part of our consumer economy. Countries like Canada have banned expiry dates outright, while the United States enforces a minimum five-year expiry date requirement. By comparison, many New Zealand retailers still impose a shorter six-month or 12-month expiry date. I have proposed the three-year minimum period as the middle ground at this first reading stage, and I hope, should this House pass the bill to the select committee, that we hear industry and consumers alike as to the best time scale for New Zealand standard gift card expiration time.
As with much proposed legislation, there have been some small concerns raised with me that this proposal could infringe on small-business practices. Some argue that extending the minimum expiry date may burden businesses or lead to unintended consequences. One article in particular raises concern about how this bill might affect retailers and implies potential drawbacks.
Let me address these concerns directly. First and foremost, this bill is not intended to place an undue burden on businesses. Instead, it seeks to strike a balance between consumer protection and fair business practices by providing a three-year minimum expiry date. Retailers still have ample opportunity to encourage timely redemption while ensuring fairness to consumers.
Moreover, this bill aligns New Zealand’s regulations with international standards promoting a competitive and fair marketplace. It is essential that we take into consideration the experiences of other countries that have successfully implemented similar policies. So many of our New Zealand businesses that offer gift cards are part of a wider international network, so it makes greater sense in a globalised economy that we can have better gift card expiration date alignment with our international friends and trading partners.
Finally, I know that some consumers also want to debate how gift cards should be treated when a business ceases trading, and I look forward to advice and submissions on this topic at the select committee. Just last week, I had an email from a consumer who had seen a TV story about gift cards and my member’s bill. I contacted her, and it’s a tragic story of how her son was leaving work because of an illness, and the company had given him a $500 gift voucher for the Nike shop at Britomart. Her son has since died of a brain tumour, and what the family wanted to do was to utilise that gift card for purchases for their grandchildren. But the shop at Britomart had since closed, and when they went to another Nike store, the gift card was not honoured.
So I look forward to the submissions on this very matter, because I did not include that in the actual bill, but I’m sure the select committee could make recommendations, and perhaps a Supplementary Order Paper could be introduced on that.
There are some significant additional questions to add at select committee, in particular whether Prezzy cards and other types of temporary credit and debit cards should fall within the remit of the proposals, and how our policy can align with trans-Tasman operational businesses and, indeed, other online-only and international partners. These are important considerations I hope to discuss comprehensively at select committee stage. I know there are many businesses, consumers, and commercial organisations all eager to constructively engage in these conversations.
Honourable members, we are still in a cost of living crisis. New Zealand is in a recession, and weekly shops, the replacement of utilities, and the need for services are hurting New Zealand households. Gift cards with a minimum three-year expiry date can go a long way to helping those households who save a card, thinking that they can purchase something for a rainy day, but find out that the gift card expired a long time ago.
In conclusion, the Fair Trading (Gift Card Expiry) Amendment Bill is a vital step towards consumer protection and economic prosperity in New Zealand. By extending the minimum expiry date of gift cards to three years, we ensure that Kiwis have a fair chance to utilise the value of their gifts. I call upon all members of this House to support this bill to ensure that New Zealand remains at the forefront of consumer protection and fairness in the market place. I commend the bill to the House.
ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.
Hon Dr DAVID CLARK (Labour—Dunedin): Thank you, Madam Speaker. Look, there is clearly an issue here that needs to be addressed. There have been surveys which show that of the 20 percent of gift card users who’ve been stuck with an expired card, more than half lost more than $20, and 10 percent lost more than $60. We know that a percentage of shoppers never spend, or are able to redeem all of the money on a gift card that they’ve received. There are real advantages to retailers in selling gift cards. They have money banked already, essentially they have a sale in the pocket, and they also have the prospect of further sales as those who are gift card users frequently spend beyond the amount of the gift card when they come into a shop to redeem that card.
So we know that these cards are of big benefit to retailers. We know that the practice in New Zealand is out of line with other partners that we—other countries we look to overseas or align ourselves with. Melissa Lee has talked about, in her contribution, the merit of aligning expiry dates with overseas partners. I think that is an issue the select committee will need to pick up if this makes it through to the select committee. Australia has a three-year limit and we see that many Australian firms don’t apply that limit in New Zealand. So New Zealand consumers are being treated more poorly than Australian consumers by the same companies.
But we also see that in other jurisdictions like the United States and Ireland, that it’s five years typically for an expiry date on a gift card. In many, if not most, Canadian provinces there is no limit, no expiry date on gift cards. So if alignment is what we’re looking for, I think that is something that would need to be looked at more closely.
Melissa Lee’s also raised the issue of shops that have closed, transferability of gift cards; there are a range of issues around gift cards that need a more serious look. I would add to that the classification of what is a gift card. We know, for example, that many retailers offer benefits with the sale, ones that spring to mind readily are the free coffees that supermarkets offer, which comes in the form of a little token that you can redeem usually within a short period of time. Discounts on petrol are another frequent thing that appears with a receipt when you’re making a purchase at some stores, and typically they don’t expire very far into the future at all. So “what are gift cards?” is one of the questions that will need to be thought carefully about if this is going to be a blanket extension of that limit. So I fear that in its current form there are some things to be concerned about in the bill, albeit that it is a bill that is addressing a very real issue.
So on this side of the House, we’re very much mindful of the significant amount of money that remains unspent on gift cards, nearly quarter of a—or in fact more than quarter of a billion dollars according to one survey. The average Kiwi has three gift cards with credit remaining, with a combined total of $72 left over, we’re told. There’s actually a gender gap here, men tend to have more money sitting on their gift cards unused than women—$90 according to a survey; whereas women typically have $54 sitting on their gift cards. Also a generational one: millennials, according to the same survey, have an average of $97 on unused gift cards.
Another question that that I have is what happens eventually if a gift card isn’t redeemed? We know that in the case of banks, for example, unclaimed monies are returned to the Crown. Should it be the case that unclaimed monies on gift cards are returned to the Crown? Very similar principle at play here. Or does that money, and should it, accrue to a retailer who has issued that gift card and who has accounted for it throughout? That seems to me, again, an issue that needs closer scrutiny.
So bearing in mind the challenges with making a really good fit for purpose law here, and the issues that sit already in the system with gift cards that are not redeemed, that are unfortunately meaning that Kiwis are not getting to spend money in a time when money is tight—things are pretty tough. We know that many of the markers we see are moving in the right direction, but there’s no doubt that lots of Kiwis are doing it tough.
This Government’s sought to address some of those challenges directly through things like the action on supermarkets that the Hon Dr Duncan Webb—well, I had the privilege of leading, but the Hon Dr Duncan Webb has now picked up, and appointed a Grocery Commissioner to oversee the sector because we know there was a million dollars a day being made in excess profits after a very thorough inquiry into the sector. We know that there’s going to be an investigation into banking profits and so on. These things, like the $5 prescription—scrapping of the co-payment for prescription medicines, and so on, are measures that this Government is taking to make sure that Kiwis have more of their money in their own pockets. Free public transport for kids aged five to 12, and also things like the child support pass on to address child poverty. There are lots of things we can do to make sure Kiwis get to spend their money wisely, and keep more of their money in a difficult time. Certainly not uncosted tax cuts—don’t hear me arguing that in this House. I’ll leave that to others to try and make that case.
This side of the House will be supporting this bill. We think that the principle is right, that it should be the case that there should be a longer expiry date on these cards so that Kiwis get a fair chance to spend money that has been gifted to them in a gesture often around a birthday or a significant occasion, and that short expiry dates are really removing consumer’s rights. That’s not a situation that we think should stand, so we’re going to support this bill to select committee. We look forward to the challenges that are inherent in it being addressed by the select committee process, and I congratulate the member, Melissa Lee, on bringing this bill to the House.
ASSISTANT SPEAKER (Hon Jacqui Dean): Damien Smith—five-minute call.
DAMIEN SMITH (ACT): Thank you. Congratulations to the member for bringing the bill to the House. The objective of the bill is to extend the period in which a recipient can redeem their gift cards, to avoid consumers missing out on potentially purchasing goods with their gift card because the credit expired before they used it.
The bill seeks to prohibit the selling of gift cards with an expiry date of less than three years after the initial sale date, giving the recipient a more reasonable period in which to redeem its full value. This will apply to vouchers redeemable for goods and services and retailers but will not include prepaid cards for phone credit or internet access or any cards provided as part of a customer loyalty scheme. It also excludes any cards issued by financial institutions such as credit, debit, or prepaid travel currency cards.
The position of the ACT Party is that the Government should have no role in dictating the time periods which private businesses must make their gift cards available for, or viable for. The bill is not a good use of Parliament’s time. The objective of this bill is worthy; however, ACT will not be supporting it at its first reading but will await what is produced by the select committee to cover those areas of concern. Thank you.
INGRID LEARY (Labour—Taieri): I’m delighted to support this bill, which is really about fairness, and the Labour Party is all about fairness. It’s logical, it’s rational, because if you look at what is a gift card, it’s really an elegant way of trying to give somebody some money but acknowledging what their interests are in life, showing that one has an understanding that somebody might have an interest in sport or music or something else—or perhaps it’s about encouraging a spend in that area. Certainly, I can imagine well-meaning grandparents giving gift cards, for example, for bookstores, perhaps trying to get their grandchildren off devices, and so on. So it is an elegant way of giving a gift, and it seems very “Grinchy” and unfair that it’s time-bound. So there’s no reason really not to pass the law that would allow a reasonable amount of time for the gift card to be spent—three years, five years. I agree with the Hon Dr David Clark—we need to look at what that appropriate time frame is.
But we do need to take into account the fact that people do lose or misplace gift cards—especially according to the statistics, men, who have a higher propensity to do so, or perhaps that they don’t get to the shops as often because they’re working and so on.
We have seen from the research that 50 percent of people have three main issues with gift cards. One is checking the balance; I think it would be great if there was an easy way to check the balance. The other two, I’m not sure that legislation or regulation can resolve, which are the limited number of stores—if somebody chooses to direct the gift at a particular store, then that’s really their prerogative. And the third one, if somebody is struggling to find something at that store, then I suggest perhaps they trade in their grandparents or the person who has given the gift card, because clearly they have no idea what the person is interested in!
But a shout-out actually to Bunnings and to Barkers who perhaps have recognised the gender bias that seems to exist in who loses gift cards: they don’t have expiry dates on their gift cards.
I’d like to shout-out also to Consumer magazine because some of the research—the valuable research—in this area came from Consumer magazine, who have shown that one in five people who receive gift cards have found that they’ve expired before they get to use them, through either delay in going shopping or perhaps losing them, but also have provided that valuable insight around some gift cards for Australasian stores not being able to be used in New Zealand, when in fact they could be used in Australia due to the legal regime there.
Andrew Bayly and I and Damien Smith were on a podcast recently called Consume This, and gift cards came up. We were asked about it, and I must confess, I wish I’d known about the member’s bill. I did support the idea of looking at regulating gift cards when asked about it. If you do want to hear that podcast, gift cards and other things around market interventions to do with things raised by previous speaker Dr David Clark around groceries and so on are also traversed in that podcast on Consume This.
Andrew Bayly: Shameless self-promotion.
INGRID LEARY: It was not really self-promotion, Andrew Bayly, because I believe you’re on that podcast too. So a little bit of promotion for Consumer, who, I have to say, do a really good job for consumer rights, whose research is evidence-based, who can then get their research picked up by members of this House who can bring in bills like this really useful bill from Melissa Lee. So good shout-out to them.
But, as I say, when it comes down to it, gift cards are simply an elegant way of giving somebody a gift that is similar to money, perhaps a little bit more limited, in a way that acknowledges that the person who’s giving the gift recognises the interest area of the person receiving it and is trying to express that; there’s no reason that should be time-bound or -limited. Therefore, having a regime that follows international best practice, that has a reasonable expiry date that isn’t forever—because we know businesses change or that it could be cumbersome for business if a gift card were, say, to be presented 15 or 20 years later. So a reasonable amount of time in the legislation would be good.
There’s no reason not to do it. It’s about fairness. The Labour Party is all about fairness. I commend this bill to the House.
RICARDO MENÉNDEZ MARCH (Green): I’m pleased to support the Fair Trading (Gift Card Expiry) Amendment Bill and want to commend the member Melissa Lee for bringing this forward. I think Mt Albert candidates have had pretty good luck with members’ bills being drawn this term.
For the Greens, this is a common-sense bill that would benefit consumers and address what is inherently an unfair arrangement with gift cards that does mean consumers are missing out on being able to cash them in due to the fact that many of them have very short-range expiry dates. So, for the Greens, this makes absolute sense in terms of prohibiting, basically, expiry cards that have an expiry date of less than three years being sold. I want to acknowledge Consumer New Zealand for their advocacy on this issue and for raising this to the public, and politicians then acknowledging that there is an equity issue in terms of low-income communities ultimately losing out the most when their gift cards expire and they’re not able to cash them in.
I also want to acknowledge that for many volunteer organisations, gift cards actually are one of the ways in which they recognise the contributions that volunteers have made, and so this also will help better support people who are part of that sector. So we’re looking forward to having a good discussion with the select committee process, particularly around whether it should be three years, whether it should be longer. But I think the nature of better protection for consumers is something we can absolutely get behind. So I’m pleased to support this bill and to vote for it in later stages. Kia ora.
ANDREW BAYLY (National—Port Waikato): Sorry, Madam Speaker, obviously there’s a bit of hesitation from the Government side there on taking a call, so I thought I might quickly jump up and take this call.
First of all, I just want to congratulate Melissa Lee, who’s had 15 proud years serving this Parliament. I think this is her third member’s bill. Hopefully, with the support of Government, this will pass. But it’s a pretty outstanding result to get to this stage.
Of course, we’ve heard this bill is about expired gift cards. It’s interesting, looking at this, that’s roughly a quarter of a billion dollars’ worth of value left on unused cards at present. On average, consumers have three of them—which I find surprising. And there’s an estimated $10 million of outstanding or wasted gifts that are not redeemed within time. When you hear that sort of estimate, it’s quite staggering. I’ve got to say that I find the comments that men lose cards more often than women slightly disconcerting. I’m not sure where the basis came from for that that the previous member spoke about.
But I think this is an interesting bill. It’s obviously one that has a financial cost to consumers. It’s good that the House is supporting it—other than our friends from the ACT Party. I think Ingrid Leary spoke about the contribution of Consumer New Zealand—that is right; they certainly have done some work around it. I think it should pass through; I hope it does. I’m keen to support it.
NAISI CHEN (Labour): Kia orana, Madam Speaker. Thank you very much. First of all, congratulations to my colleague Melissa Lee for having her bill drawn out of the cookie tin, for this bill. It’s really lovely to see more bills being taken in the consumer affairs space. My one is also one that is, so I’m wishing for luck as well here. But, also, I really hope that my colleague will send this bill to the Economic Development, Science and Innovation Committee. I think this is a bill that we would love to hear submissions on and making sure that we get into the weeds of all this. I think definitely in the select committee stage we’d be looking for things like unintended consequences, things like stories, as well, of how this bill will affect everyday New Zealanders’ lives. But, also, I really do want to hear from the retailers as well, those who do actually issue gift cards, to see what their thoughts are on this bill and maybe some of the minor details that they would have in suggesting either amendments or things that they would see as really improving this bill, also making sure that their voices are incorporated into this as well. Like I said, there’s always unintended consequences, and I just haven’t—out of all of the documents that I’ve seen here, there hasn’t been the other side, of the issuing retailer.
We know that different businesses and different retailers have different business models. As I was sitting there contemplating this bill, I thought of the Costco model. The Costco model makes profit based on people’s membership, actually, not by the profit they make on the products. So, in fact, they issue out membership just to rely on the fact that, actually, people don’t go and shop there; that they buy membership and that’s the end of it. That’s their relationship with their consumers, and that’s where the bulk of their profitability comes from.
We know that in our New Zealand retailers, issuing gift cards is also a really big part of their profitability as well. I read here in a stat as well that there has been $267 million unspent value on gift cards, and so making sure that we unlock that value, especially as we know that New Zealanders are facing hardship at the moment, that’s probably something that we’re really keen to explore in the select committee stage of this bill. As my colleagues have no doubt already expressed, the Labour Party will support this through the first reading, and then we’ll see what happens during the select committee stage.
So, as I talked about those who we invite to come in to do a submission on this bill, the other stuff that I actually really wanted to hear about specifically as well is actually COVID, during the probably, you can argue, four years of COVID, whether there have been especially different, I guess, effects on the whole gift card as well, knowing that, you know, not every gift card works on online shopping scenarios—trust me; I know that—and making sure that the gift cards apply to all different situations as well.
I was just sitting here thinking of other ways to draft this bill as well; perhaps it’s making sure that there’s a mandatory—so I think this bill suggests three years for everything, but I know that there are six months and 12 months as well; that’s probably the most popular, making sure that it only goes to one particular date out of the two as well. So there’s lots and lots of different ways that we can definitely find the balance, but I think however we land, we make sure that our consumer voices are heard through this, and I think the issuing retailers, for me, is just the other side of the story, making sure that we mitigate all unintentional consequences. Definitely, as always when we pass bills like this, we love to hear from the legal community as well, because they definitely have the other side of making sure that when these laws go and get challenged in the courts or in authorities like the Commerce Commission, we always actually get the right balance in this as well.
I know that a lot of times reading the fine print is not something that you can expect all consumers to do, and so making sure that we read the expiry dates on it is not a practical thing, and I don’t think it’s fair to print it so small on a gift card. It’s eyesight problems. It’s accessibility issues as well.
So, I think this is a bill that we’re proud to support through to select committee stage, and, like I said, I hope my colleague decides to send it to our select committee. I think it’s a great select committee to work collegially on this, and I really do look forward to examining this bill further then. Thank you very much, Madam Speaker.
Hon STUART NASH (Labour—Napier): Thank you very much, Madam Speaker. I rise to support this bill. It’s a fantastic bill and well done for bringing it to the House.
Now, I have heard that men actually are a lot worse at redeeming their gift cards than women are—astounding, eh? Well, I will admit that I am one of those guys. I hope my wife isn’t watching this, because I was cleaning out my office recently and amongst a whole lot of stuff was a gift card.
Erica Stanford: For a facial?
Hon STUART NASH: R.M.Williams, actually; quite a lot of money—quite a lot of money. I looked at this and went, “Shivers, this is expired.” I thought, “What do I do?” Do I tell her, when she asks, “What did you spend that amazing amount of money on that I gave you for your birthday?” You know, that’s the thing, right? There’s a little white lie.
But what I thought I would do is give R.M.Williams a call and go, “You know what? It was the middle of COVID. I couldn’t get to you. Things were really busy. Is there any way that you can allow me to spend the money when the contract between R.M.Williams and the person who bought the gift card has expired? Come on; do the right thing.” Now, I actually didn’t end up calling them. The gift card is still sitting on my desk at home. I might even do this, especially now that I’ve read this and realise that we leave over $200 million on the table.
Now, this is a contract, right? This isn’t as if you get the card and then you spend the money; the money has already transacted. The money is already in the bank account of the retailer who has issued that card. I will also say that I found a book card from my in-laws and I also found a garden card that was given to me by someone—I don’t know who that was from—and a Mitre 10 card. I don’t know how much was on that, but it’s still there. So I am that guy. The reason why is that I am really difficult to buy for, so, to everyone who buys for me, give me cash. It’s easier than giving me a card. It means the same thing. But it is—they’re easy, right? And they are very convenient.
It is why we have these gift cards, because for some people they are really, really difficult to buy for. So what you do is you go, “I know this guy loves books. I know he loves the garden.”—well, we haven’t got that; got it a little bit wrong—“He wears R.M.Williams, but I don’t know what sort of book to buy him. Do I buy him the latest biography written by Paul Goldsmith?”—no; that will be a waste of money because it will never get read—“Do I buy him a history book? Do I buy him a book on history? Do I buy him a book on politics?” What do you get him?
In fact, it is recognition that they’ve thought about the gift but they don’t quite know you well enough to go that next step and buy the book, even though you can stick an exchange card in the middle, so you buy a gift card. It is the perfect gift, right? It’s easy. It fits in an envelope. Yeah, sure, they know how much you spent on them, but when it’s family or good friends, that’s OK—that’s OK.
In fact, my 11-year-old son went to a birthday party over the weekend—two birthday parties, actually—and the vast majority of things that these kids got were gift cards. Now, they’re normally spent within about 24 hours—I’ll be honest with you—but it is easy. Melissa, the thing about this is: for guys like me, we don’t go out there and buy things, because we sit on things, right? We don’t procrastinate; we mull over what is the best thing to do. It sits on the table there. It sits on the table there, and it’s constantly front of mind. Then when we’re going down to the bookstore, we go, “I’m going to take that card.” When you’re going to the movies and you’re a little bit short of cash: “I’ll take that movie card.” Then you turn it over and go, “I’ve been procrastinating about this for a little bit too long.” Three years, however; I would still have this.
I think it’s only fair, because there is an implied contract between the retailer or whoever issues the card, and the purchaser. I think with any implied contract there should be a definitive period of time—I buy into that—whether it’s three years, whether it’s five years or whatever; it doesn’t really matter, but the money has already exchanged hands. As a consequence of that, I think three years is enough time for this to go into the wallet or go into the console in the middle and then to be discovered again and then to be redeemed. Anything longer than three years, I get it; maybe you have lost it. I get that. I get it. Five years is perhaps a little bit too long; one year is not long enough. You’ve picked the perfect sweet point.
The fact that Consumer New Zealand calls for this, the fact that Kiwis are leaving—what is it?—$250 million - plus on the table means that there are a whole lot of people like me who find these gift cards and go, “Oh yeah, that’s right.”, then turn it over and go, “What do you mean I only had a year to spend this?” It doesn’t work. So, Melissa, I support this 100 percent. If you can make it retrospective, that would be really helpful.
Melissa Lee: You can make a submission.
Hon STUART NASH: Well, I might, as a member of the public, if it goes to select committee. But I am a big fan of this because, as a number of Labour people have talked about, it’s just about fairness, and the Labour party is the party of fairness. It’s why we support this 100 percent. Thank you.
RACHEL BOYACK (Labour—Nelson): Thank you, Madam Speaker. It’s a pleasure to take a call on the Fair Trading (Gift Card Expiry) Amendment Bill. Can I begin by congratulating Melissa Lee on having her bill pulled from the biscuit tin, and I look forward to seeing this bill go through the House and submissions on any particular changes that may be needed for this bill.
It’s been interesting, just during my colleague Stuart Nash’s contribution, myself and my colleague Glen Bennett have had a bit of a chat, actually, about a couple of scenarios which I’ll get to soon, which I think could also be considered for the bill.
I have a recent example in Nelson of someone purchasing a voucher at a very, very, very high amount and having a very short time frame on it and losing out. So, as you may know, many charities around the country will often have auction nights. We had one last year for the Cancer Society and very generously a travel voucher—quite a significant travel voucher—had been provided for the auction and someone bid on it and spent quite a few thousands of dollars. A bit of chatter went around the room when we were at the same auction this year when someone started bidding on the same auction prize this year, and it turned out it’s the same person because they bid on it last year and the voucher expired. So they literally spent thousands on some travel vouchers and they expired. And they were so generous that they came back for round two. But it does speak to the need for this bill, that there needs to be an element of fairness in how long those vouchers can expire.
There should be a limit at some point, although I would note if you’ve bought a voucher for $100 now, in 10, 20 years’ time it probably won’t mean so much to the retailer. I imagine if someone picks up a voucher in their office, like Mr Nash did, that might be 20 years old, it might only be a $10 voucher, so it’s not going to be as big a deal, is it? But this bill is really sensible, and Mr Bennett and I were just having a quiet conversation here—we weren’t, of course, speaking over my colleague while he was giving his speech—about what would happen, and I think this is something that would be interesting for the committee to look at, what would happen if the business changed hands. And, actually, that exact situation happened to me. A friend of mine very kindly purchased me a voucher for my birthday and it was for a beauty salon. They changed hands within about a month of purchasing the voucher, so really soon. So the voucher had a one-year expiry on it, but the business changed hands pretty much immediately after it was purchased. I’m interested about that because they were really, really good, the new business honoured the voucher, which was great, and they’ve now actually got a loyal customer out of me and I’ve been going back.
So that probably is something I think that needs to be looked at—in fairness to the new business as well, because they would need to know that there were a number of outstanding vouchers available. But you would expect, for a business like that, it should be something that gets built into their business model, an expectation. Something like a beauty salon, that is an area where people will often purchase vouchers, that if there is a change of ownership that there perhaps could be some acknowledgment of that in the bill. So I encourage the member and the committee to look at that particular scenario, because it is one that crops up.
So this is a really good bill. We do see a real anomaly in the law here, a lot of people will, in good faith, go and purchase a voucher. In my family, it’s quite common. I’m one of eight children, so it was the common Christmas Eve rush around the mall looking for gifts for each other, and often the easy gift was to get a voucher—and then sometimes we’d swap with each other if someone got a voucher they preferred to somebody else. Very common gift item in my family.
It is frustrating, though, when you’ve bought something for someone—actually, with kindness behind it and wanting to purchase something nice for somebody—and then to see it’s only got a three-month or a six-month expiry. I think we’ve probably all had that experience ourselves, where—I certainly have had the odd-voucher where I have gone to look at it and gone, “Oh three months.”, and you wouldn’t even have thought that. So I think three years seems like a good kind of fair time frame for me. I’m sure there will be submissions through the committee on that exact issue and I think it will be a really, really good bill to progress to protect our consumers and to introduce more fairness into the system. On that note, I commend it to the House.
ANNA LORCK (Labour—Tukituki): Thank you, Madam Speaker. I have to confess that I’m not one who buys gift cards, nor am I one that’s good at spending gift cards. I had to take the conversation before from Stuart Nash around teenagers, and it has become such a very popular way of teenagers—for birthdays and for Christmases—coming together to be able to afford a good present for a friend.
So I refer to my daughter, Olivia, who actually just last week said, “Mum, we’re all going in to give one of my friends for their birthday a gift from Cotton On, we’re all putting in what we can afford—it’s a gift card”. And I said “So you don’t want to go down to Cotton On and buy your friend a present?” She said no, because then they can spend it on whatever they want. I was thinking about that and thinking, well, you know, if they’re given it at 14 and they don’t spend it until they’re 17, they might have grown up a few sizes, but it’s still well worth them being able to spend it on what they wish to spend it on.
I did have a question that I hope will be clarified around those who buy gift cards but they are aligned to an actual service, such as going to a beauty salon or a spa where somebody might actually gift a massage, not actually a monetary value, but an actual massage. So what would happen there if it was actually connected to a particular service? I also think it’ll be good to hear from the retailers and those businesses that are offering gift cards, because if you have sold that service but that service is not then used or that money has not spent for three years, when it comes to actually providing that things may have changed in the business, and you may well have sold the business. So I think that those are facts that will need to be worked through in the select committee process.
One of the gift cards that I do think is one that I have—I was thinking “Have I actually purchased any gift cards?”—and the other one would be for at the supermarket. I often think that that is a very good gift to give somebody who may use it over a period of time. So that again, I think, is a good way to gift on a gift card. However, I do wonder why people don’t give them to me. Maybe it’s that they like buying me actual gifts rather than—and think about it when they do. As somebody who likes to go shopping, I do enjoy also purchasing gifts for people and seeing them wrapped up in a present. So I might, now that I see this bill coming through the House, give a little bit more thought to using a gift card, but I’d probably have to wrap it up in a big box with a big ribbon, and make it feel like I’m actually giving a gift.
I was not surprised that there was nearly $254 million worth of gift cards that are not used, a year, which I thought “Wow that’s significant, isn’t it?” If that’s sitting on somebody’s businesses’ books, and they still have to get those purchases or services out the door. I do wonder about the deadline. I think that sometimes we need deadlines to get things done, and to spend, and get the service under way. So on that, I wonder whether three years will be what comes back from retailers, or, yes we’ve seen that that’s what Australia does.
But I commend the member for—congratulate the member for having it pulled from the biscuit tin, and, like the rest of my colleagues over here, we are supporting the bill, and it’s good to be speaking positively on something. Thank you.
MELISSA LEE (National): Thank you very much. I think there is a saying along the lines of “three times the charm”. This is my third member’s bill that has actually been drawn, and I’m so pleased that this will finally get to select committee and have the public submit on it.
I’d like to thank all of the members who have actually spoken for their considerate speeches and giving out anecdotes and examples of their personal experience, which is actually really wonderful. In terms of the Hon Stuart Nash, who actually talked about how he mulled over too long to find at least three gift cards in his office desk. I just say maybe he shouldn’t have mulled over it too long, but most of us tend to do that. When we get a gift card, we actually put it away, because it is valuable and is something that someone has considered to give us, a meaningful thing. They couldn’t quite figure out what exactly to get for us, so we actually get the gift, and we think about it, and you forget about it. It’s in the wallet, or it’s in the back drawer, or it’s in the desk drawer, and sometimes you forget.
In an example that I gave earlier, there was a family member who had actually received a gift card from a store, and the family member had since died, and the store closed. That actually means that the gift card has since expired, and it has been many years since that gift card has expired.
To the question of Anna Lorck, who wanted to know if vouchers for services were what we are actually talking about: in the actual bill at clause 24A(4) and (5), it says, “gift card means a card or voucher (in hard copy or electronic form) that is redeemable for goods or services, but does not include—(a) a card supplied in substitution for goods returned to the supplier of the goods; or (b) a prepaid card or voucher redeemable for phone credit, internet access, or other similar services; or (c) a debit card, credit card, prepaid travel card, or any similar products supplied by a financial institution; or (d) a card or voucher supplied as part of a customer loyalty programme. (5) This section only applies to a gift card sold after the commencement of this section.”—of the Fair Trading (Gift Card Expiry) Amendment Bill.
Consumer organisations have actually been very, very active in wanting to protect our consumer rights, and having more than $267 million worth of gift cards not being used is completely unfair, when the businesses have in fact received the money, and the purchaser or the giftee of the gift cards cannot actually use it because of the expiry date.
I look forward to the select committee process, where I will have an opportunity to listen to all of the submissions. Thank you to everyone for sending this to a select committee. I commend the bill to the House.
Bill read a first time.
ASSISTANT SPEAKER (Hon Jenny Salesa): The question is, That the Fair Trading (Gift Card Expiry) Amendment Bill be considered by the Economic Development, Science and Innovation Committee.
Motion agreed to.
Bill referred to the Economic Development, Science and Innovation Committee.
ASSISTANT SPEAKER (Hon Jenny Salesa): Congratulations to the member.
Bills
Parental Leave and Employment Protection (Shared Leave) Amendment Bill
First Reading
NICOLA WILLIS (National): Oh, happy day. This is one of those days in Parliament where we have the opportunity—
ASSISTANT SPEAKER (Hon Jenny Salesa): Order! My apologies; if you could move your bill please.
NICOLA WILLIS: Yes, I move that this House introduce the Parental Leave and Employment Protection (Shared Leave) Amendment Bill.
ASSISTANT SPEAKER (Hon Jenny Salesa): If the member could just read it. Thank you.
NICOLA WILLIS: I’m going to be very precise about this. Thank you, Madam Speaker. I move, That the Parental Leave and Employment Protection (Shared Leave) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill.
Oh, happy day. Now that we have introduced this member’s bill in my name, I want to make some pre-emptory celebration, because I think that this is an opportunity for Parliament to work in the way that so many New Zealanders ask us to make it work but that is often not the case. And that is, we can use this time to make a pragmatic, modernising change to a piece of legislation that has become out of step with modern families but to which we together as parliamentarians, free from ideology or political partisanship, can make a good change that will make a difference to parents and caregivers across the country. I hope that all political parties will support this bill.
What this bill does is it modernises paid parental leave rules by giving parents more flexibility to share their leave entitlements. In New Zealand, we have paid parental leave for caregivers. While parents and caregivers can nominate who receives that entitlement, there are currently rigidities around how they use it. What I want to see is those rules being loosened so that parents have more flexibility about the choices they make in their caregiving arrangements during those first few weeks of parental leave with a new baby. This bill modernises the outdated existing rules by allowing parents to divide their paid leave between themselves in the way they think best, so it allows them to take it at the same time, to take it one after the other, or to take it in overlapping instalments. It frees up parents to make exactly the choices that best suit their personal circumstances.
Whether you’re a dad wanting to support mum in the first few weeks after birth and take your paid leave at the same time as her, right now our archaic law will not allow that. This bill will make it possible. Whether you wish to share your paid parental leave between two primary caregivers in overlapping instalments, right now the law will not allow you to do that. This bill will let you do that. It recognises that the choice belongs to families and shouldn’t belong to a rule book bound up in a Government department. As we stand here today, outdated Government rules are getting in the way of families doing what they think is in the best interests of their own babies.
I think about how much things have improved in terms of the way we view those early weeks with a baby, in terms of the ways we view the need for support, and in the way that we recognise that people would arrange the care arrangements not according, necessarily, to gender or traditional roles but according to the circumstances of their own families. This bill seems an absolutely sensible and pragmatic evolution along that path. It’s a good thing when you can make a practical change that makes a difference without creating any extra cost for the taxpayer, and that is the case with this bill. What it doesn’t do is increase the overall leave entitlement that is available to parents; it simply says, “Here’s your bucket of entitlement; divide it between yourselves as you wish. If you want to do six weeks together, go ahead. If you want to do it in overlapping bits, go ahead.” All of those choices can be made without any impact on Government funding and without any impact on the choices available to Government.
The only people those choices impact are the parents and the child in that home. Anyone opposing this kind of modernisation, I think, would be inserting themselves into families and saying that Government knows better than they do about how they should use the entitlements they are given. I believe it would be unconscionable for anyone in this House in 2023 to take that stance.
I’m feeling a little bit nervous, I’m noticing interjections from across the House, I’m seeing furrowed brows on the faces of Labour backbenchers, and I think we may have a situation, team. I think we may genuinely be in a situation where members opposite—out of partisan, petty politics—may oppose this bill.
Hon Member: Oh, say it’s not so!
NICOLA WILLIS: I sincerely hope it’s not so. If it’s not the case, I apologise for impugning you in that way, because surely—surely—that would not be possible. Surely a modern Labour Party that says that it wants to represent the best interests of families and children would not neglect the opportunity to modernise this outdated piece of law. To do so would be unconscionable. It would be out of step with modern families. It would be out of step with modern parents.
As I look around this House, I think of all of my colleagues, on this side of the aisle and on that side of the aisle, who themselves have had babies and who have had them in such different circumstances. We’ve had babies to all sorts of caregiving arrangements with dads and mums, married couples, unmarried couples, mums as primary caregivers, dads as primary caregivers, and adopted dads as primary caregivers. In my world, all of that is great, because what matters is the love a parent or a caregiver shows for their child. In my world, what doesn’t matter is outdated rules telling you how you should do it best. The idea—the idea—that Government rules would stand there and say, “Well, actually, the way that we think it should happen is one parent at a time. We disagree with the idea that two parents should take it at the same time.” Well, you know what? It’s none of Government’s business. I believe that parents and caregivers are best placed to make the choices for their babies and their kids about how they raise them. What matters is the love that they give them and the care and stability that they give them. This bill is a logical progression in support of that philosophy.
So, as I stand here, I make this plea: sometimes, my fellow Labour colleagues, a member’s bill comes to your caucus and you might have someone stand up—a Minister—and say, “Oh, look, we’ll oppose this because it’s a National bill; we’ll oppose this because we don’t want Nicola Willis to get a win.” Well, I would plead to you, when it comes to something this simple that comes at no cost to anyone, don’t stand on the priggish side of partisan politics; do what’s right.
Hon Dr Deborah Russell: Ha, ha!
NICOLA WILLIS: Don’t laugh when, actually, there are mums and dads and parents who this affects who have written to me and said, “Why is the law this way? Why is it stopping my family doing it?” Don’t laugh at this change, which is exactly what Parliament is meant to do. It’s meant to take the statute book and say, “What’s in keeping with our modern communities? What’s out of step? How do we keep the law reflecting the values and ideals which we as a society wish to progress?” Don’t be MPs who stand in the way of that because someone in your caucus meeting said that politics is more important at this time in the political cycle.
I welcome this opportunity to bring a bill to the House that will bring New Zealand’s paid parental leave rules in line with the expectations of modern families. I want to pay tribute to Amy Adams, who first brought this bill to Parliament. I want to pay tribute to all of those men and women who through the years have made pragmatic changes to ensure that parents in those first such important days of children’s lives are able to make the arrangements that provide them the stability and the choice that allows them to be good mums, dads, and caregivers. And I want to, once again, put it to you that parties who oppose bills in this House that come at no cost to anyone—except for the political pride of those who oppose them—are parties who are out of step with what really matters.
I think back to the time with my young babies. I admit I look on it nostalgically now, because probably at the time I was completely exhausted and stressed and all of those things—I understand that—but I look back on that time, and it is one of the most special and momentous times in anyone’s life to be doing that job of bringing a child into the world, of giving them your love, and of raising them as well as you can. And if we in this House can step one step closer to making that profound experience a little more practical, then that’s exactly what we should do. So I appeal to your better selves, members opposite. Do what’s right; don’t do what’s political.
ASSISTANT SPEAKER (Hon Jenny Salesa): The question is that the motion be agreed to.
CAMILLA BELICH (Labour): Thank you, Madam Speaker, and thank you for allowing me the opportunity to take a call on this member’s bill, the Parental Leave and Employment Protection (Shared Leave) Amendment Bill, brought in the name of Nicola Willis, and I thank the member for bringing this important issue to the House.
Parental leave and the paid aspect of parental leave have been important aspects of consideration for this House over a number of years. In preparation for this speech, I did actually go back and look at a lot of the history of paid parental leave and how it has been implemented within New Zealand. A common theme is that we actually started out in New Zealand with very, very few rights for paid parental leave and for parents to actually take time off to take care of children. That’s because we had, for a very long time, a different system where most likely the mother, in most families, would take a large amount of unpaid leave—maybe not entering the paid workforce at all—in order to take care of children. The advent of paid parental leave is relatively modern in New Zealand and a world context. We need to recognise the fact that, these days, a lot of carers—a lot of primary carers—also have a paid job and shouldn’t have to sacrifice their career to be able to do that.
There is a proud history in this House of the consistent increase of paid parental leave and entitlements. So when this bill came to our caucus—and I take the member’s points in terms of her assumptions of the conversations that we had, but I can assure her that this is a bill that we looked at really carefully, and it does raise important issues which I think this House should take into account. It’s something that needs attention in terms of not only the child in question but also the way that families do share and take care of their leave. I do think it is an important issue, so I don’t want to belittle the issue by saying that it isn’t important.
I’m not delaying saying how we’ll vote on this for any anticipation means; we won’t be supporting this bill. The reason that we won’t be supporting this bill is because we see it taking away and having an impact on children and primary carers.
Nicola Willis: Oh, so you know best! Labour knows best!
CAMILLA BELICH: If members opposite would allow me to elucidate some of the thoughts on that, I would like to, because I do think it’s an important issue, and I’m not trying to minimise the importance of it.
The history of paid parental leave, that I was able to ascertain, started in 2001 with the Labour-Alliance Government. That was the introduction of 12 weeks’ paid parental leave. Then we had an introduction of 14 weeks in 2005.
Hon Scott Simpson: Shame on Labour!
CAMILLA BELICH: These are hard-won wins by campaigns run by women, mainly, and also by trade unions and by parents to actually get these entitlements. If we talk about shame and talk about people knowing best and not wanting to support parents, then we only have to look to 2015, when the majority of members of this House voted to increase paid parental leave to six months—26 weeks. And what happened then? We had a National Government in power, we had Bill English lose his financial veto—
Nicola Willis: Point of order, Madam Speaker. Standing Orders require that members speak to the bill, which is a very specific bill about allowing caregivers and parents to share their paid parental leave entitlements as they see fit. It is not about a previous bill many years ago, and I would invite the member to speak to the bill.
Simon Court: Madam Speaker, speaking to the point of order. I’m a new MP here, but I understood that points of order are to be heard in silence, is that correct?
ASSISTANT SPEAKER (Hon Jenny Salesa): That is absolutely correct, and can I just appeal to all members in the House: this is a robust debate; members who have spoken previously—there was no shouting down of the members. I would actually like, as the Speaker sitting on this Chair, to be able to hear the speech of the member Camilla Belich, so can we please be respectful of each other.
CAMILLA BELICH: Thank you, Madam Speaker. So we did have that particular moment in the history of paid parental leave, which I do believe is relevant to this particular bill as it seeks to, in our view, reduce the entitlement of the paid leave in terms of time, which is important for children. In terms of time, if this bill was introduced, some children would receive less paid time available to their parents than they currently receive. So I do believe that the history of it, and the hard-won fights that people on this side of the House, myself included, were involved with to try and get this entitlement put there in the first place are relevant.
The 26 For Babies campaign, which was the campaign that eventually—if I continue with my history—in 2017 increased paid parental leave to six months was a very, very hard-fought campaign. It actually required changing the Government to get this put in place. I don’t necessarily want to make a contribution about the various parties and what they’ve done wrong in the past; what I want to look at is what’s best for children and for families.
Erica Stanford: What if a mum’s just had a caesarean and needs dad there?
CAMILLA BELICH: I do think the issue that the member has brought up is an important one, and people on the other side of the House are yelling at me, but what I want to say to you is that I think what the member has raised is important. We did consider it very, very seriously, and the reason that we are not supporting it is we do not want to see a situation of reduction. We think if more support is needed for babies and for other parents who are not the primary carer, then that should be looked at separately and not in a way that reduces entitlements. That is an important issue that should be looked at, but this bill, in our view, is not the way to advance that. I just wanted to go through all of that history, because it is really important, and I did, you know, start my speech by commending the member for bringing this bill and raising this important issue.
The member brought up two things: she said that this does not impact on anyone else, just the family; she said it is at no cost. I disagree. This bill, if passed, would have an impact on children and on families in terms of the time that they have. We can look at the science behind that and the evidence on how important it is for children to be able to spend time with their families. So it does have an impact. It is not true to say that it has no impact. We know those first hundred days and that time that the children spend with their families are so important in their development and how they grow up as adults, so it does have an impact—
Nicola Willis: So mums should stay at home, hey?
CAMILLA BELICH: No, absolutely not. It just does have an impact. It has an impact, and it does have a cost, because it reduces the time.
So what I would like to conclude with is just to say that I do think that the support—
Nicola Willis: You’re standing here saying mums should stay at home—unbelievable!
CAMILLA BELICH: I’m absolutely not saying that; I’m saying that the availability of time for primary carers should not be reduced, and this bill would do that. It would reduce the time available for primary carers if they chose to do that. What is available for New Zealanders at the moment is that if they want to take unpaid leave, if they want to take time out, and if they want to take annual leave, there are absolutely no restrictions on them doing that at the moment. What we’re talking about is actual Government-provided paid parental leave and how that should be implemented.
I’ve said that getting to where we are now with six months’—26-weeks’—paid parental leave was a huge fight for this country, a huge achievement. We do not want to see the amount of time that families have reduced, and we consider that this bill would do that. That’s why, sadly, we cannot support this bill.
CHRIS BAILLIE (ACT): Thank you, Madam Speaker. It’s a pleasure to rise to speak to the Parental Leave and Employment Protection (Shared Leave) Amendment Bill. It’s a pleasure because, to me, it is just a no-brainer that we support this. When I looked at it, I thought, “What am I actually to say about it?” I couldn’t think of much, because it was so sensible and so fair. During the debate on the last bill, the gift card bill, I heard a Labour member say that Labour is a party of fairness, and I think we’re absolutely proving now that Labour is a party of petty politics. To bring up past, vindictive-type behaviour is, I think, quite unfortunate.
The policy statement says the bill amends the Parental Leave and Employment Protection Act 1987 to ensure that paid parental leave can be split between spouses or partners who are caring for the child and can be taken at the same time. The paid parental leave, as has been indicated, is not going to cost anything. It is a choice that the couple make. The couple are not forced into anything; it’s their choice. The flexibility that that will allow will just make many families quite happy that they can choose to bring up their kids the way they want to and not the way the Labour Party thinks they should.
Having both parents bringing up those young kids is really important in brain development, social development, and forming habits, and the health outcomes are known to be better. It’s just a no-brainer in terms of the first few years of a baby’s life. It’s certainly not up to the Government, a political party, to decide how parents are going to bring up their kids as far as the leave goes—I think that’s quite despicable.
There will be a time in the future to discuss the Family Court and some of the decisions they make based on whether the parties are male or female, and we could discuss the fairness of a lot of those decisions. But that is for another time, not for this bill.
It’s an absolute pleasure to support this bill, and I’m really disappointed in the attitude that Labour has taken.
Dr EMILY HENDERSON (Labour—Whangārei): I rise to speak to this bill as a mum of four children and as someone who chose, with my husband, that I would do the main parenting role while they were little. So I know very well the strains of being a young mum at home with young babies. Rightly or wrongly, we had three of ours within 3½ years, and, boy, that was tough.
So I do want to acknowledge Ms Willis for bringing this issue before us. It is a really heartfelt and important one; we need to talk about it. I am going to talk to my experience for a few minutes, if I may, in the context of this bill. So when I was a young mum, I had my small amount of parental leave under the previous regime, because my last baby was born in 2007, but my husband took his parental two weeks, because what we recognised was just how hard it is for young mamas to be alone with newborns—particularly to be alone, may I say, with a two-year-and-one-week-old, a 3½-year-old, as well as a six-week-old; can I just put that out there. Yeah, it is really tough to do that. Tom took his two weeks. I was lucky: my mum took in a week as well, and they balanced those. I was so darn lucky to have that opportunity. You can look at this and say, “Isn’t this great for parents? It gives them the opportunity to do that shared parenting time and to cut that 26 weeks.”—as my colleague Ms Belich put it, those hard-won 26 weeks that we had to fight for in 2017. You can say that it increases fairness for those parents to be able to take those 26 weeks, but I think it’s short-sighted. What it isn’t looking at is that the reason we want that parental leave is not actually for the adults in the equation; it is for the babies. I have absolutely no compunction in saying it is our duty to take care of those who cannot care for themselves—I say that as a parent, but I also say that as an MP—and infants are the prime example of that. They need at least that 26 weeks of one-on-one intensive care, and I am concerned that while it sounds really nice to say, “Let’s enable the parents to cut this pie any way they want.”, what you’re really doing is creating an either/or, not an and/and.
I do invite Ms Willis to live up to the much-vaunting beginning of her speech where she talked about the need for cross-party collaboration on the issues that matter and to really engage with the Government—whatever Government is in next time; I hope it’s us—who will continue to do the policy work that really isn’t in this bill at this point. We do not need an either/or that, effectively, cuts the 26 weeks that our vulnerable infants get at this point, and that creates a half-situation where we are back to possibly worse than the 18 weeks the National Government fought so damn hard to keep us at. We need to not do an either/or. It is a false fairness. It is a false economy. It does not create equity. We need to be looking wider and more ambitiously. We need to be looking for an and/and. As someone who had a partner who took six months and swapped, I know how rich and valuable it is to be able to co-parent with another parent who has actually been there in the trenches with you on a full-time basis. It’s vital. But Ms Willis—
Hon Louise Upston: Yeah, together, at the same time.
Dr EMILY HENDERSON: No, I would just say to the member opposite, let’s have more ambition for our children and our families. Let’s go beyond either/or, cut the pie, keep the pie smaller. Let’s actually take this half-baked idea and turn it into something really magnificent and an and/and.
JAN LOGIE (Green): Thank you, Madam Speaker. With pleasure, I rise to speak to the Parental Leave and Employment Protection (Shared Leave) Amendment Bill in the name of Nicola Willis. I congratulate the member for getting the bill drawn, and I acknowledge Amy Adams, who I remember having this discussion with previously, when she last put it in front of Parliament.
I’ve got, personally, a very long history with paid parental leave. I was part of the campaign team who got it introduced. We were one of last developed countries in the world to provide that support for our families. I am a huge believer in it. It’s a policy that has multiple positive outcomes for our communities. One of them is that it’s a very, very significant contributor in terms of reducing the gender pay gap, because women’s time out of employment is—often with caring responsibilities—one of the main drivers of that gap. It’s also a driver around women’s attachment to employment, which has positive social outcomes, and it plays a really essential role in terms of supporting positive attachment in the early years and the wellbeing of our tamariki and children. The reason the six months—the 26 weeks—campaign was specifically in that link was to ensure breastfeeding was able to be supported at home during those early years, specifically in that time frame.
The Greens, unlike Labour—I understand the arguments that they’re making, and I think they are genuinely valid arguments—are supporting this bill today because we believe that the conversation is really an important one to have as a country. Women in this country have said that paid parental leave and the sharing of it and the ability for both partners to take parental leave is one of their priorities. There was a survey in 2022 of 3,500 women that said that making the leave entitlement available to both parents was their top-rated solution to support women to balance their caring responsibilities with other things in their life. That was ahead of even more Government funding for childcare. So if we’re listening to women, then we do have to engage in this conversation. The National Advisory Council on the Employment of Women, way back in the day, in 2008, recommended paid paternity leave, leave specifically reserved for fathers of infants—not this proposal, which is about sharing; it’s about ring-fencing a specific allocation for the other parent, which is what we know, internationally, will have the impact of encouraging that other partner to take the leave. There’s a very low uptake of parental leave for the other parent in this country. International evidence shows us that just enabling people on paper to share the leave, as this bill will do, does not make a difference in terms of the increase in that other partner taking the leave.
What makes the difference is a ring-fence provision of “use it or lose it” and—possibly not surprisingly to many in this House—increasing the payments that recognise that, actually, one of the major disincentives at the moment particularly for male partners from taking the leave is the massive drop in family income that comes about if they take the leave, because men are still far more likely to be paid much higher than their partners.
At the moment, there’s been, under this Government, a 7.7 percent, I think, increase in paid parental leave. I want to acknowledge that, but that is still significantly below minimum wage. When families are struggling to pay the rent and pay the bills, we have to increase it. The Green Party policy is to have 100-percent payment of the average male wage, if we’re going to be supporting our families, for 15 months—this is the Green Party policy based on the best evidence of what will support our families—and to increase it, to enable people to have it, and to ring-fence it, “use it or lose it”, for partners, because, actually, we need to make that commitment to our children and to our families and to reducing discrimination. We’re happy to have the conversation and hear from New Zealand to get that result, which would be better than this.
JAMIE STRANGE (Labour—Hamilton East): Thank you, Mr Speaker. I appreciate the opportunity to take a call on the Parental Leave and Employment Protection (Shared Leave) Amendment Bill. Also, like others, I’d like to acknowledge the member Nicola Willis for bringing this bill to the House and for raising this important issue that we are debating today.
I feel like it would be useful, like other members have shared in this House, to share a little bit of personal experience. I find that it is important that, as MPs, we do that from time to time so that people know we are real people. In 2008, my wife and I had our first child. At the time, my wife was working as a school teacher. I was studying, and working part-time while I was studying. My wife received 12 weeks’ paid parental leave. That was the amount at the time; it was 12 weeks. So she received that 12 weeks and, basically, gave up her teaching role, and I continued to study and work. Needless to say, our income was fairly modest at that time. We made the decision for my wife to do her very best to stay at home to look after the kids. We ended up having three more. We had four under five, which was a bit of a blur, really. I wouldn’t recommend that, to be honest. It was a challenging time, but that 12 weeks of paid parental leave was absolutely vital for the early years of the life of our first son.
There was an MP in the House at the time—Sue Moroney; Labour MP—and she was campaigning to see that increased from 12 weeks. She was successful in that, in terms of getting support—I believe it was from the Hon Peter Dunne at the time—to increase paid parental leave to 26 weeks, which is what we currently have. I agree with the previous Green member Jan Logie in terms of the benefits of having one of the parents at home with the child. It’s incredibly challenging at the moment for a lot of people to be able to do that, and a lot of that I’d put down to rising house prices. Also we acknowledge the challenges around the cost of living at the moment, but certainly the cost of rent and the cost of mortgages has gone up a lot, which means that it is very difficult to have a parent staying at home if the couple does want to go down that route. Personally, I think it is still the preferred route, in my personal opinion, to have a family member at home. We used to see a lot of that back in the 1940s, 50s, 60s, and 70s, but particularly in the 80s, we started to see a few changes in the area.
This piece of legislation—I guess, building on that—talks about having some flexibility in that so that it doesn’t have to be just, as it was in my case, the mother at home. At that time, I could have also got some paid parental leave, and we could have shared it, so I understand where the member’s coming from. She certainly makes her arguments very clear in terms of the benefits of that flexibility.
Personally, after the election, I’d like to see the Government of the day look into this issue, because I think it’s an issue that is worthy of working with officials on and actively looking into, in terms of what the member’s brought to the House today. So I do hope that, in the next term of Parliament, this is actively looked at. I would like to go on record by saying that I would like to see the Government of the day do that. Mr Speaker, thank you for the time today.
ANNA LORCK (Labour—Tukituki): Thank you, Mr Speaker. I am a mother of five daughters, and my oldest daughter, Tabitha, turned 27 yesterday. When I was thinking and hearing about what people were talking about, it took me back to what it was like when Tabitha was born 27 years ago. We didn’t have paid parental leave 27 years ago, and I went back to work when she was six weeks old. We were a young couple who had a mortgage to pay, my husband was a freezing works worker, and we couldn’t afford to have me at home looking after my first baby. I can remember the challenges I had, even then, trying to establish breastfeeding, and 27 years ago, it was pretty much OK: I popped her on the bottle, went to work, and Mum came in and helped look after Tabitha.
I then had Brittney and Augusta, and they, too, weren’t at a time when there was paid parental leave. By the time I got to have Livia, who is now 14, there was paid parental leave. Having that time with my youngest baby made me realise then how significantly important it is for a mum to be able to spend time with their baby and to be able to breastfeed for six months. The greatest gift we can give a child is time—it’s time. This bill, the Parental Leave and Employment Protection (Shared Leave) Amendment Bill, will actually take a length of time away from the one-on-one attachment between a parent or a caregiver and the baby in those first six months.
Nobody knows how significant it is for a child to have that time, which all the research shows, and so I have spent some time thinking about this bill and looking at what it would really achieve. What it would achieve is—yes, it might enable two parents to be together and to be with their young baby, but that will take time away from the length of time for which at least one parent doesn’t need to return to work during those first six months.
We wouldn’t even be talking about this bill if it hadn’t been for the Labour Party and being able to introduce paid parental leave—something that, I’ve already said, was never available to me as a young mum; it wasn’t available to my mum, and it certainly wasn’t available to my grandmother. To think now, as we go forward, that all five of my daughters will have that time with their children while they are first-time, second-time, third-time, or maybe five-time mums—I can’t wait to have grandchildren, by the way.
I just think that we need to look at how we can enable something that is better than what’s on offer in this bill. If we can come up with a way that does enable us to give the most time we can give for newborns to be with their parents, then I think we should. The main reason why I can’t support this bill is that the greatest gift we can ever give a child is time. Thank you, Mr Speaker.
CHRIS PENK (National—Kaipara ki Mahurangi): Thank you, Mr Speaker. I want to talk about the great gift of time for a newborn to be with both parents, if there are two parents available. That is at the heart of this bill—and I emphasise “the heart of this bill”—that has been put forward by my colleague and friend Nicola Willis. I find it bizarre and ridiculous that we are hearing arguments from the other side of the House that they will not support this bill, which gives flexibility for different family arrangements and different circumstances in the way that we could have shared leave—as that phrase was used in the bill—to enable families to do what is right and what is best for themselves.
So we have, just to be clear, a situation where Nicola Willis has proposed a scenario whereby a family can choose that the amount of leave that they are already accorded, by way of parental leave, be sliced and diced in different ways, if that were to suit the family, in different circumstances. So it might be, for example, that both parents—if, again, there are two parents, and I accept that’s not always the case—could take that leave both concurrently or in order, one after the other. Or it could be that they choose, of course, for the primary parent—usually the mother, but not necessarily, again—to have all that time in one hit, straight through—just that person alone.
There are different circumstances that might suit different families according to their particular needs. Then, we come, therefore, to the question of choice. We’re not saying, for example, that a family should not have the ability to have that maximum length of time in the very one-dimensional way that the Labour Party seems to consider the matter. Actually, it could be that the family does choose that. It might be that in a lot of situations, that’s the case. But where they might choose something different because they know best what is best for their family—not relying on being told that by speeches by Labour Party members in the first reading of this bill—then, actually, they should be able to choose that. If this is a thing that belongs to them and it’s for their benefit, then why on earth would a nanny State approach be taken that says that they can’t take that in the way that best suits them? If you think about that phrase “nanny State”, I mean, traditionally we think about the nanny telling the kids what to do. In this case, the Labour Party seems to want to tell the parents what to do as well, which I find is a strange intrusion for them to be wanting to make.
Let’s deal with other potential objections to the bill. If we’re thinking, “Will this cost more to have two parents involved in taking the leave?”, the answer is no, of course, because we’re talking about, again, the same amount of leave that would be or could be split across two parents; we’re not talking about any additional resources of the State. We’ve heard the Green Party making a pitch for extra time, and I think we can all be sympathetic about that, even as we weigh the different costs and benefits available. But, in this case, that need not be an objection, because there is no additional time that’s required; it would merely be that it could be taken in a different form and a different shape by the family, again, if they were to choose it. I find the idea strange that there needs to be more policy work done, somehow. More policy work is not required by the Government; it should be a decision of the family. So too we must acknowledge that there are no additional resources that are needed in that way.
I do want to talk about flexibility, because that relates to the question of choice. This is why it’s powerful that families would have the choice. In different circumstances, it might be that the mental health needs of the primary parent or the first parent or the one who would ordinarily, all things being equal, be providing that care for the whole time—it might be that their mental health needs are best served by the second parent being available at the same time, right at the start. It might be that the physical health needs dictate that. By way of example, in the case of a caesarean-section birth, it might well be the case that a second pair of hands are needed to lift, to drive, and to do various things that are important at any stage of life, and, goodness knows, when one has a newborn child, that’s all the more important. I don’t usually speak about my own family situation in this House for various reasons, but suffice to say, I’m aware of circumstances in which that would be very helpful. I think it’s a real disappointment, to put it mildly, that there is such a lack of imagination across the other side of the House that they can’t conceive of those scenarios in which that might be beneficial to families who are in that particular situation.
For a first-time mother or new parents, it might be the case that this is particularly valuable, the proposal that Nicola Willis makes. It might be, in the case of second and subsequent children, particularly helpful, because the extra pair of hands is needed to take care of those older kids, depending on what they’re up to and whether school or other care arrangements are needed. I can’t understand the reason that the Labour Party’s not supporting this—unless it’s politics, not policy. And I say to them, the National Party—supported by anyone who also sees the common-sense arguments in favour of this bill—will pass it with or without you, and if it be following the election rather than in this member’s bill, now, in the name of Nicola Willis, then so be it.
DAN ROSEWARNE (Labour): Kia ora. Thank you, Mr Speaker. I’m taking this call to express my opposition to the Parental Leave and Employment Protection (Shared Leave) Amendment Bill. Before I begin my contribution, I just want to do a shout-out to all the parents here in the House and then also to the parents that are probably listening to question time while on their parental leave at home.
I have memories, when I was a young dad at home with the kids, of chucking the kids in the jolly jumper, while watching question time, and then running away to get bottles and things like that, and, yeah, using the jolly jumper for babysitting probably. That’s probably why my boy is so keenly into politics right now. The big thing for me was just to make sure that the house was tidy enough by the time that my wife got home. That was always a challenge, but question time was a good babysitting mechanism for my kids.
Now, this bill would allow paid parental leave to be split between spouses or partners who are caring for a child. In that way, during the birthing period, one partner could give the other partner a few weeks of their paid leave so they can both be home for the child. Now, while I truly believe the member that brought this bill before the House has the best of intentions, the bill, as it stands, I feel, doesn’t quite go in the direction that we would like, and there is definitely a lot more work required.
Parental leave is an important right for new parents. It has been shown that taking parental leave greatly relieves stress on new parents and allows them to create a stronger bond with their children. That’s why Labour extended the paid parental leave to 26 weeks, in the first place, when we came into Government in 2017. This was in line with the recommendation of the World Health Organization of exclusive breastfeeding for children up to six months of age, and the finding that extending paid parental leave improved the health and happiness of both children and parents.
When I think of parental leave, I also look at the support that’s required inside those 26 weeks. I do have memories of—you know, we only had one car at the time. I’d get home from work, the car would be running in the driveway, Sheree would jump in the car, and then she’d go to work. It was always like a double team in providing care for the kids. We were always short on cash, you know, and had to do side hustles to get enough money in the door to pay for things like formula and nappies. As we all know, those can be quite expensive. So I was very proud of Labour’s policies. Things like free prescriptions go a long way. Things like the Best Start payments and fees-free, if you want to upskill while you’re on parental leave, and things like that are very important and provide that holistic approach while parents are on parental leave—and then also after those 26 weeks as well, because it doesn’t mean that everything’s OK after that 26-week mark.
I think that this bill, as mentioned, has the best of intentions. I even agree with its goal to allow parents to spend more time with their children. However, the bill does not really achieve that. It does not represent real progress for parents. The bill divides existing leave between the partners, and it does not create any additional time for parents to be with their children. The overall paid parental leave time available to the family does not increase, as Camilla Belich mentioned in her contribution. The direction I want to go in is extending that leave for both parents overall. As it stands, the bill would only create more complications for parents.
My question is: why should we just slice it between parents? And if you look at the bill itself, under new section 9A, inserted by clause 5, it’s got an example there where “Abby is entitled to 26 weeks of primary carer leave.”, and then “Abby transfers 6 weeks … to”—who was it there?—“her partner”. Now, what if her partner was pressuring Abby to get back to work earlier so he could sit at home? I think sometimes there might be inequality there where the mother might feel compelled to get back to work earlier, which is not in the best interests of that young infant. So, for that reason, the bill, as it stands, I do not commend to the House.
NAISI CHEN (Labour): Thank you, Mr Speaker. I probably might be the only non-parent that has taken a call on this bill here this morning, but I am the proud child of a gynaecologist, one who is trained in Western medicine, who has been working on the surgery table in the operating theatre, and one who’s also trained in traditional Chinese medicine—or TCM, as we call it. Gosh, the stories I had coming back to school from our family clinic when I was helping out at the front desk for my mum, helping her patients.
Now, I don’t know if the House knows this, but in Chinese traditional medicine, we have something called “fitting in for a month”, or it’s better translated into English as “the confinement period”. I know that in a lot of Asian cultures, we have this thing where mothers need to stay home for a whole, entire month after giving birth. So sometimes I do get a little bit astounded when meeting people who are holding their two-week-old baby and coming out to meet us, and I go, “Aren’t you supposed to be at home? Aren’t you supposed to be in a beanie?”—because we think we have to protect the head. You have to be kept warm, you have to have socks on your feet the whole time, and in ancient times, we didn’t even allow women to wash their hair in that month as well, because it lets away the good energy.
We feed them very nutritious food: a diet of chicken soup, pig trotters—because it has collagen to help with breast milk production—and a special regime. Then the whole family comes in, whether it’s your mum—so the mother of the mother. So the grandmother on the mum’s side comes in to help you with caring for your daughter, or even your mother-in-law comes in and helps.
In modern day times now in China, there are actually special institutions that are set up so that it’s almost like a hotel. I don’t know if this analogy is right, but it’s almost like a retirement village, where you go in. There’s medical care, there are nurses to help with teaching, and then there are coaches as well to help you take care of the child. Obviously, all of the needs of the children are taken care of, and there are those special, nutritious, professionally designed meals for the mothers. Actually, it’s quite a luxurious stay. At other times, we invite what we call “pui yuet”, which is directly translated as “monk nannies”. These are confinement nannies, who come and live in our homes to help those young mothers with their first 30 days after giving birth.
So I do think that young mothers in the Asian communities are looked after really, really well, and often it’s the reason why people attribute—not that there’s any scientific evidence, but it’s the reason why people attribute it and say that Asians don’t age as fast. We think sometimes that it’s because we look after our mothers really well in the first 30 days. That’s when all your body’s hormones are readjusting, and often if you have long-term ailments, it’s because you haven’t done your confinement properly. That’s what we believe in our culture.
I say all of that to, basically, come back to the point that I think it’s extremely important to give our birthing parents—our mothers—the time they need. Especially for me, it’s those 30 days, which might be in jeopardy because of this bill. There is no actual minimal guarantee for the person who gives birth to actually spend that time at home. My good colleague here—Dan Rosewarne—has just talked about coercion, and maybe it’s within the family, or it could be from society as well. If you’re the higher-earning parent, maybe you could be coerced into going back to work as well, as we know well in this House.
I think about my own future prospects, and I think about my own career here, as well. For these moments, I want to make sure that a bill we bring to this House is one that is not half-baked but it is one that actually has had all of the scenarios thought through and that there are actually safeguards within the bill to make sure that the birthing parent has that physical time to get better so that all of the parts are back in line again—not that I heard it ever does—and it should be when we’re sure that they’re ready to take on the world and that they have some time—as we’ve talked about it here, over and over again—to have that breastfeeding establishment period as well. That’s why we’ve raised the parental leave period entitlement to 26 weeks.
So it is a bit of science and it’s a bit of, I think, sage-old experience from the ages as well, but we’re making sure that when we come to this bill, it’s one that really looks after the birthing parent. Like my good colleague Emily Henderson has said, it’s an and/and, not an and/or. I really want to make sure that this bill is one that is well-thought-out, and that’s why I cannot support this bill.
DEPUTY SPEAKER: Nicola Willis—five minutes in reply.
NICOLA WILLIS (National): What a shameful day. Members opposite should hang their heads in shame. In deciding to vote down this bill, they have insulted every parent in New Zealand because they believe they are better placed to tell parents what to do with their parenting and caregiving arrangements. They have insulted them by voting against parents’ opportunity to have more choices about how they arrange their affairs to best deliver for their own families.
I did not think that in 2023 I would hear a Labour MP tell me that they knew what was best for the birthing parent. That was the phrase that was used by Naisi Chen just now—“This is about what’s best for the birthing parent.” Well, I’ll tell you what. I’ve been a birthing parent, I have birthed four children, and I find it insulting for members opposite to imply that women do not know what care arrangements best suit their family. For Labour to say it is wrong for men, for fathers, for lesbian partners to say, “Well, actually, we think it’s best in our family that we take paid parental leave at the same time.”, I find that insulting. This is 2023, and members opposite would do well to reflect on what the role of the Government is. Is it to insert itself into the arrangements of families and tell parents who should be at home and who shouldn’t and how much time they should spend breastfeeding? Well, actually, I prefer to leave it to mums and dads and caregivers to work that out for themselves.
Let’s think about what this bill actually would have done. I want you to think about the mother who sustained a birthing injury, who’s suffering from terrible post-natal depression, and who has no family support, and her partner says, “You know what? I’m going to stay at home with you for these first few difficult, challenging weeks so I can support you, and we will take our paid leave at the same time so we can keep this family together. I can look after you and our baby, and we can do what is best for our family.” What the Labour MPs opposite say to that family in that circumstance is, “No. You’re not allowed. We know better. There shouldn’t be paid parental leave for both of you at the same time.”
I am shocked, because one of the things I think is important in this House is that we do not seek as individuals to impose our particular personal experiences upon others. I am really conscious of that, because here I am as a mother of four—and, boy oh boy, was I lucky that I had a supportive partner, and I had the ability to stay at home on paid leave. I know many members opposite had the same thing. But there but for the grace of God go I, because I can imagine circumstances—and women have written to me about their circumstances in which things didn’t go that well—“I really needed my partner at home taking paid leave at the same time.”
It shouldn’t be beyond the Labour members opposite to have that empathy and that imagination too. What they have done today is take a no-brainer of a bill, a bill with no cost to the taxpayer, a bill that does no harm to anyone but simply enhances flexibility and enhances choices, and they have said, “No, no. We’ll put our own patronising political views first, and we will deny it.”
I think that what’s really going on here is that Labour has cast aside their values as they become desperate about the upcoming election. What they really wanted to do today was deny National a win. The sad thing is it’s not about National; they’re denying parents a win. I would implore the members opposite to think again, because, actually, we’re here in this House not for our own selves but for the people whose lives we can have an impact on. With this churlish decision to vote against a pragmatic, modernising, cost-free bill, the members opposite have shown they’ve left their values at the door and they’ve put petty politics first, and I tell them that New Zealand parents will ensure they pay the price.
A party vote was called for on the question, That the Parental Leave and Employment Protection (Shared Leave) Amendment Bill be now read a first time.
Ayes 57
New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.
Noes 62
New Zealand Labour 62.
Motion not agreed to.
Bills
Crimes (Theft by Employer) Amendment Bill
First Reading
IBRAHIM OMER (Labour): I move, That the Crimes (Theft by Employer) Amendment Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill.
I hear a lot of speeches in this House about crimes. This bill is a tough-on-crime bill. When employees steal from their employers, they face serious consequences, including possible imprisonment, but when the employers deliberately steal money from their workers, they can get away with it. The most the victim may get is the money owing, but usually that doesn’t happen, because the victims are normally migrant workers who do not have the resources or the knowledge to pursue action against the thieving employers. Employer theft is an intentional failure to pay any kind of wages owed to their employees.
This bill inserts new section 220AA into the Crimes Act 1961, which provides that an employer’s intentional failure to pay an employee any money owed in relation to their employment is theft. If an employer is an individual, the maximum penalty is either one year of imprisonment, a fine of $5,000, or both. In any other case, the maximum penalty is $30,000.
This bill arises out of my own experience and the experience of many workers like me in New Zealand. I came here as a refugee, and I was told that New Zealand was a paradise, compared to the country from which I originated, and a place where the rule of law will apply to everyone and where it’s there to protect the most vulnerable. I soon found out that was not always the case. Not long after arriving in New Zealand, I got my first work in the Wairarapa. It was farm work, with my employer shuttling me from Lower Hutt to Martinborough each day for work. At the end of my first week of work, I was told by a contractor that I had done a poor job that was not worth the cost of shuttling me to and from work, and that I did not deserve any pay. I was told that if I had any decency, I should be paying back the employer his costs for the week as the work that I’d done had amounted to nothing. I was told that I would not be paid and that if I did not like it, then I should piss off. Not knowing what my rights were, I just walked away from my payment for my week’s work, but as I became involved more with migrant workers, I found out that my experience was not the exception. I found out that the problem of intentional theft by employers is rife in the low-paid casual sectors that rely on migrant labour. It is common for these workers to have the hours they work under-reported, leading to lower pay, or for the employers to argue down the work the employee has done. It is already against the law in almost all circumstances to withhold pay or deliberately underpay staff, but the law is regularly flouted, and there are no criminal sanctions.
Without this bill, the sanctions for wage theft in this country are very light. All you can get is backpay and a small fine. In Norway, for example, they criminalised wage theft last year. Thieving employers there can get a significant fine or a prison sentence from two years to six years. In the Australian state of Victoria, the maximum prison sentence is as high as 10 years, and a fine is $222,904 for an individual or over $1,000,000 for companies. Some businesses rely deliberately and regularly on underpaying their employees, and they have baked it into their business model. Serious criminal sanctions will stop this.
The problem I experienced is also identified by an official report in 2019 on the exploitation of temporary migrant workers in New Zealand, commissioned by the Ministry of Business, Innovation and Employment, which found that wage theft was one of the most common forms of migrant labour exploitation in New Zealand. A few cases of wage theft have gone to the Employment Relations Authority, but these are the tip of the iceberg. Let me mention a couple of examples. In November 2018, Jagran Property Services, which operates both Crewcare Commercial Cleaning and the Green Acres Mobile Care Valet, were ordered by the authority to pay $37,000 for underpaying six members of staff. They were found to have underpaid six migrant workers by more than $17,000. They also failed to pay minimum wage and holiday pay and had demanded a premium from one worker for his visa.
In another example, in February 2019, a migrant worker was found to have worked for 985 hours for no pay in Canterbury at a bakery. In March 2019, at around the same time that these cases were occurring, three migrant workers were reported as being underpaid by a Bottle-O franchiser. One worker claimed to have worked 84 hours a week but to have only been paid for 32 hours, which is equivalent to $7 per hour. There was no criminal sanction for any of these employers.
In November 2019, the New Zealand Herald reported on a Waikato cafe owner who allegedly stole wages from staff in August of that year. After the cafe suddenly closed down, the employer disappeared without notice. An employee, who asked not to be named out of concern it would affect her job prospects, said she was owed 32 hours of wages on top of unpaid holiday pay. Her boss had also deducted KiwiSaver and tax from her wages for the past two months, but these had not been paid out. “ ‘She blocked us all on Facebook, on Instagram, blocked us from the shop Facebook page, changed her phone number, changed her email. She ghosted us all,’ said the worker.” In the aftermath, the employee sought legal advice and was shocked at how complex the process was. She believed that this was a significant deterrent for others who had been victims of wage theft.
This bill addresses that. It simplifies the process significantly by making it a criminal offence, as it should be. It also means that those employers who steal from their employees face criminal penalties just like any other thief. That means employers are deterred from stealing wages rather than employees being deterred from claiming their rights. It also sends a strong message of disapproval to bad employers. This does not impose any new obligations on businesses. It only applies to those who intentionally do not pay their employees. Businesses are already required to provide back-pay after complex civil proceedings if they do not do this; the problem is too many bad employers rely on the complexity of the system to avoid enforcement. Those employers who commit wage theft are gaining commercial advantage over competitor employers by deliberately not observing the minimum legislated employment standards.
Dawn Duncan, a lecturer at the University of Otago’s Faculty of Law, told the New Zealand Herald in November 2019 that wage theft was most common in New Zealand’s hospitality industry. This was the same point made by the Employment Relations Authority in the 2018 decision in the case of Jagran Property Services: “These types of businesses not only exploit vulnerability. They also undermine legitimate businesses who are doing the right thing by their workers and start a ‘race to the bottom’.” Just as has occurred in other jurisdictions around the world, it’s time that we recognise the intentional theft of worker wages as a crime.
Since my bill was drawn from the ballot, I have received many messages and emails from workers who have been subject to wage theft. One of them told me of her experience. She’s a young woman. She was young and living in poverty, and she did not have a strong understanding of her rights in the complex system. She was living pay cheque to pay cheque, doing physical labour for a small construction company. However, her health declined, and she asked her boss for time off with a medical certificate. When her condition got quite extreme, he told her she had to come back to work, and when she refused, he fired her. He never paid for the work that she had done before he fired her. He never compensated her for transport costs incurred during the work. She told me, “I was living on the mattress on the floor of a living room in an old and tiny apartment shared with three other people. I could not afford to lose these wages.” Trying to navigate a complex system, she went to mediation, and her employer just laughed and offered a $100 goodwill payment. He knew the system; she didn’t. She could not afford the lawyer or the risk of having to pay for one if she took him to court. She felt abused and humiliated. Stories like hers are too many.
I would like to thank, at the end of this, the Council of Trade Unions for their support, Peter Cranney, John Ryall, and my good friend Camilla Belich for her support in this bill. This is a good bill. I commend it to the House.
Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. I thank you for the opportunity to speak on this member’s bill by Ibrahim Omer, on the Crimes (Theft by Employer) Amendment Bill.
Look, this bill, as the introducer of this bill said, criminalises intentional failure to pay employees. That sounds like a very simple thing, and nobody would stand in the House and defend non-paying employers. So what is the issue? Well, the issue is that it is actually a reasonably complex area of employment law, and this one-page bill, which sort of just baldly states that anybody who intentionally fails to pay an employee goes off to face potential criminal charges. We in the National Party won’t be supporting this bill as it is drafted, simply because, primarily, it’s unnecessary in the sense that the Employment Relations Act has mechanisms in place, it has the duty to act in good faith, and there are penalties if employers do not act in good faith. Secondly, of course, any actual theft of money is already dealt with in criminal law.
What this bill, in essence, does is it can potentially turn disputes around employment practices—when you say “intentionally failing to pay”, it may relate to all matter of deductions from pay slips, for example, for a host of various things, then there could be a dispute about that. An employer may have intentionally deducted something from a pay and it may or may not have been justified. Now, that’s all dealt with, currently, through the employment law. What this bill, effectively, does is shift that into criminal law, and we don’t think that is a justified or a sensible thing to do.
The member talks about widespread and systematic practices of wage theft, but he offers no particular evidence to back that up. I certainly think there is widespread concern around worker exploitation in the immigration space, and that is a matter that does continue to need to be dealt with and policed effectively. If immigration laws need work in that space, well then that’s something we should continue to look at, and I agree with that. But does that mean you change all the employment relations to deal with that?
If it’s in relation to modern slavery, again, that’s something that Michael Wood promised was an urgent matter more than two years ago and promised to introduce legislation to deal with that. Instead, we have Carmel Sepuloni giving press releases, saying, “We are tough and we are going to do something about that eventually. We are going to work on some legislation and it might be ready in three years’ time.” So I would encourage Ibrahim Omer to encourage his colleagues to actually get on with doing something in that space rather than just talking about it.
Then, of course, if the worry is that the Employment Relations Act system that we have in place is not working, because it’s too slow and too complicated, well, then I think there is a very good argument that the Employment Relations Authority is quite slow and cumbersome. Unfortunately that’s a reality in all the courts across the land and should be, rightly, a focus of any Government to speed up access to justice and get on with it. It’s sad that after six years, that hasn’t been an area of focus for this Government and the justice sector and the employment relations sector. I’d encourage Ibrahim to encourage his colleagues to get on with making that work better.
Then I noticed today, when a story was running on Newstalk ZB, that only 2.3 percent of retail thefts have led to an arrest. I suppose it’s a bit ironic—
DEPUTY SPEAKER: Mr Goldsmith, you’ve had a pretty good run. Let’s get back to the bill, shall we?
Hon PAUL GOLDSMITH: Well, the purpose of the bill is to criminalise wage theft, and the only point I’m making is—right here, right now, this morning, we’ve had a story saying that only 2.3 percent of retail thefts were actually leading to an arrest, down from 50 percent in the previous Government. So I think, before the members of this Government bring in new criminal offences, they might look at whether the current ones are actually being effectively enforced and dealt with. That might be something to consider.
Look, the only point I would make is, yes, nobody would defend people taking money from employees, and the current laws in relation to theft and in relation to the Employment Relations Act cover that extensively. What is being proposed here is to transfer disputes, potentially around deductions from payslips and not paying, from the employment relations space into the criminal space, and we think that would have all manner of unintended consequences. It may well be that the proposer of this bill has thought through all those ramifications, but there is certainly no evidence of that from the one-paragraph introduction to the piece of legislation that we have before us.
No doubt, the Government with its numbers will pass this bill at stage one, it’ll head off to select committee, and we’ll be very interested to see and get some details from the people who are engaged in the sector, and from officials, to run through the consequences of this.
My only point is that, on the basis of what we have in front of us, we cannot agree to it at this stage. Mr Speaker, thank you very much.
DAN ROSEWARNE (Labour): Kia ora. Thank you, Mr Speaker. It’s my pleasure to rise in support of the Crimes (Theft by Employer) Amendment Bill. I just want to take a moment to congratulate the member who brought this bill before the house, Ibrahim Omer. Ibrahim’s story about how he came to New Zealand and entered the workforce, and the challenges that he faced, is just a fine example of why we need people like him in this House, advocating on behalf of the community. Even before he entered Parliament, Ibrahim was working as a union organiser, raising awareness on this issue, and fighting for the rights of exploited workers. I want to thank him for continuing this work here in Parliament.
This bill will send a strong signal that wage theft is a crime that will need to be taken seriously. As it stands now, it is often quite hard for workers to go after employers withholding wages. This process can be costly, complex, and time-consuming, and it’s often hard for migrants with limited resources to navigate the current system. The bill also addresses a double standard: when employees steal from their employers, they receive a criminal conviction; wage theft is usually treated as a civil matter. This bill proposes an amendment to the Crimes Act 1961 and introduces a new section that defines “wage theft” as theft by an employer. The amendment aims to ensure that employers pay their employees the wages owed, as agreed upon in the employment relationship. This bill clearly defines the withholding of wages as theft. Deliberately withholding wages or monetary entitlements will be considered theft and punished by a term of imprisonment or substantial fines.
This is an important first step when we know that sanctions against wage theft in New Zealand are relatively light compared to other countries. In Queensland, for example, wage theft has a maximum penalty of 10 years in prison, and the fines can reach in the amounts of hundreds of thousands of dollars. By clarifying the definition of wage theft, this bill will simplify the process for the victims and make it easier for workers to get what they are owed for their labour and their hard work. It’s time to hold everyone to account.
This bill is important because the crime it punishes is one where the victims are often vulnerable members of society that can have a hard time fighting for their rights. This kind of practice is common in sectors employing low-paid immigrant labour, and Ibrahim’s experience shows how common this is for migrants here in New Zealand. They arrive here, and they have no support system and only limited knowledge of their rights and legal protections. It’s very easy for a small number of businesses out there—or owners out there—to exploit that vulnerable workforce. We should not accept that situation as normal, and we should strive to guarantee the dignity of all workers here in New Zealand.
This bill will deter those behaviours, and it will make it clear to employers that these practices are unacceptable and will be punished. It will also make it easier for the exploited worker to report those practices with confidence, and it will be taken seriously and punished in accordance with the new Act. When we make sure that everyone receives fair payment for their work and that all workers are protected from exploitation, we will have a better workforce, a workforce that is better represented.
Now, National often claims to be tough on crime. Well, and this is—
Hon Dr Duncan Webb: Not all crime!
DAN ROSEWARNE: That’s right. That’s right, Mr Webb. But the only reason I can explain why National will not support this bill is that they somehow consider white-collar crime to be less serious. Stealing and withholding pay—that’s a crime in the same way that a thief’s stealing from a home is a crime. The only difference is that sometimes the ones committing this crime in the first case are wearing suits. This bill fits with what the Government has done to protect workers: we have established the fair pay agreement system, we’ve expanded workers’ protection, and we’ve raised the minimum wage. I commend this bill to the House.
SIMON COURT (ACT): The ACT Party won’t be supporting this bill, but I do want to acknowledge the concerns that the member has raised by bringing the Crimes (Theft by Employer) Amendment Bill to the House. The crime of theft, in terms of the Crimes Act, means theft or stealing “dishonestly and without claim of right, taking any property with intent to deprive any owner permanently of that property or of any interest in that property”. For those listening at home, I think that’s a point which maybe has been missed so far.
Employees have a number of ways that they can seek redress if their employer has not paid them their due. For example, there are a number of Acts. The Holidays Act: there have been a number of Government departments, local councils, Government agencies which haven’t been able to fulfil their obligations to employees under the Holidays Act requirements. It’s taken years and years and years to sort out back-pay for those employees. Potentially, those employees, under this proposed legislation, would have a claim of theft if it goes on for long enough. Well, this Government has allowed unpaid holiday pay to be withheld from nurses, for example, for years and years and years. Potentially, the liability comes to billions of dollars. Would this bill allow the nurses to bring a claim of theft by an employer against a Government department?
There are the Wages Protection Act 1983 and the Minimum Wage Act 1983. They all provide protections for workers who have not been paid in accordance with their employment contract.
Hon Dr Duncan Webb: No, no, no—that’s a wage deduction Act.
SIMON COURT: Now, there are many, many opportunities for employees to receive benefits from their employers that may or may not be subject to a wage deduction agreement, Dr Webb, but are often extended to help out employees when they’re starting a new job, for example, or when they are faced with a choice of paying a bill or putting tyres on the car, for example. Sometimes, employers will help out their staff. I’m aware of employers who have paid household bills for their staff because their staff are suffering under the cost of living crisis, which has been exacerbated by this Government’s crazy and wasteful spending that has forced up interest rates and the cost of everything, with inflation over 7 percent at one point—now 6 percent. Employers extend all kinds of loans and allowances to employees, which may not be covered. If the employer needs to recover that loan or that allowance, whether it’s for boots and overalls for a new worker starting out in construction; whether it’s for a set of tyres so a worker can get a warrant of fitness so they can get to work; or whether it’s a food tab or a bar tab, like many of the employees who work in Parliament have at our cafe, Coppers—now, there may well be an opportunity for an employee to get a benefit from an employer and then for that employer to need to make a deduction, and if it’s not documented, then, potentially, that employer is exposed to charges of theft.
What ACT believes is that business owners should be trusted to treat their employees well. Employees are extremely valuable. Anyone who’s ever had to hire someone in the past few years knows how difficult it is to get good staff, how important it is to treat them well, and how important it is to pay them on time. If you don’t treat them well and you don’t pay them on time, then they can leave and go somewhere else and take their labour with them. It’s much harder to do business if you don’t have workers. The ACT Party trusts employers to get this right. If they don’t get it right, there are already mechanisms for employees to take action and recover their wages. ACT won’t support this any further.
DEPUTY SPEAKER: This debate is interrupted. The House stands adjourned until 2 p.m. today.
Debate interrupted.
The House adjourned at 12.59 p.m. (Wednesday)