Tuesday, 22 August 2023

TUESDAY, 22 AUGUST 2023

TUESDAY, 22 AUGUST 2023

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

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

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

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

SPEAKER: A petition has been delivered to the Clerk for presentation.

CLERK: Petition of Paul Fisher requesting that the House urge the Government to review Waka Kotahi’s proposed safety improvements to State Highway 1 Timaru to St Andrews.

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

CLERK:

2022-23 annual report of the Remuneration Authority

International Labour Organization report of the New Zealand Government Delegates to the 111th Session of the International Labour Conference, Geneva, 5 to 16 June 2023

2023 to 2027 statements of intent for the Broadcasting Standards Authority, Radio New Zealand Ltd, Television New Zealand Ltd

2023-24 statements of performance expectations: Broadcasting Standards Authority, New Zealand on Air, Radio New Zealand Ltd, and Television New Zealand Ltd.

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

CLERK:

Report of the Economic Development, Science and Innovation Committee on the international treaty examination of the Agreement between New Zealand and the EU on the Participation of New Zealand in Union Programmes and the Protocol on the Association of New Zealand to Horizon Europe

report of the Environment Committee on the briefing on reducing construction and demolition waste going to landfill

report of the Foreign Affairs, Defence and Trade Committee on the inquiry into illegal, unregulated, and unreported fishing

report of the Governance and Administration Committee on the briefing about the select committee exchange to Australia

reports of the Justice Committee on the:

briefing on trends in youth crime

petitions of Christine McCarthy, Diane Hunt, and Lois McGirr

reports of the Petitions Committee on the petition of Akhtar Zaman and Kirstin Murray

report of the Primary Production Committee on the inquiry into the future of the workforce needs of the primary industries of New Zealand

report of the Regulations Review Committee on the briefing about orders made under section 70 of the Health Act 1956

report of the Social Services and Community Committee on the Ministry for Pacific Peoples, Long-Term Insights Briefing 2023.

SPEAKER: The reports of the Economic Development, Science and Innovation Committee; the Environment Committee; the Foreign Affairs, Defence and Trade Committee; the Governance and Administration Committee; the Primary Production Committee; the Regulations Review Committee; and the Social Services and Community Committee’s and the Justice Committee’s briefings are all set down for consideration. The Clerk has been informed of the introduction of bills.

CLERK:

Residential Property Managers Bill, introduction

Hauraki Gulf / Tīkapa Moana Marine Protection Bill, introduction

Ram Raid Offending and Related Measures Amendment Bill, introduction

Victims of Family Violence (Strengthening Legal Protections) Legislation Bill, introduction.

SPEAKER: Those bills are set down for first reading.

Oral Questions

Questions to Ministers

Question No. 1—Housing

1. ANAHILA KANONGATA‘A (Labour) to the Minister of Housing: How is the Government’s record public housing build programme supporting more people into trades training and apprenticeships?

Hon Dr MEGAN WOODS (Minister of Housing): Our Labour Government has delivered more than 13,000 new public homes in the last six years, with a further 6,000 new homes under construction or contracted. Our record of delivery has not only provided more homes for New Zealanders but training opportunities, too. Since 2017, more than 850 people across the country have gained valuable construction skills through Kāinga Ora’s apprenticeship programme, which helps to reduce our skills shortages and train the next generation of our construction workforce.

Anahila Kanongata‘a: How are the apprenticeship programmes supporting more women, Māori, and Pasifika into work?

Hon Dr MEGAN WOODS: Well, in order to ensure our construction sector can deliver on our Government’s significant infrastructure programme, we need to grow the diversity of our construction workforce. Through the Kāinga Ora apprenticeship programme, we’re actively seeking to recruit women, Māori, and Pasifika, as well as Kāinga Ora tenants, into apprenticeships. Over 40 percent of the over 850 apprentices, to date, have been Māori and Pacific, and I’m delighted to say 53 of the apprentices have been women.

Anahila Kanongata‘a: What regions are benefiting from encouraging young people into the building and construction sector?

Hon Dr MEGAN WOODS: Kāinga Ora’s partnerships with schools are helping to train the next generation of tradies all across the country. Kāinga Ora has eight partnerships with schools and polytechs, and it has five more currently being worked on. Communities across New Zealand are benefiting from this programme, including Dargaville, Onehunga, Rotorua, Hastings, Ōpōtiki, Wellington, Nelson, and, of course, Christchurch.

Anahila Kanongata‘a: How will the Government’s sustained and consistent investment in public housing continue to support the training of apprentices?

Hon Dr MEGAN WOODS: In Budget 2023, we continued our Government’s commitment to delivering public homes through our record build programme. This means more public homes and more apprenticeships.

Question No. 2—Prime Minister

2. 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 the removal of the $5 prescription charge, which has seen 900,000 New Zealanders receive almost 3 million free prescriptions. Alongside extending 20 hours’ free early childhood education, extending targeted childcare assistance, making public transport permanently free for children under the age of 13 and half-price for more than a million people, removing prescription charges is a practical measure to support families with economic pressures whilst laying the foundations for a better future for the country—without making inflation worse, as unfunded tax cuts for the wealthiest would.

Christopher Luxon: Is the Prime Minister seriously saying that he and I should get free prescriptions, rather than giving Kiwis battling cancer access to drugs that are available in Australia but not here in New Zealand?

Rt Hon CHRIS HIPKINS: No; on this side of the House, we would prioritise extra drugs for cancer patients ahead of tax cuts that would, for example, mean that somebody on a salary of $1 million a year would get over $50,000 a year extra in a tax cut. We actually think that funding Pharmac, along with our health system, our education system, housing, transport, and the other public services New Zealanders rely on is more important than tax cuts for millionaires.

Christopher Luxon: Why is New Zealand the only country in the Asia-Pacific region in recession?

Rt Hon CHRIS HIPKINS: Because we had a cyclone at the beginning of the year. The member may not have noticed, but actually the contributing factor to the fact that we had a technical recession was the effect of the cyclone on our primary producers.

Christopher Luxon: Why, then, is inflation in New Zealand twice the rate of the US, Canada, and Japan, if inflation is all just a global problem—because they had weather events too?

Rt Hon CHRIS HIPKINS: I notice he left Australia and the UK off. At any given point in time, New Zealand’s inflation rate won’t be exactly the same as others around the world. I’m sure, given his in-depth knowledge of the economy, he would understand that. Australia, of course, were lower than New Zealand for a long period of time and then peaked higher and later than New Zealand in their inflationary cycle. Different countries have a different economic cycle. There can be no doubt, other than in the separate reality the National Party live in, that inflation has been a global problem over the last 18 months.

Christopher Luxon: Was Westpac right when they forecast $15 billion more in debt in the next four years, and does he take any responsibility for the explosion in debt and deficits?

Rt Hon CHRIS HIPKINS: Most economists are now picking that Government revenue will decrease, rather than significant increases in Government spending. That will have an impact on the Government’s finances. Everybody will be able to see what impact that will have on the Government’s finances when the Treasury release their pre-election fiscal update, which will be available to everybody.

Christopher Luxon: Given, and by his account, the economy is doing great, why are there 55,000 more people on the job seeker benefit than when Labour took office, including 8,000 more in just the last four months?

Rt Hon CHRIS HIPKINS: There are more people in New Zealand—that is absolutely correct. The New Zealand economy’s fundamental indicators are looking more positive. Inflation is trending down, GDP growth is returning, and we continue to have record low unemployment. On this side of the House, we are unapologetic about our commitment to keep Kiwis in jobs. I note that’s quite a contrast to members on the other side of the House, who are being quite open in their intention to increase unemployment.

Christopher Luxon: Why, then, if everything is so swimmingly great, are there 55,000 more people on job seeker benefits?

Rt Hon CHRIS HIPKINS: As I’ve indicated, the population is, of course, larger, but we should also note that there are more people in the labour market.

David Seymour: How is it possible that Government spending has increased by 70 percent over six years for no measurable improvements in outcomes, with 70 percent of New Zealanders saying the health system is worse than in 2020, 64 percent saying the justice system is worse than in 2020, and 57 percent saying the education system is worse too?

Rt Hon CHRIS HIPKINS: Oh, I am so glad that the member asked that question, because while he doesn’t think that it’s a positive outcome that New Zealanders’ wages are rising, we believe that is a positive outcome, on this side of the House. We believe the fact that more New Zealanders are in work than ever before is, in fact, a positive outcome. We believe that New Zealanders having better access to healthcare, such as the 3 million free prescriptions that New Zealanders have received, is a positive outcome. We believe that 77,000 fewer New Zealand children living in poverty is a positive outcome. We believe that record levels of renewable energy generation in New Zealand is a positive outcome. We believe that reducing New Zealand’s greenhouse gas emissions is a positive outcome. We believe that extending the coverage of free-trade agreements to cover more of New Zealand exports is a positive outcome. We believe that more New Zealanders in apprenticeships, upskilling for the future of our workforce, is a positive outcome. We believe that building more classrooms to accommodate roll growth so that kids aren’t learning in hallways, libraries, and gymnasiums, as they were when we came into Government—we believe that’s a positive outcome. We believe that building more State houses than any Government since the 1950s is a positive outcome. I could go on for a long time.

David Seymour: Could it be the case that the Prime Minister just talks far too much because he has those beliefs but the public, including Labour voters, don’t share them and are now abandoning his Government in droves?

Rt Hon CHRIS HIPKINS: I would say that the election campaign’s just getting under way, and I’m looking forward to meeting the member and the members opposite on the campaign trail. When even his own coalition partner calls him divisive, I think maybe he should take a little bit of a look in the mirror.

David Seymour: Does that mean the Prime Minister is looking forward to a campaign running on fear of the Opposition’s record in future because he’s given up running on his own; and if that’s the case, does he understand that hope always beats fear?

Rt Hon CHRIS HIPKINS: Well, first of all, if the member actually has a record of the future, he should share it, because I didn’t know that it was possible to have such a thing. But when it comes to campaigning on fear, I would again invite the member to take a long, hard look in the mirror and consider the way he is trying to demonise a large segment of New Zealand society—a segment of New Zealand society that have too often been kicked around for political benefit by members who sit on that side of the House.

Christopher Luxon: Isn’t it a vote of no confidence in his Government that after six years of running health and education and the economy into the ground, almost 35,000 Kiwis have voted with their feet and left New Zealand over the last year?

Rt Hon CHRIS HIPKINS: An 87,000 net migration to New Zealand—the population is growing in New Zealand. Yes, post-COVID, some people left and some people came back. Overall, 87,000 more people are in the country now since we’ve opened the borders than there were before.

Question No. 3—Prime Minister

3. DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori) to the Prime Minister: What advice or reports, if any, has he received regarding the rising threat of white supremacy in Aotearoa?

Rt Hon CHRIS HIPKINS (Prime Minister): Since becoming the Prime Minister and Minister for National Security and Intelligence, I have not received any reports or advice solely about the rising threat of white supremacy in Aotearoa New Zealand. I receive regular classified reporting on counterterrorism, including on violent extremism, which I’m not in a position to detail in the House. However, I note that the New Zealand Security Intelligence Service released the New Zealand’s Security Threat Environment Report 2023 on 11 August 2023. That report covered a range of security threats facing our country, and it stated that “White Identity-Motivated Violent Extremism (WIMVE) continues to be the dominant IMVE ideology in New Zealand. Young people becoming [more] involved in W-IMVE is a growing trend. W-IMVE adherents in New Zealand express views, which include but are not limited to, rhetoric relating to anti-Semitism, anti-Rainbow Communities and various white supremacy narratives, such as anti-Māori and anti-Islam.”

Debbie Ngarewa-Packer: Does he agree that the use of divisive rhetoric or hate speech from political leaders—whether they are joking or not—can lead to violence against marginalised communities?

Rt Hon CHRIS HIPKINS: I believe that all political leaders have a responsibility to take care in the statements that they make about all of New Zealand’s citizens and groups, and we have a particular duty of care to ensure that the statements we make don’t inflame tensions, such as those I have just mentioned.

Debbie Ngarewa-Packer: What is he doing to protect people’s ministries from acts of violence due to political incitement?

Rt Hon CHRIS HIPKINS: Of course, our public servants deserve our full support. They do not deserve to be demonised in the way that they have been. I don’t believe that making jokes about blowing people up is a particularly funny or responsible thing for political leaders to do.

Rawiri Waititi: Does he believe the ACT Party leader’s comments regarding the Ministry for Pacific Peoples—that he would send a guy called Guy Fawkes in there and it would all be over—have the potential to incite violence against Pacific people and the ministry itself?

Rt Hon CHRIS HIPKINS: As I have indicated, I believe that political leaders all have a responsibility to be careful in the language that they use. I don’t think that making statements about blowing people up—even if they were, poorly, intended in humour—is the sort of thing that responsible political leaders should do.

Rawiri Waititi: Why did the Government, under his leadership, back down from passing legislation to protect marginalised communities from hate speech?

Rt Hon CHRIS HIPKINS: There are issues—legitimate questions—being raised around hate speech. It is a very fraught area because it does intersect with issues around free speech. That is why we have asked the Law Commission to do more work in that space, because we do acknowledge that there are pressing interests amongst the community for more action in this area but there are also countervailing concerns around the rights to free speech. We think that the Law Commission will be able to produce some recommendations that I hope we as a Parliament as a whole can actually debate in a constructive manner. I think that’s more likely after an election than immediately before an election, but I do think the issues that are being raised here should be taken seriously.

David Seymour: Does the Prime Minister then stand by the factually incorrect statement he made to Newshub on Saturday “The idea that you’d make a joke about blowing up an ethic minority is something that isn’t really that funny”, and, if he does not stand by that statement, will he apologise for confusing Government waste and a story about a Government department with a race of people, turning a debate into something it never needed to be?

Rt Hon CHRIS HIPKINS: Yes, I do, because, as I have also said publicly, I believe that member is deliberately and wantonly playing the race card in this election, and he should be ashamed of himself.

Question No. 4—Finance

4. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he agree with Westpac’s view of the outlook for the New Zealand economy as being “elevated persistent inflation, an over-heated economy set for a prolonged period of low and below trend growth, a high fiscal deficit in cyclically adjusted terms and an elevated current account deficit”, and what responsibility, if any, does he take for this economic outlook?

Hon GRANT ROBERTSON (Minister of Finance): In answer to the first four parts of the question, inflation is coming down and is forecast to be back within the target range in the September 2024 quarter—a fact I know the member is aware of after last week. We’ve reached a turning point in the cycle and, as forecast by Westpac, the economy is set to grow over the next few years against a tough global backdrop. The average operating balance before gains and losses deficit as a percentage of GDP under this Government has been lower per year than under National during the financial crisis, and the current account deficit is forecast by Westpac to keep closing. While our net international liability position is at 48.4 percent, it is lower than the 53.4 percent we inherited in 2017, and well down on the 84.3 percent of GDP it hit in 2009. In answer to the fifth part of the question, this is undoubtedly a challenging time for Kiwi households and businesses. I take responsibility for supporting them as we have done and will do into the future—including nearly record-low unemployment, wages growing faster than inflation, lower Government debt than the countries we compare ourselves against, and New Zealand being one of the few countries in the world which received a credit rating upgrade during the one-in-100-year COVID economic shock.

Nicola Willis: Who does he agree with: the Prime Minister, who this morning said, “We are turning a corner [economically]”—or the BNZ, who said, “The wheels are starting to well and truly fall off the New Zealand economy”?

Hon GRANT ROBERTSON: I obviously agree with the Prime Minister, who, in turn, is agreeing with ASB, who had the headline on their story: “A turning point for the economy is coming.”

Nicola Willis: Who was correct: the Prime Minister, who said this morning “[We’re seeing] inflation coming down”, or the BNZ, who said last week, “Inflation refuses to die. In fact, inflation has recently accelerated [driven by] local body rates, an excise tax hike, insurance costs and rapidly rising petrol prices.”?

Hon GRANT ROBERTSON: I, of course, agree with the Prime Minister, who, in turn, interestingly enough, agrees with Westpac—who were used in the member’s primary question but dropped for the supplementary question—because they also noted that inflation is coming down.

Nicola Willis: Who was correct: the Prime Minister, who said “[We’re seeing] GDP growth returning”, or the ANZ, who said “the economy is slowing, the export outlook is challenged, and unemployment is set to rise”?

Hon GRANT ROBERTSON: Look, I thank the member for serving up another lob to me. I agree with the Prime Minister and, funnily enough, Westpac—the primary question subject for the member—who also see economic growth in our future.

Nicola Willis: Is it really the Minister of Finance’s position that everything is looking so rosy with the economy, and, if that is the case, can we expect the pre-election fiscal update to reflect that rosiness?

Hon GRANT ROBERTSON: I have stood in this House day after day indicating that we understand, on this side of the House, that times are tough for many New Zealand businesses and many New Zealand households. The global economy is slowing, and it is a very challenging period. What that requires in response is a balanced approach that looks after New Zealanders, eases the cost of living pressure, puts public services back on the footing that it needs to be on, but does not engage in unfunded tax cuts that will ultimately be more inflationary and put more pressure on those Kiwi households.

Nicola Willis: Does the Minister of Finance recall in May last year describing inflation as a “short term challenge”, and given the cost of living crisis has now entered its 27th month, why should New Zealanders trust either his or the Prime Minister’s promises that everything will be better?

Hon GRANT ROBERTSON: At all times, we have stood up in this House and talked about the forecasts that we have seen from the likes of the Treasury, the likes of the Reserve Bank, and, indeed, the retail banks that the member has been quoting today. Inflation is coming down in the eyes of all of those people, and while it is a very tough time for many New Zealand households, we know that what households need is a Government that supports them to ease the cost of living pressure while balancing that against providing public services, not a party that has unfunded tax cuts to the tune of billions of dollars and no way of making it add up.

Question No. 5—Education

5. ANGELA ROBERTS (Labour) to the Minister of Education: What action is the Government taking to ensure the teaching of maths, reading, and writing is consistent across the country?

Hon JAN TINETTI (Minister of Education): The Government has announced that we will regulate core teaching requirements of maths, reading, and writing to guarantee foundational teaching and learning of these subjects. This is work that has long been in the pipeline, having first been outlined to the sector and wider public in March last year in the Government’s maths and literacy strategy. Core teaching requirements have been welcomed by the sector and experts as it will deliver clear and consistent education from Kaitāia to Invercargill. Therefore, the Government has opted to embed this into legislation so that no learning is left to chance.

Angela Roberts: How will parents, teachers, and students know whether they are progressing in the new maths and literacy curriculum?

Hon JAN TINETTI: Every subject in the new curriculum will have maths and literacy progress steps to ensure maths and literacy learning is embedded and contextualised within teaching practice. Progress steps will also enable teachers to track a child’s progression over their education and identify where further support may be needed to move to the next step. Parents and students will have visibility of this progression plan and have confidence that their child is well supported to progress in their maths, reading, and writing skills in a way that suits them.

Angela Roberts: How will teachers be supported to implement the core teaching requirements?

Hon JAN TINETTI: Teachers will be well supported with guidance, professional development, and materials to implement these changes and ensure there is consistency across all schools to give all kids equal opportunity. This prevents teachers from having to recreate the wheel every lesson. The core teaching requirements will provide clarity on what needs to be taught and when throughout the curriculum, so no learning opportunities are left to chance.

Angela Roberts: How are the core teaching requirements different from national standards and standardised testing?

Hon JAN TINETTI: National standards were a complete and utter failure. They were neither national nor standard, and taught children how to pass a test rather than progress in their education. The difference is this Government is focused on evidence-based teaching and learning. We are legislating core teaching requirements that will add to teachers’ existing expertise by giving them evidence-informed practical guidance to enhance the way they teach literacy, communication, and maths.

Question No. 6—Transport

6. Hon JULIE ANNE GENTER (Green) to the Minister of Transport: Is he confident the draft Government Policy Statement on land transport will give effect to the transport targets identified in this Government’s emissions reduction plan; if not, why not?

Hon DAVID PARKER (Minister of Transport): Yes. The Government Policy Statement (GPS) on land transport is one component of enabling emission reductions in the transport sector. Some of the emission reduction plan actions relate to such investment, whilst others require different interventions, such as regulatory change to, for example, improve the make-up of the fleet.

Hon Julie Anne Genter: Has a climate impact assessment been undertaken on the draft GPS on land transport?

Hon DAVID PARKER: As was the case with the draft GPS released in 2021 by, amongst others, the then Associate Minister of Transport, no climate change impact assessment is done at the time of the draft; it’s actually done at the time when individual projects are committed to.

Hon Julie Anne Genter: Does he agree with the Climate Change Commission draft advice “The transport system needs to change at all levels to provide New Zealanders with more low emissions options.”, and, if so, how does he reconcile this with the reduced proportion of funding going to public transport in his draft GPS?

Hon DAVID PARKER: In general terms, I agree with the quote that the member put in her supplementary question. The GPS provides increased funding for public transport services, for public transport infrastructure, for the rail network, for walking and cycling improvements, and for coastal shipping. It also includes new funding for inter-regional public transport.

Hon Julie Anne Genter: Why has the proportion of spending for public transport in the transport fund reduced from 20 percent in 2021/22 to 18 percent in 2022/23 to now 17 percent as forecasted in this GPS while we are in a climate crisis and when people in New Zealand desperately need better public transport?

Hon DAVID PARKER: The main reason for those changes in relative percentage would be the massive increase that’s going into road maintenance, which is necessary, in part, to deal with the likes of the storm damage that we had earlier this year.

Hon Julie Anne Genter: Does he agree with the International Transport Forum at the OECD, which states “The continued dominance of road infrastructure in national investment priorities is not in line with the need to decarbonise the transport sector and makes reaching the Paris Agreement goals even more challenging.”; if so, how does he justify an upper spending limit of over $4 billion on new roading projects that could be put to transforming our public transport system, which benefits not only the people who use it but also our roads?

Hon DAVID PARKER: In the first three-year period covered by the GPS, I would note that the major investments in Auckland are in the likes of the north-western busway.

Hon Julie Anne Genter: Has he seen the Essential Report poll that showed 72 percent of New Zealanders supported improving public transport, rail, and coastal shipping over building new roads, and does he agree, then, therefore, that doing the right thing for the climate would also be popular in New Zealand?

Hon DAVID PARKER: I haven’t seen that poll, but I will look it out.

Question No. 7—Health

7. SARAH PALLETT (Labour—Ilam) to the Minister of Health: What announcement has she recently made regarding free prescriptions?

Hon Dr AYESHA VERRALL (Minister of Health): This Government is reducing the cost of healthcare for New Zealand households by removing the $5 co-payment for prescription medicines. Yesterday I was proud to announce that since the $5 co-payment has been removed over 3 million free prescriptions have helped around 900,000 New Zealanders. Removing the $5 charge has made it cheaper for New Zealanders to access the medicines they need. This has had a meaningful impact for many households, particularly those who have multiple prescriptions to fill on a regular basis.

Sarah Pallett: What financial impact has this investment had for New Zealanders?

Hon Dr AYESHA VERRALL: The 3 million free prescriptions has put approximately $8.4 million back in the pockets of 900,000 New Zealanders. Free prescriptions are part of the Government’s 10 point plan to reduce the cost of living, and mean people are less likely to get sick, less likely to live with pain, and less likely to need time off work for illness.

Sarah Pallett: Why has the Government moved to improve access to medicines?

Hon Dr AYESHA VERRALL: We know the $5 charge was a barrier to some New Zealanders accessing the medicines they need. Now, the 21-year-old student won’t have to worry about having enough money for her contraception; a young man with epilepsy can stay in training and keep his driver’s licence; the father with diabetes gets his life-saving medicine for free. Our track record is to invest in Kiwis’ health.

Sarah Pallett: How is this change supporting the better health of New Zealanders?

Hon Dr AYESHA VERRALL: Removing the $5 prescription co-payment means we are investing in simple treatments that prevent chronic conditions becoming emergencies that need hospital treatments. We’re making it easier to get blood pressure treatment so that fewer people have strokes, people have access to diabetes treatment to prevent kidney failure and blindness, and we are making it easier for people to get cholesterol treatment to prevent their heart attacks. Proposed changes to reinstate the payment while proposing tax cuts for millionaires are both unfair and out of touch. Labour’s track record is to invest in health, and that’s all at risk under a National-ACT Government.

SPEAKER: Order! Yeah, Government cannot use patsy questions to attack the Opposition. The member will stand, withdraw, and apologise.

Hon Dr AYESHA VERRALL: I withdraw and apologise.

Dr Shane Reti: Does she think it’s appropriate that members of Parliament like me and her receive a $5 co-pay relief, or would that money be better spent on cancer drugs?

Hon Dr AYESHA VERRALL: All people are entitled to medical treatment and what’s more I noticed that every method that that side of the House proposes to try and target this does mean that some people will miss out. I believe in universal access to healthcare.

Question No. 8—Education

8. CHRIS BAILLIE (ACT) to the Minister of Education: Is she satisfied with the state of schools in New Zealand?

Hon JAN TINETTI (Minister of Education): I am satisfied that the rapid action taken by this Government to improve attendance is working, with 412 initiatives funded across 762 schools and 84 additional attendance officers in place. I am satisfied our teachers are to be well supported to teach the new maths and literacy curriculum, with core teaching requirements to be legislated so it’s clear what needs to be taught and when. I am satisfied that barriers to education have been removed by programmes such as free healthy school lunches, free period products, counselling in schools, and removing school donations. Is there more work to do? Yes. But I am satisfied that under this Government schools are best placed to support learning environments for our kids to thrive.

Chris Baillie: Is she aware that Melville High School in Hamilton has had to hire private security guards to “ensure that everyone goes home safely at the end of the day”, and, if so, what is the Ministry of Education doing to support schools like these?

Hon JAN TINETTI: I haven’t had that information come across my desk.

Chris Baillie: How can the Ministry of Education begin to understand whether it is helping to improve school safety when it doesn’t collect information on assaults on students or staff members, even if it involves the use of weapons?

Hon JAN TINETTI: The Ministry of Education went through a very big restructure last year. Te Mahau was created, which is very close to schools, and they have officers that work very, very closely and close with those schools and know those schools and the issues that they are presented with, and are supporting them.

Chris Baillie: Is she aware that the number of home-school students increased from 6,000 in 2017 to nearly 11,000 in 2023, and does she accept that this 81 percent increase is an indication that parents are losing faith in the education system?

Hon JAN TINETTI: That member will be aware that a big reason why that happened was because we had been through a pandemic. Sometimes they do forget that there has been a pandemic that has created a disruption to our school learning. What that member should also be aware of is that those home-school numbers are coming back down again because those people are re-entering school. And what is happening is that there is a growing number of them coming back into the schooling system and showing great support for the State system.

Question No. 9—Health

9. Dr SHANE RETI (National) to the Minister of Health: What is the latest Faster Cancer Treatment (31-day indicator) result, and what current hurdles are there for improved cancer management?

Hon Dr AYESHA VERRALL (Minister of Health): The Faster Cancer Treatment 31-day indicator is the proportion of patients who received their first cancer treatment within 31 days from the date of decision to treat. Health New Zealand’s most recent clinical performance metrics for January to March 2023 is 83 percent; the target is 85 percent. I am confident performance against this metric will improve as our efforts to grow our workforce take effect. To the second part of the question, a hurdle to purchasing expensive cancer treatments is when a politician promises to purchase specific medicines without allowing Pharmac to negotiate a good deal and make our dollar go further.

Dr Shane Reti: Is 83 percent the worst Faster Cancer Treatment 31-day indicator in the past five years?

Hon Dr AYESHA VERRALL: It is not that different from previous performance against that indicator.

Dr Shane Reti: When will the Cancer Control Agency complete the chemotherapy gap analysis with Australia, for blood cancers such as myeloma and leukaemia?

Hon Dr AYESHA VERRALL: That work is under way. But, speaking of the cancer agency, that agency does tremendous work to define how we should better look after cancer. And it’s a reminder of one of the many initiatives that this Government has brought in to improve cancer care, after the previous Government disestablished the Cancer Control Council. It’s also worth remembering the 10 linear accelerators our Government has built, when no cancer radiation treatment and infrastructure was built under the last Government. It’s worth remembering that the last Government promised to implement HPV screening, something this Government has brought in. It’s also worth remembering that the bowel screening—

SPEAKER: It’s also worth remembering this is not a speech.

Dr Shane Reti: Is 83 percent the worst 31-day Faster Cancer Treatment indicator in the past five years?

Hon Dr AYESHA VERRALL: I am aware that that figure has been around the target across the five years. If that member wants a more specific answer on those statistics, they are welcome to put that question on notice.

Dr Shane Reti: Has she asked officials to assess how many people go to Australia each year to receive cancer medicines that have significant clinical benefit that Australia funds and we do not, and, if so, how many people is that?

Hon Dr AYESHA VERRALL: This Government has increased the budget for Pharmac considerably—by 51 percent. And it has had a tremendous impact on the treatment of cancer in New Zealand: multiple treatments for advanced non-small cell cancer, for ovarian cancer, for breast cancer, for myeloid leukaemia, for refractory follicular or marginal-zone lymphoma—the list goes on and on.

Question No. 10—Local Government

10. RACHEL BOYACK (Labour—Nelson) to the Minister of Local Government: What Government initiatives will help limit future local government rates increases?

Hon KIERAN McANULTY (Minister of Local Government): Kiwi households and businesses are doing it tough. Across the board we are implementing measures to take the pressure off. Most local authorities are faced with no choice but to put rates up to meet the rising costs of providing services to communities. It is important that Government supports local government to keep rates down. One example of this is the Government’s affordable water reforms. Without these reforms, rates rises will become unbearable. Through these reforms, we’ve managed to keep forecasted rates rises down. For example, the establishment of the Auckland and Northland entity will avoid the doubling of charges projected in Auckland Council’s 2021 to 2031 long-term plan. This will also bring average household charges in Northland down to similar levels to those in Auckland.

Rachel Boyack: What would repealing and reversing the affordable water reforms do to rates rises?

Hon KIERAN McANULTY: Repealing and reversing affordable water would be a disaster for the rate-paying public. For example, in the Wellington region, which uses the council-controlled model, a model that has been put forward by some as an alternative to reforms would see a 60 percent rates increase by 2054. These are forecasts that have been verified by engineering consultancies Beca and Farrierswier. To put that kind of pressure on Kiwi households is unfair and unjustifiable.

Rachel Boyack: What would repealing and reversing the affordable water reforms mean for infrastructure investment if councils can only rely on rates?

Hon KIERAN McANULTY: New Zealand faces up to $185 billion of required investment in water infrastructure, and local authorities have told us that they cannot do it by themselves. If affordable water reform is reversed, small and rural councils will be left out in the cold and without the means to make the required investment. Councils in Otago and Southland, for example, by 2054 will need to introduce annual household charges of nearly $10,000 per year to make the required investment in their infrastructure. Many of these councils are near their debt ceilings or their populations simply can’t cope with higher charges. That means critical investment won’t be able to be made and levels of service will decline.

Rachel Boyack: How is the Minister showing commitment to the sector to help them keep rates under control?

Hon KIERAN McANULTY: When I visited all 55 rural and provincial councils, the messages I heard were consistent: localism works, but councils can’t be left to fend for themselves with only limited ways to generate income. Small and rural councils can’t rely on rates from large populations or significant businesses to cover their costs. I’ve been clear that under any reform I undertake as Minister, no small or rural council will be left behind. I note that no such commitment is being offered by members on the other side of the House.

Question No. 11—Education

11. ERICA STANFORD (National—East Coast Bays) to the Minister of Education: Does she stand by her statements and actions?

Hon JAN TINETTI (Minister of Education): Yes, in the context in which they were given and taken.

Erica Stanford: Why did she announce a policy that makes the methods that teachers use to teach numeracy and literacy mandatory when the final Common Practice Model document that outlines what those practices actually are is not due to be published until November—after the election—according to the time line published by the Ministry of Education?

Hon JAN TINETTI: As I said when I announced that yesterday, to make certain that teachers have enough time to engage in the process from here through to when the final copy comes through but also in the 18 months that they will have to work through that document so that we can make changes as a Government.

Erica Stanford: On The AM Show this morning, when she was asked if structured literacy would be one of these compulsory methods of teaching New Zealand kids how to read, why was she unable to confirm this, stating, “I haven’t seen, to be fair, what has come back from the expert group yet.”?

Hon JAN TINETTI: Because I haven’t seen what has come back from the expert group.

Erica Stanford: Can she confirm that the teaching practice for math contained in the draft Common Practice Model that states that “A critical maths [theory develops] critical awareness about wider social, environmental, political, ideological, and economic issues [and] recognises the importance of understanding, interpreting, and addressing issues of power, social justice and equity” will be a compulsory method for teaching mathematics?

Hon JAN TINETTI: The member has selected a quote from the principles and pedagogical approaches, a draft document for teaching professionals—for teaching professionals, not politicians. The pedagogical approaches in the Common Practice Model are theoretical frameworks or approaches to teaching informed by evidence on how students learn. Let me put that in layperson’s terms: it is putting learning into the context of the students, and it will lead to better learning outcomes.

Erica Stanford: Can she explain why the Government has now backtracked by mandating the methods teachers must use in literacy and numeracy when the previous Minister of Education Chris Hipkins stated in just September last year, “The exact methods that teachers use in order to teach are matters of professional judgment for the teachers. … ultimately the teacher in the classroom is the person who is best positioned to make that [decision]”—effectively refusing to even contemplate mandating teacher practice?

Hon JAN TINETTI: Yes, I can say that I absolutely agree with the former Minister of Education. The fact that the member thinks that’s what the Government is doing here shows she has misunderstood the announcement.

Erica Stanford: How can the New Zealand public and parents trust a Government that is mandating, or asking an expert to mandate, the teaching practice teachers will use to teach literacy and numeracy when those actual practices will not be released until November this year, after the election?

Hon JAN TINETTI: Because it is about providing clarity about what needs to be taught and when. The announcement is to get teachers on board with this decision, to get them to come with the decision. I will notice that I have had a number of teachers who have contacted me to say that this is a good move and they welcome it.

Erica Stanford: Supplementary question—

SPEAKER: I’m sorry, you’ve run out of supplementaries.

Question No. 12—Justice

12. VANUSHI WALTERS (Labour—Upper Harbour) to the Minister of Justice: What progress has the Government made on preventing litigation abuse for victims of family violence?

Hon GINNY ANDERSEN (Minister of Justice): Today, the Government introduced a bill to strengthen the courts’ powers to protect victims of litigation abuse in family proceedings. Litigation abuse is where someone uses the court system itself to harass, contact, or control their victim rather than resolving legitimate disputes within the court system itself. The Victims of Family Violence (Strengthening Legal Protections) Legislation Bill provides better protections for victims of family violence by providing judges with the power to make orders in response to litigation abuse. I remain proud of our strong track record of supporting victims compared to the previous Government, which cut funding to Victim Support.

Vanushi Walters: Why is litigation abuse an important issue for the Government to work to prevent?

Hon GINNY ANDERSEN: Litigation abuse includes the type of cases where an abuser may present fabricated allegations or file multiple court documents that take the victim’s energy, time, and money to respond to. We have seen the court system used to cause even further harm to victims of crime. This is simply unacceptable and it is not in line with our expectations of how the court system should work. This bill provides better protections while ensuring that there is appropriate access to courts.

Vanushi Walters: How does the bill help address litigation abuse?

Hon GINNY ANDERSEN: Under the new provision, courts will have to take a broad view of conduct in the family proceedings to determine whether someone is abusing the court’s processes—for example, by using the process to harass someone. Once a determination has been made, the court can then decide to make an order requiring the court to review and approve further steps in proceedings to ensure that they are, in fact, appropriate. Currently, victims of litigation abuse must meet a high threshold before they can access the protections they should be entitled to. The protections focus on the types of documents and proceedings rather than the patterns of abuse. That is unacceptable and this bill will improve victims’ rights and experiences in our courts.

Vanushi Walters: How does the bill fit into the Government’s wider reforms supporting better outcomes for victims?

Hon GINNY ANDERSEN: This bill is part of a first phase of reform and sits together with the Victims of Sexual Violence (Strengthening Legal Protections) Legislation Bill, which addresses known issues in the justice system by reducing the risk of children being questioned about consent in court and giving greater choice in complaints in sexual violence proceedings around name suppression. Also, there are three pilot programmes in place to improve safety and help navigate the court system for victims of serious crime, to strengthen support for child victims of sexual violence, and to ensure victims’ views are provided in bail decisions; and, finally, additional funding to help Victim Support and the Victim Assistance Scheme.

Bills

Imprest Supply (Second for 2023/24) Bill

Introduction

SPEAKER: I understand it is the Government’s intention to introduce an imprest supply bill.

CLERK: Imprest Supply (Second for 2023/24) Bill, introduction.

SPEAKER: The bill is set down for first reading immediately.

First Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Imprest Supply (Second for 2023/24) Bill be now read a first time.

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

A party vote was called for on the question, That the Imprest Supply (Second for 2023/24) Bill be now read a first time.

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.

Motion agreed to.

Bill read a first time.

Bills

Appropriation (2023/24 Estimates) Bill

Third Reading

Bills

Imprest Supply (Second for 2023/24) Bill

Second Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2023/24 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2023/24) Bill be now read a second time.

This is the conclusion, effectively, of the Budget debate, and I will return to the Government’s Wellbeing Budget in a moment. But firstly, to deal with the Imprest Supply (Second for 2023/24) Bill, what this does—as all imprest supply bills do—is provide interim parliamentary authority for expenditure decisions made, or to be made, by the Government through to the end of the financial year that are in addition to the amounts in the Estimates, in this case the 2023/24 Estimates.

The second imprest bill provides for any operating or capital spending decisions, including pre-commitments against future Budget allowances, and expenditure incurred against the between Budget contingency and national resilience plan. It also covers fiscally neutral adjustments which increase one appropriation but decrease another, confirmation of expense transfers, increases in demand-driven appropriations, and draw-downs of existing tagged contingency. Provision is also made for any risks that may materialise during this period.

The amount requested in the Imprest Supply (Second for 2023/24) Bill is $28.5 billion made up of about $16 billion of expenses, $11.5 billion of capital expenditure, and $1 billion of capital injections. This is the same amount sought in last year’s second imprest supply bill and significantly lower than the $41 billion sought in the Imprest Supply (Second for 2021/22) Bill. The amount sought in this imprest supply bill will be sufficient to cover any expenditure that may occur in the financial year that is in addition to what is in the 2023/24 Estimates, including responding to extreme weather events.

Treasury reporting indicates that actual expenses incurred against imprest supply Acts are consistently lower than the authority provided for by the legislation. For example, the June 2023 controller report indicates that the actual expenses incurred against the Imprest Supply (Second for 2022/23) Act 2022 totalled approximately $11.4 billion. That’s less than half of the authority provided in the Act, which totalled $28.5 billion. All expenditure incurred under the interim authority of the second imprest bill will need to be appropriated by Parliament before the end of the financial year, as is the case every year. This will be done through the Appropriation (2023/24 Supplementary Estimates) Bill, which gets introduced on Budget Day 2024.

In addition to the imprest supply bill, as I said earlier, this is the final reading of the Appropriation (2023/24 Estimates) Bill. The Budget debate comes to a conclusion. Can I reiterate, as I have said several times during this debate at different readings, how proud I am of Budget 2023. Because what that did was strike a balance, an important balance, for New Zealanders facing cost of living pressures but, equally, knowing that the Government needs to return to a more sustainable fiscal approach after the significant investments made during the COVID period, also knowing that we need to balance that against making sure that public services are provided to New Zealanders in the way that they both need and expect them to be provided, and that we responded to the weather events of January and February.

It’s there that I want to start. I am proud that this Government stepped up straight away with the kind of emergency response that New Zealanders need in these moments. That we were able to be there and provide hundreds of millions of dollars of support in that immediate emergency response phase is both a tribute to the people on the ground in New Zealand—those who work within our civil defence apparatus—but also the marae, the local communities, and those who do that work. We are for ever grateful for that, and as a Government we have backed them. We can only do that as a result of the balanced and responsible approach that we take. But we added to that in this Budget with a further close to a billion dollars, making a total of $2 billion that has gone towards the recovery and the rebuild from that cyclone. That is made up of many, many different things.

I just want to highlight a couple of those. The fact that we now have transport networks across the affected regions reopened—virtually every part of the network now usable—is a tribute to some extraordinary work. And when we see the Bailey bridges being deployed and how much that meant to the communities around it, I am proud that we funded that in this Budget. But it goes all the way down to smaller initiatives as well: the work that’s been done to roll out mental health support in the regions that have been affected by the cyclone, particularly for children as well. As we’re working day in, day out to improve the delivery of those services, we know that they make a difference as well. So that was a big part of Budget 2023: to step up to use our balance sheet to make sure that we look after New Zealanders in times of need. That is what New Zealanders rightly expect of their Government and that is what we have done in this Budget.

But alongside that, we have sought to ease the cost of living pressures that New Zealanders face whilst doing that in a way that does not exacerbate inflation unnecessarily and achieves other goals that the Government has. That includes, for example, the $5 prescription fee being scrapped, meaning that the 135,000 New Zealanders who didn’t pick up a prescription because of the cost last year will now get the health care that they need. The important thing here that Dr Ayesha Verrall was indicating today is what that means is that many of those people end up in our emergency departments because they haven’t picked up their prescription. So this is actually a win-win, in terms of the Budget, just as, I might say, making free public transport is for under - 13-year-olds and half price for under 25year-olds, because that is not only relieving a cost of living pressure; it is also good for our environment to see more people in public transport.

Then there is the early childhood education commitment that sees the 20 hours’ free policy extended to two-year-olds. As I went around the country promoting this Budget, it was that initiative that was raised with me time and time again by people who knew that this would make the difference for them. [Interruption] This is an example where members on the other side of the House who are interjecting might actually think about the fact that this policy is not only good for families; it’s also good for our businesses because this means that people can return to work earlier than they might otherwise have done. That was the comment I got from young parents, particularly young mums, saying this is the chance, this is the opportunity, because this Government and this Budget delivered that cost of living relief.

The other significant part of the spending in the Budget is around public services and making sure that we invest in our teachers, in our nurses, in our hospitals, and in our schools. That investment does not happen by accident. Sometimes when we’re in this House, it appears that members opposite believe that it is a given that that sort of investment will be made. Well, it’s not. And the reason we know that it’s not a given is because it didn’t happen the last time that National were in office.

This brings me to the other theme of the Budget, and that is around fiscal responsibility. It is always a balancing act, putting a Budget together. There are hard and tough decisions to be made. We know New Zealand households are making hard and tough decisions, and we have been doing the same thing as we bring our spending back down from the necessary levels of COVID. To get that balance right, to be able to provide public services, to be able to ease the cost of living pressures that people are facing, to be able to make our country more resilient to climate change—to do all of those things and make sure that we’re being careful fiscally is tough.

The thing that would undermine that is proposing huge—billions of dollars of—unfunded tax cuts, tax cuts that would see millionaires receiving a thousand dollars a year while those on the minimum wage get two bucks a week. That kind of tax cut, worth billions of dollars, can only be funded in this environment by making sure that public services are cut. That’s the only way it can be done, because otherwise it means increasing debt, and that’s been ruled out by the National Party; they’re not going to do that. So apparently they’re going to do it by cutting services—billions of dollars—cuts to education, cuts to health, cuts to housing, cuts to the services we rely on.

Nicola Willis: No, no.

Hon GRANT ROBERTSON: The member opposite says no, it’s not. Well, she should have a chat with her coalition partner David Seymour. She should have a chit chat with David Seymour, because what he says is we can get rid of thousands of public servants. Well, that’s one thing that’s bad. But the second part of it that’s bad is that, actually, that would be the end of the screen sector, which is funded in this Budget. That would be the end of the game development rebate funded in this Budget. There would be the end of the major events fund that brought us the FIFA Women’s World Cup. All of that gone. So there will be cuts—there will be cuts if there is a change of Government.

This Budget is something I am extremely proud of. It is a Budget that got the balance right in tough times. We continue to face those tough times, and as a Government we will step up to meet our fiscal rules, to get back into surplus across the forecast period, to keep debt under 30 percent, but all the while we will invest in our people and we will support them through these tough times. That’s what Budget 2023 does and I am very proud to present it back to the House.

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

NICOLA WILLIS (Deputy Leader—National): This is a valedictory of a Budget. It is a farewell Budget from a Government that has been unable to respond to the times and the needs of the New Zealanders they are meant to serve. In this Budget, we have Grant Robertson at his symbolic best: taxing more, spending more, and digging us into deeper deficit, more debt, and lower growth. That is the testimony of six years of Labour.

In 2019, before COVID came to New Zealand, our core Government debt was $5.4 billion. In this Budget, Grant Robertson has delivered, as we stand here today, $73 billion worth of debt, and it’s set to blow out even further to $95 billion. The question that New Zealanders ask me up and down the country is, “Nicola, what do we have to show for it?” Because, when they look around them, they see that in their family and their household they are beset by a cost of living crisis that means they struggle every fortnight to balance their bills and their income. Groceries have gone up, petrol has gone up, their rent has gone up, their mortgage has gone up—everywhere they look, costs have gone up.

Steph Lewis: You want to drive their rent up further by allowing foreign investors back.

NICOLA WILLIS: Well, to that member, let me inform you: rents have gone up $175 a week on average under Labour. That’s what you have delivered for renters, and that’s before we talk about those with a mortgage, who have seen interest rates climb so fast that those with mortgages—firsthome buyers in particular—have been left scrambling, trying to find hundreds of dollars a fortnight to service their mortgage. While, on that side of the House, they like to say, “Oh well, incomes have gone up”, New Zealanders aren’t foolish; they know that, while their incomes have gone up in nominal terms, it hasn’t kept up with the real increase in costs. So, every fortnight, they find themselves slipping backwards. What National says to the members opposite is that you can’t care for people if you don’t care for the economy, and in this Budget we have all the signs of a Government that has given up on caring properly for the economy.

What it does is it increases spending without delivering more for the people that spending is meant to serve. When we compare the amount the Government promises to spend in this Budget, this year, with how much was spent in 2017, we see an 80 percent increase. Again, wherever I go in the country, New Zealanders say to me, “Nicola, which public service is 80 percent better?” It’s not as if the hospital waiting lists are 80 percent shorter. It’s not as if people are waiting 80 percent less time in the emergency waiting room. It’s not as if educational standards have risen 80 percent or violent crime has reduced by 80 percent. What this Government has done again and again, in Budget after Budget, is mistake the act of spending money with the need to deliver results.

It is not enough to simply take more tax from New Zealanders—more of what they earn—and throw it at big promises; actually, what New Zealanders want is the delivery of results, and they have not had that under Labour. This is another Budget which refuses to give them more of what they have earned, to allow them to keep more of it, and instead promises to spend and spend and spend.

This Budget should have delivered income tax reduction. It should have put more dollars in the back pockets of working people, who have been pushed into higher tax brackets because of inflation. The Government is collecting around $100 million a day more in tax, and yet it says it couldn’t possibly afford to let New Zealanders have income tax reduction. Well, I would put to you that a Government who even in the middle of a cost of living crisis, with New Zealanders unable to pay their bills, can’t see the case for tax reduction but thinks it must continue to spend New Zealanders’ money is a Government that has lost sight of the people it is meant to be serving. This is a Budget that continues to allow the cost of living crisis to burn on. I remember when Grant Robertson promised New Zealand that inflation was a short-term challenge. Well, here we are and we are entering the third year of a cost of living crisis in which inflation is outside New Zealand’s target range.

What all of the economists warned was that, if the Government keeps doing these expansionary, big-spending Budgets, they will add fuel to the inflationary fire, but Grant Robertson took no heed. In fact, in every Budget he has delivered, according to the Treasury’s own analysis, he has, on average, spent $600 million more than he promised he would six months prior in his Budget Policy Statement. This is a Government whose spending is completely out of control and who has allowed that to fuel the cost of living crisis. We learnt last week that, as a result of that persistent and sticky inflation, interest rates are likely to stay higher for longer. That will burn not only New Zealanders with a mortgage, who will find that they have less discretionary income in their household because they’re having to service bigger debt repayments; it will also hurt the small and medium businesses which we desperately need to see growing this country out of recession.

Those who took on debt during COVID to get through are now flipping on to higher interest rates that many of them simply can’t keep up with. So we see the recession rolling on. What this Budget should have done is provide a path out of inflation and high interest rates with disciplined spending. It should have reduced the taxes that New Zealanders pay, and it should have had a focus on delivery for results.

The finance Minister, in his remarks, talked about his fiscal goals. Well, when this Budget was set out, it promised that New Zealand would return to surplus in 2026. The surplus noted is around half a billion dollars. We’ve now had multiple people come out and say it is highly unlikely that the Government will meet that target, because recessionary conditions are such that the books have completely blown out. So, actually, what we have in this budget is a Government that is delivering higher deficits into the future, huge debt, huge spending, and huge tax. And could there be anything more Labour than that? Six years of a Government that got the money hose, sprayed it all around—with very little care for what results they would get for it or what discipline they would take from it—and who has left New Zealanders worse off by almost every measure: health services, described by those who work on their front lines, are in crisis; schools, where standards in the basics of reading, writing, and maths have declined so much that the education Minister, Jan Tinetti, has decided to adopt the National Party spokesperson Erica Stanford’s policy; crime that’s up so much that, when I knocked on someone’s door recently, she was almost in tears when she told me what her staff have had to put up with in the shop that she owns, including being bitten by another human being and threatened with a hammer.

So the point here is that Labour has not only managed to spend without getting results, they’ve now burdened future generations of New Zealanders with cleaning up the mess that they have left. As we stand here today, New Zealanders are being overtaxed, paying more tax than ever, both in individual terms but as a proportion of the economy as a whole. The amount of money that the Government is soaking up into its own spending is much greater as a proportion of the economy. Our deficits are bigger and deeper than they should be, and we have debt that, as I say, has risen to $73 billion and is forecast to go up to $95 billion.

As I said at the beginning, this is a valedictory of a Budget because it’s a farewell Budget. It’s a typical end of a Labour Government: to leave the next Government with the books in a mess, huge amounts of debt, public services that have gone backwards, and everyday New Zealanders struggling because they lost sight of the basics of economic management, of disciplined spending, of ensuring that their actions didn’t put more pressure on inflation and interest rates.

They can dress it up with all of the slogans and attack lines, as Grant Robertson attempted to do, but the reality is being felt by New Zealanders, who know that under Labour they are worse off than they once were and that the team opposite me cannot be trusted to deliver for them. The good news is that a National Government can deliver, will reduce their tax, bring discipline to spending, solve the cost of living crisis, and deliver better services by ensuring value for their money. That’s what a good National Government will do.

Hon Dr MEGAN WOODS (Minister of Housing): The last 10 minutes has been a chilling Dickensian view, window, into what the future would look like under a National/ACT Government. We have heard nothing but the coded rhetoric of cuts to core public services, from the Opposition finance spokesperson in what she just gave us in the last 10 minutes. Listening to that, I’m once again reminded of how lucky this country has been to have six Grant Robertson - led Budgets. It is an absolute privilege to take a call in this debate to talk about that Budget, what it means for New Zealanders, and what it is delivering for New Zealanders.

As the Minister of Finance said in his address in this debate, this was a Budget that had to strike a balance, and a difficult balance. I want to congratulate our Minister of Finance, Grant Robertson; and our Prime Minister, Chris Hipkins, for threading the needle once again through those difficult times, for finding a way for us to provide support for everyday New Zealanders who are finding it tough, but never losing sight on the fact that we have to plan and build for tomorrow. That is exactly what Budget 2023 did. We focused on what mattered most to New Zealanders right now, like dealing with measures that will deliver on the cost of living.

But we did not shy away from facing up to those issues that no Government should take its eye off, like dealing with climate change, like properly planning for our infrastructure. Sadly, that is exactly the lack of vision that we have seen for decades from the National Party and that we are being reminded of again—that their short-term thinking would be delivered in any Budget that they served up.

So if we think about what we did to support New Zealanders in these immediate times that are difficult, in Budget 2023: cheaper childcare. As my colleague, the Minister of Finance, said, not only is the support for two-year-olds in early childhood incredibly important for our families in dealing with their household budgets, but this is also incredibly important for businesses in terms of the women—largely women—returning to the workforce after having children.

We also saw Budget 2023 dealing with helping New Zealanders with their health costs. Now, like probably far too many colleagues in this House—well, certainly on this side of the House—I visited pharmacy after pharmacy in my electorate of Wigram and saw the boxes of unpicked-up prescriptions; or talked to the pharmacists about their customers who have come in and asked the pharmacy staff to help them make the difficult decision about which of their medicines they’d pick up that day. Would they choose their diabetes medication? Would they choose their heart medication? Would they choose their blood pressure pills? These are the kind of choices that New Zealanders were having to make, and is why in Budget 2023 our Government saw it as such a priority.

Nobody benefits from those left-behind prescriptions sitting in the boxes of pharmacies all around this country—certainly those individuals and their families that are having to make those hard choices and certainly not our wider health system that ends up dealing with the ramifications of someone not taking their medicines that their GP provided them, when they turn up at an emergency department with a far more serious health concern.

They’re the kind of issues that we looked at in Budget 2023—for cutting transport costs, for making sure that we are continuing to support New Zealanders and take some of that burden off budgets. Also one that I am particularly proud of: reducing power bills through continuing to roll out our Warmer Kiwi Homes that now not only provides for the insulation of thousands and thousands of New Zealanders’ homes to help them cut their power bills, but also allows for installing efficient heating sources like heat pumps, but also, for the first time ever, making minor repairs to homes so you can insulate them. You cannot insulate a home properly with rotting windows and holes in the roof; you simply cannot do it. So I was very proud that we were able to do that.

What I was also very proud of is that we continued to see an investment in our public services. It is our Government’s commitment to supporting our public services that has meant that we have delivered pay rises for nurses, that we have delivered pay rises for teachers, that we have been able to invest in these professions that are so critical. We were only making up for nine years of absolute neglect in this area from a National Government previously. As the Opposition’s spokesperson told us, that our Budget exemplified Labour, I think what we heard from that member did nothing more than exemplify what a National Government would deliver and what a National Budget would deliver.

What we have heard from National and its coalition partner, ACT, of what would be gone: fair pay agreements, gone, cut; the things that will deliver wage increases for working New Zealanders, gone under a National/ACT Government; cutting free prescriptions, gone under a National/ACT Government. Instead, we’ll see the return of those boxes filled of unpicked-up prescriptions, which sit there doing nothing rather than treating the New Zealanders they should be.

We also know that a National/ACT Government: cut KiwiSaver contributions. We know that a National/ACT Government will raise the age of superannuation eligibility. We know that a National/ACT Government will cut benefit levels. We know that a National/ACT Government will cut the winter energy payment. We know that a National/ACT Government—despite many of its members picking it up themselves—will cut the clean car discount. We know that a National/ACT Government will neglect to do anything on climate change and try and roll New Zealand back into some kind of 1970s sitcom. They want to restart oil and gas exploration offshore. The rest of the world is facing up to the fact that we have to take decisive climate action and that our future and our prosperity lies in a renewable future. But not this Government that is intent on taking us back to some kind of dystopian past.

While we hear the crocodile tears from the Opposition that there is a plan that will benefit working people and put extra money in their pockets through their unfunded tax cuts, the reality of that for working people is two bucks a week while the highest earners receive over $1,000 a year. So spare us the crocodile tears.

The reality for working people is they will have their fair pay agreements cut. They will be back to paying for their prescriptions. KiwiSaver contributions will be cut. The age of eligibility for superannuation will be raised. There will be a cut to benefit levels and that money to help with the power bill over winter in the form of the winter energy payment: gone. Their ability to shift to a more affordable form of transport in the form of electric vehicles through the clean car discount: gone. All of this so the highest-earning New Zealanders can get an extra thousand dollars a year. So the National Government and its ACT mates need to come clean with New Zealand.

There are going to be cuts. They will be deep. Make no mistake about it: if this country was to have the misfortune to have a National/ACT Budget delivered next year, it would exemplify the coalition of cuts. This would cut deep and this would go to the hearts of working and ordinary New Zealanders who deserve better. I am proud to be part of a Government that has delivered a Budget that does strike that careful balance—that does offer support for today but delivers for tomorrow.

ANDREW BAYLY (National—Port Waikato): Well, it’s a pleasure to be talking on the Appropriation (2023/24 Estimates) Bill and the Imprest Supply (Second for 2023/24) Bill.

Gee, that was a dreadful speech. It was shocker from a senior Minister. It was actually full of a whole lot of mistruths—if I can say that—particularly around the issue of the winter energy payment. National is going to maintain the winter energy payment, and I don’t even know where the comment around the KiwiSaver reduction came from—it’s just absolute figments of her imagination.

It looks like a morgue over there. What has happened over there? There’s no energy. I reckon they’re all on their phones looking for jobs: “I wonder what I’m going to do in 55 days’ time.” You couldn’t even support your senior Minister; you’re all sitting there going, “Whoa, woo, oh, ooh.” What is happening? Show a bit of enthusiasm, fight to the last! They’re just giving up—you’re all giving up. It’s just disappointing to see.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! The member knows that when he refers to and uses the term “you”, he’s referring to me. Please do not bring me into the debate.

ANDREW BAYLY: I know, I know, Madam Speaker; you would never give up, I know that. So maybe it’s worthwhile just—[Interruption] Oh, look, they’ve come alive now! Well, why don’t we talk about a few figures? Because I know these people are so well versed with what’s happening in the economy. Gee, I listened to Mr Grant Robertson talking about fiscal responsibility. He loves using that term. I just wish he’d use the word “discipline”, because he has never shown any discipline. Of course, these two bills which we’re meant to be talking about are about providing a little bit of extra cash—so do you have to spend a little bit more? Well, unfortunately, he’s only got 55 days—hopefully.

So we have witnessed six Budgets where Mr Robertson has overspent what he said he would do; technically referred to as operating allowances. But we have seen year after year of him blowing these Budgets and this is partly what this is about. We have seen during the last six years a record increase in tax. What I find staggering is if you are a business with a type of growth in the amount of new tax revenue that this Government has sucked out of New Zealanders, out of their back pockets, out of businesses, it has gone from—back in 2014—about $75 billion, this year it’ll hit about $123 billion, $124 billion. That’s a $50 billion increase this year—a $50 billion increase in revenue.

Gee, if you had a business that suddenly went, in a matter of six years, to suddenly having $50 billion extra of revenue—or basically more than half of the value that you were getting six years ago—you’d think that’s a pretty good business. This is what the Government’s had, because we’ve had such rapid inflation, partly driven by the Government. Tax revenue has gone up because people have gone up into higher tax brackets and they’re paying more out of their back pocket. It’s called fiscal drag, the technical term.

But even with this $50 billion of extra money, this Minister of Finance keeps spending even more. That’s been the most appalling thing about what’s happened over the last six years; we have racked up these incredible losses. And do you realise, Madam Speaker—and I’m talking to you—that from the period 2020 to 2023, four years, this country has racked up $45 billion of losses. You imagine going to your bank, even if it’s $45,000 or $45 million, whatever, going to your bank and saying, “Every year for the past four years, we continue to rack up losses”.

What’s worse, the Budget even anticipates another $10 billion of losses over the next two years. That’s $55 billion. But what is even worse, as we’ve heard from Westpac, who are normally pretty conservative, they think, because we have got a declining economy, even worse than it was projected in the Budget, that this country will rack up another $15 billion of losses on top of that. That’s a staggering amount of money. That is $65 billion of losses because even though our tax revenue has gone from $75 billion to $125 billion, we cannot—and this Government has not been able to contain itself. It is unbelievable how wasteful, how inefficient, how inept this Government has been. That Minister who was just speaking before, Megan Woods, she is an associate finance Minister; she should be appalled at their record because whatever way you cut it, it has been disastrous management of the economy. And most of it has been driven by wasteful spending.

Most of it has occurred during COVID. We would have done some of the $60 billion of additional spending that was spent by that Government during COVID. We would have done the wage support, we would have done some more support, but there’s probably a missing $25 billion that has just gone into the ether. As Nicola Willis said before, “What have we got to show for it?” What have we got to show for that $25 billion that’s just gone into the ether? Have we had a new harbour crossing in Auckland? Have we seen new roads around the country? Have we seen lots more projects with hospital builds? Well, we’ve seen the Dunedin Hospital build; even though we signed off on the business case six years ago, it’s only just really starting—six years later. That’s how inept these people are and that is why we’re so worried about it.

We have just got rid of truckloads of money out the back door with nothing to show for it. I’ll tell you another thing: if you think about the increase in the Public Service, and I know the members opposite love talking about this, but we have seen a 14,000 increase in public servants, and many of them are well meaning, don’t get me wrong. But that 14,000 increase in the Public Service is a cost to the country, to all of us, of $1.4 billion. If you extrapolate that over 10 years—and remember this Government has been in power for six already—another four years of that would be the equivalent of $14 billion. That is the same amount of money that we could do an across Auckland Harbour crossing without even talking about funding. That is the scale of the wasteful spending that has gone on from this Government. Of course, what we’ve seen is this rapid increase in debt because where do you go if you’ve got increasing tax revenue but you spend more and you waste it, what’s the balancing factors there?

So we’ve seen debt go from roughly $6 billion to $73 billion. That is a staggering increase. Our gross debt stands at about $135 billion. If you were a household and you kept going to your bank and saying, “I want to keep spending it like this”, they would have made you bankrupt—they would have put you into bankruptcy.

Of course, the other really worrying thing—and we started asking the Reserve Bank about it; I started asking questions about this 18 months ago—is the current account deficit. Of the top 40 economies in the world, New Zealand has currently got the highest current account deficit. I’ll tell you what: going from the bottom back upwards—this is in the first quarter of 2023, to be factual—we are at the bottom; we’re behind Latvia, Belgium, Hungary, and Colombia. Oh God, Colombia is a wonderful financially managed country, I’m sure. Nice country, but I’m not sure. Mexico: they’ve got a lower current account deficit than us; Brazil: Brazil’s had a few economic issues, I believe, but, hey, don’t worry, they’ve got a lower current account deficit; India; and what about Greece? Greece has got a better current account deficit, or lower than we have.

That just shows how shameful this management of this economy in New Zealand has been by this Government, and people know it. People in the street know it. They don’t always know the details and they don’t all know about the tax revenue and all that sort of stuff. But they understand it and it’s burning a hole in their pocket because what this Government has been doing is taking that money out of their back pocket and just spending on this wasteful stuff, and, eventually, people work that out and this Government finally is being found out. It is horrendous what’s going on and the worst thing is it’s working New Zealanders now—mum and dads who are working for a wage, have got children—seeing their interest rates on their mortgages just dramatically increasing, their food costs skyrocketing, fuel prices gone up. They are the hard-done-by in New Zealand.

We will come in and have to fix this mess. But it is such a bad state that this Government has driven New Zealand back to. It is appalling when you actually look at it and analyse it and think about it for more than five seconds. It has been pitiful. This is a Government bankrupt of ideas. This is a Government that needs to leave. This is a Government that needs to be voted out of office.

INGRID LEARY (Labour—Taieri): Oh, it’s really difficult to sit and listen to the previous speech from the National Party member Andrew Bayly because of the hoodwinking that National tries to do when it comes to financial statistics. We’ve heard about the so-called high debt ratios. Well, New Zealand sits in the lower half of debt compared to our GDP of all the OECD. But, actually, the other statistic which the previous speaker didn’t mention is how our relative incomes fare, and, actually, our relative incomes and income inequality are really low. That’s what this Government has been seeking to address throughout these two terms.

Budget 2023 shows a Government that targets the support to those who need it. We take inflation seriously. We understand the urgency of climate change. But perhaps most importantly, we have a costed Budget, one where the numbers add up and where we are really clear and transparent about those numbers. I cannot say the same for the other side.

Of course, the cost of living has been hard for everybody. That is why this Government took the fees off the prescription charges so that there are free doctors’ prescriptions for those who really need them. That is a double win. It means that people get their medicines on time, they can afford their medicines, but it also takes pressure off the health system. We don’t see the same levels of chronic illness that we did prior to that happening.

There is cheaper childcare. There are the 20 free hours’ early childhood education (ECE) for twoyear-olds, which makes a significant difference to families that are working—for women, in particular, who want to get to back to the workplace where previously the economics haven’t stacked up for them to do so. They now can make that choice to go back to work for their families, knowing that their families will be up to $138 a week better off.

There is free or half-price public transport for children and young people. That’s made a really big difference in my electorate for those who need to get out, not only to be able to contribute to society but also for their own mental health, who previously have been homebound. We have very high numbers of public transport users in the electorate of Taieri and they have told me the benefit that that has given them.

There’s also the winter energy payment. Now, let me make no mistake: in cold climates like Dunedin, this is an absolute game-changer for our families and, particularly, for our seniors. Let’s be under no illusion: if this winter energy payment goes, that is going to mean that seniors are going to have to choose between putting food on their table or paying for heating in their house. I know that prior to the winter energy payment coming in, we had people who came down to our Labour rooms in Macandrew Road for social events simply to be able to get into a heated room. That’s what they told me.

We also have better pay for health and ECE workers and funding for 500 more nurses. When the previous speaker complained about what he described as the bloating of the Public Service, he was talking about nurses, he was talking about teachers. They are vital; we know that. That’s why this Government has increased their pay and that is why we are continuing to bolster that workforce. If he wants to see cuts in those areas, that means that we will have fewer teachers in our schools; fewer nurses in our in our hospital system. It just doesn’t make sense.

He also talked about the Dunedin Hospital. Well, it is Labour who builds hospitals. The National Party talked a good game for years about building a hospital in Dunedin with absolutely no intention of building it. The good people of Dunedin and of Otago know that. That’s why they are not buying the lines from the National Party.

What would happen under a National-ACT Government for all these particular initiatives is the free doctors prescriptions would go. Now, we know how difficult that will be for people. But what really concerns me about National’s announcements to do with cancer funding is not only the lack of competition and the high price that New Zealand would pay for those medicines—because there would be no competition; they’ve been promised by politicians—but it is a very, very dangerous precedent to have politicians meddling in something as fundamental as healthcare. That is really dangerous. How do we know that those politicians don’t have vested interests? How do we know that they’re not acting on behalf of particular family members? That is why we have clear rules around Pharmac. That’s why politicians have stayed out of it, and that’s the way it should be.

When National start saying they’re going to meddle with that, what else are they going to meddle with in terms of our really important democratic principles? What about 20 free hours’ ECE for twoyear-olds? That will be gone. Changes to Working for Families: that will be cut. Half-price transport: cut. The winter energy payment: cut. Now, National said they won’t cut it. Well, good luck to that, because if you’re in Government with ACT—which is what the reality would be if there was a change of Government—they have made it very clear they will cut the winter energy payment. Minimum pay rises: frozen for three years, if not gone, depending on who you believe—National or ACT. And yes, really tricky for my constituents.

They have made it very clear that they would raise the superannuation age. That is the superannuation scheme, the taonga of this country, introduced by the very good former member of my electorate, Sir Michael Cullen. They would tinker with that as well, and they would make it really difficult for our seniors.

What happens about the tax cuts that National want to introduce? It’s not only that they will benefit the rich but they won’t be funded; they haven’t been clear on where their funding has come from. So we’ve heard from previous speakers on this side that there would be cuts to health, cuts to education, cuts to the environment. The reality of the tax cuts being proposed by the other side is that they will actually benefit the rich, and people need to be really clear about that. We know that it’s hard for working families, but when people hear tax cuts, that sounds promising. They need to do the math. They need to understand where those tax cuts will go.

Under an ACT regime, it is actually the lowest paid who would be paying $800 more per year, because the lowest tax threshold would actually increase, and so they would be paying $800 per year. Under National, a person earning $180,000 would pay $7,270 less per year, but a low-income earner, it’s around $2.00 to $2.50 per week. That is the reality. Now, I don’t think the richest New Zealanders need a tax cut and I don’t think that ordinary New Zealanders think so. They’ve been enticed by the rhetoric. They hear the words “tax cut”, but they haven’t done the maths to understand where that sits for them and what that will mean.

Let’s not forget the high net worth individual research data that came out this year that shows some people in our society—the top richest in our society—pay a real tax rate of only around 9 percent. The rest of New Zealand—middle New Zealand—pay around 22 percent. That is the reality. That is the reality that caused Treasury to actually revise its figures upwards around the redistribution of wealth to say that the most wealth is concentrated in the top 26 percent of people, rather than the top 21 percent. That’s what that data shows. So why would we want to give tax cuts to those people?

Now, the other issue is just looking at how things will or won’t be funded. We know that the National Party are not being clear about how they’ll fund, particularly around transport, for example. Simeon Brown has said toll roads. Well, that’s a lot of toll roads to make up for a $9.5 billion shortfall over 10 years. Nicola Willis has said transport would be hypothecated. She stopped saying that, so there’s some disagreement now.

But the leader has talked about allowing the CCP—the Chinese Communist Party—to fund roads in New Zealand, and I find it absolutely staggering, actually, that the media hasn’t picked up on that more, and I say this as a co-chair of IPAC—the Inter-Parliamentary Alliance on China. National either don’t know how else to fund those roads or they’re blatantly ignorant of the geopolitics happening in the world at the moment, including in our own backyard, in the Solomon Islands. Or there could be more sinister motives. Are they in the pocket of the CCP? I don’t know.

But if that’s not the reality, the other thing that they possibly may do is raise GST. Why not? The National Party love GST. They’ve said before that they wouldn’t raise it. They raised it in 2010 under John Key. He tried to say that that was different from the promise that he broke, because it wasn’t around funding deficits, but—

Hon Judith Collins: Point of order. The member who has just resumed her seat has made an allegation in Parliament questioning whether the National Party is in the pockets of the Chinese Communist Party. From my recollection, that’s a breach of our Standing Orders.

ASSISTANT SPEAKER (Hon Jenny Salesa): The member will withdraw and apologise.

INGRID LEARY: I withdraw and apologise. In the final moments of the speech, I just ask New Zealanders to—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! The member’s time is up.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Speaker, tēnā koutou e te Whare. I want to talk about the opportunity that we have: together we could build an Aotearoa where every person has a warm, dry, secure, affordable home. Where that home gets some or most of its electricity from rooftop solar and rooftop wind, that’s generated for community benefit—not private profit. Where people have the opportunity to get public transport: fast, frequent electric buses, trains, light rail. Where they can walk to the shops. Where the kids can walk and cycle to school and the park and the playground and the sports fields. Where we’re spending so much less time commuting in our cars. Where we have cleaner air and quieter streets—except when people gather there, and people do gather there because it’s not a traffic sewer anymore.

We can build an Aotearoa where native birds and forest are regenerating; where our jobs that people do are actively restoring nature, helping each other, providing the caring support that is needed right across our communities. Where we’re undoing the harms of our history of colonisation. Where Māori can get stolen land back—we’ve set up a framework for that—and use that as an economic base to look after their whānau. And now into the future where education is a human right, where tertiary education—whatever it is, vocational, or at university, or at polytech or some other—is something that anyone can access at any point without having to live in poverty. Where people’s power bills are lower. Where we are combating the climate crisis.

The work that we need to do is great. As a society, we have a lot of work to do to look after our people, to tackle the challenges of climate change, and to restore nature. Yet, we can do all of that but it does mean changing our priorities. In this Budget, I can say the Greens—we’re proud of the accomplishments of our Green Ministers and we have made a positive influence on this Government. There was a number of Green wins that will make a difference to people’s lives, but they’re too little and it’s almost too late.

People need to know, at home, that in the next few weeks they have a choice. They have a choice, and they can ensure that we have a Government that is bold enough to take on the systemic inequality in our tax system—where, right now, New Zealand ranks 136 out of 161 countries in terms of an equitable tax system. We can change that. We can ensure that our Government agencies have the funding that they need to provide the services that people need, like free dental care. How amazing would it be if every New Zealander could access the dental care that they need, when they need it? That’s something we could do together. How amazing would it be if we were making Government grants and loans available to everyone to be able to put rooftop solar on their houses, to insulate their homes, to upgrade their appliances, and switch off fossil fuels for good? That would lower their power bills. It would help reduce fossil fuel use, which we have to end very, very quickly.

There is such a stark choice, and I don’t blame people for being disappointed. Because while there’s some good stuff in this Budget, it is not going fast enough or far enough to tackle the systemic inequality that we still have in our society. People are feeling the pain, but that will continue to happen. Climate change means we are going to see more frequent and intense severe storms. We’ll have times of drought. We need to rapidly reduce our fossil fuel use to zero, and we can work with nature to help both make our communities more resilient, and to ensure that we’re reducing our emissions and restoring biodiversity at the same time—because people know that’s what really matters.

What matters is if you have a home, if you’re able to power it, if you have enough resource to put healthy kai on the table, if you have some form of stability in your life—and you know, whether you rent or you own your house, you should have the right to that stability. Our communities are going to need to cooperate on a scale that we have never before cooperated if we are going to survive and thrive in the 21st century.

I’ve seen reports, and I’m sure many other New Zealanders have seen the scale of the tragic and devastating fires in Canada that are raging right now, the unprecedented storms that hit Aotearoa but that have been hitting other parts of the world with flooding. There is a cost to that and we do not have the luxury of carrying on like we have in the past. Most of the changes—if not all of them—that we need to make to reduce fossil fuel use, to live sustainably in harmony with our environment, with a stable climate, will actually enrich people’s lives. They will actually make lives better. I tell you what they won’t do. It won’t line the pockets of the billionaires who have been making tons of money off of the sale of fossil fuels, which are slowly killing the planet—and now rapidly, potentially, killing the planet.

So yeah, the Green Party makes no apology about standing here and saying the system needs to change and it can change, but we need a more equitable distribution and access to resources for that to work. We need to have a clear plan. We cannot rely on the goodwill of billionaires or a hundred millionaires to come to the rescue and save us when we are being hit by severe weather events. We can’t rely on them to donate through charity to ensure that we have the public services and infrastructure that people need to live good lives.

Only the Green Party has consistently been standing in this House for over 25 years saying, “Climate change is real, wake up, we need to do something about it.” Only the Green Party has been standing here saying, “We can have an economic system that actually looks after people and protects our planet.” That’s the whole point of it. But we are different than the parties on the right, and so while people right now might be concerned that the Labour Government has not been as competent as it could be, I have to agree. OK. Tunnelled light rail in Auckland makes zero sense. Two new tunnels for cars under the Auckland Harbour make zero sense. The enormous amount of money being promised on massively carbon-intensive infrastructure projects that will provide little to no benefit to people’s ability to move around the city is absolutely astounding. The National Party and the ACT Party will take us backwards much further and faster.

So people at home need to know if they are dissatisfied with the status quo, with the cost of living, with the fact that we’re having to deal with increased storm events, with the fact that the health system is not yet where it should be, with the fact that housing is still too unaffordable, that rents are still going up: you have a choice. People at home, people of New Zealand: you have a choice to vote for the Green Party. We have a clear, consistent message. We have delivered in Government. We have been a positive influence. We have brought forward the home insulation programme that both the National Party and the Labour Party claim a success—that was our co-founder, Jeanette Fitzsimons, who did the work to bring that to New Zealand, and it has had enormous benefits and it has carried on. It has created jobs, it has helped communities, but we can do so much more.

The public transport projects that the Green Party has consistently advocated for have been proven to be a success when people in the National Party were saying they’d be a white elephant, like the Northern Busway and the electrification of Auckland’s rail network. We campaigned hard for the City Rail Link and it hasn’t been delivered as fast as we would have liked; National Government at the time delayed on it.

At the time National was last in Government, the carbon price was $2 a tonne and there was absolutely no Government direction to invest in things that would address climate change or that would really help nature. We had a Predator Free 2050 goal with absolutely zero funding to achieve it. Now last term we saw Jobs for Nature make a huge difference to our natural areas, creating jobs that will restore nature. We can continue to do this, but to do this we have to change the system. And to change the system the Greens need to be at the heart of a coalition Government, with many more MP’s and many more Ministers.

I see the opportunity that we have. I know that New Zealanders care about nature. I know that they care about pulling our weight in climate change. I know that they want more investment in public transport, rail, and coastal shipping. There was a poll recently that showed that 72 percent of New Zealanders think the priority for transport investment should be public transport, rail, and coastal shipping. And yet the three other major parties in this Parliament all are promising more roads. Some are promising it financed by overseas interests, at which we will definitely have to pay back at a much higher rate, and the Labour Party’s still not going far enough in seizing the opportunity and the desire from the public for better public transport. Only the Green Party can help deliver this vision and we can do it with your vote.

ANGELA ROBERTS (Labour): Thank you, Madam Speaker. I rise to take a call on the Appropriation (2023/24 Estimates) Bill, and it is with great pleasure that I do so. I have spoken before in this House about how in the good old days when I taught economics, we would have parties on Budget day. Yes, there are people in this country who are excited about this process, and I think it’s because they understand this is a democratic way that we decide, as a society, how best to invest in our nation.

But I’m wondering if, actually, it would be better to have our little party on this day, because what we’ve had an opportunity to do since Budget day is go out into our communities and listen to people when they say, “Oh, it’s wonderful that you’ve continued to invest in this great project.”, or “It’s great that you’ve decided to back us in this way.”—whether it’s been with public housing, whether it’s been in health, whether it’s been in education or infrastructure, we have made sure that we are investing in our society, and I think it kind of feels like today is a much more appropriate day, and I’ll be giving that advice to my former colleagues who are excited about economics in their classrooms.

So this Budget has been pretty unique, and I can understand why the Minister of Finance was so proud of it. That ability to balance the significant challenges being faced every day by New Zealanders around the cost of living, but at the same time, moving to a more sustainable way of approaching a budget—having that more sustainable approach while we have still been able to push back with COVID investment and sustain and build our public services that everyone holds so dear, and also to respond to those significant weather events in January and February. How do we manage to do this? How do we manage to pat our heads and rub our tummies at the same time? I think I’d like to reflect on a few parts; but I’d like to start with the really big, really global context and pull it right back to a particular example in education.

So when we talk about our Wellbeing Budget—and this is not the first one, but it is world-leading. The fact that our Budget is built on OECD and best practice internationally; and it is world leading. We have a Living Standards Framework that allows us to be inter-generational in our thinking and our investment. This isn’t about just what others would call “just spending money”. When we keep hearing challenges from the other side, it’s all about making cuts to spending, when what every line in this Budget is about is investing.

When you look at our Living Standards Framework and you look at the dashboard and it talks about the indicators of the wealth of Aotearoa New Zealand, you’d think, from the other side, that would simply be the financial and physical capital that our nation possess, but that’s only one aspect of wealth. We’ve heard so many speakers speak since Budget day about our natural environment—the wealth that that provides us—and this Budget invests in that. Our social cohesion, our human capability—these are aspects of wealth that our Treasury values and makes sure is considered when we put our Budget together. So that approach—that ability to be thinking inter-generationally, to be progressive, to be ambitious for our nation, for our economy, our people, our whenua—is why this Budget looks very different from anything that could possibly have been suggested from the other side of the House.

So I’m just going to narrow it down a little bit, and I am going to talk about wealth with regards to human capability. When we think about education, we’ve heard about the thousands of classrooms that have already been built and the commitment in this Budget to building 300 more. The four new schools, the 175 small rural schools that are getting retrofitted. The significant investment in the place within which our students learn and our teachers teach, we’ve got to make sure that they are warm, they are dry, they are fit for purpose. We invest so much in our students, and they deserve to have good places to learn so we’re investing in them.

We’re investing in our tertiary system. We know that not just the Apprenticeship Boost, which is going to be enabling tens of thousands more workers to become more highly skilled—that’s 57,000 to date; another 30,000. This is about enabling a just transition. This is about making sure that we invest in our human capability and capacity to make sure that we are where we want to be in a generation’s time. We’ve had the largest increase in investment in our university system in 20 years, because we know it isn’t just the significant commitment we’ve made to the reform of vocational education through Apprenticeship Boost and supporting employers who are taking on those magnificent people who have so much potential but in our universities as well.

At the other end, we’ve heard a lot in this House about the 20 hours’ additional early childhood education. We know that by having these incredible early childhood educators, these experts, who really are at the most critical part of human development, being able to support families and support children as they start off on their lives—it’s really exciting. And talking about having to think intergenerationally, I think that’s such a fine example.

The continuation of school lunches and, of course, making sure that not only do they have full tummies but actually they can get to school. The continuation of under-13s having free public transport. For our young people, under 25, every penny counts to be able to have half-price public transport. That isn’t just about making sure that life’s a little bit more affordable for our young people but that’s about having a modal shift and making sure that you get into the habit of using that train or that bus—that’s an investment, not just in our environment but in growing a great society.

At this point, I want to talk about—because I could talk about a huge number of wonderful things that are happening in education, but I just want to come on to one more, in particular; narrow it down a little bit more. I want to talk about alternative education. It is our most vulnerable students, the ones who are at risk or are already disengaged from mainstream education that we’ve seen those students and we’re investing in them, because we know that they have such potential and they deserve our backing.

I just want to reflect for a moment about what an alternative budget might look like from the other side of the House. While we choose to invest in our schools with buildings, with investing in our teachers, with supporting the schools through investing in those who are trying to bring their students back to class who’ve been absent, we see on the other side of the House that they intend to—when they see the challenges that our public education system is facing, they say, “Let’s just abandon them.” On the other side, they want to abandon our public education system. They want to say, “Good luck. We’ll cash you up and you can become a charter school.” That’s what they want to do.

I want to be very clear in this House today what charter schools are and where they came from. We know they are a direct result in the United States when in 1954, as a result of Brown v Board, they outlawed segregation in public schools in the United States. So there were parts of that community who didn’t like integration, so they decided to set up schools where there was more choice. That choice isn’t for our most vulnerable students and their families; that is a choice those who sit outside of the school. What charter schools do is they give more choice for those who are inside the school gate to exclude students and say, “You know what, we’re just going to look after the ones we want to look after and good luck to the rest of you.” That is not an investment approach. That is not something that I can see Treasury supporting when we are looking at building the wealth of human capability, and that is one thing I’m really proud of in this Budget. So I commend it to the House.

DAVID SEYMOUR (Leader—ACT): Thank you, Mr Speaker. I rise to take a call in opposition to the Appropriation (2023/24 Estimates) Bill. This is the bill that Parliament passes in order for Parliament to spend billions and billions and billions of dollars of taxpayers’ money. We’ve had people say it’s a great tradition and there should be parties. To some extent, that’s true. It is a great thing that we have no taxation without representation. It is a good thing that the Government—the Prime Minister and his Ministers and their Government departments—cannot spend money without it being debated transparently in this House and examined by select committees so that people know at least where their taxes are going. That’s a wonderful process and a tradition of parliamentary democracy we should hold dear.

One of the problems, though, is that when we see what this Government is doing with our money, we almost wish that we didn’t know. You actually think ignorance could nearly be bliss, because we have a Government that, in round terms, has increased Government expenditure from $87 billion to $137 billion in just five years. It’s increased the amount that it spends every year by 70 percent. That money, I know, has partly been required because of inflation—that much is true—and it’s also spread amongst more people. It’s surprising how fast the New Zealand population rises—we’re not actually the team of 5 million; we’re over 5.2 million now. So, to some extent, the extra spending is needed because there are more people, and this Government’s management of the economy has led to so much inflation.

On the other hand, once you strip away the growth in the population and the amount of inflation people have seen with the cost rising in everything they buy, well, then you find the amount of money that’s spent per person after inflation has risen 29 percent. The number of people employed in the core Public Service has gone up from 47,000 up to 62,000—almost exactly 29 percent as well. The question might be: what have we got, at the end of the day? What are we getting for all of this extra taxpayer money being spent by the Government through this process?

You see, Mr Speaker, that’s where things get a bit tough. I’ve challenged, in this House, over this year, many times, Grant Robertson, the Minister of Finance; and Chris Hipkins, the Prime Minister, to explain how they are guessing better outcomes—better outcomes—not spending more money, but, actually: what is better, at the end of the day, for all of this extra money? A $50 billion, 70 percent increase in spending that means we’re spending 29 percent more money per person after inflation, after population growth—29 percent more money on each person. What are they getting that they weren’t getting five years ago for 29 percent extra?

It’s worse than that, because, while taxes have risen, a lot of that extra spending over the last five years has been paid for by borrowing. You see, this Government, in six Budgets, has increased debt by $121 billion. It’s hard to put that in any kind of perspective. What is $121 billion? Well, if you say there’s 5 million of us, then it’s $24,000 of borrowing per person over six Budgets. That’s $4,000 a year of Government borrowing for every person in this Chamber—in fact, every person in this country. For a family of four, the Government’s been borrowing 16 grand a year on their behalf—but they’ll have to pay in taxes one day—in order to try and get the same results.

And where are those results? Where is it that this Government is now doing better for its people, for the money that’s gone in? Well, it’s not in education. In broad terms, over the last 10 years, we’ve gone from about 70 percent of kids regularly attending, to about 60 percent—a disaster. We have gone from around 5 percent who are chronically absent, to around 8 percent. There are fewer kids going to school, even though the Government are spending 38 percent more on education. What do the kids get when they go there? Well, they’re learning less; they’re tumbling down the international league tables in reading, in maths, and in science. Kiwi kids know less and can do less than their older brothers and sisters and uncles and aunts who are 20 years older. In fact, they’ve got about half a year less learning than kids of the same age 20 years ago. This is a disaster.

What about transport? Do we have more roads with fewer potholes that get us where we would like to go faster and safer? Actually, the road toll has flatlined, the speed limits have come down anyway, and the potholes are damaging people’s cars up and down this country nearly every day. This is, again, a disaster.

What about law and order? Are we getting better value for money or safer streets? Is it safer to run a dairy? Is it safer to run a jewellery store? Is it safe to run anything in this country? No. Victimisation, according to the Ministry of Justice’s own surveys, has got worse.

But, then, there’s healthcare. What about healthcare? Do we have more doctors and nurses? Are people getting more drugs, are they finding it easier to get into their GP, and are the waiting lists getting shorter? No, they’re not.

So, in every area, this Government is spending more money—even after inflation; even after population growth—and they’re getting worse results. That takes a special kind of incompetence.

Why has this happened, and what will the next Government, in just—what is it now?—52 days, do about it? Well, first of all, we need to get back to giving the chief executives of Government departments clear objectives, and then say, “If you do well, you get paid more.” You see, Mr Speaker, in every private business on the NZX, the chief executive gets paid more if the company performs. In New Zealand’s Government, we have people who are responsible for multibillion dollar organisations—the Ministry of Social Development, the Ministry of Health, and the Ministry of Education—and they get no reward for doing better, and no penalty if their agency lets New Zealanders down. They’re not even trying to measure what they’re trying to achieve. No wonder we’re spending more money and getting worse results.

So one of the things the next Government has to do is follow the Australians’ reporting on Government services’ objectives and start giving the chief executives of the departments clear writing instructions on what we need to achieve. If they do well, they do well, and if they don’t do well, they might lose their job or some of their salary—that’s how the real world works, and it’s how Government departments need to work.

For example, the Ministry of Social Development should be measured on how many people get off the dole and into work, and how long they stay in work. We’re not even trying to do that, right now. We’re just throwing money at every problem, and still the results get worse.

Just this weekend, the ACT Party released a policy to show how we can make sure that New Zealand is better off and better served by its Government departments by actually telling them what we want and demanding they achieve it, and rewarding them when they do. Then, we start cutting Government waste. We cut the Government departments that can’t produce any good outcomes. We cut the enormous bureaucracy that’s grown by 15,000 people—from 47,000 to 62,000—and achieves nothing. ACT’s alternative budget shows how we could reduce expenditure by over $8 billion a year and nobody would notice. People say, “Oh, that’ll be the end of the world.” Just remember: this Government has increased expenditure by $50 billion a year. We want to take it back $8 billion. You’re still $42 billion up in five years. The difference is we want to get some more results.

What can you do if you reduce expenditure by $8 billion a year? Well, you can give tax cuts. You can actually start paying back debt faster. ACT’s alternative budget will not only demand better results from Government departments, it will also cut people’s taxes. So someone on the average wage—$78,000 a year full-time—would get to keep $2,200 more of their own money each and every year to fight the crippling price rises that New Zealanders up and down this country are facing.

That is the kind of fiscal management that this country needs so that people feel their efforts in life make a difference—that, if they work hard, save, and invest, life will actually get better, rather than having their money and their effort poured into the gaping maw of this Labour Government; this Labour Government that wants to give kids mandatory lessons in financial literacy. Well, here’s another idea: I think the children of New Zealand could give financial literacy lessons to Labour, and we’d all be much better off. Thank you, Mr Speaker.

DAN ROSEWARNE (Labour): It’s my privilege to be taking a call on the imprest supply bill and the appropriation bill. I was recently at a retirement village in the Waimakariri electorate, having a yarn about what happens in the House, and one of the things that came up was, “Dan, maybe it would be good to discuss the mechanics of what you’re discussing when you’re in the House?” So for those listening in today, the imprest supply Acts are a regular part of the annual Budget cycle, and the Crown cannot spend public money, or incur expenses or capital expenditure without an appropriation or other authority of Parliament. So spending that occurs outside of these categories is considered unauthorised expenditure, and the third reading of the appropriation bill is the final stage in Parliament for passing Budget 2023 by appropriating the various appropriations set out in the schedules of the bill.

I first want to highlight how this Budget continues to embody the spirit of our independent, nuclear-free New Zealand, which is something that’s not discussed very often. Recently, we discussed in the House the time that we sent one of our Ministers to protest against nuclear tests at Mururoa Atoll. As he sailed vessels across the Pacific—very important in the Pacific with what’s happening right now; it’s always important to look outwards while everyone else is looking in—it led to the Treaty of Rarotonga, where we worked with our Pacific neighbours to establish the world’s first international nuclear-free zone, known as the Treaty of Rarotonga. This Budget continues that tradition of Pacific cooperation.

This Government is investing into building up that Pacific resilience with a $14.1 million investment in Pacific community wellbeing. It aims to strengthen the capability and leadership of our Pacific workforce. There are also capital injections of over $16 million planned for 2023-24 as part of our blue Pacific investment, and we’re also investing $1 million into the Pacific Cooperation Foundation for the promotion of mutual understanding between New Zealanders and other countries and the people of the Pacific. These are just some of the initiatives in this Budget that build and strengthen our special relationship with our Pacific neighbours.

I also want to touch on what this Budget does to ease the cost of living. I’m proud that through this Budget we’re tackling the cost of living by putting money back into people’s pockets with cheaper childcare, free prescriptions, and free or half-price public transport for young New Zealanders, and we’re easing the pressure on struggling families by providing targeted support that won’t drive up inflation.

Now, it’s a no-frills Budget, but it suits the times, with a particular focus on support for families under the pump. There are things like 20 hours’ free early childhood education for two-year-olds, the $5 prescription fee being scrapped, also free public transport for our under-13s—very important—and it being half-price for under-25s, and then we can never forget the extra 100,000 more Warmer Kiwi Homes.

When I’m out and about in the electorate—and I’ve been doing a lot of constituency clinics over the last few weeks and doorknocking, out in Pegasus, which is just north of Woodend—people are concerned about what the scrapping of fair pay agreements might mean if an ACT-National coalition came into Government. They’re also worried about what the freezing of the minimum wage would mean to them and their families and they’re worried about the investment hole that’s in the strategic infrastructure plan of what National is proposing—you know, that foreign investment and what that might mean to everyday Kiwis—because they certainly don’t want to be tenants in their own country. With the Labour Government, when we invest in infrastructure, the people of New Zealand will 100 percent own it, and that’s very important.

The other thing I just want to touch on is what they feel is at risk. There are a lot of working people in the Waimakariri electorate. There are a lot of tradies and people in physical jobs, and they’re worried about the increase in the retirement age. They’ll get to that stage where they’re not in the position to work an extra two years because their bodies are wrecked, and with a Labour Government, we are committed to keeping the retirement age at 65, which is very important.

Now, we’re also strengthening the economy by investing in the basics for growth with skills that will better position our workforce for infrastructure—science, technology, and the economy—to address the shortages in our workforce. The economy is through the worst, with inflation having peaked and returning to the target range next year. We’ve got good growth, tourism is back, and more workers are plugging our skills shortages—we’re seeing that firsthand in the Waimakariri electorate, where, again, the Waimakariri economy continues to grow strongly, up by 4.3 percent over the year to June 2023—and then GDP is up 1.7 percent per annum in the June 2023 quarter.

Waimakariri’s housing market remains relatively strong relative to both Christchurch and the rest of the country. Tourism activity in Waimakariri has benefited from the return of international visitors to New Zealand over the past year, and with tourists’ electronic card spending in Waimakariri up by 14 percent over the year to June 2023, there’s a good story to tell in North Canterbury. Guest nights at commercial accommodation in Waimakariri have also grown by 38 percent to the year June 2023, which is very promising.

Also, I just want to talk about jobseeker support. Recipients in the Waimakariri District in the year to June 2023—that figure has decreased by 7.6 percent compared to a year earlier.

Non-residential building consents to the value of over $58 million were issued in the Waimakariri District during the year to June 2023. So this is an increase of around 90 percent over the year to June 2023 compared to the year earlier, and this has placed us in a great position to build for tomorrow in North Canterbury.

We’re also providing a massive boost to our nation’s infrastructure across the country, which has been tested during the recent flooding and cyclone. We saw roads and bridges as well as telecommunications and power wiped out too easily, and we can’t let that happen again. We’re building back more resilience so that we can be better prepared for more extreme weather events in the future, and some of those examples include 300 new classrooms to be built across New Zealand. We’ve got 100 more resilient roads and 3,000 additional public homes.

So things are tough right now, and we totally understand that, but the numbers are moving in the right direction and we’re easing the costs for families through targeted investments that will avoid stoking inflation. I’m proud of what this Government is doing for working battlers and young strivers, in particular. We’re creating opportunities through our prudent management of the economy and building a New Zealand where there are greater opportunities and access to homeownership as we build back better. We’re getting inflation under control and back in the target range next year. We’ve got half-price public transport, and then also free apprenticeships and innovation investments to prepare our workforce for the future.

In the electric vehicle (EV) space, we’ve got 23 EV multi-charging hubs around New Zealand. Again, in the Waimakariri electorate, they’re springing up in Woodend and out at Rangiora, which is great to see, and pretty much almost every town around New Zealand is getting additional EV chargers.

Then we’re also seeing major investments in things like science and skills, which is great, and we’re growing our tech and gaming workforce, which is, in my view, a form of investment. Last week, my colleagues and I in the Pacific caucus visited PikPok, which is just in town here. They are world leaders in the gaming sector, and it was great to chat to them about the 20 percent rebate for game development and how that sector is benefiting. PikPok is a home-grown business here in Wellington and they employ some of our best and brightest people in New Zealand.

The gaming sector shows some great promise, and so that development scene—we’ve actually saved it from going offshore to other nations. So it is very, very important that we grow, raise, train, and sustain that workforce for the future.

Getting out and about in Waimakariri, people know that they have a clear choice. They have a clear choice about who to vote for this election. The movement for Labour out there is fantastic, and I’m really looking forward to hitting this election on 1 September. Thank you, Mr Speaker.

Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. This is the final debate on this year’s Budget. Frankly, we’re on the second to last week of Parliament and this is the last will and testament of this Government, and what a grim set of accounts it is.

We’ve got 6 percent inflation. Remember, about two years ago the Minister of Finance and the Reserve Bank Governor said, “Oh, inflation will be transitory. It’ll come; it’ll go. It’s going to come down fast.” Two years later, we’ve still got 6 percent inflation. We’re in recession, and the Government has managed to increase debt at the same time from $5 billion when they took over to $91 billion in five years. They’ve increased Government spending by 80 percent, and I defy a single person in this country to be able to stand up and say, “We’ve got an 80 percent better outcome in education or health.”, or any area of Government policy. So this Budget is the final Budget in what has been six calamitous years for the New Zealand economy and everything else that hangs off it.

Now, we’ve heard, for the last few days and the last few weeks—it seems to be the line from the Labour Government’s spin machine that they’re supposed to be empathetic, so they keep on saying, “Yes, times are tough. Yes, it’s very tough times for New Zealanders. It’s been a difficult three years.” I heard the Prime Minister say, people are grumpy—it’s been a difficult time; very hard times. Well, they don’t seem to appreciate that the reason for the hard times, primarily, is their own mismanagement of the economy and of this Government. They should take some responsibility for it and, frankly, hold their head in shame.

So what did they inherit? Six years ago, they inherited a strong, positive, upbeat economy in a strong, positive, upbeat country, where people looked and saw a great future for themselves and their family, were managed to absolutely reverse the flow across the Tasman so that more people were coming to New Zealand from Australia than the other way around, and people felt like they could get ahead. Unfortunately—and everybody sees this right here, right now—too many New Zealanders are concluding, the 35,000 of them that left to go to Australia this year, that they don’t actually have great opportunities in this country because the economy is not strong, because the cost of living is too high and inflation is not under control under this Government.

They’ve seen the $175 extra a week they are paying on average rents, driven largely by the misconceived and ill-considered housing policies of this Government and their war on landlords, which has forced costs on to renters. They see the 9.6 percent increase in the cost of vegetables—the cauliflower, the squash, the pumpkins—and the only thing that the Government can come up with is a hare-brained scheme to exclude fresh fruit and vegetables from GST, which has gone down like a lead balloon because nobody can see the logic for it. They can’t understand why it wouldn’t apply to meat or nappies or any other thing, and all it would do would be to mess up a simple system. They’ve seen the $700 increase in fortnightly mortgage costs under this Government, primarily because they haven’t been able to control inflation properly.

So that’s why National has come forward with a strong plan to get on top of the cost of living. We’re going to get the Reserve Bank focused on its knitting, which is fighting inflation, not doing all the other things that the Governor is keen to do, and the law requires them around employment. Secondly, we’ll get Government spending under control—that 80 percent increase in spending with very little to show for it is one of the reasons why we’ve had this burst of inflation in this country. Then we’ve got to deal with a Government that keeps on adding costs to businesses, particularly small businesses, and then wonders why things are more expensive.

We’ve heard about the fair pay agreements, the misnamed “fair pay agreements”—what they really are: mandatory union deals to make our workplaces less flexible and less adaptable at a time when they need to be both those things. We’re going to repeal that; we’ll get rid of it, because we need to have flexibility in our employment relationships so that people can actually sort things out for themselves and work out what works for them.

Then we’ve got to reduce taxes so that people aren’t paying ever more taxes because the Government is using that old trick—that old trick that goes back hundreds of years: if you have lots of inflation and people creep up the income tax brackets, they pay more tax, which is why—

Anna Lorck: Then you’re going to up GST; that’s what you’re gonna do, isn’t it?

Hon PAUL GOLDSMITH: That member’s got an opportunity for a valedictory soon. But we’ve got, on average, $22,000 per household more in tax that has been taken from this Government. Can you believe that? New Zealanders, on average, are paying $22,000 a year more in tax under this Government—$22,000. You could actually get a decent car for $22,000 every year, for the extra money that this Government is spending on tax.

And what are we actually getting for it? What are you getting for it? Are we getting better education? Oh, no; the kids don’t even go to school. We don’t get better education. Are we getting better healthcare? Well, no, you can wait for ever for anything. You’re not going to be getting inoculated from the various diseases because that’s not working. You’re going to have to wait ages for your hip replacements, Mr Speaker—I’m sure you’re not needing one yet. For all these things, we’re not seeing the improvement that we should be from the money that’s being spent.

Then, of course, that’s only just the start of it. I mean, heaven forbid, if Grant Robertson got another chance to have another go at it, he’d be introducing his insurance tax; the jobs tax, which would be adding another 800 bucks or so a year on to annual bills; they’d be coming back to their wealth tax. If the Greens had their say, they’d be coming back to the wealth tax. So when it comes to the economy, this is the end of the Budget and it’s a woeful Budget and it’s the end of six years of economic mismanagement.

Then we come to the other things. What do we come to? Well, what about law and order? What progress has been made on that? Now, if anybody is tempted to vote for the Greens, let me suggest this one to you, because it is their stated policy—and I’m glad we’ve got Ricardo Menéndez March here. It is the stated policy of the Greens that if there’s a warrant out for your arrest and you’re on the run, you should still get your benefit, because it’s a nasty thing that the Government currently does that if you’re on the run with a warrant out for your arrest, we cut your benefit. But, oh no, the Greens think you should have some money when you’re on the run and there’s a warrant out for your arrest; therefore, you should still have your benefit. Well, I think that sums up everything you need to know about the Greens and law and order and welfare. I think it also sums up how it all would work in a Labour-Greens Government if they had their time.

So we’ve actually got to restore some law and order in this country and actually have real consequences for crime. We go round the doorsteps and what do we hear from people? They’re worried about what’s going on in their communities. They see the increase in violent crime—40 percent increase in violent crime—and they are perplexed and confused and can’t understand why the only priority of the Government that’s been clearly articulated in the justice sector is to reduce the prison population by 30 percent, irrespective of what’s going on in the community. That makes no sense to anybody and it is part of the reason why we’re having this breakdown on law and order that we’re seeing.

It’s part of the reason why, frankly, Countdown is having to spend $45 million on fancy new trolleys that stop people from running out of their supermarkets without paying for the food, which is a metaphor. It is a metaphor for everything that’s wrong. I’ll have you know that I’m a regular at Glen Innes Pak ’N Save. It’s a good supermarket and they shouldn’t have to have electric trolleys that clam up because there is a breakdown in law and order in our supermarkets. So it’s a metaphor for how things have got out of control. Yet, we’ve got a Government whose only target in the whole justice sector is to make sure that we have fewer people in prison, irrespective of what’s going on in our community. We think that’s wrong, it’s misguided, and we’re going to change it.

We’re also going to get a little bit of clearer guidance around the sentencing principles so that we restrict the ability of judges to massively reduce sentences. So we’ve got to fix the economy. We’ve got to restore law and order, the third and fourth areas around health and education, and everybody is concerned about the decline in standards from education. We’ve got a budget here. Like I say, the Government has increased spending by 80 percent—80 percent. It has gone up to $137 billion a year, $61 billion more than what they started with, and yet, in education, fewer kids are going to school and they’re not learning the basics. So we’ve got to get back to the basics.

When it comes to health, it’s about priorities, basically. We can’t do everything. This Government thinks it’s better that families that can afford to spend $5 to get their prescriptions shouldn’t have to pay that money, and yet they don’t have the resources to invest in 13 cancer drugs that will make a real difference to a thousand people a year. We think it’s far better to use scarce healthcare resources to help those people who have got real serious cancers rather than just putting another $5 into the hands of people who can perfectly afford to pay for their prescriptions. Now, that, to me, sums up muddled priorities. Thank you, Mr Speaker.

VANUSHI WALTERS (Labour—Upper Harbour): Thank you, Mr Speaker, for the opportunity to take a call in relation to the Estimates and the imprest supply bill. I brought along a copy of my wellbeing Budget 2023. I do carry this around with me as I’m travelling, because there is so much in here for New Zealanders—there is so much in here for New Zealanders. But a Budget is more than a collection of bound papers; it’s been said several times through the Estimates debate: a Budget is a moral document. It is more than a set of papers; it is an inherently ethical undertaking we go through when we’re deciding what to spend funds on.

This is Labour’s fifth Wellbeing Budget, and I think there is some poetry that the phrase “Wellbeing Budget” now rolls off our tongues, like the two terms are inherently connected. But they aren’t—they’re not—for every party around this House. They are a choice that this Government has made to put people’s wellbeing first. We have done that consistently for the last five years. We’ve put people first in terms of making the most of opportunities that are available to them and responding to their wellbeing needs and responding in a crisis.

I must say I was actually kind of tickled to hear David Seymour speak about a special kind of incompetence, but perhaps I will be kind, rather than using those words about him, and say that what we have in his case is perhaps a perplexing kind of amnesia. Mr Goldsmith appears to be demonstrating the same kind of amnesia. Both of them asked what we’ve seen in terms of the results of our Government spending over the last five years. There has been something we’ve gone through called the COVID experience. “What have we seen?”—what have we seen? The lowest morbidity rates in the OECD; the lowest hospitalisation rates in the OECD. Lives, health, and wellbeing may not matter to that side of the House, but it does on this side of the House.

We put people first, and Budget 2023 is no exception. In north-west Auckland, our communities, our businesses, our whānau are still feeling the effects of the Auckland anniversary floods and Cyclone Gabrielle. I have walked through the homes of people in Massey who have been affected. I’ve spoken to the red-stickered residents of Muriwai. There are devastating impacts that continue in those communities, which is why Budget 2023 builds on the $889 million already provided to provide an immediate response to those events, with supporting the reinstatement of our roads, our rail networks, repairing and rebuilding homes and damaged schools as well. We invested in providing direct support, in terms of temporary accommodation, to those who were suffering most, but also we recognised that there were wellbeing needs and we provided counselling support, including to some of the children who had been affected.

Again, I went out to Muriwai and a family spoke to me about the huge numbers of children who went to the local school who were affected, where Visionwest went in and provided immediate support. But, for us, it’s not just about responding to the immediate; it’s also about keeping a weather eye on the future, which is why we also look to protect communities from future climate impacts, including a $100 million fund to help councils invest in future flood resilience. Support for today, building for tomorrow.

We are a Government that is about putting people first, and supporting families is absolutely key to that. At one stage in my life, my husband and I had three children under 5½ years old, and almost every conversation I had with others who were parenting kids of that age would be about what the tipping point was: when can you afford to go back to work, go back into your workplace? The 20 hours of free early childhood education for two-year-olds is going to be a game-changer for so many families, who can make that choice when they want to, which for many would be earlier, and for those who would have chosen the option anyway, it puts extra money in their pockets. I think of the families who attend the Seeds Early Learning Centre just up the road from my electorate office. They will be saving up to $133.20 per week. That is huge. That is this Government addressing the cost of living for families.

We are about putting people first. We are about bread and butter issues. The $5 co-payment issue—we removed that. While it might seem small to members opposite, I’ve spoken to pharmacists, including one on the corner of Moire Road in Massey, who spoke to me about the fact that people who lived locally and had never—never—picked up their prescriptions before were coming to pick up their prescriptions. This is a game-changer for people in terms of the cost of living, but it’s also smart policy that’s squarely focused on multiple benefits. The fact that these are people who can pick up their prescriptions means that they won’t be turning up a month or two months later at Waitakere Hospital or at North Shore Hospital.

I have a wonderful youth advisory group in Upper Harbour who talk to me about the issues that matter most to them. I spoke to them about what matters most in Budget 2023, and they spoke about the free fares for young people. They spoke about the half-price fares for under-25s. There is a huge cohort of young people in Upper Harbour who travel across the city to get to school, to get to university. This is another example of a policy that will not only benefit them, in terms of addressing the cost of living, but also has a multiplier effect in terms of the reduction of carbon emissions as young people start to embed taking public transport in their lives.

This is not a Budget that’s just about sound policy, though. I’m also proud of the methodology of this Budget. This is a Budget that sees women. For the first time, Budget 2023 includes a gender budgeting snapshot. Gender budgeting is a powerful tool for understanding how and to what extent people will be affected differently by initiatives, depending on their gender. It applies a gender lens in 15 agencies. That’s triple the number from last year’s pilot that have been using this methodology. It covers 27 initiatives. Which initiatives? Well, one is funding to permanently reinstate the Training Incentive Allowance, which will support sole parents and disabled people and their carers to enter higher education and training. Now, since 2021, the initiative has supported approximately 5,000 clients, of whom 90 percent have been women. There are several other initiatives that, because of this budgeting methodology, will influence what women have access to, including the digital tech industry transformation plan package, which aims to increase the number of women participating in the tech sector from 27 percent to 50 percent by 2030. This is a game-changer.

I’ve started to use the word “game-changer” far more frequently in the last six months, and the reason is because this is what people are telling me across the country. In Upper Harbour, I go into schools, and principals talk about what a game-changer it is that kids have access to free lunches in schools and free period products. I talk to people on the doors who talk about the winter energy payment being a game-changer in terms of their lives. These might seem small to that side of the House; they are game-changers for everyday New Zealanders. Under our Labour Government, you will continue to see these investments—an increase in the minimum wage, access to medicines, funding supports for our minority communities, including through our essential ministries.

Budgets are moral documents; I wholeheartedly believe this to be true. I’m incredibly proud to be part of a Government who, at every corner, in the face of crisis and in identifying opportunities for New Zealanders, puts people first and makes sure we all thrive together.

PENNY SIMMONDS (National—Invercargill): Thank you, Mr Speaker. I rise to speak in opposition to the appropriation and imprest supply bills. This Budget is a continuation of this Labour Government blowing out even their own spending limits. It’s really important that we are under no illusion about how bad the situation is with our economy. We have $73 billion of debt—the most in the history of our wonderful little country—but when you team that also with high inflation; high interest rates; a recession; a current account balance worse than 40 other countries, then you see just how difficult our economic situation is.

Whenever I’m out in my community, people express to me their absolute disgust and despair at how the Government could possibly keep spending at the rate that it is. They compare how much they have had to haul back their farm, their business, their household spending in the face of a cost of living crisis and inflated prices.

I see farmers who are trying to face the reduced milk solids payout by going through their expenditure in their budgets, line by line, looking at where they can reduce or cut out completely expenditure. I see businesses going through their budgets trying to cut out unproductive expenditure, and you see households going through and cutting expenditure that is going to hurt but they know they have to do it—cutting out things like kids being able to play sport or undertake cultural activities—because they have to prioritise their expenditure.

But they are doing that and they see a Government that is doing none of those things to try and trim expenditure. They see a Government that is spending 80 percent more than it was back in 2017 when they came into Government. They see a Government that is spending $1 billion more every week—week after week after week—than was being spent back in 2017. They see a Government that has had record tax takes, but that money has been literally sprayed around through undisciplined spending, which does nothing to make New Zealand more productive; to get out of this incredible debt that we are in. They see a Government that has, through its financial incompetence and lack of discipline, saddled taxpayers with years and years of debt repayment. They see a Government who has treated our valuable agricultural sector with disdain and disrespect, despite them being the ones keeping our economy afloat.

There’s been much talk recently of financial literacy and basic economics being taught in schools. But, by golly, what an own goal that set Labour up for. Because the ones that need this the most are Labour MPs who need to understand that if they keep spending, the economy gets worse. If you hammer the productive sectors that bring in export dollars, you impact the amount of money that is available to be spent on schools and hospitals and police and other essential public services. Because so many in this Government don’t seem to have that basic economic connection. But I guess it’s less obvious that you just keep borrowing and borrowing, like this Government has, but you can’t keep doing that because eventually it comes to a very sticky end—and that sticky end is where we are at, right at this moment.

So I look at the education expenditure in this Budget and see the damage that has been caused in the early childhood sector: the absolute avalanche of home-based providers that have closed this year; the stress and uncertainty that centre-based providers are under. Then we take a look at the tertiary education sector, where universities are being hit by the perfect storm of declining domestic student numbers, international student numbers still not back to pre-COVID levels—unlike our Aussie neighbours—and the impact of inflation on their operational costs.

For too long, this Government tried to convince the New Zealand public that these were issues that were worldwide. But the universities know that we have lagged behind Australia, Canada, and other competitive countries in getting the borders open and getting international students back. So, now, the universities’ strained finances are impacting on staff and the range of programmes that can be offered to local New Zealand students.

Then we look at the mess of our vocational education sector: polytechnics and industry training organisations centralised into Te Pūkenga. And my goodness, if any management tutor or lecturer ever wanted to see an example of how not to restructure, Te Pūkenga is going to give them the information for years to come. How did Chris Hipkins get this through Cabinet in 2018 without full costings?

In October last year, Te Pūkenga put a business case through saying, “Oh gosh, look what’s happened. We need $1 billion dollars more over the next 10 years to make Te Pūkenga work.” The Minister said, “Oh, that’s too much. Go away.” Fifteen times they reworked that business case, and they finally came back with, “Oh, we need $423 million over five years.” Those who have done even primary school maths will understand that’s about half what they were asking for over 10 years.

Quite rightly, Treasury said they shouldn’t be given anything. So what was put into this Budget? A $220 million loan—oh, that’s on top of the $200 million that’s already been spent—to solve a $40 million problem. So, now, Te Pūkenga is faced with a $220 million loan to somehow try and get into shape a centralised entity to be able to get some efficiencies of economies of scale. It just can’t be done. But in the commercial world, would any bank have lent $200 million to undertake a centralisation and then find out halfway through it that they needed another $1 billion dollars to make it happen? If anything shows the incompetence of this Government, that certainly does.

This Labour Government wonders why the public has fallen out of love with them. Well, I can tell you that any business owner, any farmer, any household budget holder understands that they have had to go through and do what this Government has not done in their Budget: trim their costs. This Government is incapable of doing that. They are addicted to spending, they have been incompetent in pulling this Budget together, and that is why the public will not stand for it any longer. They will not see our country being taken any further down this debt track than this Government has already done. Thank you, Mr Speaker.

DEPUTY SPEAKER: Just for those aligning their speeches, this is speech number 13. Anae Neru Leavasa.

Dr ANAE NERU LEAVASA (Labour—Takanini): Fa‘afetai lava lau afioga le Fofoga Fetalai. Thank you, Mr Speaker. It is a pleasure to take a call as the MP for Takānini on the Imprest Supply (Second for 2023/24) Bill and the Appropriation (2023/24 Estimates) Bill.

This Budget 2023 is about delivering for all New Zealanders. It’s about delivering for communities like Takānini and communities across Aotearoa. When we look at the issues that are at hand for our Kiwis, number one: we want to support them through the cost of living crisis. It is about delivering the services that New Zealanders rely on and also looking at recovery and resilience for those that were hit hard from Cyclone Gabrielle, the Auckland floods, but also in the future, of any environmental factors happening again. It’s also about being fiscally sustainable as well.

When I look at the cost of living support that this Government has already had, let’s just lay down the context of what we’re facing: the high inflation is seen globally but also here in Aotearoa. It is putting pressure on our Kiwi households everywhere. This Government has already delivered significant support through the cost of living payments, the fuel prices that were low during that time period when we supported also the public transport half price, and the increases to Working for Families, the superannuation, and many more.

When I look at the policy such as extending the 20 hours of early childhood education (ECE) to our two-year-olds, this is going to benefit many of our communities; our whānau. Recently I visited the BestStart Kauri Flats in Takānini, which is one of our ECEs, and met up with the centre manager Aman and the staff. We were celebrating Matariki last month and to meet our whānau coming through that live in Takānini, and seeing them there, seeing our parents celebrating Matariki, but also to discuss what matters to them—this policy would definitely help our younger folk and our kids and whānau. This will help support parents who want to choose to go back to work. This will help give them that time as well. So, again, I want to acknowledge our BestStart Kauri Flats ECE in Takānini. But under the National-ACT Government, if they were to come in place, gone—“gone-burger”! That is what is at risk, and this is one of those policies that we still need, to help support our whānau.

One of the biggest ones that I love is the scrapping of the prescription co-payments. As a medical doctor that’s worked over a decade and a half in South Auckland—Māngere, Manurewa, Takānini and everywhere in between—having that $5 co-payment is huge. Yes, the other side will say “Well, it’s only $5.”, but when we see our communities in South Auckland, many of the clinics that I’ve worked in, we’ve seen whānau who have not one or two medicines—they’re on many more, and it all adds up. This is just one of those avenues where we can take that priority and reduce that barrier for many of our whānau.

One of the things that I’ve had when many of my patients come through, once we prescribe something, and there’ll be a list, they will actually say, “Doctor, name for me the top two medicines on that list, because I can’t afford the other three or four.” It is so hard to see when we’re trying to treat our people with chronic issues and trying to improve their health and wellbeing, and then having to choose which are the best two. We don’t prescribe things just for fun. We’re trying to help our whānau get over their medical conditions. There’s times when me and my colleagues have had to go and get medicine out of the medical clinic cabinet because we know our whānau cannot go next door to get a prescription.

There’s those travel barriers as well. We’ve had many of our whānau say, “Can you send it to this pharmacy that gives free prescriptions?” Because, back in that time, only a few were getting them free. That removes that barrier. They can go next door, don’t have the cost of fuel, don’t have time wasted to get their medicines. This would definitely help in that regard.

I acknowledge that when we’re looking at policies—and I’m all about health and wellbeing; follow the whare tapa whā model—we look at the fonofale model. I just want to acknowledge that we do have the pioneer of the fonofale model up in the gallery, afioga ia Fuimaono Dr Karl PulotuEndemann. Thank you so much for the work that you do in our community. Thank you.

I acknowledge that this policy as well will help communities such as Wainuiōmata, the Mana community, and I just want to acknowledge again the former Minister Luamanuvao Dame Winnie Laban. Thank you for the work also that you do. I don’t want to say “you” all the time, Mr Speaker, because I know that’s saying it to you. But there are many communities that would benefit from this one policy. I acknowledge we have the Māngere-Ōtāhuhu local board chair here: lau afioga a Tauanu‘u Nanai Bakulich. The work that he does in seeing this policy working in that community will make huge inroads that a place like Māngere 275 represents.

When I look at free public transport for our kids, Takānini has a young population and I know many communities have a similar demographic in age; just over a third of the population are under 25. So when we look at just public transport itself, the free public transport for our under-13s and half price for those under 25, over a third in my community in Takānini will benefit from this policy. So, again, it is looking at different levers to improve the health and wellbeing of our people, lower the cost, and therefore supporting our communities as well.

When we look at the KiwiSaver contributions for paid parental leave, I know many whānau and I know my wife went on paid parental leave recently for our baby as well and she’s now one year old. I look across, again, to our young whānau across the House—across Aotearoa—and this policy is helping support their whānaus as well in giving those contributions while mum or dad is on paid parental leave.

When we look at cheaper energy bills for our whānaus—and I love that we’re expanding the Warmer Kiwi Homes programmes because again, warm, dry homes, supporting our whānau from the home itself is whānau and our housing is one of the foundations of improving the health and wellbeing of our people. Too many times I’ve seen come through the clinic people who have respiratory conditions, people have skin conditions, the kids are suffering, when we have chronic conditions that we’re trying to manage, but then we obviously get those acute things happen at home because it’s too cold, it’s too damp, and therefore affecting their health. Warming their homes and providing this policy would definitely support our whānau that go through similar things.

When things happen, when it comes to environmental issues happening across Aotearoa, we want to make sure that we’re supporting them. So when we saw the cyclone happen, Cyclone Gabrielle, and also the Auckland floods, I want to acknowledge that the first South Auckland civil defence centre was set up in my rohe of Takānini, Randwick Park, Manu Tukutuku, and I want to acknowledge the MPs that came across, to come and support.

Hon Marama Davidson: They’re awesome.

Dr ANAE NERU LEAVASA: Yes, very awesome and, again, I want to acknowledge my colleague across the House as well, who was there—in pretty much her home town—as well. That sort of support and seeing what happened in Cyclone Gabrielle on the East Coast, we want to make sure that there is investment into those areas to deal with the here and now, but also help to improve the resilience for what the future may hold. Also, looking at protecting communities, we look at the $100 million fund to help councils invest in the future flood resilience as well.

The Pacific caucus had the opportunity to meet the PikPok gaming operators in Wellington. This is where that policy of providing a 20 percent rebate for video game developers was warmly welcomed by them. I just want to highlight that Tyrone McAuley, the owner of PikPok, is a Samoan, So big ups to our Samoans and Pacific who are making headway in different sectors. But Tyrone said we need more Māori Pacific in the sector of games as well and game developing, and so forth. It’s a growing industry. It’s providing high-paying jobs. There’s many things you can do in the industry itself, so, again, I want to acknowledge Tyrone and the crew that we met—Lance, the chief financial officer—and their contribution to the sector being the pioneers in leading the way in Aotearoa new Zealand and I’m just happy that it’s a Pacific Islander who’s one of the co-owners.

When we look at additional public housing, the 3,000 additional public housing places, when we look at the different policies such as supporting Kiwis into work and the health polices, there’s so much that I could say but it’s all at risk if the National-ACT Government comes into place and does a moonwalk and takes us backwards in this place. Fa'afetai, Mr Speaker.

DEPUTY SPEAKER: This is a five-minute split call—Toni Severin.

TONI SEVERIN (ACT): Thank you, Mr Speaker. Much appreciated for your guidance on that. It’s a pleasure to stand on the appropriations and this imprest bill to oppose it. Now, just before in the House, we were informed that this is the fifth Wellbeing Budget this Labour Government has presented. My question is: how many people out in New Zealand listening to this will feel that it has been a wellbeing Budget? We’re in a cost of living crisis and people are feeling it in their pockets every day they go to fill up their vehicles at the service station, and when they go and buy their groceries. Most people are really struggling today and this Government is saying that this Budget is bread and butter and wellbeing. I don’t think so.

Most people that I speak to in the community are struggling too hard to just do these things. Now, the biggest thing they say is, “OK, we have electric cars. Most of us don’t mind too much about electric cars or hybrid cars, but we still need roads to drive them.” So who’s going to pay for these roads? That comes back at the moment to those that have got petrol or diesel. Is that fair? No. So there you go. Is that wellbeing and feeling that people are being listened to?

What results has this Government shown for this large amount of spending that they have put here? Do we have more kids going to school every day? No. Do we have a better education system? No. Do we have a better health system? No. I’m talking to family in Invercargill and they are talking about possibly losing their hospital because they can’t get staff there. I understand that not everybody wants to move down to the deep South, but there are lovely, friendly people down there, and we’d love people there.

Now, the other thing is around health. Everybody talks about doctors and nurses—what about the laboratory scientists that helped us through COVID, and how well have they been treated through this Budget? No, they are going on strike again. Now, that’s very unusual for that to happen. So where are they being looked after in this Budget around health? All we see is more and more spending with very little improvements on anything.

Now ACT put out a fully costed alternative budget, and we found that there was up to spending—was it 61 percent over the last five years? Now if I could do that in small business, gee, I would be very happy. But no, when you’re in small business, or a ma and pa, you tighten your belts when you need to. You look at where you can save some money. But this Government doesn’t seem to be wanting to do that.

There is so many more bureaucrats—and I call them bureaucrats because they’re working in Wellington. To me, the public servants are your doctors, your nurses, your teachers, the people on the ground that we need to look after more. But we are not looking. We have got far too many people here in Wellington that also are being hired against the private sector. In the private sector, the small businesses can’t keep up with the wages that this public sector is offering them as well.

So this is it. What are we getting for this Budget really, the average person? That is very little. We have not got any improvements in any of our key education, health—even corrections: crime is up under this Government. You wanted to reduce crime but it hasn’t; you put less prisoners out. Now this is just going to inflate more and more because the more crime we get, the more people are going to be struggling, especially those small businesses that have to pay for this. This Government hasn’t given too much to most people.

Now, we also said that if you earn $70,000 in this alternative budget, we say we can give you a tax cut without affecting the front-line services. Now, this Government over here, Labour, will scaremonger everybody, but we can afford to do it; you’ve just got to watch where you are spending it because you’re just throwing money around to people that don’t. We oppose this.

Hon MARAMA DAVIDSON (Co-Leader—Green): Thank you, Mr Speaker. If there is time, I would like to stand as the Green Party MP on these bills and support them, but we would not stop here. The Greens know that there are further levers that we can pull to make sure that we step up to the scale of the climate and inequality challenges that are facing all of us—every single one of us—here in Aotearoa.

A lot of the debate today in this House on these bills has been focused on the cost of living. We have been clear that it is not actually just a cost of living crisis; this is an inequality crisis. When we talk about who pays, there are people who are not going to the supermarket and who are having to use a calculator to make sure they stay within their budgets. There are people who are not having to worry about paying the mortgage or the rent and the power bill and the kai bill. There are people who are firmly secure and stable and have got more than they need to live a good life. Our economic and tax system has to change if we have any chance of raising the revenue that we absolutely need now, but especially now into the future.

The Greens support the $5 prescription fee being waived. I was in the Manurewa Southmall Pharmacy just last week hearing directly from chemists themselves, making it really clear that they’re having more pick-up because of the removal of the $5 barrier, which is a lot for far too many people. That’s a lot. They are actually having more of the prescriptions picked up because of that, so we celebrate that.

I know that it is important that in this bill it includes the work to start reducing energy bills for families. Right now, families are having to choose to not turn their heaters on because it is too expensive to cover that plus the rent, plus the kai, and goodness knows whatever else comes up. We support all of these moves. There is also the transport being less expensive.

We support all of what is in here as good, important moves and changes, but we can’t tinker around the edges. The Greens would go far further to making sure everyone has access to a minimum income no matter what, whether they are out of work or studying, for example. We can actually increase the tax on wealth for those with more than enough and redistribute that back to, for example, 3.7 million New Zealanders who would benefit from the sorts of proposals that the Greens have been putting up right from the very start, where everyone earning under $125,000 would actually benefit, and where those who can most afford it—without diminishing much of the quality of their lives at all—can actually help the Government raise the revenue that we need.

We have to massively scale up our public, affordable, and community and Māori and Pacific housing. We can do that because it is a political choice not to. We have to end poverty, not just see less of it. Our Greens proposals would actually end whānau and child poverty. If people are concerned about crime and community safety, ending poverty and making sure people have warm, affordable, healthy homes would go most of the way to seeing intergenerational change.

It is a political decision to not put those plans into place where we’ve got what we need. We have what we need to actually make those changes; we should just do them. I’m proud that the Green Party is continuing to build support, because we are putting up the actual, achievable policies that could actually ensure that we are meeting the climate challenges, meeting the challenge of growing inequality.

Over the past few years, we have seen, around the world, the wealthiest—top not even 1 percent; even less than that—building ridiculous, immoral wealth. No need for the build-up of that immoral wealth for such a few—literally a few, in the context of the world. Here in New Zealand, it is exactly the same. There is no need for that. We can redistribute that so that we can help Aotearoa. Kia ora.

HELEN WHITE (Labour): It’s a pleasure to take a call in support of what is a bill about the appropriation of money. Now, money is a very real thing and there is only a limited amount of it, and there are always hard choices to be made. What I have around me is a team of people that I am incredibly proud of because I know that they come from every walk of life in this country, and they are truly grounded—they are grounded people. I’d just like to mention my Pacific Island colleagues because I am particularly impressed with the crowd today and its regard—it’s here to respect one of our wonderful Ministers, and he comes from the Pacific Island community. Our caucus is rejuvenating the Pacific Island community in its rank. It has some wonderful Ministers, and they also come from a variety of backgrounds.

If I want to talk about medicine and the state of our health service, I can go to Dr Anae and we can have a talk about that. He is working and has seen a lot of things happen. He has seen the terrible reality of a postcode lottery. I worked in employment law for 25 years and I remember going in to negotiate on behalf of a group of workers in Middlemore Hospital. I was told at that point that Middlemore Hospital was not given the same funding for people who were coming in to that hospital. They were given less money in Middlemore than they were given in other hospitals in Auckland. Now, that’s absolutely ridiculous. What we are doing now is we’re replacing a system where it had been that the poorest people in our country were being given less money than everyone else when they had the highest needs, because there is a direct relationship between poverty and health outcomes.

There are also dots being joined, and you can see it in this Budget, because the dots that are being joined are the ones between health and housing and poverty. Now, the reality is we had far too much chronic illness in this country and it was a result of the fact that our houses were not warm and dry; our rentals were not secure. People were living in places they never should have been with children; that was going on. And you know what? They were then going off to a hospital which had mould in its walls—mould in its walls. We were not paying our nurses enough. That was what we inherited, and we inherited it at a precarious time. We inherited it when we had a situation where we were going to face a pandemic. We were just building up those services when that pandemic struck.

While I have heard a lot of whinging from the Opposition, I remind them that they were not clear about closing the borders because, again, they weren’t grounded. They weren’t from the class of people who would be most affected, and they did not want to close those borders, then they did want to close those borders, then they did not want to close those borders, then they did want to close those borders. They were driven by a lack of groundedness. This Government knew exactly what its priorities were: the priorities were people—they were people’s health. As a result, I am proud of what was accomplished, but there is work to be done.

There is a lot of work to be done to make sure that our health service is robust, that it serves our people. There is work to be done in terms of making sure that our houses are still warm and dry and there are enough of them to put people in. There is work to be done by a Government that’s not afraid to lead in this area; that’s not afraid to make hard choices. I respect my colleagues in the Green Party, but sometimes I struggle with the fact they continually have the advantage of being able to promise things that are not priced. The hard choices are being made in the ranks of the Labour Party. We have to make choices, and those priorities have to actually respect our people and the value of our people. They have to get wages up in this country; they have to keep innovation going.

So in this Budget, you will see a multitude of wonderful things. There are a multitude of different things—and you’ve heard my colleagues list some of those things—and there’s an abundance of them. That’s because there are so many things that need to be done in this country. It is absolutely critical—critical—that we get a chance to do that.

Now, I want to contrast that with what I have been hearing, because I want to bust one myth before I sit down, and this is this ridiculous situation over tax cuts. Because let’s just talk about those tax cuts as an alternative for a minute. They are being dangled in front of New Zealanders, but they are not being explained. Let’s remember that this would be an alliance—if there was a change in Government—between the ACT Party and the National Party. Now, let’s just take a quick look at the alternative that they are promising us. They are promising us an alternative whereby, even by their stats, people on $180,000 get over $1,000 worth of extra benefit in their tax break that year. Do you know how much somebody on a minimum wage gets? They get something like, I think, $2 a week—$2 a week. That’s what we’re dealing with. We don’t value people if we’re giving the top bracket that doesn’t need it that kind of money and we’re giving people on minimum wage so little.

What would ACT do? ACT would have frozen the minimum wage for three years. I’ve been sitting here for three years and every time that the Labour Party has suggested that we will increase the minimum wage, we have been told “Not now—not now.” Well, I heard that all my life—I saw that all my life. As an employment lawyer, I saw people hold those wages back. I saw what it did to people’s families. I had a case at one point which was actually in Terisa Ngobi’s area, it was in Levin. It was in a meat works where people were actually paying the workers less and less because they were paying them piece rates. So what they would do is they’d just add another job to the piece rate and they ended up being on less than the minimum wage. That was the kind of sleepy approach we had because we did not prioritise people; we did not actually prioritise getting wages up in this country and paying people in a dignified way.

So I’m going to finish by just talking for a second about these fair pay agreements, because it’s a big word and people aren’t used to it and they don’t know. Those fair pay agreements are about basic minimums and never going below them. They’re about making sure that if one employer is paying an amount of money that is fair, they’re not undercut by somebody doing what I just described happened in Levin. That isn’t going to happen because there’ll be a floor—there’ll just be a minimum. Doesn’t mean you can’t pay more; doesn’t mean you can’t do different terms and conditions, but you can’t pay less than your friend down the road who’s trying to do the decent thing and pay New Zealanders a decent wage. That is an incredibly important thing.

Now, I have got a minute and a half and I’d like to just for a minute turn to my friend—this is Emily Henderson, and she is about to give her valedictory. I’d just like to say, first of all, it’s been an utter pleasure working with you. I have been so lucky to have Emily’s counsel at times, but I also wanted to talk about her work, because I started this speech talking about how grounded this team is. Emily made a valuable contribution to this team. She was a family lawyer before she came here. Now, my ex-husband was a family lawyer and I know it’s a really tough gig. It’s actually quite tough living with a family lawyer, Emily. It’s hard because the work’s traumatic because people doing family law see some of the most strained families in our country. I know that she’s contributed a massive amount to the work that we’re doing in this area. We are working on issues like family violence. We are working on victim support. We are working on things like litigation abuse. And we’re able to do that because we have people in our team like Emily who’ve been feeding us real, grounded information.

So if this country wants to look at this Budget, they will find a mine of information and care that has taken place where a limited amount of money can go. And yes, we haven’t got everything we want in this Budget. We’ve got a lot more work to come, and we want to be able to get on and do it, and we want to make the priorities New Zealanders—make sure that they get food on their tables and have warm, healthy environments and are free from violence. That’s the work only a Labour Government can do. Kia ora koutou.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Speaker. Now, I think it’s important that we just take a moment to reflect on what this debate is about. This debate is about the Government’s Budget and their plans to—purportedly—deliver better outcomes for New Zealanders. We heard the last speaker, Helen White, talk about how the priority is people. That sounds great, and, actually, that reflects the last 5½ years under this Government—it sounds good but does not deliver. That, quite frankly, is where Kiwis are being let down time and time again.

“It’s about people”, we hear. There are more people now in emergency accommodation than there were when this Government came to power. There are more people now living in their cars than there were when this Government came to power. There are more people suffering as victims of crime than there were when this Government came to power. There are poorer health outcomes. There are poor educational outcomes. Across the board, people are suffering after six years of failure from this Government. Now, this latest Budget does nothing to relieve that pressure for everyday Kiwis that are going about their jobs, trying to make the best of their situation and trying to make a better future for themselves and their families. They are being let down by a Government that has great intentions but simply cannot deliver meaningful improvements for New Zealanders.

We have a Government spending 80 percent more now than when they came into office—80 percent more. That would be OK if we were seeing an 80 percent increased outcome across health, education, law and order—name your priority area. Yet, across the board, we are not seeing those improved outcomes. That is one of the biggest failures of this Government: they are splashing the cash and not delivering tangible gains. Time and again, what we are seeing is a total confusion between the inputs versus the outputs. The assumption from this Government is that if we spend more—and we’ve seen net debt rise from $5.4 billion to a staggering $73 billion under this Government, an increase of 1,250 percent, but where are the outcomes? We simply are not seeing improvements for Kiwis as a result of this Government’s focus.

Now, I commend them on that side of the House because they have good intentions; without a doubt, they’ve come to this place to try and deliver better outcomes for Kiwis. But after six years of suffering, it is simply not credible that they are delivering improvements for New Zealanders.

Now, when I talk to my constituents in the mighty Waikato, what I hear consistently is that they are frustrated that it costs them more at the supermarket, the kids aren’t learning what they should be at school, their parents can’t get into hospital when they need it, and the local dairy keeps getting robbed. On those basic measures, we have, after six years, seen poorer outcomes now than we had when Labour came into power. Kiwis have had enough. They want change, and we are seeing that time and time again with the conversations we are having around the country and the focus we are seeing shifting in the public polls as well.

The Government have demonstrated they do not have a plan to deliver a credible improvement to the economy. We are suffering continuously, and Kiwis have had enough. Those good intentions that I mentioned are admirable—absolutely we should have good intentions, and I commend them for that, but good intentions are nothing without good outcomes. We simply are not seeing that. Again, I reflect on those key areas: health, education, law and order, and the economy, areas that impact Kiwis in their everyday lives. Kiwis that are trying to make the most of it, whether they be business owners—whether they be farmers, in my building and construction portfolio, for example—across the board, time and time again, we are hearing the frustration from the difficulty of getting things done.

SPEAKER: Sorry to interrupt the member, but it’s come time for the valedictory statements.

Debate interrupted.

Valedictory Statements

Valedictory Statements

SPEAKER: I just want to inform members that following the valedictory statements, the House will suspend for the dinner break and resume at 7.30 p.m. for further consideration of the Appropriation (2023/24 Estimates) Bill and the Imprest Supply (Second for 2023/24) Bill. Members, I call on Dr Emily Henderson to make her valedictory statement.

Dr EMILY HENDERSON (Labour—Whangārei): E te Māngai o te Whare Pāremata, for the last time: tēnā koe. This is an incredible job. This is an incredible place. This is an incredible team. Admittedly, it’s a team I never expected to join—and let’s be honest, you were as shocked as I was!

But the welcome, especially from Kelvin and Willow, my brother and sister in arms in team Te Tai Tokerau, and from the gloriously talented team 2020, the warmth and the wraparound has made the decision to leave so soon so much harder.

And not only the team here; I’m also leaving the team up there in the gallery. The wonderful crew from my office: Audrey Van Dalen, Denise Phillips, Emma McLean, Glen Service, and Judy Riggir; not to mention my wonderful local party exec and volunteers, family, everyone.

But the truth is, I didn’t really stand in 2020 with any expectation of winning. And as wonderful as this caucus is and as deeply as I believe in its work—and if you cut me open, you would find “Labour” stencilled across my heart—I have come to believe in the words of the prayer that opens every sitting day, in “justice”, in “humility”, and with as much “wisdom” as I can muster, this is not the way I best serve New Zealand.

I had been researching and writing about how to reform the court system and make it safer for vulnerable people for 25 years before I entered this place. Over the years, I’d helped introduce a plethora of practice reforms, culminating in the sexual violence court. I’d even managed to shoehorn a few ideas into legislation before becoming MP. There’s been any number of Ministers of Justice of all political persuasions who have had the dubious privilege of listening to my unsolicited ideas.

When I sat down and really thought about the next term, I realised that, as much as I enjoy this job and this team, it’s in that generating of new ideas that I believe I add most value. Maybe the ideas I come up with won’t be the best ideas; maybe I won’t save the justice system; maybe I will leave this place, come up with nothing, and persuade no one; but it’s still the wisest decision I know how to make.

And to those who wonder why, with such a knife-edge seat as mine, I didn’t just quietly wait to lose the election and then go back to my books, well: once bitten, twice shy. When the Whangārei Labour Party asked me to stand in 2020, they were crystal clear that we had no chance of winning then either. When your hometown has been blue for 45 years, it’s hard to expect anything else—even though we are also the town with the most to gain from a Labour Government. For decades, Whangārei has been coming in first at the wrong end of every socio-economic race. When you’ve been deprived for that long, it’s hard to generate any hope for anything better or energy to ask. Poverty is the only thing that ever trickled down the neoliberal pipeline in Whangārei.

So I didn’t stand to win; I stood to protest. I stood to protest being taken for granted for 45 years. I stood to protest being ignored. I stood to protest the National Party’s abysmal failure to get funding for our abysmal hospital, for their allowing our social housing to fall apart, for their decision to strip the regions of road maintenance funding for nearly a decade. I stood to protest the sheer failure to make an effort that comes when you’re arrogant enough to take a region for granted for almost 50 years, even when you know the depth of its need.

And if there is one thing Labour proved to Whangārei on election day 2020 and every day since, including the day we got our new hospital funded and all the days we got our hundreds of new social houses and the day we got our Port Road bridge and funded our Vinegar Hill bridge and our port rail link and opened our cardiac catheterisation lab and our colonoscopy unit and all the other days, we proved that day that Whangārei won’t be taken for granted anymore.

Whangārei has stopped feeling whakamā about our modest hopes. We can and will demand better for ourselves and our children. And I’m warning you now: I’ve made it my mission while in this job to talk to our people, especially our young people, about how to demand better. I mentioned our new hospital; I’d almost say my proudest moment as MP was when the usually very patient health Minister Andrew Little stood up at its announcement and complained bitterly that he’d had to give in because the local MP made his ears bleed.

But my actual proudest MP moment was one of my regular Whangārei Girls’ High visits, where I learnt that a group of girls from Raumanga and Otaika—two of our poorest suburbs—had taken on board our previous session about petitioning Parliament, and now had over 1,000 signatures demanding we extend our free school lunch policy. Now, it might not be great party discipline to be encouraging constituents to pressure your own Government, but that’s my single proudest moment. Because those girls—so shy they had to come and see me in a little huddle and took many attempts to get their words out—now know how to demand better.

I know who I think should take my seat. [Points to Angie Warren-Clark] I believe in her so much, I’ve even become her campaign manager. But whoever takes over, don’t you ever do Whangārei the disrespect of taking it for granted again. Because if you do, the girls from Raumanga and Otaika and Tikipunga and Otangarei and Morningside and Raurimu—the girls and boys of all our beaten-down suburbs—are rising up, and they demand better. What will stop them—especially will stop them from fulfilling my ultimate dream of seeing some of them in this House—is not just the challenges of the places they come from, it’s also going to be the challenges of this place.

I’m here as part of the most gender-equal, Māori-, Pasifika-, rainbow-inclusive Government ever—a Government in which my Whangārei rangatahi can, for the first time, truly see themselves reflected. In this caucus, I knew I could say anything, argue hard, be myself, and say my piece. I knew my views were respected even when we disagreed. But the space for constructive debate and the ability to tolerate opposing views outside the caucus room and amongst the public—especially in the toxic swamp of social media—that space has changed significantly.

Now, don’t get me wrong: it takes more than a bit of trolling to silence a tough old courtroom lawyer, especially one who survived raising four extremely opinionated teenagers—and I’m also Pākehā. But for young political aspirants without similar advantages, politics is starting to look like a very difficult ask. Every day in Whangārei, I hear concerns about how intimidating even ordinary voters without political ambitions are finding entering into political discussions. No one who has led through the last few years—even obscure backbench MPs like me in my beloved Whangārei—can be in any doubt that the culture has changed. But the people in this place still have the power to steer us away from division. As someone about to step back into the mass of ordinary voters, I’m asking you today to use that power. I get we won’t ever play “Kumbaya” and hold hands across the aisle here. I’m not naïve, I come from the courts—we invented adversarial argument, and this place is nothing if not democracy’s courtroom.

We need a strong Opposition to test the Government from every angle. But as someone from the courts—someone who’s spent a lifetime trying to reform the courts—there’s danger when adversarial argument stops being about testing and becomes about winning alone. That’s the nub of the problem in the courts. In rape cases or cases with vulnerable witnesses, lawyers who think their sole responsibility is to get a win will do virtually anything with any means necessary—even when that drowns out and distorts the evidence. In a normal election, that might not matter so much. But these aren’t normal times. Normally, extremism rolls right off New Zealanders, but this is a time of heightened anxiety, when many voters are undeniably on edge, struggling to come to terms with an uncertainty we haven’t had to face since the 1930s. Scared people notoriously seek scapegoats, and it’s the easiest and oldest trick in the book to tap into that fear and prejudice and drive a wedge into the community.

I would not suggest anyone in here is about to jump the conspiracy bandwagon, but, in an election year, there’s a temptation to at least try and tap into some of that energy. It’s there when politicians start using the language of “taking back our country” from minorities. It’s there when politicians ignore the actual facts and, instead, go around telling people that they’re unsafe and crime is out of control—and, when confronted, that the facts don’t matter as much as the fears. It’s there when politicians start saying “the apocalypse is nigh” because we’re about to put two of our official languages on street signs—even when their leader led the charge to turn our major carrier into a hotbed of bilingualism. Demonising the neighbours is as simple as turning a deeply boring bit of legislation about pipes into a crusade against overreaching Māori. The temptation to divide in order to rule is clearly present, and it is a danger—including in the increasing attacks on the independence of the judiciary, coming from this House.

Every time someone in leadership weaponises the power of that scapegoating—against whatever people—it licenses some unbalanced person to take their frustrations out on an actual person. It’s only a few years since UK MP Jo Cox was murdered by white supremacy conspiracy theorists. Now, Jo Cox herself, in her maiden speech, just over a year before her murder, famously said that all of us, whatever our ethnicities or allegiances, “have far more in common than that which divides us.”

As someone about to fade back into the mass of ordinary Kiwi voters who depend on you to keep us safe, I’m asking you to heed her words. All it takes for democracy to crumble is for people to stop believing in it, to stop honouring the concept of shared power, shared decision-making; the idea that he waka eke noa—a whole community can be represented in here, in this place, and make decisions for the whole with a reasonable degree of fairness and efficiency. We need a new way to debate this. We need a politics that doesn’t play games with peoples’ emotions. We need a politics that isn’t afraid to lead from the front. We need a politics that isn’t afraid to admit solutions are complicated, that isn’t afraid to make tough decisions and trust us to catch up. We need a politics that has more respect for the people it serves, for our intelligence, for our realities, and for our futures.

So, as an ordinary voter, I wish you all sufficient courage of your convictions to stand firm against those who seek to stoke the fires of hatred and resentment and divide our community. This place may not be perfect, but it is a good place—the beating heart of a strong democracy. I wish you the confidence to stand firm and assert its strength and goodness, even if it occasionally means admitting you agree with the other side of the House.

It only remains for me to look up into the gallery and thank my wonderful family and friends for their support of me personally, especially my sisters and brothers, my mum and dad, my wonderful argumentative kids, and, most of all, Thomas—I’m so glad to be coming home at last. Mr Speaker, this House is, ultimately, not my home. I resign it to those who, in justice, in humility, and, yes, with a considerable degree of wisdom, will go on to serve here for the welfare and peace of the people of Aotearoa, New Zealand. Tēnā koutou, tēnā koutou, tēnā koutou katoa.

[Applause]

Waiata—If I Had Words

Hon AUPITO WILLIAM SIO (Labour—Māngere): E te Mana Whakawā, e ngā mana, e ngā iwi, e reo e ngā hau, e whā e ngā kārangaranga maha tēnā koutou katoa.

[The Speaker, the authority, the iwi, the voices, the four winds, and the many ethnicities, sincere greetings to you all.]

Ou te manatu ua sā le vao, ua sā foi le sami. Ua sā vasa i vasā, aua o lea ua taufai sunu‘i ao o le lagi. O lea ua liligo le fogātia ua paū le tua'au mafuamalu. Aua ua pa‘ia le faatafafā o le Maotafono Faitulafono Aoao o Aotearoa nei. Ua pa‘ia Tamalelagi aua le aiga Sā Levi ua aofaga potopoto. Ua pa‘ia foi tama a le mālo, aua le tapuaiga o upufai o Mālo i Aotearoa, Samoa ma le Pasefika loaloa, Ua pa‘ia tama o le laueleele nei aua Māori, e faasino i fanua ma eleele. Aua le fale alii o Tainui Maori, auā King Tūheitia Potatau Te Wherowhero Tuawhitu. Aemaise uo ma e masani ma aufaigaluega a le Mālo. Tulou, tulou, tulouna ia.

Kia orana tatou katoatoa. Fakaalofa lahi atu ki a mutolu oti. Mālō ni. Tāloha ni. Talofa, Tuvalu. Mālō e laumālie. Mālō ‘aupito, kainga Tonga. Ni sa bula vinaka. Noa‘ia ‘e mauri. Warm Pacific greetings to one and all.

I’ve conveyed my utmost respects to the mana of the land of Aotearoa, the sea, this House and its people, for this is my home. I have conveyed my highest respects to the mana of the many people, Government leaders, diplomatic corps, MPs, local government, NGOs, churches, our chiefs and traditional leaders, friends, and public servants present tonight, including my family and those who have travelled from overseas to be here and those who are listening from across the oceans. You are my community. I’ve also expressed my deep respects to Māori, the people of the land, and the Kīngitanga, for you are my kin.

My heart is filled with gratitude and it is my absolute pleasure to stand here tonight—semi-naked, of course—to present my final remarks in Parliament. In the last seven months, I’ve been saying farewell to the Pacific communities of Aotearoa New Zealand. This was my tour of duty with my community, where we’ve cried, we’ve danced, we’ve eaten pork, we’ve drunk kava on many occasions. I got lifted up once and got carried by the elders of the Cook Islands community while others chanted. All the time, I was fearful I would cause injury to someone—they were elderly—and then feeling glad I was no longer the Minister responsible for Pacific Health.

I want to pay tribute to all the Pacific mamas who have continued to feed me as they farewelled me. They are the ones that get things done all the time. Prime Minister, you need the mamas on your side if you want to win this election. I see them in the public sector, in health and education and employment, even in this House. They do a lot of work for our communities. In fact, during the election year, most of my colleagues would lose weight as they got so busy campaigning they didn’t eat. I didn’t have that problem. I put on weight because everywhere I went, all the Pacific mamas would feed me wherever I go, and they wouldn’t let me go until I’d eaten something, and then they put food in my car.

I received so many reflections from the Pacific community about my time here as the MP for Māngere and as the Minister for Pacific Peoples. Perhaps what remains to be said is for me to express my absolute gratitude to everyone here tonight. There are so many people who have made sacrifices of their time, given me counsel, your personal resources, and have supported me throughout. Whilst there are so many to name, I do express my gratitude to Vui Mark Gosche, Luamanuvao Dame Winnie Laban, Faamoetauloa Jerome Mika, Paul Retimanu, the Māngere Labour Party—are you in the House? Yeah. I want to acknowledge also those of our Māngere Labour Party who are no longer with us, who passed away, and the many volunteers. To each of you I say fa‘afetai, fa‘afetai, fa‘afetai tele lava. Thank you so much.

Pacific peoples’ representation in Parliament only started in 1993, with Taito and Anae. After them came Vui, then Luamanuvao and Charles Chauvel. I came along as the fifth Labour MP of Pacific heritage, first Samoan born, and, as the late aunties Fili Fiu and Liz Lee-Lo of the Service and Food Workers Union would say, I also was the youngest and most handsomest of the lot.

As I reflect on the maiden speech I gave on 1 April 2008, the issues I raised then are just as relevant today as they were in 2008. The work must continue, and I wish all the best to those who will take it up, especially members of the Labour Party Pacific caucus in the next Government. Tonight I want to focus on the future of Pacific peoples of Aotearoa, attempt to lift the spirits, hopes, and dreams of our Pacific youth, and offer a few challenges to those who wish to lead New Zealand in the future.

In 2018, Grant Robertson as Minister of Finance and myself launched a new Treasury report called The New Zealand Pacific Economy. It is the first report of its kind, which showed that for a small population, Pacific peoples contributed $8 billion to New Zealand’s economy, despite the inequities and barriers they face. We knew then as a Government that Pacific peoples needed a long-term vision in order to remove barriers and address the inequities they face. To make an impactful difference required a significant investment across a number of Government agencies. It required everyone working hard and moving at pace to establish foundations of wellbeing that would endure, and that’s what we did. We worked hard and at pace to deliver a Pacific Wellbeing Strategy across a number of Government agencies, with investments and outcome measurements. We delivered for Pacific languages; housing; health; education; science, technology, engineering, the arts, and mathematics pathways; Tupu Aotearoa employment opportunities; and business. Even my uncle thanked me for an increase in the minimum wage when it reached $21, and then he asked whether he can get another one next year. This is the work that must continue.

Thank you to all the staff of Ministry for Pacific Peoples for all your hard work and support for our community, Pacific communities, and your support of me during my time as Minister. You were always my favourite ministry because the challenges you face were always insurmountable.

Yet, when we as a country ensure that Pacific peoples of Aotearoa are strong, resilient, thriving, and prosperous, we are also ensuring that New Zealand as a whole benefits, for Pacific people are the youngest and fastest-growing population. We have to prepare the next generation to succeed so that Aotearoa New Zealand succeeds. They are the future workforce, future business owners, and taxpayers required to produce for the rapid ageing population.

We also launched in 2018 Lalanga Fou goals of economic prosperity, thriving languages and culture, healthy and wealthy families, and a focus on Pacific youth to live confident, thriving, resilient, prosperous lives.

I set out our future direction then for our Government and Pacific peoples of Aotearoa based on the age-old saying “O le aso ma le filiga, o le aso ma le mata‘igā tila.”, a saying rooted in the voyaging practices of Samoa, where each leg of the journey is marked by arrival; we check our canoes to see if all is well, then prepare for the next leg of the journey and, whilst others ended up staying to establish new settlements, the voyage will continue to find new horizons. In other words, moving forward, “e sa‘ili Mālo”, to pursue better opportunities for the next generation. And that’s the challenge to future Governments.

To the Ministry of Health pacific team and health officials, including the Pacific health providers and church and community leaders, I will always credit you for your tireless efforts to keep our community safe and protected during the COVID pandemic. Thank you also to the Pacific diplomats for your role in giving confidence to our people throughout the challenging period, especially my colleagues, the Consulate-General of the Cook Islands and Samoa in Auckland.

To Jacinda Ardern, thank you for the opportunity to be a member of your Government, for supporting my council. I will never forget how I attempted to control my motions when I was first asked to travel with the Pacific Islands Forum to represent you in Rome two weeks after I was sworn in as a Minister. Then when you asked in 2019 that you and Winston Peters would like me to accompany you to the United Nations General Assembly, I simply said, “Yes, Prime Minister.”—but I could have jumped out of that vehicle we were in, I was so excited.

I remember the swell of emotion, also, when you agreed we would deliver the Dawn Raids apology and I couldn’t go to sleep, thinking through every detail of what needed to happen and I cried. Then it seemed like I couldn’t stop crying. I was even more emotional when you agreed to participate in the ifoga, despite your reservations, fa‘afetai tele lava. However, Pacific immigration settings is work that remains to be completed.

To Grant Robertson, the Minister of Finance, thank you very much to you and your Treasury officials for your amazing willingness to listen, understand and support the Pacific bids. It’s not always easy when you’ve also got Minister Willie Jackson and Minister Winston Peters breathing down your neck for their slice of the Budget pie. You, above all, I wish to pay tribute to because you kept your word with me and turned up to front our Pacific communities every year.

To all of my former ministerial colleagues and Labour Party caucus, including the fighting-fit Pacific and Māori caucuses: thank you so much, we had a blast, but there is still so much more that needs to be done and a lot is at risk.

To Prime Minister Chris Hipkins, I thank you for your support and our work during the COVID pandemic. I appreciate that you listened to my challenges on Pacific health matters for Aotearoa and across the Pacific through the Pacific health corridor, and I am grateful for your support in the Pacific education space as we pushed for reform on Pacific languages, Pacific history, Pacific scholarship, and Pacific staffing. We have a saying in Samoan: “E afua mai mauga faamanuiaga i le nuu.”—from the mountains flow the blessings unto the villages. I believe that you are a mountain of a man: solid, steadfast, and immovable in your values and doing the right thing for others. You are doing a great job as Prime Minister.

Thank you to Minister Winston Peters who texted me to say he gives me his apologies and your team and Ministers James Shaw and Marama Davidson of the Green Party, fa‘afetai tele lava; it’s been a wonderful journey working with you, and I always appreciated your support. I’ll never forget how Minister Shaw and I were so excited, two weeks into being sworn as Ministers, we were off to Germany to the climate change COP meetings. We both agreed to address climate change refugees. Ministry of Foreign Affairs and Trade officials had advised us on a humanitarian visa and away we went, using it every speech, media interview, and I was promoting it to the Pacific Island leaders. And when we returned, my political adviser asked me “Did you consult Winston?” “Oops,” I said, “I forgot.” Thank you, Winston, for your understanding and support.

After meeting Pope Francis on that trip, I was able to show him that this is the hand that shook the hand of Pope Francis, and perhaps that may have settled the anger he may have had against me and Mr Shaw—or maybe not!

Mr Speaker, I bet when the “no tie” rule was introduced, you didn’t think an MP would extend it to “no shirt”, did you? Sir, that’s not my intention tonight, nor is it my intention to compete in an ab competition—I’m sure that Mr Stuart Nash will win that! As you can see, I’m a family pack kind of person! Nor is it my intention to compete with the hat of Mr Rawiri Waititi of Te Paati Māori. His hat is a colonial construct, and my tuiga is a traditional, reserved only for special occasions, made in West Auckland.

I’m in my traditional attire as a matai of my aiga Samoa, reserved for special events such as tonight. The Kīngitanga, the Tainui elders, plus K'aute Pasifika will know better than most of the symbolism of my attire, and I invite people to make inquiries of them. I present myself this way as a sign of respect to the Pacific communities and traditional leaders who have supported me and also to my families, the many families, aiga Sā Aupito, aiga Sā Tiumalu, Toelesulusulu, Tofae, and Su‘a, all those connected to the genealogies in those families. O so‘u taupega‘afa ma so‘u maluāpapa ou te malu ai. They who have protected me; to them all I say: “Faafetai tele lava mo le tapua‘iga mamana.”

I’m also in my traditional attire, because I want to give confidence to the people who look like me—tall, dark, and handsome—that they can know that they too can be standing where I’m standing and to be proud of who they are and to not be afraid to claim the right to sit at the decision-making table at all levels of Aotearoa. I stand proudly this way to make a statement for the sake of Pacific youth of Aotearoa. I am showing them that it is OK to be different, that they can be proud of their cultural heritage, even if they are just half and half or quarter like many of my nieces and nephews and my grandchildren; that it is OK to be a member of the rainbow community, too; and that it is OK to use pronouns—he, him, and they, them—and I want to thank my former staff, Nelly and Lou, for many lessons in that regard.

And if you are a Christian, Muslim, or whatever faith you profess it, OK, but allow all others to worship how, where, and what they may; don’t criticise or condemn, but try to understand. I say to all Pacific youth: it is OK to love and be proud of your point of difference; it is OK to love your cultural heritage even if you don’t speak the language; it is OK to pursue your dreams, and don’t ever allow your surroundings or anyone to prevent you from that pursuit. My late mother would say to me, “If there is anything virtuous, lovely, of good report, or praiseworthy, we should seek after these things”. She also said to me, “Whatever thou art, act well thy part”. Be proud of your cultural intelligence, your language and your community and never leave it outside the doors of your workplace. Your language gives you direct access to thousands of years of experience and insights into how to navigate life. Take that with you wherever you go. Nurture it, study it, pursue it, be proud of it. I say again to the Pacific youth of Aotearoa: be proud of your being “generation B”—brown, beautiful, brainy, bilingual, bicultural, and bold—and to remember that only in Māngere our young people are the “generation eight Bs”, because they are just bloody brilliant.

To all the candidates in this upcoming election, beware of demonising young people. If you stick with the Ministry of Justice facts, you’ll find the data shows fewer youth are offending but the severity of the offence has increased. I challenge you to see the youth of New Zealand, especially Māori and Pacific, for the potential that they can become for Aotearoa New Zealand.

For all our youth, the best way of pushing back on politicians is voting on election day against those who use colonial constructs that divide and rule. It has been an absolute pleasure to work with the team at the Ministry of Justice as the first Pacific Minister for Courts. We did some wonderful work in funding and supporting the work of tribunals, funding the coroner’s reform, the youth court, and the judicially led Te Ao Mārama programme. I thank the judiciary for their leadership in using therapeutic principles to address the challenges victims and offenders face when it comes to mental health, drug addiction, anger management, homelessness, or fetal alcohol spectrum disorder. This is also work that must continue. I ask the Chief District Court Judge and your peers, the Principal Family Court Judge, and the Principal Youth Court Judge Ida Malosi: please do not slow down on your leadership with Te Ao Mārama programme. It enables access to justice for all New Zealanders and improves our justice system in the long run.

When I announced I was leaving, my wife Jean reminded me that my youngest son Daniel is 23 years old—he’s going to be embarrassed now—and that’s how long I’ve been playing my politics, she said. She didn’t say it, but in other words, I haven’t been around home that much, and she is absolutely correct and I want the Hansard record to reflect that I was only able to focus all my time and energy on my role as an MP for Māngere and as a Minister in the Jacinda Ardern Government because my family supported me. They grounded me. They sacrificed to allow me to take up what many would argue is the greatest calling in the world: to serve the public, to serve my community, to serve my fellow human beings, to serve Aotearoa New Zealand, to serve Māngere, to serve the Pacific, to serve the New Zealand Labour Party to the best of my abilities, and I have absolutely enjoyed and loved every minute of it.

To my wife Jean and our children Losa, Mausey, Fred, Makisha junior, Maimoana, Joan and Daniel and your spouses and children, thank you very much. To my children in the US: Joshua, Makisha senior, and Jacob and your families, fa‘afetai tele lava. To my father, Aupito Snr, the last of the Mohicans, the last of his generation, who recently turned 85 years in Samoa: you have always been my unofficial campaign manager in South Auckland. You can now promote your many other grandkids and daughters.

Faafetai mo lau tapua‘iga. Thank you for your constant prayers, words of encouragement, support, and for being proud of my service. To my siblings Tutoatasi Taoa, Soloau Lipine, Suausi Viena, Tiumalu Noma, Faatonu, Lolly, and Yvonne and your spouses and your children, including my late brother Kenneth, thank you for being honest and frank with me all the time.

To all my wonderful nieces and nephews, thank you for keeping me real. Thank you for supporting me. Thank you for making me feel special whilst you also made your own decisions; like I would later find out that some of you voted for the Green Party and Māori Party while all the time making me feel that you were supporting me all the way. Good thing was I never once heard them mention the other parties, so I’m proud of you. Keep it that way in this election. Remember that Labour and Chris Hipkins are in it for you, and he’s the Chris with hair.

On the walls of this House, are 12 carved circular rimu memorial wreaths around the balcony. Each bears a ribbon with the name of a significant engagement involving New Zealand troops in World War I. There, above your seat, Mr Speaker, is the memorial wreath and ribbon for Samoa. It marks New Zealand’s first World War I engagement, when they sent 1,400 New Zealand soldiers to capture German Samoa at the request of Great Britain. The New Zealand Expeditionary Force Advance Party sailed from Wellington on 15 August and landed at Apia on 29 August 1914. From that year onwards, New Zealand occupied Samoa and continued to administer it until Samoa won its independence in 1962.

The New Zealand colonial administrators did more harm during their colonial rule from 1914 to 1962. They forced my ancestors off their lands in Satapuala village to build an airport for the war. There are horrible stories of rape and pillage and killings that the late chief To'alepaiali'i Toeolesulusulu Salesa III shared with me. There was the deliberate infection of the local population when, on 7 November 1918, the New Zealand military administration controlling Samoa, led by Colonel Robert Logan, made the deadly decision to knowingly allow the ship Talune, which was carrying Spanish influenza, to dock at Apia. The results were catastrophic, wiping out over a quarter of Samoa’s population and decimating entire families and villages. Colonel Logan refused the offer of medical help from Tutuila, American Samoa. When the local Samoan leaders protested and revived the Mau movement, they were banished from Samoa. They were taken and imprisoned, some in Mount Eden. Many were stripped of their Samoan Matai titles and moved off their land. When they were in Mount Eden, Māori visited them and gave aid.

Then there was the horrific shooting by New Zealand Military Police on the Mau independence demonstrators in Apia, where 11 Samoans were shot to death, including the independence leader of High Chief Tupua Tamasese Lealofi III. Saturday, 28 December 1929 became known as Black Saturday, and I have been singing wherever I have gone as a Minister the song “O le fana taavili ua oteote mai” because that song tells of that story, so I don’t forget this history. Prime Minister Helen Clark apologised in 2002 for the wrongs and harms caused during New Zealand’s colonial rule. More must be done. The Treaty of Friendship that New Zealand holds with Samoa is the only one it has. It is the document that has to be enhanced to achieve restitution for the harms caused and wrongs committed. It is not for Samoa to ask for it; it is for New Zealand to right those wrongs tangibly. This is the history that I hope will now be taught in our schools as part of New Zealand’s history curriculum. By teaching this history, New Zealand can become a better country. By understanding the mistakes that have been made in the past, future generations can learn not to keep repeating the folly of past Governments. Climate change still remains the single-biggest security threat in the Pacific and will remain so. More must be done. We save ourselves when we save the Pacific.

In conclusion, to my political staff Chris McAvoy, Nina Sudiono-Price, Chris Harrington, Tasha Thomas, and others, and to my Māngere electorate staff, Delilah, Ara, Makalita, Maria, Florence, and the many volunteers, thank you so much for your dedication and support of me. Thank you to the Māngere Labour Party. To the sisters who have travelled from afar to be here—Carol, thank you very much. Pacific vice presidents, the New Zealand Labour Council, and the Auckland Northland council, our local board members in Auckland Council—there are no words to convey my gratitude to you all. I pay tribute to all the seconded staff from the Ministry for Pacific Peoples, the Ministry of Foreign Affairs and Trade, the Ministry of Education, the Ministry of Justice, and the Ministry of Health who worked in my office, and all the Government agency officials. We did some amazing and wonderful work that we can be very proud of, and I think I had the best team ever as a Minister. To all our health and education providers, Pacific groups and churches, my advisory groups, the Pacific expert advisory group—words cannot express my heartfelt appreciation, nor can I repay your dedication. I will dance for you tonight. To our Pacific communities of Aotearoa, to our Orometua, our religious and faith leaders, our traditional leaders, chiefs and artists, and our mamas in particular, fa‘afetai. To all of you, I say: “Meitaki Atupaka, Meitaki Ma‘ata, Meitaki Ranunui, Meitaki Kororeka, Faafetai, Faafetai tele lava, Fakafetai lasi, Fekauelahi, Malo Aupito, Vinaka Vakalevu”.

Thank you, thank you, thank you very, very much.

[Applause, hongi, and harirū]

Waiata—Ua Faafetai, Ua Faafetai, Ua Malie Mata E Vaai

Sitting suspended from 6.20 p.m. to 7.30 p.m.

Bills

Appropriation (2023/24 Estimates) Bill

Third Reading

Bills

Imprest Supply (Second for 2023/24) Bill

Second Reading

Debate resumed.

ASSISTANT SPEAKER (Hon Jenny Salesa): Members, before we went on the dinner break, we were debating the third reading of the Appropriation (2023/24 Estimates) Bill and the second reading of the Imprest Supply (Second for 2023/24) Bill. Tim van de Molen has five minutes and 38 seconds left, if he would like to take the call. I call on Rachel Boyack.

RACHEL BOYACK (Labour—Nelson): Thank you, Madam Speaker. It is a pleasure to take a call on the Budget from 2023, another outstanding wellbeing Budget from our aspirational Minister of Finance, Grant Robertson. I’m proud to be a member of the team on the Labour side of the House, delivering for New Zealanders, especially during what are incredibly tough times for our country and for people around the globe. I want to make some points tonight specifically about the Budget and some of the initiatives that I know are benefiting the people in my community of Nelson but also across New Zealand.

I said in the House last week how much I love public transport, and I’m excited that I can share a little bit more information tonight about the incredible improvements we’ve made to public transport in Nelson and Tasman. It’s well-known that we have an area that does have congestion at those highdemand times of the day, and because of our geography, it’s not a case of just adding more roads, because all you’d do then is add more cars and you’d end up in a situation where we’d all just converge at the same point. We’d just move that congestion from one part of the city to the other. As I said in my maiden speech, one of the travesties for transport in Nelson was the removal of our railway, which would right now have given us a transport corridor to transport goods and people throughout our region.

So what I am so excited about is that our changes in Budget 2023 to support people through the cost of living and to reduce the price of public transport have come along at the exact same time that we have doubled the frequency of buses in Nelson, and they now go to places like Motueka. I can actually take a bus to go and visit my colleague Damien O’Connor in the neighbouring electorate, and we can get on a bus out to Wakefield. We have an airport bus.

The buses are electric buses, so we’re reducing emissions, and at the exact same time we’ve introduced free public transport for under-13s from Budget 2023, we’ve introduced half-price public transport for people aged under 26, and we continue to have free off-peak travel for our seniors and half-price transport for people on the community services card. So you can get from Nelson to Richmond in my electorate for two bucks if you’re using your Bee Card, and if you’re one of those people getting half-price public transport, it’s only a dollar to get the bus around Nelson. In the first week, we had a 44 percent increase in the usage of our bus services, and at the weekend, it was a 200 percent increase. It was a classic case of “Build it, and they will come”, and the feedback I am getting from people around my electorate is that this is an investment that the Government has made that is making a real difference for people in Nelson. There are people able to get out and about who otherwise wouldn’t have in the past because there wasn’t a bus going near their place, and for many of those people, they can get on that bus for free or for only $1, thanks to our Government.

The other amazing change that we made in the Budget which is making a real difference for people in my community is the removal of the $5 co-payment for prescriptions. Like many MPs across this House, I am sure we’ve all visited pharmacies and seen the piles of unclaimed medicines sitting on the shelves. I know that for many people, being able to know that they can go to the doctor and then go to the pharmacy and collect that prescription without having to pay for it means they are much more likely to take that medication and they are far less likely to end up in hospital.

We have seen the data now that 900,000 New Zealanders have collected 3 million prescriptions since we made this change, and I know that for many people, they’ve turned up expecting to pay, worried about what that might mean for their budget—because just remember, for people on low incomes, if you’re getting two or three prescriptions, 15 bucks can be a huge cost. It can be the difference between buying bread and milk for the week. So we have made this change, and it’s making a real difference for people.

Another initiative in this Budget that I absolutely love and that will deliver for people in Nelson is our commitment to building another 3,000 more State houses, and that’s on top of our delivery of 13,000 public homes since Labour came into office. I know that in my electorate, we have a number of people who struggle to find affordable housing. We had no addition of State housing and only six more community homes built during the term of the National Government, and during that time the National Government claimed there wasn’t a housing crisis. They claimed that the people in Nelson didn’t need affordable housing. But I know that they do, because they come and see me in my electorate office every single week, and I know many of these people by name.

I am so proud of what we have begun in Nelson. Earlier this year, we opened the first 14 Habitat for Humanity homes as part of our Progressive Home Ownership scheme. We have another five opening in Richmond soon, and another five being built in Stoke. We also have added a number of community homes through the fantastic provider that is the Nelson Tasman Housing Trust, and they have received support through the council and through our Government to build affordable rentals and also public homes that people who are on the housing waiting list can move into. These are warm, dry homes.

What I’m also really excited about is the work that Kāinga Ora are doing in my region. We are starting to see an absolute ramp up of the building of State housing in Nelson, and it is so exciting. Just this year, we’ve had homes built in Richmond that have opened, another round of homes being built in Richmond that are due to open soon, and another round of homes in Nelson’s CBD that are due to start being built very, very soon.

We have a partnership with the Nelson Marlborough Institute of Technology where apprentices—so our fantastic construction apprentices—are building State houses that are due to be moved very, very soon to the community of Nelson South. That is another area where we’re planning to build nearly 50 new homes in my community—where I live—of Nelson South, and this is a piece of work that we have been waiting on in Nelson for decades to lift up the number of affordable homes, because we are one of the most unaffordable regions in New Zealand when you compare wages against house prices. It’s cheaper to buy a home in Christchurch, but you could earn more money.

So my commitment and our Government’s commitment for Nelson is to ensure that those people on the waiting list won’t have to be waiting too much longer, because we are building homes for them, and that is because we believe in the Labour Government—unlike the previous National Government, who sold these houses off, we believe that the State has a role to play in housing our people. It is our job to ensure that every New Zealander has a warm, dry, safe, affordable home, and I will not rest and we will not rest until we know that every New Zealander can go to sleep at night knowing they have the security of an affordable, warm home.

But on the other side, we have the coalition of cuts. Where we are investing on this side of the House, that lot over there have plans to cut many of the policies that I know are making a real difference for our people. We can expect no more winter energy payment for everyone who needs it. They’ve said already that they will remove the free prescriptions for many, many people, which will make a terrible difference to people. I’ve heard no commitment from anyone on that side of the House for the Nelson Hospital, which we are rebuilding and that we have committed $1 billion to, and I’m so proud of our Government’s commitment to health infrastructure so that we can ensure we have hospitals being built up and down this country to ensure that our communities get the healthcare they deserve.

One of my biggest concerns is their plan to remove fair pay agreements, because on this side of the House we know that one of the best ways we can address the cost of living challenges that we face in New Zealand is to lift the incomes of the lowest-paid people. That side of the House is offering them two bucks a week. They want to give $1,000 a week in tax cuts to the wealthiest New Zealanders, and yet they’re somehow promising that they can reduce revenue but increase spending. It is just bizarre. Their economic triangle that involves also, somehow, paying debt down faster when, again, they’re reducing revenue—it just does not add up.

On this side of the House, we are committed to ensuring that we are investing for New Zealand. We are committed, as a Government, to supporting people through these difficult times. We will continue to invest in our lowest-paid workers. We will continue to build State houses. We will continue to build more hospitals. We will continue to make public transport more affordable. But the coalition of cuts will deliver nothing but pain and devastation to our country.

Hon MEKA WHAITIRI (Ikaroa-Rāwhiti): E te Māngai o te Whare, tēnā koe. Otirā, e ngā mema katoa o te Whare nei, tēnā tātou katoa. I’m pleased to take a call on the Appropriation (2023/24 Estimates) Bill on behalf of Te Paati Māori. As is our custom, it’s important that I acknowledge a dear kaumātua by the name Heemi Kara, from the marae of the Prime Minister, at Ōrongomai Marae in Upper Hutt, who, sadly, passed away over this weekend.

So, e te rangatira kua whetūrangitia, haere, haere, moe mai rā.

[So, oh esteemed one who has passed away, rest in peace.]

In taking this call on this bill, I just want to acknowledge that this week was the 17year anniversary of Kīngi Tūheitia’s reign. I mention that because, on the paepae, he mentioned change was important. In fact, one of the speakers from the pae addressed the fact that only 2 percent of Treaty settlements that are settled with iwi across this country amounts to 2 percent of what was actually lost, which then equated to the further statement that 98 percent was goodwill—98 percent was goodwill.

So let’s look at this Budget. It will come as no surprise that Te Paati Māori and I will be voting against it, simply because our tax system is doing exactly what it was designed to do: take money from the poor and give it to the rich. The richest 10 percent now own half the wealth in this country, while the poorest owns a mere 2 percent. On top of that, average people in Aotearoa pay 20.2 percent in tax, while the wealthy only pay 9.4 percent. It is time, Madam Speaker, we rectify this imbalance. We’ve all seen the growing wealth inequality in our country. This Government’s inaction on housing and response to COVID-19 has seen a massive transfer of wealth from ordinary people to the richest in our society. This is on top of the entrenched poverty that our people have been experiencing for generations. It is unacceptable that over 2 million people in Aotearoa earn less than $30,000 per year. Nearly 50 percent of our working population do not earn enough money to survive, let alone thrive.

Te Paati Māori’s vision is simple, yet profound: to shift the burden of tax from the poor to the wealthy, and to restore fairness and economic justice. We believe in an Aotearoa hou, where ordinary people don’t have to subsidise the extravagant lifestyles of the rich. No one should go hungry while supermarkets are making record profits. No one should be homeless when there are enough vacant houses to house everybody. Whānau should not have to choose between paying their bills on time or taking their babies to the doctor. We will no longer accept any excuses from the two major parties, who are fighting to keep people poor.

We are putting our pou in the ground. Now is the time for radical change, just like Kīngi Tūheitia said yesterday. Our tamariki are literally hungry for it. Te Paati Māori has a plan which would see 4.2 million people paying less tax in Aotearoa. That means more kai on the table. It means whānau being able to afford their own homes instead of being forced to pay off someone else’s mortgage in rent. It means reinvesting into those who need it the most. It’s time for the wealthy to start pulling their weight.

We hear a lot of talk about unprecedented times, but we aren’t seeing any unprecedented solutions. We stand on the precipice of an Aotearoa hou, a new era of Aotearoa, one where economic justice shouldn’t be just a dream but becomes a reality. What does an Aotearoa hou look like? Let me remind you. It looks like how we treat you on our marae: we will welcome you, we will feed you, we will house you, we will love you. Unfortunately, this government has lacked the vision to usher in the Aotearoa hou that our people deserve. No one should be hungry, no one should be homeless, and no one should have to feel unsafe. We envisage an Aotearoa hou where every whānau is thriving.

It’s time for transformative solutions to redistribute wealth, to restore economic justice, and bring an end to poverty. And we can do this by removing GST from all kai and regulating the ability of supermarkets to hike prices. We can do it by removing income tax for low-income whānau. We can do it by increasing income tax on those earning more than $200,000. We can do it by increasing the corporate tax rate from 28 percent to 33 percent.

But we go further. We talk about the wealth tax that I’ve just outlined, but there’s also taxes on foreign companies who earn their earnings in Aotearoa and transfer them overseas. They should be made to pay. There’s much land that is banked in this country, sitting idle. It should be forced to pay tax. And, of course, there are many vacant houses, that if we were to tax them and bring them back on the market, we wouldn’t have the homelessness that we currently have.

I’ve touched on a few policies that Te Paati Māori are putting up in this year’s election that are going to rebalance an unfair and unjust tax system. This is what we were looking for in this bill; we didn’t see it. This is why we are voting against it. Like Tūheitia said, it is time for change. And as Te Paati Māori says: he Aotearoa hou—by Māori, for all. Thank you, Madam Speaker.

ARENA WILLIAMS (Labour—Manurewa): Tēnā koe, Madam Speaker. This is a good Budget and it’s a privilege to speak on it today.

But I’ve joined the House after a quick trip to Manurewa High School, and I wish to reflect on that visit because it was very important to me to be able to start my week in Parliament in that way. After caucus committees this morning, I went to Auckland and met with the Rt Hon Dame Jacinda Ardern at a high school which is special to her in Manurewa. It was a really special moment to be welcomed into the school hall by the students to celebrate their performing arts of the school, particularly the Māori performing arts.

They have a student-led production about Ngā Maunga Whakahii o Manurewa, the two mountains that have been almost quarried away to nothing—Matukurua—and it tells that story. That is a celebration of New Zealand histories and schools, given life by this art that the students put together today. It’s on Monday, 6 o’clock at the Due Drop Centre if you’d like to check it out. We were also treated to a performance by the hip-hop group and by the choir—who, for the first time, are in the finals of The Big Sing on Saturday.

This is a Budget which invests in the future of those kids. This is a Budget which also addresses the things which matter most to them right now. As the two head prefects, Lolo and Paige, said to me this morning, “Keep going.” There is so much more that this Government has to do to address the things which matter most to them.

Because these kids are affected by the global economic situation right now. Inflation affects them in a way that many of us in here will never experience and have never experienced in our lives. The effect of their parents struggling to put food on the table. The effect on their education when there’s pressure on them to—like many of their friends in school—go out and get a second job. The effect of them not being able to play sports on the weekends or, as Lolo has been able to do, to sing in the choir because he will need to be another earner in their household.

That is why this Labour Government is razor-focused on a cost of living package that delivers for these families. That’s why things like the scrapping the costs of a prescription make a real difference in South Auckland. Because though for these kids it’s free to pick up their prescriptions, for their parents it was not. That meant that their mums, their dads, their kuia kaumātua didn’t have the same access to medicines that they did. That meant a continuous cycle of being sick, of not going to go to school, of not being able to go to work. By removing that co-payment, we’ve made a difference in these families’ lives and we’ve made it better to be a South Aucklander.

The changes that we’ve made by introducing free public transport for kids and young people makes a difference to them. It means that they can get to school for free; that they can travel to Auckland. Some of these kids in Manurewa High School, they’ve never seen the Sky Tower. It is so important to our kids that we give them a mobility and a sense of their place in our city. Can I mention that this Budget also funded an $18 million package of transport investment into Manurewa through the Better Travel Choices package.

But on Browns Road, the bike lane that is protected, that goes to Manurewa High School, where young people travel every day on their bikes—and there’s a thriving bicycle club at that school—was rejected by the Manurewa Local Board that is held by a majority of National Party members. It is a shame that this Government has invested in local transport solutions—that our high school students are asking for—that our local members have rejected purely on ideological reasons.

It’s also making a difference to these kids that we’re investing to make their energy bills cheaper and to keep their kuia kaumātua—their nans and pops—warm in the winter. It means that these kids will have their grandparents around for longer. It means that they’re able to visit and it will be warm and it will be dry and it will be good to be in their homes. It’s so important for so many South Auckland families that we have those intergenerational connections, and I’m really proud that this Government has invested in superannuation and invested in care for our kuia kaumātua; for our older people. It’s important to these kids too.

It was an emotional morning for me at the school because these kids also got to talk about those choices that they saw a Government make that was for them. The care that Dame Jacinda Ardern had shown to South Auckland and the decisions about the COVID19 pandemic meant so much to these kids, who are deeply involved in the community organising around vaccinating the communities. These kids got on the phones, they called their peers, they called the families of people in the high school to make sure that they got vaccinated. These kids were leaders during that time, and their service to the community cannot be undersold.

I’m so proud of Manurewa High School that feeds 2,000 people in our community every day because of their free school lunches programmes. It is so important that this Government continues to support the work of that school community and I commend this bill, which does so much for them; so much for the school; so much for the kids; so much for the school leaders in the community; so much for Principal Pete Jones, who I’m very, very proud of; and Manurewa High School. Madam Speaker, thank you for the opportunity for me to speak on this bill.

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

A party vote was called for on the question, That the Appropriation (2023/24 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2023/24) Bill be now read a second time.

Ayes 71

New Zealand Labour 62; Green Party of Aotearoa New Zealand 9.

Noes 47

New Zealand National 34; ACT New Zealand 10; Te Paati Māori 2; Whaitiri.

Motion agreed to.

Appropriation (2023/24 Estimates) Bill read a third time.

Imprest Supply (Second for 2023/24) Bill read a second time.

ASSISTANT SPEAKER (Hon Jenny Salesa): The Imprest Supply (Second for 2023/24) Bill is set down for third reading immediately.

Bills

Imprest Supply (Second for 2023/24) Bill

Third Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Imprest Supply (Second for 2023/24) Bill be now read a third time.

A party vote was called for on the question, That the Imprest Supply (Second for 2023/24) Bill be now read a third time.

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.

Motion agreed to.

Bill read a third time.

Urgency

Urgency

Hon GRANT ROBERTSON (Leader of the House): I move, That urgency be accorded the remaining stages of the Water Services Legislation Bill; the Crown Minerals Amendment Bill; the Water Services Economic Efficiency and Consumer Protection Bill; the Taxation Principles Reporting Bill; the Land Transport Management (Regulation of Public Transport) Amendment Bill; the Local Government Electoral Legislation Bill; the Fuel Industry (Improving Fuel Resilience) Amendment Bill; the Resale Right for Visual Artists Bill; the Sale and Supply of Alcohol (Community Participation) Amendment Bill; the Legal Services Amendment Bill; and the Land Transport (Road Safety) Amendment Bill.

The House is now in the final sitting block before the election. This motion follows the longestablished practice of giving the House extra time in this period in which to complete its programme. When we rise on 31 August, we will not sit again for two to three months with the summer break, then close.

The emergency motion now before the House includes a range of legislation that is important to pass in order to complete the work of the very busy 53rd Parliament in the limited time remaining. The two bills that will complete the reform of water services are prime examples. They are the work of this Parliament, particularly the Finance and Expenditure Committee, the members of which spent hundreds of hours listening to submissions. It is right that the current Parliament should see its work through to a conclusion, and that the decades of waiting for action over our deteriorating water infrastructure can come to an end.

A common feature of many of the bills in this motion is that they bring about significant change in their sector and a delay in their passing would mean that preparations for their implementation would be frustrated by those awaiting the changes. The Land Transport Management (Regulation of Public Transport) Amendment Bill is a good example of this. The passing of the Local Government Electoral Legislation Bill will give more time for changes that result from it to be put in place before the next local government elections. The passing of the Resale Right for Visual Artists Bill meets New Zealand’s obligations under the Free Trade Agreement with the United Kingdom, expertly negotiated by my colleague Damien O’Connor. It is important to enact this bill as soon as possible in the interests of getting the very best out of this key agreement for New Zealand.

Earlier today, the Government requested that the Business Committee agree to hold oral questions at 2 p.m. on Wednesday and Thursday, as is normal. I thank the House for its consideration of the motion.

A party vote was called for on the question, That urgency be accorded the remaining stages of the Water Services Legislation Bill, the Crown Minerals Amendment Bill, the Water Services Economic Efficiency and Consumer Protection Bill, the Taxation Principles Reporting Bill, the Land Transport Management (Regulation of Public Transport) Amendment Bill, the Local Government Electoral Legislation Bill, the Fuel Industry (Improving Fuel Resilience) Amendment Bill, the Resale Right for Visual Artists Bill, the Sale and Supply of Alcohol (Community Participation) Amendment Bill, the Legal Services Amendment Bill, and the Land Transport (Road Safety) Amendment Bill.

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.

Bills

Water Services Legislation Bill

Second Reading

Hon DAMIEN O’CONNOR (Minister of Agriculture) on behalf of the Minister of Local Government: I present a legislative statement on the Water Services Legislation Bill.

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

Hon DAMIEN O’CONNOR: I move, That the Water Services Legislation Bill be now read a second time.

I present a legislative statement on the Water Services Legislation Bill. As I said, I move that it be read a second time. I’m pleased to speak on the bill, today—

Hon Member: No, you’re not.

Hon DAMIEN O’CONNOR: —on behalf of the Minister of Local Government—I’m thrilled to speak on the bill, actually. Forming part of the water reform suite of legislation, it will help to optimise New Zealand’s water system to help us better manage new challenges and to provide water infrastructure services that are safe, reliable, resilient, and affordable—because they are not, now. It’s another key step towards ensuring New Zealand will have the water infrastructure and services we need to support better health and environmental outcomes and healthy, prosperous, and growing communities—now and into the future, which is something this Government is concerned about.

This bill is a step towards ensuring that New Zealand has water infrastructure and services that deliver safe and affordable drinking water. It is a step towards ensuring that our water network is resilient to extreme weather events. It will help to support new housing and urban development, and it will ensure that our water infrastructure and services operate sustainably within our environment.

As mentioned, this bill is part of a suite of legislation that will reform the delivery of New Zealand’s drinking-water, waste-water, and stormwater services. For those who didn’t notice, it did have an impact in Auckland—some of those storms. The Water Services Entities Act, which passed in December 2022, enabled the reform and set the framework for establishing the water services entities.

This bill sets out the function of those entities and provides them with the tools they need to carry out these functions. It enables modern regulatory and service delivery arrangements that will replace existing powers under existing local government legislation.

I’d like to briefly remind the House of the most important components of the Water Services Legislation Bill. This bill contains the regulatory functions and powers for the entities. It enables the entities to make secondary legislation to effectively manage water services infrastructure, deliver safe drinking water, and protect the environment, among other objectives. For example, this includes stormwater management strategies, which will comprehensively set out the entities approach to managing the impacts of stormwater. This is, of course, important in the country’s work to develop solutions to challenges around the changing climate. The entities will have their own modernised compliance and enforcement regime to enforce these functions. This is a major step forward as the Local Government Act, which was passed in 2002, is no longer fit for this purpose. New Zealanders need to be sure their drinking water arrangements are appropriately protected.

The bill also establishes charging mechanisms to provide fair, transparent, equitable, and affordable charges to households and businesses for water services. It sets out the path for transitioning to the new system and integrates the water services entities into wider regulatory frameworks—for example, the resource management system.

I’d like to thank the Finance and Expenditure Committee, who considered more than 460 submissions on this bill. I’d also like to thank the local government sector and other interested groups and individuals who made submissions on the bill. In particular, I’d like to acknowledge the work of councils and other water sector specialists in this respect, who engaged deeply with the bill and provided specific, technical recommendations that assisted the committee’s work and, ultimately, provided more practical, workable legislation—the Government does listen, always. As a result of this work by submitters and the committee, we now have in our hands a further optimised piece of legislation, along with amendments, that will ensure the legislation is workable for the water services entities and the communities that they serve.

Let’s look at some of the key areas of change recommended by the committee. The bill provides for relationship agreements, which will be critical in supporting the important links between the entities and other parties, including councils. These agreements set out how the entities and other parties will engage with each other and work together. For example, they set out how territorial authorities, regional councils, and water service entities will work together to effectively plan under the resource management system. Relationship agreements ensure that there is an ability to reflect the unique circumstances of different regions around the country, and ensure that entities and councils have the flexibility to agree on day-to-day operational arrangements that work for them. The committee has strengthened the relationship agreements by making them binding on the parties, with a statutory disputes resolution process. The committee also recommended that relationship agreements will need to be entered into three months before the entities’ go-live date, to ensure that they are in place before each entity does go live.

Secondly, under the affordable water reforms, around 75 council owned mixed-use rural water supplies will transfer to the water services entities. These supplies provide water for agricultural or horticultural purposes, along with drinking water for households. The Government has listened to rural communities’ concerns about this change in arrangements for these schemes, and recognises their importance. That is why this bill allows for the users of these schemes to work together with water service entities to transfer ownership and management of these supplies back to the communities they serve. In addition, the committee has introduced rural supply plans in this bill, which the entity must have for each small, mixed-use rural water supply in its service area that remains under its ownership. The rural supply plan will provide better recognition of the special nature of these schemes and ensure that farming communities can continue to be involved in their management.

Thirdly, there is a change with regard to the bill looking to the challenges we are facing as a result of changing climate, with new mechanisms to support the comprehensive management of stormwater. The committee has recommended that stormwater management plans and rules will be integrated into a single instrument: the stormwater management strategy. This will provide a system-based approach to stormwater networks and their regulation. The bill also provides for stormwater risk management plans. These seek to identify risks and hazards relating to watercourses on land not owned by the entities. There is a new requirement that the entity must work collaboratively with landowners to ensure that the risk is managed, controlled, monitored, or eliminated, if a—Madam Speaker, sorry. If a collaborative approach cannot be agreed upon or is not implemented, the entity must implement a solution.

The Government has also listened to councils’ concerns about the transfer provisions for councilcontrolled organisations. These will now only apply to a council-controlled organisation whose predominant purpose is to support territorial authorities in their management and operation of water services. The “predominant purpose” is defined in the bill as 85 percent or more of revenue from provision of water-related services.

Christchurch’s Citycare is now exempt from the transfer provisions due to the special nature of the contracting work it does for councils across New Zealand. The bill, as reported back from the committee, also provides that council-controlled organisations can be excluded from the transfer arrangements in the future if it is determined that they also have special characteristics that mean a transfer would be undesirable.

By-laws are an important and complex area for councils and entities. Existing by-laws will continue either until an entity makes an equivalent water services, or until the end of the transitional period. The water services entities will have the compliance and enforcement powers in relation to by-laws. Water service entities will be required to enter into relationship agreements relating to bylaws.

The committee also made amendments to ensure that the integrity, intent, and effect of the Treaty settlements are upheld by the entities. These changes represent a holding pattern until such time that the Crown and iwi have completed discussions on the changes required to Treaty settlements in greater depth, and provide a process for amending Treaty settlement Acts that are impacted by the water services reform.

In addition to the improvements I have mentioned, I have tabled a Supplementary Order Paper to make a number of minor and technical amendments to the bill in order to ensure the legislative regime is consistent and workable across water services legislation and the new resource management system. This includes changes relating to establishment dates for the entities that result from the move to a staggered approach in the now amended Water Services Entities Act. The Supplementary Order Paper includes a few other—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! Unfortunately, the member’s time is up. The question is that the motion be agreed to.

MATT DOOCEY (National—Waimakariri): I think you were right, Madam Speaker. The time is up! And that’s exactly what’s happening tonight. Another round of urgency and isn’t it interesting that out of all the four three water bills—because that’s what it is; we’re not allowed to talk about three waters any more on that side of the House, but it’s another three waters bill—all four of them have been brought in under urgency. All four of them! The Leader of the House, when he passed the urgency motion, talked about all these bills having a common feature. Boy, do they have a common feature. They’ve been rushed through under urgency because they’ve gone down like a cup of cold sick out around New Zealand.

I’m not surprised that they’re now trying to lowball this bill, because really, who on that side of the House would want to be talking about three waters after last night’s poll? They walk in today battered and bruised and then they say, “Well it couldn’t get any worse.”, and then the whip says “Yes, it can. You’re on the speaking list to talk about three waters again.”, and then the member for the West Coast has to get up and talk. Boy, you could see the tail of that rat dangling out his mouth as he chewed on it, as he knows how three waters has gone down on the West Coast. But he’s been around a while and, in fairness, he kept a brave face. He had to, for the young ones. He had to keep the ship steady because he knows it’s tanking and he knows what’s going to happen.

Of course it is interesting, when I heard the Minister speak and he went through his very perfunctory report—it’s interesting that back in the days it was about the cost of living. Remember what three waters was about? It was the cost of living. Now I think there was some sort of mumbled response to weather events. That’s the problem with these bills. It’s that every time they’re changed—but in fact all they need to do is listen to the submitters. And what I thought was very interesting from that member’s speech tonight was that there was very little about the select committee stage and the overwhelming opposition from the submitters to this bill.

Let’s remember what this bill is about. It’s an omnibus bill that will establish and empower the water services entities. Remember them, the water services entities? The Government started off with four of them and then, obviously, they had to have a back down. So they put another bill in and now there’s ten of them and it’s going to establish and empower water service entities. The reason why the submitters opposed this bill is that under these water service entities they will facilitate State theft of locally owned water assets. That’s exactly what this bill does: it enables the transfer of locally owned public assets from councils to unaccounted, unaccountable mega entities. That’s exactly the detail of this bill that we’re talking about in the second reading as it goes through under urgency, because the reality is the Government’s run out of time. It’s an absolute shambles and that’s why the submitters overwhelmingly opposed the bill.

So for the Minister to get up tonight and say that, well, they listened in the select committee process; they didn’t, because the submitters were opposed to it. Of course, let’s also remember, not only will it be State theft of locally owned assets, this bill will set up the pricing and charging arrangements for water services, and overwhelmingly the submitters oppose that. The reason they oppose that is because there’s going to be a blanket charge across the whole water entity. There will be no variation for communities that local governments and councils allowed for in their pricing structures. So you’re going to have small communities cross-subsidising larger ones. That was the point of keeping it locally controlled for local councils, because they know their communities. Now there’s only going to be the mega entities who will set a fixed price across the water entity. That’s what people are opposed to.

They’re opposed to the confiscation of their assets and they’re opposed to the uniform charge across, because of course—and I’d like to say, “Well done, Simon Watts”. He’s been very clear and concise, outlining very articulately National’s policy on three waters and what we will do. It is very clear that this issue will come straight back to Parliament after the election, because when National is in Government, we will repeal this bill and replace it. What we know is that communities know best, and we’re going to back local councils because they know what’s best in it for them.

If we go back, we’ve had the Water Services Entities Act 2022, which set up three waters. Then we had to have an amendment, the Water Services Entities Amendment Act 2023, which backed down on the four entities and set up 10. Now we’ve got the Water Services Legislation Bill, which will establish and enable water services entities. What’s been very clear through this whole process is that this has been a sham. Decisions have been made before consultations have proceeded. It’s all been about decisions made behind closed doors. Remember when the Government promised councils that they could opt out? Then Official Information Act documents revealed it was a legislated all-in right from the start. So there’s no good faith. These trilogies of bills have turned up in the House. In fact, it’s bad blood. And that’s exactly why three waters has gone down like a cup of cold sick.

The reality is voters don’t trust this Labour Government. They’re sick of them talking out both sides of the mouth. Remember that advertising campaign with the green sludge coming out of taps that they had to pull off the ads that used taxpayers’ money? That was disingenuous. This Government talks about misinformation and disinformation. They should look at themselves.

Let’s be very clear. National will repeal three waters and scrap the 10 co-government mega entities. We will restore council ownership and control, set strict rules for water quality and investment in infrastructure, and ensure water services are financially stable. On behalf of the National Party and our local government spokesperson Simon Watts, soon to be the Minister for local government, who will work with that sector—he will listen to them and most of all he will return assets stolen from this Government back to the councils so they’re locally controlled and accountable to the people who paid for them. But of course, as we’ve learnt through this whole process of four bills through three waters, Labour knows best, Wellington knows best, and what they’re going to learn on 14 October is that they didn’t know that at all. Thank you, Madam Speaker.

INGRID LEARY (Labour—Taieri): As the chair of the Finance and Expenditure Committee which oversaw this, I’d like to report to the House that despite the polarisation of the affordable water reforms, the select committee amendments passed unanimously. It shows a level of collegiality and consensus that’s not captured in the political debate and media coverage. It is clear that the previous speaker, Matt Doocey, wasn’t actually across the bill, which is unfortunate because it would have been good to have a debate about the really detailed and technical aspects of this bill, which covers 292 pages.

Some of the areas that the select committee worked on together collegially, as I said, were about making the relationship agreements between water services entities, councils, and transport corridor managers binding. That was making sure that the binding nature of that underpinned any servicelevel agreements in that there was a prescribed set of mandatory requirements, that there was a binding dispute resolution system, and that the agreements be signed three months prior to the establishment of the water services entities. It also enabled the Minister of Local Government to step in and prescribe the terms not agreed to so that the relationships would be negotiated in good faith and with a willingness to support the reform system.

There were changes to the rural water supplies, and I’d like to thank the submitters from the Clutha district in my own electorate of Taieri for giving us plenty of food for thought. The really big area of change was around stormwater. That was big, it was significant, and I’d really like to acknowledge the Hon Phil Twyford for his hard work and perseverance in this. The Minister that just gave the legislative statement spoke about collaboration. I would like to say the characterisation, from my perspective as the chair of the committee, added to that collaboration is clarity around responsibility and accountability for those waterways. I’m sure my colleague will speak to that more.

The Act now supports urban growth. It requires the water services entities to be responsive to developers via a development code, and that’s able to be enforced by the Commerce Commission to avoid the chilling effect of protracted litigation. Matt Doocey referred to the pricing, but, actually, as well as enabling geographic averaging to achieve pricing efficiencies, there are also added provisions to recognise vulnerable consumers and the fundamental right of all people to have access to clean and safe water.

My final comment, despite anything you might hear in this House to the contrary, is that we made some comments about the process as a select committee. Given that what is technical and what is substantive can be a moot point, we ourselves took the approach of creating a schedule of all changes so we could be across absolutely everything. We had the added scrutiny of two independent advisers in this regard. It is my firm view that the officials did their job; we did ours. We made our comments and the system worked as it should have. Let me be very clear for the record that that is what happened, nothing more, nothing less, and I am very happy with where the legislation landed.

I want to acknowledge the Hon Nanaia Mahuta for her initial work, and the Hon Kieran McAnulty for shepherding it through. I want to thank all the officials for their incredibly hard work and the independent advisers and the committee for their scrutiny of this very technical bill. It was a privilege to chair the committee through this important piece of legislation and I really recommend it to the House.

Hon DAVID BENNETT (National): Thank you, Madam Speaker. The Water Services Legislation Bill, the National Party will oppose. As our previous speaker, Matt Doocey, said, we will reverse this legislation later this year.

The nature of three waters and the Labour Party is quite interesting—why they actually want to progress it at this stage. Why have they been so keen on having this Parliament in urgency for the last couple of weeks, and this week, to pass this bill?

Angela Roberts: We’re taking responsibility.

Hon DAVID BENNETT: The Labour member over there says “responsibility”—I’ll come back to that. The reality is that they have no faith in what they’re going to deliver at this election. This is an insurance policy from the Labour Party if they have to go into coalition with other parties. They’re pushing through as much of their agenda now so that—just say they were in a coalition which they don’t have control over—they’ve got the vast majority of what their agenda is. That’s the only reason you would do that now. Why would you have your MPs here, not campaigning, and have them doing bills like this if it isn’t an insurance policy? I see a couple of smirks from the Labour members of Parliament, because they know that they’ve discussed this at caucus and that is the reason they are doing it. They know they’re not doing it out of any genuine legislative requirement. The member over there said, “We’re doing it because we needed to.” That’s a falsity. The Labour Party has dressed up the idea of water quality in New Zealand as requiring them to do this agenda.

They have used one example of an issue that can happen any time. After this legislation, it could well happen. That has enabled them to promote legislation around three waters, because it’s so vital now because everybody’s at risk from the water they drink! The water we drink tonight could be at risk! That’s what the Labour Party is saying. Our fundamental water system is broken! We need to be out there doing it! What a load of rubbish—an absolute load of rubbish. New Zealand has some of the best water quality for drinking water in the world, and the Labour Party are using one instance as an excuse to try and create an agenda. This isn’t about getting better water quality for our communities, it isn’t about saving money for our communities—and I’ll come back to that—this is simply to reinforce their co-governance role that they have dictated to. This is what the Labour Party has done. They’ve done a deal in their caucus around co-governance of water, and they have to push that through before the election, just in case they’re in coalition with Winston after the election—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! The member will now talk about this bill.

Hon DAVID BENNETT: Oh, I thought you wanted his full name—Winston Peters, they’ll be in coalition with. But, coming back to the bill, one of the big things in the bill is actually the cost. The Labour members over there have talked about that already. They’re saying this will save consumers—save ratepayers. It just doesn’t happen that way. How can a water system that is deficient—that’s the Labour Party’s argument. If you just put it all together, it’s suddenly got a lot of capital to change all the problems that you’ve got in the system. How does that work? Where does that come from? That’s what the Labour Party is saying. All they’re really doing is robbing one council to pay another council, and they are doing that time and time again.

Now, when submissions were in around the water services bills, all these councils came forward and said that they were against the bills.

Glen Bennett: Which bill?

Hon DAVID BENNETT: It’s not just this bill; it’s the combination. They were against them, and the Minister went on this glorious trip around New Zealand listening to these councils. Not one of the councils’ wishes was actually made to happen. The bills still went ahead; they didn’t stop it. It’s predominantly rural councils that have invested more and got their infrastructure at a good level that are now going to pay for some urban councils that have spent their money on cycleways and playgrounds. That’s, effectively, what’s going to happen. The greatest example is actually Whangārei. Whangārei has actually got one of the best water systems in New Zealand—they’ve invested in it—and they’re going to take that off them and make it part of Auckland. Then Whangārei is going to lose that investment—the growth that could have happened in Whangārei—because, over the next 20 years, that’ll be run down. That’ll be run down because that money has got to go into Auckland.

How do you pay for the changes in Auckland around stormwater? Because they’re not going to be a billion dollars. Nobody can tell me that you’re going to be swimming in those eastern suburbs or North Shore beaches for a billion dollars. There’s no way that’s going to happen—no way.

Helen White: Do you think we should be able to swim in the beaches?

Hon DAVID BENNETT: “Do you think we should be able to swim in the beaches?”—well, of course you should be able to swim in the beaches. But somebody’s going to pay for the change. They’re saying, “It’s only a billion dollars to fix up Auckland stormwater.” I don’t think it’s going to happen that way. Wellington—what’s the percentage of water actually lost every day in Wellington through leaky pipes? It’s horrendous. And you’re going to fix that? How much is that going to cost? “That can’t be a billion dollars. That’s got to be, like, $200 million, because it’s not as big as the Auckland problem.”—that’s the reality for these guys. They actually believe that they can do something with nothing.

Mark Cameron: They’re mathematically illiterate.

Hon DAVID BENNETT: No, it’s not that they’re mathematically illiterate—because Grant knows, and Grant’s told them in caucus that this will work, and they all believe Grant, because Grant has never been wrong!

Ingrid Leary: Point of order. I believe that, if the member is referring to a member of this House, he should use the member’s name, not the first name.

Hon DAVID BENNETT: Well, I’m quite happy to say Grant Robertson can’t be wrong! Grant Robertson has told these members and they’ve lapped it up as good little lap dogs would, and they believe in what Grant Robertson said about the economy coming right and “Don’t worry about the economy.” Suddenly, it’s dawning on them now, two months out from election, that Grant Robertson might have told them a fib. Grant Robertson might have actually not told them the truth.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! I would like the member to come back to this particular bill instead of talking about someone who might not have told—you were not there. Can you just come back to the bill. You’re trying to make a story up.

Hon DAVID BENNETT: OK. I wasn’t there, but I’ve heard from others that were there about what actually happened, so I’ve got a pretty good idea what happened there. You can see it on their faces, because they’re starting to realise; it’s starting to tick over in their minds that maybe this isn’t such a great idea. Maybe we have been conned—

ASSISTANT SPEAKER (Hon Jenny Salesa): And maybe you should just come back to the bill, before I get you to sit down.

Hon DAVID BENNETT: It takes some time to get the Labour members to understand what is actually happening to them, and it’s very difficult, because they’ve been brainwashed in caucus time and time again—

ASSISTANT SPEAKER (Hon Jenny Salesa): No—talk about the bill, the Hon David Bennett. Come back to the bill.

Hon DAVID BENNETT: Three waters is their great solution to the water issues in New Zealand, but nobody’s going to pay for it! Now, I’m sure Simon Court is going to stand up and say the same thing, because he’s brought up the same arguments in the select committee. He understands that you’re not going to magically solve Auckland’s stormwater issues—stormwater is a big part of the bill; around $1 billion. You’re not going to solve Wellington’s failing water system with the small amount of money they are talking about. What this bill actually does is co-governance and then makes New Zealand ratepayers pay again for it, and it won’t actually achieve anything, because the Labour Party has never achieved anything in six years. While they think they can do something out of nothing, the reality is that nothing actually happens. That’s what we’ve seen from them.

New Zealanders aren’t that silly. New Zealanders understand that you just don’t put all the entities together and suddenly have this magic pot of money that’s going to solve all the issues and that you can swim in the beach because the Labour Party has put the three entities to 10 entities and made them all perfect. The reality is that the New Zealand public don’t believe Grant Robertson. The Labour Party members of Parliament—the 30 on the backbench—that have believed him are starting to realise the folly of their ways. This bill is just another example of a failing Labour Government.

Hon PHIL TWYFORD (Labour—Te Atatū): A river runs through my electorate called Te Waio-Pareira, otherwise known as Henderson Creek, and every time there’s a heavy rainstorm, raw sewage floods that river. And the reason it does that is that for decades, successive councils have failed to build the infrastructure needed to support a growing city. In January, about 1,000 people in my electorate in West Auckland suffered catastrophic flooding. Why? A heavy rain event, sure, but, again, a total failure by Auckland Council over multiple decades to build the stormwater infrastructure needed to support a growing city.

I am happy to say that with the passage of this bill through the House, we will see a specialist water agency whose job it is to deliver, maintain, and manage stormwater and waste-water networks in the city. It will be able to borrow two to three times as much as Watercare currently can, because its balance sheet will have been separated from Auckland Council’s balance sheet and it will be freed from the shackles of the rating agencies. Thirdly, it will have a detailed and comprehensive legislative mandate that, for the first time ever, will require these entities to do the job of managing stormwater in our communities. There is no such legislative mandate currently. There is no way to hold councils accountable for, in the case of Auckland, its manifest failure to manage stormwater properly in that city.

I want to make a brief remark about one aspect of the work that the select committee did in scrutinising this bill, and I want to thank the Minister, the Hon Duncan Webb, for his willingness to engage with our committee and allow us—and when I say “us”, I mean all the members of the committee, because in spite of the huffing and the puffing by ACT and by National in this House, in the select committee room the members of that committee worked together in a way that was sensible and adult and collegial in the best interests of our country. Together we developed new policy. The committee developed new policy to change the way that the responsibility for managing the streams that make up the urban stormwater network in Auckland is managed.

The current problem in Auckland, which was so exposed by the weather events earlier this year, is that Auckland has had a stormwater by-law from 2015 which says that if an urban stream passes through private property or abuts private property, the responsibility for maintaining it and clearing any blockages lies with the private landowner. It is a nonsense, an absolute nonsense, because those urban streams pass through literally dozens of suburban properties. It’s not feasible for a suburban property owner to spend $50,000 to hire a heavy digger and equipment to clear the stream. Every time there’s a heavy rain event, debris flows down from upstream and can block that property.

What happens currently is that the landowner rings up the council and says, “I’m worried there’s going to be another catastrophic flood because there’s a big blockage in the stream next to my property.” What happens right now is that the council says, “It’s not our problem, you deal with it.”, and that is one of the main problems—the blockage of streams and the refusal of the Auckland Council to take responsibility for maintaining those streams. That is one of the big problems that emerged from the floods earlier this year.

Our committee has fixed that problem, and the bill, as it stands in the House today, says that it is the responsibility of the new water entities to maintain the entire stormwater network, including the urban streams. Property owners will still be required to exercise their responsibilities and not allow, through their own actions, for blockages to occur, and the new water entities will have all of the powers and tools needed to enforce that. But suburban property owners in our cities will no longer be able to be held responsible by a council like Auckland Council for messes and blockages in the streams that happened as a result of someone else’s omission or commission further upstream. I say to the House, that is a significant improvement and advance, and I thank our colleagues on the select committee for the work they did.

SIMON COURT (ACT): Thank you, Madam Speaker. The ACT Party agrees that there is a problem with three waters infrastructure, in that, for too many decades, some councils have failed to uphold their responsibilities to care for community assets, to make provision for maintenance and renewals, and instead have wasted money on things like painting rainbow pedestrian crossings on the road.

So, of course, New Zealanders have lost confidence in local government and their ability to manage assets. That actually goes back to 2005, when a previous Labour Government gave councils the power of general competence, which means they could do anything. Of course, what did they do? Anything but asset management well. Then we come forward—we leap forward—to the current Labour Government, which has given councils the instructions to focus on the four wellbeings: social, environmental, cultural, and maybe economic.

Well, what should this Government have done? What should any Government have done? They should have said, “Focus on the infrastructure needed to support growth, intensification, new urban development, and manage and maintain your assets. Invest in them in a way that doesn’t lead to a whole lot of liabilities—like waste water overflows onto beaches, for example.”

Let’s just come back to this bill. ACT took a constructive approach. In fact, we’ve taken a constructive approach to engaging with the Government and with officials and with submitters right throughout the three waters reform process going back to 2020, prior to the election, where Department of Internal Affairs officials gave David Seymour and I a briefing on what the reforms would involve. They omitted stuff like centralisation, and taking the assets without compensation. They omitted to talk about co-governance, creating these awfully complex water entities with two levels of governance, including giving 50 percent of seats on a co-governance entity to unelected, appointed iwi Māori representatives when it didn’t appear there was any justification for it.

So Labour has behaved appallingly when it comes to this reform. A problem that New Zealanders from Cape Reinga to the Bluff and the Chatham Islands—whether they were involved in farming or they lived in a small town or they lived in an urban metro like I do—

Ingrid Leary: Come on Simon, you know more about the bill than this.

SIMON COURT: —could have agreed there’s a problem with three waters. Something to fix. Labour ruined that opportunity by focusing and listening to some people with some kind of misguided agenda to try to allocate decision making over water assets and infrastructure to unelected iwi Māori—for some reason, without justification—and to centralise the assets and confiscate them from local councils.

It turned out what we heard during consideration of this bill at select committee—which I must acknowledge, was admirably chaired by Ingrid Leary in her role as chair of the Finance and Expenditure Committee. She enabled wide-ranging investigation of the bill and its implications, and I certainly want to acknowledge her for that. But what we learnt throughout the process is that this is the implementation part of the three waters reform. Labour had no idea how they were going to implement the reforms. That’s what we learnt. It was like “Holy, what have we done?”

What did we learn? There was no plan to integrate local government planning, land use planning, and the asset management functions that the water service entities were supposed to take from local councils. There was no plan to integrate how stormwater would be managed by water service entities and land use planning. In other words, the planning that goes on to say where homes should and should not be built, where businesses should and should not be built because of natural hazards wasn’t going to be integrated into the way water services entities managed stormwater.

There was no consideration of how rural water supplies, which typically supply 50 or 80 percent of their water to rural use—farming, irrigation, stock water supply, washing down, hosing down—all of that water and only a few residential users. How on earth would those rural water suppliers’ mixeduse supplies going to be integrated into water service entities? No idea. How was the demand for infrastructure connections meant to respond to growth when these water service entities’ role was set up basically to deliver clean drinking water to residential consumers, but completely ignored the fact that metros like Auckland are going to grow from 1.5 million to 2 million to 2.5 million—the volume of water required to supply Auckland’s growth is enormous. It can only come from places like the Waikato River or new dams. As developments proceed, they must be able to call on water connections and waste water disposal so that more houses can be built on affordable land. None of that was answered.

Then we come to the point raised by the Hon Phil Twyford—a Minister, some might say, in a past role who could have been a genius for coming up with a National Policy Statement on Urban Development that encouraged more high-density development in our metro areas. So for example, where once there were four homes on residential sections, now there are 11 or 13. Like where we live—where the Hon Phil Twyford and I live—in Te Atatū Peninsula. But what the former Minister of Housing didn’t allow for was the infrastructure needed to support that growth. So where we live, in Te Atatū Peninsula, it’s true there’s been housing intensification—which is welcome. But the waste water overflows from the sewage system right by our boat ramp at Taipari Strand—right next to the waka ama club, the multi-sports club, the rowing club. Why on earth was that not addressed when that former Minister did his colouring-in exercise and said, “You can build up, but we haven’t taken account of or funded the infrastructure.”?

What was missing? What was missing? The hundreds of millions of dollars spent by building construction companies in Te Atatū Peninsula alone, where I live, in the past four or five years. Not a single cent of the GST collected on that revenue has gone back to local councils to fund infrastructure. What ACT says is if we want to have growth, if we want to enable housing growth to respond to demand, then the proportion of the revenue—half of the GST, which would amount to $1.5 billion a year that central government currently collects—must go back to local government. Phil Twyford’s speech sums up everything that’s wrong with this Labour Government. Great at colouring in, great at announcements, great at press releases, but absolutely hopeless at implementation and solving the hard problems.

So what is not resolved? Who pays for the water infrastructure is not resolved. Is it the bulk water users? Is it people like me in Auckland? When I turn on the tap, my water metre spins, and every month I get a bill? That’s not very common around New Zealand. You try telling people in Wellington that they’re going to get a water metre and they’re going to have to pay a bill. A lot of the people who live in Wellington will probably revolt. But unless you find a way to charge people for the water they use, it’s not possible to actually provide sustainable funding and financing.

What is unresolved? Who says yes or no to development? Is it a co-governance entity? Is it a group of people who believe in spiritual and animist concepts such as “water has a life force” or mauri, and that that overrides the needs for communities to have water for housing growth or farming or economic development? How would we know? The bill talks about upholding Treaty settlements. Of course, ACT would support any settlement that restores property rights that have been infringed. But that does not help us understand how we provide infrastructure for growth and how these entities, when they’re constituted, will actually be able to fund asset management.

So this is what ACT says. Look, it’s quite simple to solve. These organisations need to be voluntary. If councils are going to be co-opted, they need to get one share per 50,000 residents so at least they have control. If they need revenue, then they need to be able to raise that from water users. Alternatively, if there’s major projects, they can raise it from the private sector and institutional capital and do large-scale multi - master-plan developments using private capital. All the answers are there. ACT looks forward to delivering them should we be in Government.

Hon EUGENIE SAGE (Green): Thank you, Mr Speaker. I’m pleased to take a call on the Water Services Legislation Bill. The Green Party is not supporting this bill, and I’ll give our reasons in a moment, but I would like to join with others in congratulating Ingrid Leary as the chair of the Finance and Expenditure Committee. The public often thinks that Parliament, this House, is where we argue all the time, but in select committees there is a lot of constructive work done, and, even when we oppose the bill, we try to improve it. I thank Ingrid Leary for the very good, collaborative way she chaired the committee.

We’re opposing this bill because of the large level of corporatisation which is involved in the three waters reforms and the limited accountability that the entities will have. We’re concerned about the loss of community voice and the limited ability of councils to influence the entities’ infrastructure planning, their policy, and their pricing. Yes, there will be relationship agreements, but the entities can choose to take heed of those; they don’t have to.

One of the other major reasons for opposing the bill is that it will be the entities, not councils, that are responsible for stormwater management. Certainly, the committee, as Phil Twyford has noted, has clarified the issue around responsibilities for streams going over private land, but there’s a much larger issue at play here, in terms of stormwater management. We know that with more intense weather events, we are going to get more flooding, particularly in our urban areas. One in seven people in Aotearoa live in flood-prone areas. One study has estimated that over 441,000 buildings are at risk of flooding, most of them in urban areas, and they’re worth about $218 billion in value.

When we’ve got more intense weather events and spikes in rainfall, stormwater management is critical to preventing flooding. It’s closely connected with land-use planning, with the type, the scale, and the location of urban development; the provision of open space, how roading works; how drainage works on road ways; and you need to have a really strong integration between land-use planning and stormwater management.

Drinking water and waste water, the other two waters, are very different services. They are much more related to pipes, they’re not as related to natural waterways, overland flow paths, wetlands, and the permeability of rain into the ground. So the arguments for managing waste water and drinking water together are strong and of course Watercare does that. But, I think, in terms of stormwater, the arguments are much stronger for leaving it with councils.

The bill provides very directive provisions around stormwater management. They, I think, are likely to be very challenging to implement, because councils have got to determine whether assets that they manage to use primarily for stormwater management or for things like recreation and have other benefits to the community—it’s the Minister, in the end, that the schedules provide has the final decision.

The whole process of transferring assets from councils to entities, because of all the land involved, is going to be expensive and complex. I would really encourage the Minister to consider that whole implementation and, if there are major challenges arising, to come back—because, hopefully, Labour and the Greens will be in Government post-election—and really look at that. Certainly, focusing on drinking water and waste water, that logically does go to the entities. But we need a partnership between local government and central government, and if stormwater stayed with local government, we think that would reinforce the partnership.

There’s been a recent report by the Helen Clark Foundation by Kali Mercier, and she looks at the whole concept of “sponge cities”, which was something that was developed at large-scale in China, and it involves recognising that the more we harden our cities, the more we have concrete, asphalt, and large roofs, then the more we increase the amount of runoff after rain and the more we encourage flooding in urban areas. So in China, there’s been billions of dollars spent over the last 10 years in nature-based solutions, putting more permeability back in their cities and towns, using and working with water, rather than regarding stormwater as something to defend against by piping it, putting in stop banks, dams, and the like; working with nature and creating new wetlands in the landscape.

We heard at the Environment Committee, just last week, from the Secretary for the Environment, highlighting the damage we have done to wetlands. We all know that we’ve destroyed 90 percent of our wetlands in Aotearoa. They are our first defence against stormwater in urban areas because they clean the water and they allow it to soak into the aquifers.

So it’s councils, which are involved in planning for recreation, planning for sports fields, ensuring that there are areas of green space that are so important for a more “spongy cities” approach. It is councils that provide the land-use planning requirements about the amount of hard surfaces. If we want to move to more spongy cities, we need more porous surfaces, more of the concrete pavers which allow water to go through, rather than just our continuous asphalt. Councils direct those planning rules, not the water services entities, so it makes much more sense from a land-use perspective if stormwater stayed with the councils.

Our worry in the Greens is that the transfer of stormwater to the entities will see an emphasis and an increase in that traditional approach of defending people against nature using concrete, pipes, and grey infrastructure rather than green infrastructure of nature-based solutions.

The Parliamentary Commissioner for the Environment has estimated that there’s been a major decline of about 30 percent in green space in Auckland alone between 1980 and 2016. That has been largely on private land. We have in the Medium Density Residential Standards a requirement that only 20 percent of sites should be outdoor space. If we’re going to move to porous spongy cities, it’s the councils that will drive that through land-use planning, currently now through the district and city plans but under the Natural and Built Environment Bill through their regional planning committees which would have territorial authority representatives on them.

So this sponge city, porous city approach is critical to climate adaptation. But it’s not necessarily going to happen when you separate out the land-use planning from the entities that manage stormwater, and here’s certainly been no consensus across councils that stormwater should be transferred. Both Auckland and Christchurch councils—big metro councils—oppose it because of the severing of this connection to place making. It’s been in Christchurch where we’ve seen major wetlands constructed in south-west Christchurch in the Halswell area. They have stopped flooding in the Ōpāwaho River, and they’ve had major benefits for biodiversity and recreation.

There is no incentive for the entity to make those big wetlands, because they haven’t got the charging mechanism, other than averaging charging across the region, to actually justify the cobenefits: the recreational and biodiversity benefits, the benefits for wildlife, and the benefits for activities like walking. So the councils can do that because they can spread the cost through their rates, but the entities have got to charge for the water services, so I think I think it will be much harder for them to do that.

One of the other reasons we oppose the bill is because of the considerable decision-making powers of the Minister of Local Government to amend and decide the asset allocation schedules in the restructuring. We also oppose it because of the provisions in Part 8, new Schedule 6, which allow for small mixed-use rural water supplies to be privatised. As Minister O’Connor said, some 75 percent of the mixed-use rural water supplies are likely to transfer to the entities. These schemes are currently managed by councils. They provide both stock water and drinking water. They provide water for agricultural use. So if they are privatised—the euphemism is “giving it to the community”. But if they are privatised, once again, it is leading to—because water is used for agricultural development—water assets being concentrated by agribusiness.

So we don’t think this is a good part of the bill, because it allows schemes which service fewer than 1,000 dwellings and where 85 percent or more of the water is used for agricultural or horticultural purposes to be transferred to another operator—i.e., privatised. That’s what we saw in the 1980s with schemes that the Crown had invested in through the Ministry of Works being passed to private entities and used largely for irrigation. So we’ve tried to improve the bill, but the Green Party does not support it.

HELEN WHITE (Labour): Thank you. I’m just going to take a short call on this and try and bring things back a little bit to the basics, because I heard David Bennett talk about two absolutely contradictory things and I’d be confused if I was the public looking at this. He talked about how we had the best water in the world. He also talked about leaky pipes in Wellington and he talked about how the problems in Auckland were so big that we couldn’t possibly fix them, so we could never necessarily swim at our beaches.

But the truth is that in Auckland we can’t swim at a lot of our beaches. We have to use an app and we have to look on that app to see whether it’s safe that day. If it’s rained, it’s not going to be safe that day. People get sick from that process. But the most serious issue we had was an issue that happened in Havelock North and people died. That issue was what sparked the original work that led to this bill and to the others that have joined it.

I’d like to thank the Finance and Expenditure Committee for all the work it did, really getting to the nuts and bolts. You’ve heard the Hon Phil Twyford talk about the work that we did that was quite original and careful and very much about making sure that things happened right for Aucklanders after floods which had been so devastating and partly having been contributed to by failures of this water management done by the councils. We can’t have that happen again. We need places like Mount Albert to actually be able to rely on the water systems that they’ve got. It’s really important, because people don’t feel safe in a city where that can happen. We need pure, good water systems in our city, and that is a good thing for New Zealanders and for our Aucklanders and for the people of Mount Albert. Thank you.

DEPUTY SPEAKER: A five-minute split call—Barbara Kuriger.

BARBARA KURIGER (National—Taranaki-King Country): Thank you, Mr Speaker. The problem with this piece of legislation and a number of other pieces that we’re doing is that they’re being done in a piecemeal way. It’s really short-sighted, in terms of climate adaptation and the lack of a climate adaptation bill, to be putting in piecemeal pieces of legislation that deal in water pipes and not think broader than that. I was listening to the Hon Eugenie Sage before about the sponge city approach, and I know we’ve been going through in the Environment Committee, looking at other pieces of legislation—as the cyclones have been happening—thinking about how our stormwater does disappear. I feel like this is being pushed in a way that’s not given each of our councils a chance to think about how they might do that, but aggregates them all in such a way that they’re going to be pushed together—thinking about pipes, thinking about dividing things up, thinking about putting things together, and not thinking about the landscape as it currently sits—in terms of solving this problem.

Labour doesn’t like to use the term “three waters”, because they know it’s become so toxic, so they now call it “affordable water reforms”. On this side of the House, we don’t believe it’s either affordable—or, it’s neither affordable, or it is not a real change to the reforms that were being proposed. It’s still the same three waters, and Kiwis know that it’s the same three waters.

We hear a lot about smaller councils missing out. When you look at a place like Taranaki, where you’ve got three councils around the maunga and you’ve got the Taranaki Regional Council, it’s a nice, compact region. One can see how those councils have been so willing to work together—already do; don’t need to be pushed together; know how to do it in a way that’s constructive. But when you actually look at an entity like the Waikato Regional Council, and you look everywhere from the Coromandel, which is extremely broken at the moment from severe cyclone after cyclone after cyclone—and not only are their roads broken but their water system, a lot of the infrastructure, is broken. Take that all the way down through Hamilton City and down to the bottom end of the Waikato Regional Council, to a place called Mōkau—it’s very hard to imagine how each of those councils, including the small regional councils, are even going to get any thought, I guess, around what might be needed locally in any particular given water situation, because everything is so vast and so different.

That’s why we on this side of the House believe that councils should have the right to be able to aggregate in a way that they believe, if they wish to, because they know where the natural landscape fits, they know where the natural resourcing is around the communities, and they have a vision on the ground of how it all fits together—not something that’s arbitrarily drawn on a map by central government.

There is one thing that really worries me about this, and it talks about mixed-use rural water supplies: “Water service entities must prepare in consultation with farmers and other interested parties a rural supply plan for each mixed-use rural water supply in its service area.” And then it says that that entity must review the water supply plans at least every three years. Someone on the other side might explain to me how they’re going to get through that, even in a three-year process, because rural supply plans are so mixed and varied. One of the things we can see is that those who are supplying houses that perhaps aren’t connected with farming businesses are just as likely to pick up the pipes and go, “Well, if I’m going to be responsible for all of this extra bureaucracy”, and they’re going to actually cut the houses off. The councils will then have to go and find another way and another responsibility to supply those houses with water.

So we on this side of the House are very sceptical. Again, by the time we get this bill—we get the two Resource Management Act bills that were passed last week, we get the climate adaptation bill, which we don’t yet have, this bill, and local government reform. We’re scratching our heads as to how it will all fit together. It’s not good legislation. Thank you, Mr Speaker.

GLEN BENNETT (Labour—New Plymouth): Three waters is the life force that helps run our villages, our towns, and our cities. We need these 10 entities, and I’m proud to come from Taranaki where we as councils, as iwi, are working together to ensure the future of our waters are safe and are secure for all for generations to come.

DAN ROSEWARNE (Labour): This bill sets out more of the detail of the Government’s affordable water reforms. These reforms are about protecting New Zealanders from extreme rates rises to pay for the renewal and replacement of ageing water infrastructure.

Interestingly, I was sitting here quietly, just going through the district council websites of all the members on the other side of the House there, and you’d be quite interested—

Nicola Grigg: Did you go through yours? They hate it.

DAN ROSEWARNE: —at the amount of boil-water notices that actually exist. The member for Selwyn has just piped up, but in Hororata, on only 2 August, they had a boil-water notice, and that led to the water being offline for several days. Over in Oxford, on the No. 1 water supply, we just had an update in Waimakariri, and over there—so their water supply is going to be offline for four to six weeks. Whilst the boil-water notice was precautionary before, it’s now critical as the water quality from the river intake is very poor in comparison.

So for those listening at home, have a scroll through the local council websites and have a look at the boil-water notices, and you’ll probably find that most of those notices are in the same locations as those “Stop 3 Waters” signs. So this is a good bill. It’s an important bill, and I commend it to the House.

NICOLA GRIGG (National—Selwyn): I think the technical term for the conception and passage for these water reform bills is a cluster—a giant cluster. Here we are again for the fourth time in urgency, trying to ram through—the Government, sorry; we’re not—bills that they say seek to reform the provision of water services in this country, but in actual fact will do absolutely nothing for the provision of good quality, safe water to the families and people of New Zealand.

Just last week we had the passage of the Water Services Entities Amendment Bill. I’m just having to outline this a bit for anyone listening because it is really complicated and convoluted. So that was the bill that established the 10 mega-entities. Bearing in mind that’s an amendment bill—that’s amending a bill that actually passed just eight months ago which was then called the Water Services Entities Bill. But the Government got such blowback about it it’s had to bring an entire amendment bill back to the Parliament to fix it—or seemingly so. So here we are again with the Water Services Legislation Bill. This too is, effectively, a Supplementary Order Paper to a bill that’s previously passed—the Water Services Entities Bill—last year that we had to debate last year, but they’ve brought 200-odd pages of amendments back to the Parliament this year because they’re still trying to fix it, they’re still trying to make it right. I think the analogy is these guys over there trying to govern this country are trying also to build the plane while they’re flying it at the same time. It’s a monumental, catastrophic disaster. It is a failure.

This Water Services Entities Bill that we have here—sorry, the Water Services Legislation Bill; it gets confusing—in front of us is about changing the status of that Water Services Entities Act that I mentioned previously and their obligations, their powers, and of course how they may amend their constitutions. But there’s a whole lot of stuff in here that is just thoroughly confusing and out of touch.

I think what’s really interesting—and to be able to talk about it tonight, because I really don’t think the New Zealand public know much about it—is this bill brings in the provision for pricing. This is really interesting because this bill contains provisions relating to water pricing which the Government has not talked about. It is very clear now that New Zealanders, when they’ve been told by the Government that this is about saving them money, they’re now having to pay for these reforms that they didn’t want in the first place. But as yet we’ve seen no schedule for payments. We don’t actually know what the ratepayers are going to be hit with when they try to get it off the ground.

So, too, and equally as quietly, they have tried to slip under the radar the schedule of penalties that this bill contains. It contains extensive provisions for penalties that include fines of $20,000 for breaking a sprinkler ban—$20,000 for breaking a sprinkler ban!—and $100,000 for digging a hole next to a stormwater asset. Now, that could include parks or sumps or stormwater drainage systems—$100,000! And doesn’t it beggar belief that a Government that is so soft on crime, who does not arrest serious offenders, does not throw the book at serious offenders, is going to go out and charge $20,000 for someone for watering their garden on a hot nor’west day. That’s quite extraordinary.

Obviously, another provision in this bill is about the ownership of these water assets. Now, on this side of the House, we will maintain until our last breath that the people that own these water assets are the ratepayers of New Zealand, who have paid for them and have built them up over generations. This bill will see the usual rights and responsibilities of the ownership transferred to these 10 megaentities, these 10 unelected, anti-democratic mega-entities, and there is nobody there that can be held democratically accountable. We have a fundamental opposition to that. The fact that this is so anti-democratic that these people on these mega-entities have not been elected by the people of New Zealand to run the water assets that they have paid for.

On that note, we will continue to oppose this bill. We are in urgency, probably for the next 48 hours, and we will continue to build the case for National’s local water done well policy. Thank you, Madam Speaker.

STEPH LEWIS (Labour—Whanganui): Thank you, Madam Speaker. It’s a pleasure to rise and take a call on the Water Services Legislation Bill, and I’ll tell you why. A little story: back in 2016 when we had the local body elections in Whanganui, there was a group who came in campaigning against—get this—spending money to upgrade our waste-water treatment plant. Guess what! They got in and then they triggered the penalty clause in the contract, which meant ratepayers in Whanganui paid more for our waste-water treatment plant upgrade than they otherwise would and should have. That is why we need to take the politicisation out of the management of our water assets.

I’ll tell you another reason why we need reform in our water service provision. In Whanganui we’ve got a housing shortage; that’s accepted. The council’s housing plan is to do infill housing. That’s fantastic—great; fully support it. But I had a couple of developers walk into my office and say that their consents had been declined because—get this—there’s no capacity in the sewerage pipes for them to build more houses there. We need water reform now. I commend this bill to the House.

A party vote was called for on the question, That the Water Services Legislation Bill be now read a second time.

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Motion agreed to.

Bill read a second time.

ASSISTANT SPEAKER (Hon Jenny Salesa): I declare the House in committee for consideration of the bill. This bill is set down for committee stage immediately.

In Committee

Part 1 Amendments to Water Services Entities Act 2022

CHAIRPERSON (Greg O’Connor): Members, the House is in committee for the Water Services Legislation Bill. We come first to the debate on Part 1. This is the debate on clauses 3 to 25 and Schedules 1 and 2, “Amendments to Water Services Entities Act 2022”. Members should note that Part 1 inserts new parts into the Water Services Entities Act 2022, and these are included in the debate on Part 1. Clause 21C inserts new Part 5A, and clause 22 replaces Part 6 with new Part 6 and inserts new Parts 7 to 13. The question is that Part 1 stand part.

MARK CAMERON (ACT): Thank you, Mr Chair. Minister, thank you very much for coming down tonight to try and address the concerns that I have as a rural New Zealander and to try and contextualise what on earth it means to rural New Zealand in terms of stormwater management, especially.

I try and reconcile the concerns that are offered to me in terms of stormwater management in rural New Zealand. I heard the remarks from the former speaker Eugenie Sage in the previous debate, when she raised concerns about stormwater and what that actually looks like. How on earth will that be managed, Minister?

I’ll just try and contextualise it for you if I can, and I think this warrants a genuine answer—not a flippant one, but a genuine answer—on what this looks like. Where I live in Northland, it is a piece of land called the Ruawai Flats. It was reclaimed back at the turn of the last century, totally drained by part of a wider scheme called the Albertlander scheme. They reclaimed it all. Now, that stormwater reality—it’s dead flat. To give you some kind of context, it’s about 3 meters above sea level that was all drained into the Kaipara Harbour. That was done by local catchment groups.

Can you please tell me, this committee, and anyone weighing in, how on earth that local asset and the management and the infrastructure that has been managed by those people for, now, the last 120 years would fall into a new entity with shared governance arrangements—some appointed; some go through the democratic process—to give effect to Te Mana o te Wai statements. Gracious me; I still don’t know what that means when it comes to stormwater management, especially. When it comes to outcomes—because I stress this point, Minister—this is an example. We don’t have a problem. There absolutely isn’t a problem, and I think this committee deserves to know how rural stormwater, Minister, will be managed.

In previous exchanges with the former Minister of Local Government, we were talking about green overland flow, and I think that needs to be reconciled. How many tens of thousands of kilometres of local government infrastructure assets will this bill run roughshod over? And what will it mean in terms of asset management, having that asset taken off the likes of where I live and then adjudicated, financed, funded, and controlled from an entity based predominantly in Auckland?

MELISSA LEE (National): Thank you very much, Mr Chair. It’s a pleasure to actually participate, because I have yet to speak on this particular piece of legislation. I grabbed the legislation and I started reading, and even right from the beginning, I’m slightly confused as to what this is all about, because it is rather convoluting. When I was listening to my colleague earlier, she gave a little bit of a history, which sort of seems like there’s a massive confusion.

Going to Part 1, in replacement section 161(1)(ia), inserted by clause 4(2)(h), it talks about how that section “provides that the annual reports of water services entities must contain information on actions they have taken to give effect to te Tiriti o Waitangi/the Treaty of Waitangi with reference to each of the other matters listed in this section”. I’m trying to understand—if the Minister could explain to me or to this committee—how that helps or impacts on the services that this water entity will potentially have for customers in water quality and water services.

BARBARA KURIGER (National—Taranaki-King Country): Thank you, Mr Chair. I just want to follow up—it’s page 66; clauses 234 to 236, around the purpose. We’ve got the “Purpose of the rural supply plan”, then the “Contents of the rural supply plan”, and then “Engagement on rural supply plans”. I brought up in my speech in the second reading the multiple different ways that rural water is supplied: not just for animals but also for those people who work on farms and people who, maybe, live near to farms. When you start having to define the geographic area setting out how the water services entity will operate the supply with the users of the supply: all of the arrangements, the detail around the ongoing maintenance, committee and other arrangements for making decisions, roles and responsibilities—Minister, I know that you often say that you’ve been out engaging with all the rural communities. I wonder if you can help us by understanding the potential for lots of water supplies to be cut off in terms of those people who don’t want to engage with what seems to be a hugely bureaucratic process, and those houses will be left to councils to then supply water to, because it just becomes too complicated and too hard, and another piece of bureaucracy that’s imposed on rural people. Thank you.

Hon KIERAN McANULTY (Minister of Local Government): I thank Barbara Kuriger for her question, and Mark Cameron. I’ll go through those as best I can. In regards to rural water supplies: if the existing supply already has a relationship with the council—so it could be that they have a committee that is made up of the water users and it is also made up of the council—then that relationship can continue. But, with the entity, those users will be able to continue to have the opportunity to have a joint operational committee. They’ll also have a choice: they can withdraw themselves from coverage of this bill and the reforms if they wish; however, of course, they wouldn’t get the benefit of the scale of being included in those. We’ve worked really constructively with water users. There’s been a really targeted, constructive approach down in the Clutha area, led by the council down there. We’ve taken on board their concerns, and a lot of that is being reflected.

In regards to rural drainage, that’s not in scope of these reforms—councils will continue to be accountable for rural flood- and stormwater arrangements. Water services entities will be required to collaborate and support councils as agreed. In regards to the specific example, I’m unfamiliar with that. If they have an existing relationship with the local council, then that opportunity will continue with the water services entity. If they are completely removed from council provision and they are solely rural supply, then they won’t be covered by these reforms.

STUART SMITH (National—Kaikōura): Thank you, Mr Chair. It’s a pleasure to speak on this Water Services Legislation Bill, which is not one we support. I want to ask the Minister about clause 5, around definitions in particular—clause 5(2)—“In section 6, definition of stormwater network, after paragraph (b), insert: (c) does not include a transport stormwater system”.

Now, does that mean that stormwater coming off the road is a stormwater transport system? Is that the meaning of that particular clause? I would have thought that’s the major carrier of the stormwater in our transport networks, actually—the roads and carparks. We’ve heard that it’s not in the rural area, so that kind of makes sense. But, in an urban area, how do you define what’s a transport water system—drainage system, stormwater system—and what’s stormwater? The water that comes off the roof of a house or off buildings would, I would assume, be the only other stormwater. So I would be quite interested in that definition.

I know that, turning back to rural water—in fact, I’ll come back to that later. I’m interested in that stormwater one. I think there’s a massive issue with that in New Zealand, because we actually haven’t designed our roads from scratch in New Zealand; we haven’t had a clean sheet of paper and started putting our roads out and said we’re going to build them in such a way as to manage our stormwater in the most effective manner. They’ve, essentially, evolved over time, and so we’ve ended up with an imperfect system. I think that would be a really good question. If we could have that answer, we would really appreciate it.

Hon EUGENIE SAGE (Green): Thank you, Mr Chair. Staying with stormwater, in the bill, water services entities must have a comprehensive stormwater strategy. They’ve got to have a relationship with the relevant local authorities. And the bill also—because of the changes the committee made—has ensured that the water services entities have “primary responsibility for managing and maintaining watercourses that have a stormwater … function”, including on private land.

In a city like Ōtautahi Christchurch, the city council has done a lot of work on the Ōtākaro and Ōpāwaho—Avon and Heathcote—rivers, in terms of riparian planting, improving the naturalness of the rivers, putting in place rock to create riffles so that there’s better habitat for fish. All of that work has been done to enhance the amenity of the river, its natural functioning, but the rivers also carry quite significant volumes of stormwater. In the bill, it also provides that the entities can only charge properties for stormwater services where they are serviced by or within 100 metres of a stormwater network or in a particular geographic zone that receives benefits from that network.

When a territorial authority is doing work to improve the functioning of a river or stream, where it’s doing riparian management and planting to safeguard water quality, to provide for urban amenity, how is the water services entity going to interact with the council? How is it going to charge for that work, because the council can charge for it under a number of its functions. But, if it’s not primarily concerned with the conveyance of stormwater, how is the entity going to recoup any costs involved, and how are we going to ensure that there is a prospect of water-sensitive urban design and spongy cities being implemented by these entities when they are not associated with the land-use planning that is required to ensure that we move more towards those nature-based solutions?

Hon KIERAN McANULTY (Minister of Local Government): In regards to Melissa Lee’s questions relating to the Treaty of Waitangi clause, the section sets out what the Crown will do to give effect to the Treaty of Waitangi obligations. These sections are quite common in legislation, and we believe it is consistent with previous approaches.

In regards to Stuart Smith’s question, the bill provides that stormwater networks and transport corridors are managed separately. Roads, while they are designed to channel water away, are managed separately to the underlying stormwater network.

And to the Hon Eugenie Sage’s question, I’ve sought advice on that, given its technical nature, but I’ll get back to you when I receive it.

SIMON COURT (ACT): Mr Chair, thank you. Thank you, Minister McAnulty, for making yourself available to come to the committee tonight to answer questions about another three waters bill, this Water Services Legislation Bill, which is the third of four bills, I think, Minister, which I guess gives people watching at home or listening at home to this debate tonight some inkling of the complexity of the reform agenda that this Government embarked on, with conditional support from the ACT Party for the initial proposal.

But, Minister, it’s quite clear that, at some point along the way, between defining the problem, there are too many disaggregated water supplies around New Zealand that don’t have the economies of scale, the ratings base, or the income base to fund and finance the maintenance of existing networks or to provide for growth—which, if you’re in an existing town or city, often requires replacing large parts of network infrastructure to upgrade it to allow for additional housing connections or business connections. Or, if you’re developing in greenfield areas near existing towns and cities, it requires building new network infrastructure, at what can be quite a high cost, for that cost, then, to be either attributed back to the first movers—the people who come along to do a subdivision. And then the council says, “Well, we’ve had to build new network infrastructure.”—drinking water, waste water, stormwater, for example. In the case of Auckland Council, they’ve laid down a wero—a challenge—to developers at Drury South: if you wish to build, it’s $85,000 in development contributions before you build. Minister, all of these problems are yet to be solved by this legislation, although they were extensively canvassed during the Finance and Expenditure Committee hearing on this bill.

But there is a problem, Minister, that’s been introduced in this legislation that didn’t exist before the reform process started, and that is a concept of iwi Māori having rights and interests in three waters infrastructure. It was a very surprising introduction—particularly for people involved in asset management and engineering and maintenance and clearing drains and doing CCTV and having to repair pipes—that in this reform package, Minister, in amended section 5(2), inserted by clause 4, service providers will have to demonstrate how they’ve taken action to give effect to Te Tiriti o Waitangi - the Treaty of Waitangi. When you’re designing an urban stormwater or waste-water network, or you’re designing a new subdivision and you’re working out how much water you’re going to need for all the people who might live there, it would be outside the normal scope of work for a designer or an asset owner or an asset manager to be thinking, “How do I give effect to a treaty between the Crown and 500 or so iwi and hapū representatives, a treaty signed in 1840?” That’s not what land developers and asset managers usually concern themselves with, because it is not their business to be concerned about.

Minister, I just want to ask: why is it that this bill requires asset owners, the water services entities, to give effect to Te Tiriti o Waitangi - the Treaty of Waitangi? In particular, I asked the Minister of Local Government, the former Minister—the Hon Nanaia Mahuta, who’s joined us here in the committee this evening; good evening, Minister—“Does the Minister Believe that Māori have rights and interests in Three Waters assets built after 1840, and if so, why?” That is in written question No. 7396 (2022), and the Minister responded to the written question: “To my knowledge Māori have not expressed rights and interests in three waters assets over and above those [of] ratepayers within their respective communities of interest.”—that is, assets built after 1840, after the Treaty between the Crown and 500 or so iwi and hapū representatives was signed and before any three waters infrastructure was built in New Zealand. So, Minister, could you please explain why on earth these three waters entities have to give effect to Te Tiriti o Waitangi?

NICOLA GRIGG (National—Selwyn): Thank you, Mr Chair. Just a quick question to the Minister, appreciating that this bill’s reason for being, really, is to establish and empower the water services entities by setting out their functions and powers and obligations. I just was wondering if the Minister could talk us through clause 9, inserting new section 18(3)(a), where it says that a water services entity “may establish, own (in whole or in part), or operate a subsidiary only if the subsidiary complies with the requirements specified in Schedule 5;”—and so on and so forth. But, Minister, could you please outline to the committee—and, indeed, councils around Canterbury—how that relates to or applies to the current council controlled organisations (CCOs) that many of these councils own. For example, in Ashburton, Ashburton Contracting Limited; or in Selwyn, it’s called CORDE. Most councils are of the belief that the water assets within their CCOs will also be claimed by these entities. So, just with regard to amended section 18, could the Minister please outline how they do actually relate to that?

Hon KIERAN McANULTY (Minister of Local Government): Just in response to that, it’s been made very clear for quite some time, and it’s very clear in the bill, that the only council-controlled organisations (CCOs) that would be brought into the water reforms are Wellington Water and in Auckland; all others will not be consumed by this reform. We made that change as a result of listening to councils some months ago.

In regard to Eugenie Sage’s question, I thank you for it, but if you forgive me, I’m going to read, because it goes into some detail and I want to address your question. There are some cities such as Christchurch—which the member has pointed out—that does have a large and complex river system running through it, and there the entities and the councils will have to work together incredibly closely. As we know, cities like Christchurch aren’t immune from severe weather events and climate change, and the entities will bring significant benefit to addressing that with the cheaper cost and cheaper ability to borrow than it would have if it were on its own, and also greater technical expertise, recognising, though, that Christchurch does have its own CCO and they do have a high level of expertise down there. We heard the council’s concerns and removed that from the original proposals.

The stormwater management plans require an entity to specify a geographic zone that benefits from stormwater services. These geographic zones provide the basis for charging for stormwater services, and, of course, the relationship agreement provides a structure in which to do this. If I haven’t covered everything, feel free to jump up again and I’ll look into it further.

SIMON COURT (ACT): Thank you, Mr Chair. Minister, I just have to point out that, no, you haven’t covered everything, because my question was very specific: why is it that water services entities need to take actions to give effect to Te Tiriti o Waitangi when the councils that built wastewater treatment plants, dams for drinking water, water supply networks for new subdivisions and for business, which built stormwater detention ponds alongside new subdivisions or in urban areas to help mitigate the effect of pollutants entering the receiving environment—how come, Minister, the water services entities, which will take all of those assets off councils, suddenly have to give effect to Te Tiriti o Waitangi? None of the assets were built before the Treaty was signed and none of the assets, as far as I’m aware—and he may wish to correct me—are subject to Treaty settlement claims, or have been claimed, or have been settled, have been transacted to an iwi. How is it, Minister, that this Government can justify including new section 5(h), inserted by clause 4(2)?

And, Minister, while you’re considering that, would you also please tell the committee, for those watching or listening at home, what are the implications of requiring water services entities to give effect to Te Mana o te Wai? For those watching or listening to this debate, they might ask: what is Te Mana o te Wai? Well, there is a definition referred to in replacement section 6, inserted by clause 5(2A) in Supplementary Order Paper 418, under “Interpretation”, which says that “Te Mana o te Wai—(a) has the meaning set out in the national planning framework made by Order in Council … of the Natural and Built Environment Act 2022;”.

Now, just to summarise for those listening or watching, Te Mana o te Wai sets out that water has a spiritual dimension, that water comes from the heavens and embodies the mauri or life force of a deity, and then when it lands on planet Earth, it returns to another deity: the earth. And what Te Mana o te Wai means, in terms of the Resource Management Act or the Natural and Built Environment Act or the national policy statement for fresh water, all of which have a relationship to the definition in this bill—what it requires is for decision makers to take account of how to give effect to Te Mana o te Wai. That means to take account of the cultural and spiritual values of one group in New Zealand’s community who have the right to express their cultural values and to believe whatever they want to about the origins of water, its life force, and so on.

But how on earth is a decision maker, trying to decide how to build infrastructure, how to design the discharge from a wastewater treatment plant to meet ecological values, freshwater values, swimming values, wading values, whatever they are—how are they supposed to take account of one culture’s understanding of the life force of water when making decisions about what kind of filter to use, whether we need to use a filter that treats it, essentially, to achieve some kind of life force standard or whether a filtration system simply to protect the ecology, the creatures that live in the water, and people who might want to swim in it is adequate? Because, if you look at the challenges facing New Zealand infrastructure operators, it’s quite clear that the life force standard probably comes in at 100 percent premium, Minister.

So, Minister, would you please provide some justification for why water infrastructure operators need to give effect to the Treaty of Waitangi and how on earth they’re supposed to give effect to Te Mana o te Wai, the statements provided by iwi and hapū, if they’re asking for a standard of water treatment which meets their cultural needs but which far exceeds the actual biophysical needs of communities or receiving waters. Because it it’s not clear how decision makers are supposed to do that.

Hon KIERAN McANULTY (Minister of Local Government): While the obligations to fulfil Treaty settlements are in scope of this bill, giving effect to Te Tiriti o Waitangi or giving effect to Te Mana o te Wai are not in scope of this bill. The references in this bill are referring to the Water Services Entities Bill and the Water Services Act, which was passed last year and the year before.

MELISSA LEE (National): Thank you, Mr Chair. I’d like to start off by saying thank you to the Minister for Local Government, who attempted to answer my question—I think, perhaps, he got my question confused with Simon Court’s question because it relates to the same clause, 4(2)(h). The question I was actually asking was that it says, “in section 161(1)(ia), that provides that the annual reports of water services entities must contain information on actions they have taken to give effect to te Tiriti o Waitangi”—so I’m not questioning the reason why they actually engage with that. What I’m actually asking is: what does the annual report, in terms of the way that they’ve engaged re the Treaty, relate back to the services of the water entity? And does that actually improve it, or do we actually get better or cleaner water, or whatever?

And the other—you know, the committee stage is supposed to be short questions, so I’ll try and be very, very short. I found my colleague Stuart Smith’s question in relation to clause 5(2)(c), where it talks about the “stormwater network” and says it “does not include a transport stormwater system”—I’m really curious to find out why that is. I know that the Minister actually addressed Stuart’s question, saying that it is actually a different system; it’s dealt with in a different way. I’m not a geologist, but in Auckland we’ve actually had some sinkholes on the roads, where we’ve had massive gaps and there was water running everywhere. Does that mean that it addresses the concerns of the citizens when they actually look at roads—which has impacts, because the waterways actually run underneath the roads? Are we actually putting our citizens at risk of more sinkholes appearing under our road networks? I think these are things that maybe, perhaps, the Minister has actually had the officials explain that we need to look at—or does he actually think that it’s nobody’s business and it’s actually safe and, you know, we don’t need to do anything about it?

Hon KIERAN McANULTY (Minister of Local Government): Thank you to Melissa Lee for the clarification. I apologise for getting the wrong end of the stick. The annual report summarises the operations of the entity, and given that the entities are required, as has been mentioned, to give effect to Te Tiriti o Waitangi, it’s an appropriate requirement for them to outline how they are doing that. It doesn’t need to be too technical. Just as an example, they could simply outline how they are engaging with Māori. Given that the regional representative groups will be made up of mana whenua, I think that will be quite a straightforward requirement for them.

STUART SMITH (National—Kaikōura): Thank you, Mr Chair. Thank you, Minister, for those answers. But I go back to the point that my colleague Melissa Lee just raised, again, about the transport systems.

Now, I heard the Minister’s answer that there would be a separate entity for transport corridors and to manage the stormwater from those rather than the other stormwater—the normal stormwater. But I would wager that there wouldn’t be many road corridors where the stormwater system is not linked to the transport corridor’s stormwater. So how is that interface handled? I know we have an engineer in the room—perhaps Simon Court might like to comment on this later on—but you would have to think that one of those entities will carry the water of the other, and therefore they will have to have a larger pipe than they would have needed otherwise. So who pays for the larger pipe?

Because I know—from buying pipe in the past—the bigger the pipe, the more expensive it is. I know, when I chaired a community irrigation company, we had to carefully assess how many hectares were going to be irrigated and how much volume of water we wanted, because nobody wanted to pay for a bigger pipe than was necessary. We’re not necessarily talking about the pipe at the gate of a person’s property; we’re talking about the pipe delivering the water to the gateway all the way back to the source.

But, in the case of stormwater, it’s the other way. You’ve got to make sure that you’re able to carry all the water. The pipe will get bigger as it gets towards the source—but I’m sure we’ll hear from our resident engineer if I’ve got that right. I think I can just see how the two entities are going to interact about who pays for what, where the ownership ceases and starts for that network, who’s going to cover the maintenance costs. I would assume bigger pipes actually may be cheaper to deal with, because you might be able to get into them more easily than the smaller pipes. So all those things come into play.

Then, of course, the town stormwater is likely to want to cross a road corridor. What happens when that occurs? It just seems like this has probably not been thought out, I would imagine—given the way the bill looks, it clearly hasn’t, and given the time that has been allowed for the legislation to go under the scrutiny of select committees and Parliament rushing it through under urgency. Surely there will be mistakes, but perhaps the Minister can give the committee, and those that are listening and watching, comfort that this bill isn’t going to be a rod for New Zealand’s collective back in all of these boundary issues that will come from the roading stormwater entity and the conventional stormwater entity.

What role will local councils and local communities have in the road transport corridor stormwater entities? Will that have a separate chief executive on a six-figure salary?

Simon Court: Six-figure? That sounds like it’s discounted.

STUART SMITH: Well, it goes all the way up till it ticks over to a seventh figure, but how close it gets to the seventh figure I’m not sure. Maybe it is seven figures. Or perhaps the Minister could let us know what the salary ranges are, and do the transport corridor CEOs have a higher salary than the normal conventional stormwater entities? I’d really like to hear those answers. Thank you, Minister.

Hon KIERAN McANULTY (Minister of Local Government): There won’t be separate stormwater entities. What I was pointing out earlier was that the transport corridor managers will continue to manage the roading stormwater systems—say, as an example, Waka Kotahi—and the interface between those will be addressed by the relationship agreement which is required by this bill. That relationship agreement could well be with NZTA, or indeed the council if it was a local road that fell into the scope of this bill. That would address the concerns that he raised in his example. But we’re not proposing that there be a separate entity to deal with stormwater and then a separate one again to deal with stormwater off roads. That’s not what’s being proposed.

BARBARA KURIGER (National—Taranaki-King Country): Thank you, Mr Chair. Just a question to the Minister—section 13, pages 34 and 35, and in particular (o)—it says this is one of the functions of the water service entities: “to mitigate the effects of climate change and natural hazards, and support and enable climate change adaptation”. The question to the Minister is: in the absence of a climate adaptation bill, it seems like a very big ask for a water entity. And I’m still trying to get my head around how all of these particular bills actually fit together. Could the Minister, please, explain just how much is dependent on the water entity and how much will be shared around perhaps climate adaptation and some of the other resource management bills that we have just put into play in the House? Thank you.

SIMON COURT (ACT): Thank you, Mr Chair. That was actually a very useful question from Barbara Kuriger. But, Minister, before you get around to answering that, can we just come back to the transport stormwater system. The road corridor, whether it’s in a city or on a State highway, is usually impervious from boundary to boundary. It’s concrete footpaths or asphalt roads, and that very large surface area contributes a lot of stormwater to the urban stormwater system—much, much more than would typically be contributed even by roofs off residential buildings. So, up until this point in time, with local councils being the road controlling authority and owning the stormwater system, they’ve been able to balance internally the cost of managing that stormwater through stormwater treatment ponds or collection.

Where I live in Te Atatū Peninsula, in fact, there’s a whole series of wetlands being constructed as part of new subdivisions, which take stormwater off the road network as well as the residential roofs and driveways and filter it and treat it through a series of ponds. In fact, it’s already filtered and treated to such a high standard that we have all kinds of native ducks, dabchicks, and other rare and threatened species that have decided that the stormwater quality in Auckland’s Te Atatū Peninsula is so good in the Harbourview Orangihina Park that they’ve decided to call it home, at least on a temporary basis during nesting season.

But all of that stormwater that comes off roofs or roads has to, in the future under this model, be attributed to one entity or the other. Now, if it’s coming off roofs, then we could assume that maybe it’s local councils or residents that have responsibility for paying for the collection, treatment, and final discharge of stormwater. But, if it’s coming off roads, then we would have to assume that the road controlling authority, which would still be local councils, would need to make some kind of provision for paying for the treatment of all the stormwater off their local road network. So, Minister, what do you expect relationship agreements to include so that that cost could be evenly attributed? I’m pretty sure that councils and their ratepayers won’t want to have to pay for a whole lot of stormwater that isn’t theirs. But, again, if councils are still the road controlling authority, will they still be paying for it?

Now, all of this is not determined, Minister. While you, in your role as local government Minister, and previous Ministers have claimed that there’ll be significant reductions in the cost of three waters for current and future ratepayers, actually, if we think about the volume of water that councils will continue to discharge to the stormwater networks operated by water services entities, Minister, isn’t it likely that councils—and, therefore, ratepayers—will continue to pay a significant amount of money for stormwater in addition to what they pay water services entities? And I’m assuming that, at some point in the future, they’re going to get separate bills; one that might say “Water Services Entity A” and another “Water Services Entity B”—or “Water Services Entity 10”, or however many eventually get stood up. So, Minister, how can you be confident, given it’s not clear who’s going to pay for stormwater and whether it comes off a road or whether it comes off a residential property, or whether it comes off council parks and reserves, how this is going to be allocated? And what, if any, savings can ratepayers expect from the stormwater service component of their rates that they currently pay?

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair. Minister, I just wanted to ask around this new section 5(kb), in clause 4(2), which says that “agreements, arrangements, or understandings that local authorities have entered with mana whenua relating to water services transfer to water services entities:”, and I just wanted to ask: did the Minister take any advice on the use of the words “mana whenua” in this bill?

The reason I ask that is just because the Waitangi Tribunal, in the Wai 64 tribunal report Rekohu: A Report on Moriori and Ngati Mutunga Claims in the Chatham Islands, wrote that “Mana is inherent in persons, not land, and ‘mana whenua’ appears to be a modern thought that does violence to traditional ethics. It has prejudiced all on the islands and prejudices Maori generally.” The tribunal went on to say, “we think the statutory reference to mana whenua is contrary to the principles of the Treaty, being out of kilter with cultural ethics, and is prejudicial to all claimants as a result.”

It went on to say that “The term ‘mana whenua’ appears to have come from a nineteenth-century Maori endeavour to conceptualise Maori authority in terms of the English legal concepts of imperium and dominium. It links mana or authority with ownership of the whenua (soil). But the linking of mana with land does not fit comfortably with Maori concepts. Recent research tends to agree that the term ‘mana whenua’ itself does not appear in the early records about customary rights to land. The Crown’s interim closing submission in this claim drew usefully on Grant Phillipson’s collection of evidence from missionaries and others familiar with Maori language and culture, originally collected in the 1860s and published in the Appendix to the Journals of the House of Representatives, as well as some unpublished material. These opinions confirm that the term ‘mana’ was personal and was used in regard to the influence or authority of chiefs. Other opinions compiled in the Appendix consider that mana whenua was a nineteenth-century invention. Crown counsel likewise challenged—we think correctly—its use to describe a general authority of a particular group over any area of land.”

Hon KIERAN McANULTY (Minister of Local Government): Mr Chair, thank you very much. The definition of “mana whenua” was debated in the Water Services Entities Act extensively last year, and this bill refers to the definition that had already been passed.

In regard to Mr Court’s questions, essentially, the bill sets out consistent standards and the tools for entities and partners to create bespoke working arrangements for each particular area. I think that’s the appropriate approach. Of course, every area will be different, but we want it to be consistently applied. But the bill also makes it very clear that, whilst stormwater systems are complex, the entities will continue to have responsibility for discharge and the majority of work.

And finally, to Barbara Kuriger’s question around the impacts of climate change, we’ve seen the impact recently that severe weather has had on stormwater, waste water, and drinking water systems. Whilst we are bringing in these reforms, we felt it was only appropriate that we require the entities to take into account climate change, and give them the objective to mitigate against climate change. That, of course, was an obligation that was provided to the entities when this was debated in 2002.

CHAIRPERSON (Greg O’Connor): Look, I’ll just note—I intend to leave the Chair—that although this is wide-ranging, the questions have been relatively narrow and they have actually been quite repetitive to date. That will be taken into account when we resume tomorrow. It is now time to leave the Chair. The House will be resumed at 9 a.m. tomorrow.

Sitting suspended from 10 p.m. to 9 a.m. (Wednesday)

TUESDAY, 22 AUGUST 2023

(continued on Wednesday, 23 August 2023)

Bills

Water Services Legislation Bill

In Committee

Part 1 Amendments to Water Services Entities Act 2022 (continued)

CHAIRPERSON (Hon Jacqui Dean): Members, good morning. The House is resumed in committee. We are considering Part 1 of the Water Services Legislation Bill.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. It’s great to be in the Chamber at 9 o’clock in the morning, and to everyone out there who’s watching Parliament TV this morning, good morning—what a fantastic day it is.

Matt Doocey: This is what happens when the Government can’t get their stuff together.

STUART SMITH: That’s right. I was just reading what we’re speaking about, the Water Services Legislation Bill. I was saying to the Minister in the chair on the way in that I did thank him very much for the answers he gave us yesterday, and I’m looking forward to those sorts of fulsome answers again today.

But I would like to, as the Minister suggested, get local on it and I’m actually going to get personal on it. I’m in a small water scheme, a private water scheme, and I note under clause 5(4)(a) and (b), where it talks about the board and whether it’s one or more people, and that the water scheme would have to have a board. My first question is around those people on that board. Are they considered directors as in a directors under the Companies Act, and are they subject to those sorts of rights and obligations that would be required under the Companies Act? That’s quite an important thing to know.

I think, in many cases, those small schemes would have a variety of different people thrown into those roles who aren’t necessarily experienced in the world of governance and may well not even be au fait with the rights and obligations under the Companies Act for a director, which are quite serious if things aren’t handled correctly.

So I’d be grateful if the Minister could give us a bit of an idea of what those boards would look like, because there’d be quite a difference between one of those entities and one which is running a council’s water assets, particularly with these other governance structures. So that would be really helpful.

The second part I would like to understand about those entities is whether they have to have a corporatised structure underneath them to operate those assets and all the reporting requirements that are outlined in this bill. And are those reporting requirements under this legislation in any way staged for different sizes of entities, if it is one or more individuals who are users of the service? So does that mean that a farm property with a cottage on it, two houses on it, serviced off one bore—or a creek or whatever that’s treated—is considered to be one of these entities under this bill?

Hon KIERAN McANULTY (Minister of Local Government): Thank you very much for the question. To some degree, we covered this off last night when I was answering the questions from Barbara Kuriger, but I’ll run through it again. So we have, I guess, three scenarios. One, which is an entirely private rural scheme that doesn’t currently have a relationship with a council—they’re not impacted by these reforms and this bill.

Then you’ve got a rural scheme which does currently have a relationship with the council. In most instances, they have a committee that is made up of people on council and the users. What is proposed is that that relationship would remain; it would just be with the entities, not with the council. So any operational decisions and input that users have should be able to be maintained—that was one thing that came out of the process that we went through with the Department of Internal Affairs; went through with talking with the rural users down there.

Keeping in mind that rural users will also have, in those circumstances, the option of pulling out altogether and not being covered by this. In some instances, that may be best for them. But that does come with the risk of them incurring all costs of maintenance and upgrading into the future. What we found from the engagement with water users in the Clutha area was that once that was spelt out—that their level of input would be maintained but the cost and future liability of maintaining an upgrading would be shared across the entity, therefore significantly reducing the cost to those users—the feedback we got was that on the whole, they would be willing to continue with what’s being proposed.

The other aspect of it, which isn’t covered but I think would be of use to the member, is those mixed-use rural schemes—that it might be a situation where one landowner supplies water to surrounding neighbours. That could be used for the purposes of stock or it could be used for the purposes of drinking water. Again, that’s not covered in this, but we want to be as practical as possible in that. So, essentially, what happens is that it comes down to the regulations that are set by Taumata Arowai, because of course we want to make sure that all drinking water is safe—but as practical as possible.

So, in most instances, all that will be required is that at the point of delivery on the side of the house, they have a UV filter rather than full treatment at the source. In doing that, it would allow that that water that’s being used for stock won’t have to be unnecessarily treated. In some instances, though, it might be that the vast majority of the water being delivered is for drinking water, with some for stock. It might be more cost-effective of them to treat at source but that’s up to them—whatever is the most practical.

Certainly where it’s mixed-use and the majority of the water is going to be used for stock purposes and not drinking, it would just make sense to have a UV filter. So there’s a few scenarios there, but in terms of relevancy to the bill and the example that the member gave, nothing should change. It’s just that they’re dealing with the entities rather than the council.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair, and thank you, Minister, for that answer, although I didn’t quite understand where the committee members, if it’s a relationship with a council—are they directors or not directors under the Companies Act? That’s the first thing.

The second thing is in the case where a water entity has no relationship in itself with the council but those householders have a sewerage service supplied by the council, so there is one of the three waters relationships with the council but not the drinking-water one or the stormwater one. How does that work under this bill? Thank you.

Hon KIERAN McANULTY (Minister of Local Government): Thank you very much—very good point. That was the first note I wrote down and it was the first one I missed, so I’ll get to that straight away. No, they won’t be considered directors, because, of course, the entities remain publicly owned, but what it will be is exactly the same as they’ve got now. It’s an opportunity for those users to have a significant level of influence in terms of the decisions that are made on that use scheme, but they won’t be considered directors and they won’t therefore have the obligations and responsibilities that fall on directors. That will still sit with the entities because they’re publicly owned.

In the example the member gave where perhaps one of the three waters might be supplied by the council, I’m not aware of an instance where waste water, for example, in a rural area has a committee like they would do with drinking water. If waste water is provided by the council now, I don’t think they would have a committee on that—they might. If they do, it’d be the same answer. If they don’t, then it just carries on as it would do now except it’d be the entities providing that service, not the council.

MARK CAMERON (ACT): Thank you, Madam Chair. Minister, can we go back to your previous answer to Stuart Smith, when you were talking about mixed use for rural supply. I’m trying to get some clarity, and maybe you can double down on it and give that clarity, because I’m trying to ascertain what it would look like if you were a farmer, as you alluded to—that mixed supply model when you might actually have a farmer who was predominantly supplying, who stopped the water, but then there were half a dozen homes on that.

In that instance, would there need to be some sort of standard set for the drinking-water element of that mixed supply model, and what was the number, given that the ACT Party had asked for a 30 endpoint user exemption—why wouldn’t you actually look at that? Because, genuinely speaking, there are often many instances where there is more than one source of supply on a private property that feeds into several abodes or several homes. Arguably, that person is a provider and it would be incumbent upon them—it’s my understanding of this legislation—to then make sure that the water was of a safe drinking standard, assuming it was an artesian water source, or something to that effect. What is the potential outcome, if I’m interpreting this piece of legislation correctly, that, in more than one instance, you can potentially see the cessation of that supply, based on the fiscal constraints and obligations of that now deemed provider? Can you give some clarity?

Hon KIERAN McANULTY (Minister of Local Government): I thank the member for the question. Like I explained to Mr Smith, this actually isn’t in this bill. I just provided that for his understanding in terms of the context of rural supply, but this particular matter was debated in the Water Services Bill in 2021. I’m happy to address it, but I’ll probably leave it there at that point, given it’s not proposed in this bill. It is required of the provider to meet minimum standards, through Taumata Arowai. That has long been in place; everybody agrees that if you’re receiving water it needs to be of a safe standard. However, the changes that I outlined to Mr Smith were that in working with farmers, we clarified to them that it’s likely that all that will be required at the point of receipt is that they have a UV filter to meet the standards, rather than imposing undue requirements on the provider, which will inevitably, likely, lead to people just saying, “Well, I’m not going to supply my neighbours.”, and pull out. We don’t want that. We want it to be as practical as possible, and that’s what was outlined for rural providers.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I just want to come to clause 9 of this Bill, the Water Services Legislation Bill, which proposes to amend section 18 of the primary legislation: “Other things water services entities can do”. Clause 9(3) says, “A water service entity—may establish, own … or operate a subsidiary only if the subsidiary complies with the requirements specified in Schedule 5”. But more importantly, clause 9(3)(b) says what it may not do: it “may not enter into a partnership with another person or persons.”

Now, assuming that means a natural person or a person in the sense that it could be a corporate, this clause appears to extinguish the opportunity for water service entities to partner with the private sector to deliver services in the form of a public-private partnership, for example, or a special purpose vehicle, for example, Minister, where a local government entity now, or in this case a water services entity of the future, which is seeking private and institutional capital—it could be from the Accident Compensation Corporation, where that capital comes from. It could be from the New Zealand Superannuation Fund, it could be from KiwiSaver, it could be from an iwi investment fund; the private capital component, plus private management experience, capability, whatever that specific expertise is, partnering with water service entities in the form of a public-private partnership, say, to deliver a whole lot of new services for a new subdivision, or, potentially, to upgrade existing networks in existing urban environments to allow for much higher densities to be built. For example, where currently there are one- or two-storey homes—many parts of our major metros are zoned for six storeys or even eight storeys by right, Minister, but they can’t proceed because the water infrastructure is very expensive and, whether it’s a council or a water service entity, it’s not clear where the capital will come from to do that.

So Minister, could you please confirm: does clause 9, which amends section 18 of the primary legislation, extinguish the ability of water service entities to enter into public-private partnerships?

Hon KIERAN McANULTY (Minister of Local Government): No, it doesn’t, and we covered this to some degree last night when the answer to Ms Grigg’s question around council-owned council-controlled organisations (CCOs)—

Nicola Grigg: Great question.

Hon KIERAN McANULTY: It was a great question, actually—very topical and a good opportunity to clarify some of those concerns that are out there. What I said in response to that question was that only the CCOs in Wellington and Auckland will be included in that. The others will remain in ownership with the councils. There is nothing in this bill that would stop entities entering into joint ventures with those or with private companies as well.

SHANAN HALBERT (Junior Whip—Labour): I move, That the question be now put.

NICOLA GRIGG (National—Selwyn): Thank you, Madam Chair. What a relief to have been able to ask another question.

Look, if I could turn the Minister’s mind please to clause 11, just following on from Simon Court’s questions around the obligation to maintain water services. I also want to extrapolate that out to clauses 17, 18, and even—no, just 18. I think it’d be really helpful for the Minister—I think everybody in this House acknowledges there is enormous public discontent and disconcertion around this bill, and I think it would be very helpful if the Minister could outline, particularly around clause 11, the “Obligation to maintain water services” and the “transfer [of] any of its significant infrastructure to a subsidiary that the water services entity owns or operates.”

Is the Minister aware, or has any work been done around the monetary value of each and every entity thus far and the infrastructure assets that these entities will inherit off the territorial authorities? Are territorial authorities in a position to understand the full picture of the removal of those assets from their own balance sheets, and are you able to go through, entity by entity, what the value of each of those entities is going to be worth? I’ll come to 18 and 17 shortly.

Hon KIERAN McANULTY (Minister of Local Government): So the process for outlining and establishing the value of the assets and what will be transferred from councils to entities was set out in the previous Act, but I’m happy to quickly outline how that process would work.

So the initial transition unit is in that process already with the councils in the Auckland and Northland entity because, of course, the amendment bill that was passed last week doesn’t change that proposed entity. So the go-live date stays as it is and that work is under way. That is by way of agreement, because of course they need to agree to the value of the asset, what’s going to be transferred, the level of debt that will be removed from the council’s books and be taken on by the entity. All those things need to be agreed on before they can progress.

In terms of the clause that was mentioned by the member, the purpose of this is to ensure that the ownership of the asset stays public so that it stays with the entities. It can’t be transferred to a subsidiary or, heaven forbid, to a private company. It must maintain public ownership, and clause 11 helps establish that.

MELISSA LEE (National): Thank you, Madam Chair, and I apologise to my colleague Nicola Grigg, who obviously had a couple of other questions, but I wasn’t going to lose out on my opportunity to actually ask the Minister in the chair, Kieran McAnulty, a question. I’d like to thank the Minister for being very generous with his time and actually endeavouring to answer often what seems like quite repetitive—I’ll actually go to something quite different. In clause 17, it is in relation to “Obligation to publish asset management plan”, and it says that “As soon as practicable after an asset management plan is provided to the regional representative group, the chief executive of a water services entity must publish the asset management plan”. I’m trying to find out what that actually means. Practicable—as soon as it’s practicable—normally, there is a time line as to when they have to do that, within a certain time period. I’m wanting to know if the Minister actually has it in his mind as to how soon that is, what “practicable” actually means—“As soon as practicable”.

Also, it talks about how it has to be published “on an Internet site maintained by, or on behalf of, the water services entity in a format that is readily accessible.” Does he actually have instructions to the officials that it has to be mobile accessible, because often people use their mobile to access things, and sometimes internet sites are not that friendly to mobile users.

Hon KIERAN McANULTY (Minister of Local Government): The term “as soon as practicable” is used throughout legislation and is consistent—for example, it’s in the Crown Entities Act. So, when it’s already in place and systems are already under way, we thought it was important to remain consistent. In terms of referencing internet sites, that includes a requirement for mobile accessibility.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I’d like you to clarify your answer to my question before, which referenced an answer that you’d given to Nicola Grigg about council-controlled organisations. Minister, it’s very clear in replacement section 18(4), inserted by clause 9, that “partnership has the meaning given to it [or set out] under sections 8 and 9 of the Partnership Law Act”. This Water Services Legislation Bill says that entities may not enter into a partnership—they may not, Minister.

So I’m seeking your clarification. Does that mean that they may not enter into public-private partnerships? Because, potentially, the Minister thinks that a council-controlled organisation is a public-private partnership. It’s not—it’s not. A public-private partnership has quite a different definition. That is where the public sector partners with the private sector. The private sector provides the capital, the technical nous, the management experience, and the private sector, in reward for providing capital and as a reward for taking a risk, takes a profit, Minister, from the activity.

If you look at the partnership definition in the nature of partnership in the Partnership Law Act 2019, it says, “Partnership is the relationship that exists between persons carrying on a business in common with a view to profit”. Minister, that appears to be at odds with your previous statement which, as far as I was aware, said that public-private partnerships could continue, although you did refer to council-controlled organisations which are not public-private partnerships.

So would you provide some clarity, Minister? Will water service entities be able to engage with the private sector to stand up public-private partnerships for the purpose of seeking private and institutional capital, to invest in infrastructure and to have access to management and expertise from the private sector and to have that asset funded, financed, delivered, operated, and maintained by the private sector, or do you, Minister, and this Government exclude the private sector from having that role in infrastructure delivery in New Zealand?

Hon KIERAN McANULTY (Minister of Local Government): I did answer that question. At the end of the answer, I made it really clear that there is nothing in this bill that prevents entities entering into joint ventures with private companies. Then in the follow-up question from Ms Grigg, I clarified that the limit on that joint venture is that there cannot be any transfer of ownership of assets, but there’s nothing in this bill that suggests that they can’t enter into joint ventures, and that was clearly answered when I answered this the first time.

SHANAN HALBERT (Junior Whip—Labour): I move, That the question be now put.

CHAIRPERSON (Hon Jacqui Dean): There are nine new parts being inserted into Part 1, and the scope of the debate is extremely wide. I’m aware that we have been debating Part 1 for just over an hour—about an hour and 10, maybe. I am hearing new material, but I am listening carefully.

NICOLA GRIGG (National—Selwyn): Thank you, Madam Chair. There is obviously still a lot to cover. I did mention previously to the Minister that I’d like to have a quick trot through clauses 18 and 19, which relate to the content and the obligation to publish funding and pricing plans. Now, appreciating that the charging principles are specified in new section 31 in clause 22, again, for listeners—for those at home—can the Minister please outline the philosophy, I suppose, around the setting of the charging principles; again, the philosophy around how affordable or otherwise these principles intend to be; and what guarantees can the Minister give that this is actually an improvement on the existing establishment that is already occurring under the rule of territorial authorities?

MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. Just to carry on from my learned colleague Nicola Grigg, around the section where we’re looking at charging, I wanted to drill in to new section 319 in clause 22: “Rating information needed by water services entity”. I think it would be helpful for the committee if the Minister could outline what legislation would enable, I suppose, the passing on of that information that is currently held by councils, what permission each ratepayer would need to give for that information to be passed on to the new water entity for charging, and is there an ability for a ratepayer to refuse permission for that information to be passed on and what would happen if a ratepayer decided to pursue that course of action?

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Chair. Look, I just wanted to pick up on one of the new parts—new section 200 in clause 22, actually—with regard to the power to carry out work in relation to water services on, over, or under land. This part, I think, warrants further exploration because we are treading new ground here and proposing a significant change for our communities. That, unsurprisingly, leads to an increased level of concern within those communities, and whist relationships with councils can sometimes be fraught or challenging, generally people have a reasonable understanding of what that looks like, how they work with them and how they interact and what sorts of things they can expect when they are carrying out those interactions, if necessary.

Under this new proposal, what I’m interested to know is around that new section 200 in regard to carrying out the work, what power there is for the landowners to be able to negotiate around, first of all, the need for that work and the type of work and the complexity of it, if it’s being imposed on their property, and then what sort of timing may occur around that. I think the timing part is really interesting. I’m interested to understand where the level of agreement would sit and if there is any influence that the landowner can have based on, in my area, the Waikato, for example, which is a strong farming area. There are a lot of seasonal activities undertaken at certain times of the year that could be unduly influenced if work were to be carried out during one of those periods.

I’m interested to understand what ability there is for that landowner to push back and to say that on one hand they don’t want the work, or, secondly, if the work is happening—which may have occurred under new section 204 in clause 22 where, potentially, a court order has been obtained to force the work to be able to be carried out—then what ability they have subsequent to that decision being made to then be able to influence the timing of it so as to minimise the impact on their farming business, or whatever their business may be. But in the instance I’m specifically looking at, it is more around the rural impact from the timing of the seasonality of some of those activities, and maybe it’s planting crops or maybe it’s going through calving or lambing, where there could be particularly disruptive periods if work was undertaken during one of those times.

So I really want to understand what clarity the Minister can give that there will be a level of influence available to these landowners, given that we’re entering into quite a new type of relationship with a new entity. There’s a lot of uncertainty and, unsurprisingly, they’ll be wanting to know where they might sit and if they need to start planning for the risk of any additional work or the timing, and the impositions that may have on their businesses and what considerations they may need to give to that. So I’d appreciate some insight, thank you.

Hon KIERAN McANULTY (Minister of Local Government): Thank you, Madam Chair. In regard to the question from Nicola Grigg, the charging principles are based on similar regimes in the OECD, and these provisions link through to the Water Services Economic Efficiency and Consumer Protection Bill. They enable the Commerce Commission to issue determinations on the charging principles.

In response to Mr Doocey’s question, rating information needs to be passed on to ensure that entities can charge—for example, stormwater charging. This will also enable charges to be levied on the basis of property values, as they are, currently, by councils.

In response to Mr van de Molen, of course, new section 200 in clause 22 actually enables the landowner to specify reasonable conditions for the entities who want to do works on their private land. An objections process can also occur. These are modernised arrangements that already exist for other utility providers, and so are unlikely to cause disruption or a change in practice.

Hon DAVID BENNETT (National): Just one question for the Minister: what’s the estimated cost of the improvements needed in the Auckland waste water network to enable people to swim on the beaches in the North Shore and eastern suburbs? Minister, I’m just seeking your clarification of that number.

MATT DOOCEY (National—Waimakariri): Oh, thank you very much, Madam Chair. Just continuing the discussion around rating information and charging for water, I’d be interested to hear from the Minister whether there was any consideration that maybe councils maintain the function of facilitating the payment for water charging, or is the bill going to come directly from the water entity itself; and whether councils were considered a way of maintaining that relationship with the ratepayer?

Hon KIERAN McANULTY (Minister of Local Government): The Hon David Bennett’s question isn’t related to the bill, and Mr Doocey’s question is a fair one.

So we’ve been dealing with councils in regards to charging and what provisions they themselves may be able to offer. As we’re all aware, councils often charge on behalf of regional councils in their rates bills and then siphon that off to the regional council so that ratepayers only get the one bill. There is provision for that, but it’s up to each council as to whether they’d be willing to do that.

In essence, though, the charge for water will come from the entities. Whether it goes through each local council will be determined by that entity. There is a provision in there that as a transitional period, the councils will be asked to pass on the bill in the first instance. We’ve had some mixed feedback on that, and where that might cause some difficulty for councils—whether they have the resources to be able to do that—we’re going to work through them on that. Hopefully we’ll be able to get through it without putting any undue burden on councils.

Hon DAVID BENNETT (National): Thank you, Madam Chair. Well, the Minister in the chair, Kieran McAnulty, gave a very terse answer trying to dismiss the issue of stormwater, and I expected that from that Minister. But the question is: either he doesn’t know, he doesn’t want to reveal, or he didn’t—

Shanan Halbert: Or it’s out of scope.

Hon DAVID BENNETT: Well, no, it’s not—it’s not out of scope, because if you go to Subpart 2 and you look at stormwater, how can you make these rules if you don’t have an understanding of the amount? That’s the third part. You know, how can the Minister engage in all this legislation without knowing what the costs are going to be, and how can those costs then be attributed to different places?

So, Minister, answer the question: how much are we dealing with in quantum in cost, because you made all these rules—the natural implication, if you won’t give the cost, is that you made the rules without understanding or actually identifying the cost. It’s either one or the other, and we’ll draw our inference from your answer. So what is the cost?

Hon KIERAN McANULTY (Minister of Local Government): It’s not one or the other; it’s the fact that we are here in a committee stage for this piece of legislation and the member’s question refers to bills that have already passed.

NICOLA GRIGG (National—Selwyn): Thank you, Madam Chair. Given that the Minister is also the Minister for Emergency Management, I just want to turn your mind to the clauses in the bill that talk about action in emergencies. And I know I keep banging on about Entity (I) because it is my home patch. If I could just outline to the Minister, some of the water provision in the Selwyn District, for example, is bore or aquifer driven; some is also from service water. I think of the likes of a little town called Springfield and Sheffield and another little town called Hororata. They got very, very badly impacted in the 2021 floods because the rivers that were supplying the town water were blocked with rubble and trees and shingle and so on and so forth, which took a very, very long time to clear, and a very long time for the turbidity to flow on through, and a very long time for residents to be able to use their tap water once again.

So bearing in mind that Entity (I), the Canterbury councils, will also be merged with the West Coast councils—which I would wager are even more flood prone than on our side of the divide—with regard to clause 220, the “Management and maintenance of water services infrastructure”, in the context of emergency management whereby “water services entity must manage and maintain the water services infrastructure in its service area.” Can the Minister outline a time frame, given, you know, the conception of the entities, the urgency of the work, the remedial work, the mitigation work that needs to be carried out in Canterbury and indeed on the West Coast? How soon can residents and ratepayers expect that their water supplies are going to be futureproofed for future natural disasters and emergencies and flood events?

Hon KIERAN McANULTY (Minister of Local Government): I can’t give a detailed answer on that. That’s up to each entity and the constitution that is established. But the answers actually fall within what has already been passed in previous bills, in that the changes that we made with the amendment bill last week gives each council within the entity a seat on the regional representative group. There’s also a commitment that those workers that are based in each area can maintain a presence in that area. And that’s really important for the entity you’re referring to, because, of course, there’s no point having all the workers in Christchurch when they’re trying to serve the West Coast, and vice versa. It’s vitally important that the regional representative group ensures, through their constitution, that every area is serviced. That’s why I was particularly keen to ensure that every council had a seat, because my concern was that rural areas would miss out, and isolated areas would miss out.

To the specific question around a time line, that falls to the entities in those councils that are on the regional representative groups.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I’d like to ask some questions about the amendments to the purpose and content of the Government policy statement, which is clause 13 of this bill, which amends section 133 of the primary legislation. Minister, the purpose and content of the Government policy statement for water services states the Government’s overall direction and priorities for water services, and informs and guides agencies involved and the activities necessary or desirable for water services. And, Minister, if we look at section 133(3)(a)(viii), what this does is it inserts a requirement to consider geographical averaging “of residential water supply and residential wastewater service prices across each … entity’s area”; (ix) “redressing historic service inequities”; and (x)—or 10 if you translate it from Roman Latin into English—“overall direction and priorities for charging arrangements for water services”.

Now, Minister, given that there are so many different arrangements now that councils have for charging for water services and infrastructure connections, I’m interested in what direction and priorities this Minister might have for water service entities on the day that this bill is passed. Because, for example, in Auckland we’ve had water meters since the 1990s. So if you are using a hose to wash the car or you are watering your garden at the height of summer, you can hear the whirring clicking sound of the meter outside your property as it spins and records the volume of water that you’re using. And if you are conscientious about using less water because you have to pay for each cubic metre and you want to keep your water bill down, you might check it in the morning and then go back and check it in the afternoon to work out how much water you’ve used. Well, what that means is that Auckland has the lowest consumption per household of water of any region in the country because water is metered.

And then we compare that to Wellington, Minister, Wellington City Council, which meters businesses but not households and has amongst the highest losses of potable water from its water supply network of any city in New Zealand. Estimated up to 30 percent of the drinking water that is treated and supplied to residential customers in Wellington ends up running down the road. I’ve had that experience myself when I first came to Wellington as a new MP in 2020; identifying water running down the road and putting my hands down to sample that water and discovering that it reeked of chlorine. Well, at least the water’s being treated here in Wellington.

But, Minister, what does that tell you? The overall direction and priorities for charging arrangements are all over the place currently. So how would this Government, how would a Minister, how would a Government policy statement—that this Minister might sign off on in his role as local government Minister or Minister responsible for water service entities—give direction and priorities for charging arrangements? Would it do the rational thing and insist that every customer has a meter and that every customer pays a volumetric charge? Or would the Minister be satisfied with the status quo, where most of New Zealand is unmetered? Most New Zealand households and businesses have no idea whether the water they’re using is going to result in increased cost, and, of course, the flow through to that is that cities like Wellington potentially have to build a whole lot more water storage and distribution because a third of it is running down the road.

So, Minister, what would this Government’s priorities be for charging arrangements for water services in terms of this proposed amendment to the primary legislation?

Hon KIERAN McANULTY (Minister of Local Government): I have some more information for Ms Grigg: section 217 ensures that entities can take the action they need to immediately deal with emergencies. And so I think that’s important, be they in the West Coast, Canterbury, or wherever, that when there is a natural disaster they have the ability to just get on and fix it. But also, clause 220(2A), landowners will not be responsible for impairments caused to a stormwater network that are caused by a natural disaster or emergency, so that falls to the entities. So I think that’s an important point and useful information.

In regards to Mr Court’s comments, the Government policy statement is not a direction to an entity. While the bill enables water entities to charge through meters, it does not mandate that. This is up to entities and the councils that feed into it. We felt that was appropriate, particularly given the points that have been raised by that member and others around ensuring that local voices are heard.

MATT DOOCEY (National—Waimakariri): Thank you, Madam Chair—great choice; not that I’m competitive. I’d like to continue exploration around volumetric charging. I’m looking at sections 239, 330, and 331, in clause 22, and my question to the Minister is around the water entities. I see in section 330 that the board may set charges and charge a fixed or variable fee. My question is around the issue—and it did come up, I think, during the select committee stage, I’m led to believe—with the submissions: will it be a fixed charge for the volumetric charging across all the customers for each water entity or will there be a variation within certain areas of the water entity?

Hon KIERAN McANULTY (Minister of Local Government): I thank Mr Doocey for his question. It’s covered in section 475, in clause 22, and the answer is a point that I’ve made a number of times now. This bill enables the entities to make decisions that are best for them. His question will be answered by each entity in a way that is best for those communities.

MELISSA LEE (National): Thank you very much, Madam Chair. I’d like to ask the Minister in relation to when the water services entities exercise their power to, perhaps, access owners’ properties to lay infrastructure. Apart from the fact that they actually need to get permission, they may also need to move the utility operator’s infrastructure that is under the ground, for example. This is in Part 1, clause 22, in relation to section 211(2). There is no mention in terms of compensation should that exercise actually go wrong, because often you hear about people who actually dig underground and cut fibre-optic cables because they read the map wrong and accessed the wrong entry way and potentially cut thousands of people off their telecommunications line. Maybe I’ve missed it, but I don’t actually see it.

I am comparing that to section 222, where it talks about where the road owner, the owner of the house who actually has to dig up the land and potentially has to move the water infrastructure because of something that they’re doing—the cost is borne by the property owner. So I’m trying to find out if there is compensation specified—perhaps the Minister could point me to that. I specifically ask that because during Cyclone Gabrielle, there were power cuts which impacted on telecommunications, both landline and mobile infrastructure, as well as fibre that was actually cut, and it took so long for a fix to be brought into the area, because telecommunications companies could not even helicopter the batteries to the area because there was no power to—is it the civil aviation towers?—actually land the planes. And I thought, “How did they land our planes in the past without power?” They had hand signals, I think. I’m sure I look ridiculous, actually, pretending I’m a signal person, but I’m trying to find out—in situations like that, you would actually want to make sure that there is a contingency plan and the Minister has actually stipulated those kinds of instructions.

Hon KIERAN McANULTY (Minister of Local Government): Compensation provisions are in the Public Works Act, and section 222 is directly based on the Electricity Act 1992, and they’re quite longstanding provisions.

NICOLA GRIGG (National—Selwyn): Thank you, Madam Chair—great choice. The Minister, I think, would do well to explain to New Zealanders around section 231, that the “Board may designate controlled drinking water catchment areas”. I was quite fascinated to read through this particular part of the bill which talks about allocating controlled drinking water catchment areas for the purposes of, you know, geographical areas that surround surface water and a groundwater catchment from which drinking water can be abstracted. But the detail goes further to talk about that designations may be made only if “the water services entity owns or has long-term control of the land”, or “the owner of the land to which the designation relates agrees to the designation.” Now, that’s really interesting. Again, when I think about the Canterbury example where a lot of the catchment area falls on private land and farm land, particularly in Selwyn where the district territorial authorities area, like the electorate, goes all the way to the Arthur’s Pass. So there’s obviously a lot of headwaters coming out of the Alps in the foothills. But it’s quite, I think, topical to discuss whether, when the catchment area falls into private land, will this include any form of compensation to that landowner? And I think, from a Crown entity perspective, what is the Crown’s estimate thus far of the total compensation that may have to be meted out to cover all areas within the country that will be captured by this part of the bill?

MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. I wanted to continue with the exploration around volumetric charging that the Minister referred to, that there is autonomy for the water services entities to look at the fixed price for their customers. So I suppose the next question with that course of exploration would be: is there a potential for each council within the water service entity to have a different fixed price for volumetric charging?

SHANAN HALBERT (Junior Whip—Labour): I move, That the question be now put.

CHAIRPERSON (Hon Jacqui Dean): No—no. As we already know, there are a number of new parts being inserted into Part 1. Each of those parts brings substantive measures into the bill. I think that this debate should allow for members to raise questions and issues they find with each and every one of those parts. We are keeping a close eye on the debate. Part of that close eye, also, is having a look at how much of a particular part to be inserted is being debated and has there been enough debate on that. I am listening very carefully.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. I’m on clause 330: “Board may set certain charges”, and it says the board may charge “a fixed and variable [rate] … require a deposit”, etc., Clause 331 talks about promoting the efficient use of resources, and under (1)(ii)(A), “[the] groups receive different levels or types of services”, etc., but I’m at a loss to see where there is any cost-benefit analysis and justification for setting the prices. We see the methodology of setting them, but these boards are a monopoly. Obviously, monopolies in the rest of our economy have very strict rules about their pricings; take the electricity lines companies, for example. They are allowed to charge under certain rules, but the Commerce Commission has to approve their planned expenditure to ensure that it’s not overly gold-plated, etc. What assurances are under this Water Services Legislation Bill that the consumers are actually getting value for money for that investment, rather than just being charged a charge at the whim of the governing entity; the board or committee that rules that?

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I wish to ask you about clause 17, which replaces section 153 in the original legislation, and that is the “Obligation to publish an asset management plan”. Now, an asset management plan is absolutely critical to local authorities who currently run their water networks or road networks; to a telecoms company that runs fibre or cellular. Minister, when it comes to community-owned assets, like the three waters infrastructure, councils and their communities are very, very concerned that even with the changes proposed to the way three waters is operated and funded in New Zealand, that they maintain a voice—a say—in how these assets are managed, and Minister, you’ve done your best to convince New Zealanders that councils will continue to have a say. Then I come to clause 17 here, where section 153 is replaced with a new obligation to publish an asset management plan, that appears to remove the requirement to report on how territorial local authority—in other words, a council—had input and feedback on an asset management plan.

Now, Minister, whether you or the Labour Government likes to admit it or not, local councils still have a role in land use planning, in consenting, and all of those other functions that people expect their local council to have, and that has a direct bearing on how water services an water assets are managed and controlled. And yet, Minister, in clause 17, which amends section 153 of the original Act—actually, local councils’ needs are excluded. What this now says, instead of “prepare and publish a report on how the entity considered consumer and community and territorial authority owners input into, and feedback on the plan, and incorporated that feedback into the plan”, Minister, it replaces that with “the chief executive of the water services entity must … publish [an] asset management plan on [the] Internet.” It says nothing about whether a local council and community’s feedback on the asset management plan has been incorporated into it.

And I might give you an example, Minister, that’s very close to home. In fact, the Hon Phil Twyford, the MP for Te Atatū, raised it last night in the House when speaking about this bill. He raised the issue of the constant wastewater overflows from the network in Auckland to Te Wai o Pareira / Henderson Creek. Some of those overflows occur, Minister, from manholes right next to the boat ramp where the Waka Ama club, the Multisports club, the Water Ski club, and the Waitematā rowing club launch their boats; right next to the floating pontoon where school kids come from Rutherford College and Matipo Primary School to swim after school. Now, if the community told a water service entity “We’re very, very unhappy that that wastewater overflow, which occurs regularly, even after a shower of rain—we’re very unhappy that continues, we want you to do something about it”—but if the water service entity doesn’t have to take that into account, they can simply publish an asset management plan, whatever they think it should be, and publish it on the internet. Then how on earth, Minister, are communities, councils around New Zealand supposed to have confidence that these reforms will actually deliver for communities? Because although the Minister’s tried to assure the New Zealand public that they will, I think this change to the primary legislation reveals the truth: that in order to push these water service entities through, in order to deliver and operationalise this reform, the Minister has decided that some stuff is just too hard. That if communities are going to have a say in which assets are managed, how they’re operated, and so on, it’s going to make it too hard for these water service entities—for these chief executives, paid $600,000 to $800,000, three of whom are currently unemployed but still getting paid at the Department of Internal Affairs. What’s happening, Minister?

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. I am just turning now to changing contract prices—and new section 335—and I wonder if the Minister could explain something for me.

So it says, “The chief executive of a water services entity may enter into negotiations to change [certain provisions in certain contracts]”, and it goes on—through various (1), (2), and (3)—under (1), the “entity may enter into negotiations to change pricing and charging provisions in a contract that—(a) relates to the supply of water services … ; (b) is transferred from a local government organisation”, and it says that, under (3), “If the chief executive and the other parties fail to vary the contract before 1 July 2029, the contract expires.”

Well, that’s six years away. What’s that arbitrary date; why the significance of that arbitrary date? Why not 2028 or why not any other particular time, say, than that particular date? I don’t understand the significance of that. So if the Minister could enlighten us on that, it would be much appreciated.

Hon KIERAN McANULTY (Minister of Local Government): There’s nothing stopping the entities renegotiating a contract, and there needs to be a date by which it expires. The member’s right, pointing out that this 1 July 2029 if it’s not. But that’s covered by the ability for entities to renegotiate the contract. They will not necessarily be bound by the terms that they inherit all the way through to 2029.

While I’m on the member, I may as well answer his first question in this section. That was actually—there’s a bit of a theme here, but that was covered off in Nicola Grigg’s question, actually. This is in reference to the Water Services Economic Efficiency and Consumer Protection Bill. That’s outlined in that.

But to your other question around the catchments, so there’s no change proposed in what currently already exists. So it’s a direct transfer of what’s already in place now; the entities will be bound by that.

In regards to the question about compensation, it can only happen with permission. So if there’s no permission, that can’t occur and therefore there’s no provision for compensation because they have to get permission in the first instance. If there is damage to the property for other regions, or the catchment for other regions, the responsibility to fix that falls with the entities.

Mr Doocey’s question, new section 332. This will all be publicly available to ensure transparency. An entity is required to engage with territorial authorities, consumers, and communities on a funding plan.

In regards to Mr Court’s question: again, this was all set out in the Water Services Entities Act, Schedule 3 specifically. However, new sections 461 and 465 outline, in this bill, that they’ll still be required to publish feedback.

MATT DOOCEY (National—Waimakariri): Oh, thank you very much, Madam Chair, and I’ll thank the Minister for his answers as well. I just wanted to drill down into his response there. Just to clarify, so it seems like he is saying that there will be an ability for each council jurisdiction within the water entities to have a different volumetric fixed charge, and, I suppose, what will be the course of action a council could take if they think that that pricing was too high? I think that then flows through to a further question, which is: what are the principles that those decisions will be made on around the fixed charge?

Where I’m going with that, no doubt he’s gone round the country and spoken to—well, we do know that, because they all came back and said, “Nice guy; wrong party.” But a lot of them think they have done very well, and there might be a parochial aspect there as well, but I do know quite intimately one council where I live that has done exceedingly well, because the ratepayers have invested into their water assets. So it will be interesting when that variation comes out in charging within a water entity and how the decision is made, based on, I suppose, the level of investment that ratepayers perceive they have put in over the years.

Hon KIERAN McANULTY (Minister of Local Government): I thank the member for the question. It has actually been addressed, but I’ll go and do a wee bit more one last time. So in replacement section 475, inserted by clause 22, there will be the ability to limit, through regulation, the ratio between fixed and volumetric charges for residential customers if it was considered necessary, for example, to protect vulnerable consumers. This is up to the entities. It won’t necessarily be along territorial authority boundaries, but it’s not necessarily a uniform charge across the board. The entity, through the direction of the regional representative group, of which all councils are members, will be able to adjust pricing according to the realities in those communities.

SIMON COURT (ACT): Thank you, Madam Chair. Minister McAnulty, I’m sorry; I found your response to my previous question wholly unsatisfactory. But if we come to section 20 of the Water Services Legislation Bill before us, which amends 159 of the primary legislation, “Obligation to publish [an] infrastructure strategy”, we find the same theme emerging, that the obligation to publish an infrastructure strategy in the legislation this bill amends says quite clearly, 159(b), “prepare and publish a report”—that’s the infrastructure strategy—“on how consumer and community, and territorial authority”—council—“owner[s], input into, and feedback on, the strategy was considered and incorporated into the strategy.”

Minister, this Water Services Legislation Bill replaces the requirement to demonstrate how feedback from the community, from the owner, from consumers was considered and incorporated into the strategy with “the chief executive of a water service entity must publish the … strategy on an Internet site”. Well, publishing something that you’ve developed behind closed doors, having heard everybody’s concerns but not having to explain how you’ve taken them into account, doesn’t sound like communities having a voice. It doesn’t sound like the territorial authority or council owners having a voice, and it certainly doesn’t sound like meaningful consultation and actually changing what these entities might do in response to feedback from communities.

We must only contrast that with the requirement to give effect to Te Mana o te Wai statements provided by iwi and hapū, because, Minister, if a water service entities chief executive—one of those people who will be paid between $600,000 and $800,000 a year; there’ll be at least 10 of them—if one of those chief executives’ only obligation to respond to the council asset owner, the community, and the consumer is to publish a strategy but not explain how they took on those concerns or those issues that a community wanted to be resolved, and yet iwi and hapū have the right to have their Te Mana o te Wai statements given effect to by these water service entities, do you think that might undermine confidence in your assertions and this Government’s assertions, and the previous Minister’s assertions, that the water reforms are actually going to deliver for communities? Does it continue to reinforce the suspicions that many have, Minister, that this is somehow some kind of Treaty settlement in drag, that every reference to Māori rights and interests in water that appeared to be strengthened, enhanced, and given effect to by this bill—even though they’re not proven, even though the Minister Nanaia Mahuta stated categorically in reply to a written question that I put to her when she was previously the Minister responsible for this bill back in 2022 that iwi Māori don’t have any rights or interests in three waters assets beyond that of a member of the community that they live in.

Minister, would you please explain why consumers, communities, territorial authority owners—why a water service entity doesn’t have to consider and incorporate their views into the strategy, why they simply have to publish a strategy on the internet but at the same time give effect to Te Mana o te Wai statements provided by iwi and hapū. Minister, that is one of the reasons why New Zealanders have lost faith in these reforms and have completely lost confidence in this Labour Government, but you could potentially pull a rabbit out of the hat right now and convince us otherwise. Have a go.

Hon KIERAN McANULTY (Minister of Local Government): I won’t, because, as was covered quite extensively last night, everything the member’s just mentioned has already been passed in previous bills. This bill references obligations under the Treaty of Waitangi, but the member’s point is to give effect to the Treaty of Waitangi and give effect to Te Mana o te Wai statements. As I said last night on a couple of occasions at least, that is in reference to the Water Services Entities Act, which is already passed.

CAMILLA BELICH (Junior Whip—Labour): I move, That the question be now put.

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

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Motion agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 418 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 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Part 1 as amended agreed to.

Part 2 Amendments to and repeal of other legislation

CHAIRPERSON (Hon Jacqui Dean): Members, we come now to Part 2, “Amendments to and repeal of other legislation”. This is the debate on clauses 26 to 203, and Schedules 3 and 4. The question is that Part 2 stand part.

Tim van de Molen: Madam Chair. Madam Chair?

CHAIRPERSON (Hon Jacqui Dean): Is the member seeking a call?

Tim van de Molen: Yes, Madam Chair.

CHAIRPERSON (Hon Jacqui Dean): Oh! If members want the debate to continue, they need to stand up and seek a call. I was just about to start ruling, or whatever it is I do.

TIM VAN DE MOLEN (National—Waikato): Yes, so, looking at new section 468A, actually—and this comes to the earlier comment I’d been making about the uncertainty this legislation creates as well, because when we’re coming through a significant transition phase, there is, unsurprisingly, a significant level of concern around what that might be for different individuals as they’re impacted, but also for the councils.

In this instance, we see a change proposing the contract term that was originally set at being able to go up to a limit of 35 years when contracts relate to the provisions of drain management, for example. So in this instance, obviously, you’ve got entities investing in significant plant and equipment to be able to undertake this business for a period of time. There was a provision that allowed them to enter into contracts for up to 35 years in respect of those matters, including covering water courses, repairing properties, removing private drains, cutting down trees, etc.—that sort of maintenance work—but now the proposal is to reduce that to less than half, to only 15 years. I’m interested to understand why the Minister has decided what originally, presumably, his decisions were around a 35-year time frame; now it is only a 15-year time frame.

This actually speaks to some of the broader challenges we have around infrastructure planning and delivery in New Zealand as well, when you have relatively short time frames to give some level of certainty. I say that in the context of primarily investing in the plant and equipment. That’s a significant capital cost that has to be outlaid to procure that equipment, and, of course, you need to be able to generate a return from that over time. So having certainty within your contracts helps to achieve that.

But also, equally importantly, alongside the plant and equipment, is actually having the skills and the competency. This is an issue that we see from a workforce perspective, where we typically go through these waves where we potentially bring in people with skills who are able to do jobs, and then there’s a significant shift in the focus, and those skill sets head off to other opportunities, or, indeed, head offshore, which we’re seeing significantly at the moment. So I really want to understand why we’re reducing that proposal period, and therefore creating more uncertainty when it seemed, clearly, that it was deemed fit for purpose originally.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Part 2 set out on Supplementary Order Paper 418 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.

CHAIRPERSON (Hon Jacqui Dean): The question is that Part 2 as amended be agreed to.

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

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10, Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Part 2 as amended agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Schedule 1 set out on Supplementary Order Paper 418 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.

CHAIRPERSON (Hon Jacqui Dean): The question is that Schedule 1 as amended be agreed to.

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

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Schedule 1 as amended agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Schedule 2 set out on Supplementary Order Paper 418 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.

CHAIRPERSON (Hon Jacqui Dean): The question is that Schedule 2 as amended be agreed to.

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

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori; Kerekere; Whaitiri.

Schedule 2 as amended agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendment to Schedule 3 set out on Supplementary Order Paper 418 be agreed to.

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

Amendment agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that Schedule 3 as amended be agreed to.

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

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Schedule 3 as amended agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendments to Schedule 4 set out on Supplementary Order Paper 418 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.

CHAIRPERSON (Hon Jacqui Dean): The question is that Schedule 4 as amended be agreed to.

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

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9;Te Paati Māori 2; Kerekere; Whaitiri.

Schedule 4 as amended agreed to.

Clauses 1 and 2

CHAIRPERSON (Hon Jacqui Dean): Members, we come now to our final debate, clauses 1 and 2. This is the debate on “Title” and “Commencement”. The question is that clause 1 stand part.

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

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Clause 1 agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that the Minister’s amendment to clause 2 set out on Supplementary Order Paper 418 be agreed to.

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

Amendment agreed to.

CHAIRPERSON (Hon Jacqui Dean): The question is that clause 2 as amended stand part.

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

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Clause 2 as amended agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Hon Jacqui Dean): Mr Speaker, the committee has considered the Water Services Legislation Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: The bill is set down for third reading immediately.

Third Reading

Hon KIERAN McANULTY (Minister of Local Government): I move, That the Water Services Legislation Bill be now read a third time.

I’m pleased to be here today for a third reading of this bill which will provide the new water services entities with the legislative tools and arrangements they will need to be fully operational when they go live, between 1 July 2024 and 1 July 2026.

I’ll briefly canvas the core components of the bill. The Water Services Legislation Bill provides the implementation arrangements to steer the transition from the existing arrangements for water services delivery to a new model—the new model where these water services will be delivered by 10 regionally-based, publicly-owned entities. The bill enables the entities to make rules, plans, and other instruments relating to water services and engage in compliance and enforcement activities. For example, the bill provides that entities must have stormwater management strategies which include stormwater risk management plans. This will provide a system-based approach to stormwater networks and their regulations. It will also ensure the entities identify risks and hazards, and get ahead of potential problems when they turn into disasters.

The bill provides for mandatory relationship agreements between entities, councils, and other parties to manage critical interfaces such as stormwater, and flooding management, and planning under the Resource Management Act. These relationship agreements will set out how parties will work together and will provide for coordination across interdependent roles.

The bill also establishes charging mechanisms that provide fair, transparent, and affordable charges to households and businesses for their water services. The bill includes detailed mechanisms relating to the transfer of water services assets, liabilities from local government to the new entities, which are in turn owned by communities through their territorial authorities. It provides strong protections to ensure existing treaty settlements continue to be upheld in the new water services delivery system.

The bill provides a pathway for small mixed-use rural supply schemes to be transferred from the entities to the communities, if this is what the community wants and if these schemes meet specified criteria. The bill integrates the water services entities into wider regulatory systems, including the new resource management system.

This is a significant reform and I’m proud of the work that has been done to get here. It follows years of research and analysis using the best of local and international expertise, comparative examples, and extensive consultation with local government, iwi Māori, and the water industry.

The case for change is clear and what we have here is an evidence-based solution. When I think about the numerous benefits this reform will have, these key things come to mind, which I am pleased to have helped deliver for New Zealanders: an affordable, safe, reliable water network, and one that is resilient in the face of extreme weather events; thousands of dollars saved per household by 2054, based on the research that informed the proposals—specifically, households are projected to save up to $2,770 to $5,400 per year by 2054, on average, depending on which region they are in; entities with the increased size required to access more funding to improve management of water services, which is ultimately how we will save Kiwi households cash, and ensure a reliable and resilient network; water related debt removed from councils balance sheets relieving councils of the burden of servicing this debt, and this will of course help limit future rate increases.

The reform is overdue. When we consider that the cost of meeting our country’s water challenges is estimated at between $120 billion and $185 billion over the next 30 years, and we know that this is out of reach of councils to address on their own unless they have unaffordable rates increases for households, it is clear that we are ready for change, and that this is what this bill and these reforms are about.

The journey to reach this point began following the 2016 Havelock North water contamination disaster that led to the loss of four lives and made 5,000 people sick. Some continued to live with the long-term impacts of this illness. However, let’s be clear that the systematic issues that may have contributed to the Havelock North tragedy were evident for many years before then, to those who were aware. In a report issued in 2000 entitled “Ageing pipes and murky waters: Urban water system issues for the 21st Century”, the Parliamentary Commissioner for the Environment found evidence that the current model for delivering these services has now reached the end of its design life.

And that’s the point; this is about the model. It’s about the system, it’s not laying blame. It’s certainly not councils’ fault. They’re doing the best they can with what they’ve got.

Ten years later, in 2010, the previous Government’s Land and Water Forum advised investigation of the potential benefits of rationalisation in the water services sector, and of a more robust regulatory framework. Six years later, in 2016, the Havelock North incident provided a tragic and sharp wake-up call to action. I acknowledge the previous Government’s response, an inquiry which looked not just at the Havelock North contamination incident, but its implications for drinking water services across the country. The Havelock North inquiry clearly identified system-wide issues, including the unacceptable prevalence of waterborne illnesses contracted from publicly owned drinking water services which New Zealanders should be able to trust.

I would again like to acknowledge the previous Government’s courage in initiating a wider Three Waters Review, which looked at issues across all three services around the country: drinking water, waste water and stormwater. The Water Services Legislation Bill I’m speaking to today, and the Water Services Economic Efficiency and Consumer Protection Bill represent the final components of a comprehensive policy and legislative response to the matters explored in the Havelock North inquiry and Three Waters Review.

I’m proud to be part of a Government that looked at the evidence available to us six years ago, acting decisively to protect New Zealanders’ health and wellbeing and that of our environment, and ensuring they don’t face unaffordable bills. We have developed and implemented a new regulatory regime for water suppliers with the Water Services Act 2021. We’ve also established a dedicated drinking water regulator, Taumata Arowai.

These changes will protect New Zealanders’ health and the environment and they received near universal support from the sector. But they are a high bar for water service providers and create an additional affordability challenge which councils cannot meet alone. It is not just the safety of drinking water that is the issue. Waste water discharges into lakes, rivers, and harbours have become a regular occurrence. Recent flooding events have further highlighted the criticality of water services for communities, the economy, and our livelihood, and have laid bare the fragility of our critical water infrastructure for some areas.

As I have said, it is estimated that New Zealand needs to invest up to $185 billion in our water services infrastructure over the next 30 years to address decades of underinvestment in our water services infrastructure. The current model for water services delivery simply isn’t up to meeting this challenge, certainly not without huge increases in costs for households, who are at this time facing the same cost of living pressures we are seeing across the world. We currently have 67 territorial authorities delivering water services. These councils often don’t have the finance or scale to make the infrastructure investments necessary. We need a more efficient model with a better access to financing, and that is exactly what this bill delivers.

The 10 new water services entities will have the size and scale to efficiently deliver water services investment and infrastructure and meet the new regulatory standards. They will also have balance sheet separation or financial independence to allow them to borrow to fund the increased investment in water services infrastructure that New Zealand desperately needs.

I’m proud of what our Government has achieved here. The current situation is untenable and we have here a solution that is backed by evidence. We have done what is needed to ensure the long-term wellbeing of New Zealanders. I want to thank all those who have contributed to the preparation and passage of this bill. I particularly want to thank the local government sector. They have engaged throughout this process, and even in cases when individual councils have not supported the reform, they have put that aside to share their technical expertise and knowledge about the communities they serve. This help has been critical and greatly informed many of the provisions in the bill that is presented today, and the previous two bills in this reform.

The passage of this bill is a significant milestone in the journey to provide long-term, affordable, safe, reliable, and resilient water services. I commend the bill to the House.

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

NICOLA GRIGG (National—Selwyn): Thank you, Madam Speaker. This has been a long and convoluted process to get here to this point where, unfortunately, today, due to the numbers in the House because of the result of the 2020 election, this bill will pass. However, for the record, the National Party categorically opposes this bill today.

I think it’s helpful that we go through the timeline that has brought us here, notwithstanding the events of 2016 in Havelock North; in 2021, when this Government started to make real noises about the dreams and aspirations for water reform in this country; that’s when Nanaia Mahuta announced this four entities model. Ever since that model was announced, there has been nothing but very vocal, strident opposition to this proposal. And particular outrage, I might add, around the provisions of co-governance and the provisions in the make-up of these entities boards that does away with the democratically elected process of the councillors that we, the people, the ratepayers of New Zealand, have elected to represent us.

Let us not forget that back then, this Government tried to entrench some constitutionally dangerous clauses—and they got caught out. They got caught red-handed and they, embarrassingly for them, had to backtrack. It was because of the concerns raised by the National Party that this was made public. This Government had no intention of making that entrenchment clause public. But, in order to try and oil the waters, the Government then went around offering $2.5 billion to councils to get them to opt in to the reform; that then brought us to the Water Services Bill. Then, on 22 June, the water reforms began in earnest with the introduction of the Water Services Entities Bill. That bill alone attracted 88,000 submissions to the Finance and Expenditure Committee—97 percent in opposition.

Again, we have here today a bill that has been passed under urgency, as have the others before it. The night before we were due to debate this bill, the Government dropped a 200-page Supplementary Order Paper to its own piece of legislation. New Zealand has not forgotten the process that has led us here today, and the Government has made changes to its legislation as it’s gone riding roughshod over the democratic process here in New Zealand. This bill, in particular, is to establish and empower the water services entities by establishing their functions, powers, obligations, and oversight arrangements. But unfortunately, this is a missed opportunity. And I have to say to the Minister’s commentary just earlier, I think everybody in this House agrees with the case for change, but it’s how the Government has gone about it is where the agreement begins and ends.

None of the legislation that we have in front of us here today is aimed at reforming the health and the quality of water. It will not improve water quality into the households and families of New Zealand. It is simply taking away the infrastructure that local councils have been administering that has been paid for by local ratepayers. This bill is making several expansions to an already highly criticised process. The Water Services Legislation Bill is even more complicated than the Water Services Entities Amendment Bill, which also—I might add—passed under urgency. There are three key things in this legislation that the Government didn’t want to talk about, and I want to take a moment to go through those. Those, primarily, are that Kiwis will be paying for their water. We don’t know by how much—the Minister was asked about that in the committee of the whole House and he said it’s up to the entities to decide. That is unforgivable. That level of unassurance to the ratepayers of New Zealand is unforgivable. So too, does this piece of legislation impose a fine and punitive regime, a punishment regime—fines for non-compliance with the rules that the entities will set up.

So, in essence, through the passage of this bill, the Government is taking away assets and then it’s forcing Kiwis to pay for the reforms. The Minister spoke quite at length about how, in his view, this is going to remove the liability of debt from councils. But he didn’t mention it’s also removing the assets from councils. He talked about financial independence and separation of balance sheets that these new entities would bring. But what he didn’t talk about is that that could have been a provision provided to councils. That’s where the National Party and the Government differ greatly: we would actually empower councils, those that needed it, with the financial independence that they needed.

The designs of these bills do not provide enough protection for smaller councils with low rate bases. And I’ve used the example time and time again of Entity I which merges the Canterbury councils and the West Coast councils. Most of the Canterbury councils, I would argue, have very strong balance sheets, have new modern assets and infrastructure; West Coast councils do not. There is a fundamental discrepancy there whereby some councils, some ratepayers, are having to subsidise others. I don’t think either side of the ledger would agree that that is fair.

There is no flexibility in the pricing. Again, as I mentioned, we asked the Minister to outline details on pricing. Those details are unavailable. We asked the Minister what liability the Crown would have around compensation for the likes of land that is needed in catchment areas. There are no details available. But I think it’s the penalty regime that will shock New Zealanders the most, and we talked a little bit about it last night in the second reading. There is an extensive enforcement provision laid out within this bill. It includes a fine of $20,000 for breaking a sprinkler ban. Now, we often have hot, dry summers in Canterbury and most gardeners will get their sprinklers out in the evenings. But $20,000 for breaking a sprinkler ban—when you put it in the context that the penalty for most petty thefts in New Zealand is $1,000, it really does, I think, highlight the fact that this Government has its priorities way out of whack.

At the heart of our opposition to the majority of these bills that have passed is the issue of democracy and the lack of transparency. As I said earlier, one of the bills alone attracted 88,000 submissions—97 percent in opposition. This one, to be fair, did go through a proper select committee process. They did get 1,900-odd submissions, but they only heard less than 2 percent of them. That is not allowing the voice of New Zealand to have an input on shaping this legislation. And, as we’ve all observed, yet again we’re in urgency. The committee of the whole House process has been truncated because we’re in urgency. There is still overwhelming opposition to these bills—that makes it undemocratic.

We have said on this side of the House multiple times that we support the case for change, but we do not believe that this is the solution to it. The National Party has fully intended to overturn this bill if we’re in Government in October. We will do it as soon as practicably possible. We will replace it with what we call “Local water done well”, with our fundamental principle that we return those assets back to local councils, to the ownership and management of local councils. And yes, where there is a need for some small councils to be supported to maintain their assets, there are provisions to enable that to happen. We oppose this bill in its entirety.

INGRID LEARY (Labour—Taieri): New Zealand’s water infrastructure in many places is quite frankly stuffed. This is about broken pipes and waterways, and the National Party may want to repeal these reforms but they don’t have a credible plan to replace it with.

The Finance and Expenditure Committee did a really thorough process on this bill. The main areas that I really valued were the changes around stormwater, making sure there’s accountability for the maintenance of waterways; also the mandatory relationship agreements where a lot of the devil in the detail lies; the changes to rural water supplies, which shows that we listen to rural communities; and also the care taken to ensure access and affordability for all New Zealanders. It’s a really great bill. I commend it to the House.

MATT DOOCEY (National—Waimakariri): Oh wow, what a great bill—51 seconds that contribution was. I’m not surprised, because the reality is that if I was a backbencher in the Labour Government at the moment, I’d be reluctant to get up and put my name to this bill as well, because they know that they’re going to be punished in a few weeks on 14 October for legislation exactly like this. It shows that they think they know best—Labour knows best.

Remember the old days when three waters was about water quality and standards? That didn’t go too well, did it, because they got caught out with their false advertising with green sludge coming out of the tap. So much for a Government that stood up for misinformation and disinformation! They are the “Government of Misinformation”.

But, of course, then they pivoted because “Three waters is about a cost of living crisis.”, they called, and only their solution would address the cost of living crisis. Interestingly enough, they had been dragged, kicking and screaming, into the cost of living crisis debate after refusing to acknowledge the pain on many New Zealanders when they got their wallets out. Now, when you listen to the Minister when he talks about three waters, it’s about responding to weather events—that’s the latest. It’s gone from water quality to cost of living and now to responding to weather events.

In fact, the reality is that three waters was always a solution looking for a problem, because there’s only one play in this Government’s playbook, and that’s centralisation. Anything they do, they’ll centralise it. Look at the health reforms, look at the polytech reforms, and now look at three waters, because, of course, in their minds, under this failed socialist experiment that will get them kicked out in a few weeks—under socialism—you’ve centralised because Wellington knows best, the beltway knows best. But, of course, on this side of the House, we know that local knows best. That’s why we will repeal and replace the three waters legislation in the first 100 days of a National-ACT Government, because we know that this will not work.

Today’s bill is the fourth three waters bill that this Government have brought in under urgency, and that says it all. Every three waters bill they’ve brought into this House has been under urgency. They’ve rushed it through because they know it’s gone down like a cup of cold sick out there in New Zealand.

In my electorate of Waimakariri, 95 percent of ratepayers opposed three waters, and, of course, that was in the day when they said to the councils, “You can opt out.” So Waimakariri District Council went to their ratepayers because the Labour Government told them that if they went and got the consensus from their ratepayers, they could opt out, and 95 percent of ratepayers said no. But Official Information Act request documents revealed it was a legislated all-in, even with the consultation. So this bill does not come to the House in good faith; it comes in bad blood. Again, they’ve misled the public of New Zealand.

Here we have a bill that will enable and empower these big mega-entities, because, of course, they actually only wanted four of them. But they had to do the flip-flop and the back-down bill to bring it up to 10, because Kieran McAnulty, the Minister who went round all the councils—and they all said, “Mr McAnulty: nice guy, wrong party.”—but he knew the backlash. See, Mr McAnulty is a smart guy. He listens to the people on the ground because he knows he needs to listen because his seat will go if he doesn’t.

He came back to Wellington and his senior Cabinet Ministers said, “Don’t worry about listening to the public. They don’t know what’s best. We know what’s best.” But, of course, he got them to get to the 10 mega-entities, and now this legislation is passing—the detailed legislation to enable those 10 mega-entities—and, basically, these 10 mega-entities will seize and will steal ratepayer-owned water assets.

State theft by stealth, this bill is. It is taking away the hard-earned money from all those ratepayers who’ve paid into their water assets. They are intergenerational water assets, and now, under this bill, those water assets will be taken into these big water entities. All their personal ratepayer information will be forced out of the councils now and into these water entities, and then, in return, the charges will come down.

What we do know is that unlike councils, who know their local communities and who would be able to be nimble and adapt with water charging based on the level of investment and based on the capacity of the council to respond, these water entities will be a blunt instrument across New Zealand. What will happen for those councils that have diligently invested in good water assets and in good water-quality standards? Their money will be cross-subsidising other areas, and, in return, they will lose ownership of those assets. They will not be accountable to them.

There is no return here for the average ratepayer, and that is why National has said very clearly that we will repeal and replace the three waters legislation. I want to give a shout-out to my colleague Simon Watts, who in a few weeks, hopefully, will be the Minister of Local Government. He will restore faith back into councils that, once again, they will be listened to and they will be supported. They won’t be dictated to like they have been under this arrogant Labour Government, which is going to be voted out after only two terms because they’re tired. They’re tired, they’ve run out of ideas, and, quite frankly, when you look at the polls, people have just had enough of being told by this Labour Government what to do.

See, on this side of the House, we want to listen to people locally. We want to support them. We want to empower them. We won’t want to have top-down directives that tell them what to do.

So I’m not surprised that every Labour MP that has got up, time after time, has spoken very briefly, because they won’t take many calls—you watch for the next hour or two. They’ll low-ball it. They’ll hope the voters won’t clip it out on their social media as to why they think that this is a good idea.

The reality is that we’ve gone through quite a legislative process with this bill and the other three three waters bills. Clearly, the public hasn’t been listened to. As my colleague Nicola Grigg has said in her contribution—which I thought was a fantastic contribution that led off for the Opposition this morning—there were tens of thousands, hundreds of thousands, of submitters that weren’t listened to, because all we are doing here is setting up mega-bureaucratic entities, and you only need to look at the abject failure of the health reforms to see that in setting up these entities, it will not work. Look at the failure of the polytech reforms—it will not work.

But this Government is tone deaf, ploughing on in the view that centralisation is the solution to every issue in New Zealand. In conclusion, I just want to say that National opposes this bill.

DAN ROSEWARNE (Labour): Well, what a diatribe that was. The member for Waimakariri thinks he can slide in here like Steve Parr on Sale of the Century, promising people the money—promising the people of Waimakariri the money—whereas in reality, all they’re going to get is the bag: the bag full of broken promises. One thing the member for Waimakariri did not mention was the people of Oxford and the boil-water notice that exists for them, with their water being offline for six weeks until it’s up to a potable standard.

That’s why this bill is overdue. It provides new water services entities and legislative tools and arrangements, and they will need to be in place so that they’re fully operational by 1 July 2024 and 1 July 2026. So it’s a fantastic bill, and I commend it to the House.

SIMON COURT (ACT): ACT agrees there’s a problem with three waters infrastructure and the way it’s delivered and the way it’s maintained. The way three waters has been delivered has actually held up the affordability of land for housing, and it’s also led to sewage overflows and all kinds of disgusting things on the beaches around our major metros. So there’s a problem to be solved, and that problem is: how do we resolve the funding and financing? How do we provide proper oversight and accountability for organisations managing assets on behalf of the public? How do we provide for water services so we can provide more serviced land at an affordable rate?

There’s the problem. ACT engaged constructively throughout the three waters reform process, going back to 2020. We talked to farmers and growers; we heard their concerns. We heard from councils who were opposed to the reforms as proposed by this Government, Communities 4 Local Democracy, and other councils. We spoke to people in the local government financing area who described the issues with lending to councils and the fact that many of them do not have adequate revenue collection processes to actually allow them to borrow more. Most of them don’t even have water meters, so they can’t justify taking water service charges from residential and commercial customers. Imagine that: not being able to bill your customers for the services or the products that they use—only in New Zealand. That’s one of the problems that ACT would propose to solve.

But what does Government do? They’ve adopted a centralisation agenda. It’s not just three waters. It’’s resource management reform, centralising planning in unelected co-governed planning bodies. It’s Te Pūkenga, trying to get all of the polytechnics, like the one I studied at—Unitec in Auckland—to come under one umbrella, as if a Government department could work out exactly what delivering education services in each community should look like.

Then we come to the confiscation of assets. Now, this is the Labour Party that’s made a big deal about returning stolen land and stolen assets through Treaty settlements. But here it brings a bill to the House proposing to steal and confiscate assets—expropriating assets without compensation from local government.

Then they lied to councils: “It’s voluntary, not compulsory.” Well, it turned out it is compulsory. Then they lied to councils again: “Don’t worry; you’ll be no worse off. There’s $1.5 billion in a fund to make sure councils are no worse off.”

Helen White: Point of order. I think that the reference to lying in the House and accusing people of lying to councils is inappropriate and against our rules.

ASSISTANT SPEAKER (Hon Jenny Salesa): It is unparliamentary. The member will withdraw and apologise if the member wants to continue on his speech.

SIMON COURT: I withdraw and apologise, however, ACT would certainly contend that—

Hon David Bennett: Point of order. The member didn’t actually accuse anyone of lying, so I don’’t know who he has to withdraw and apologise to.

ASSISTANT SPEAKER (Hon Jenny Salesa): The member will take a seat. I am in the Chair and I have already dealt with that point of order.

SIMON COURT: Thank you, Mr Bennett, for leaping to the defence of the ACT Party. Let’s be clear. Labour promised councils they wouldn’t confiscate the assets, then they confiscated them, so, Helen White, I’m not sure how you describe that. Reach to your dictionary or thesaurus. You promised something and then we did something completely different. Labour said they would make sure councils are no worse off, with $1.5 billion to make sure that councils were no worse off financially, then they pulled the money out from under them, and said, “We’re not giving you that money.” I don’t know what we’d look to in the Oxford dictionary, Helen White. What is the particular word that we would seek to use?

Helen White: Point of order. This is a little contemptuous of a ruling that’s been made, and all such rulings need to be respected in this House, and so does your role, ma’am.

ASSISTANT SPEAKER (Hon Jenny Salesa): The member will stay away from continuing down this line. If he wants to finish his speech within the next 5 minutes and 56 seconds, stay away from that line in your debate.

SIMON COURT: Speaking to the point of order, it is a debatable matter whether a policy—

ASSISTANT SPEAKER (Hon Jenny Salesa): Accusing a party of lying is not a debatable matter.

SIMON COURT: I have not. I have simply pointed out the facts: what was announced and then what was delivered. They are different.

ASSISTANT SPEAKER (Hon Jenny Salesa): The member will now continue his speech, but make your points in a different way.

SIMON COURT: Raising a further point of order, I’d like your advice as to whether it’s appropriate to interrupt a member on debatable matters simply to make a point, because I believe that that actually risks causing further disorder.

ASSISTANT SPEAKER (Hon Jenny Salesa): This is a robust debate. The member is now at risk of disrespecting me as the Speaker. Continue your speech, but stay away from accusing other parties of lying.

SIMON COURT: Well, then, I’m not quite sure where to go to, because the three waters reforms have been a litany of broken promises. So let me reach to my thesaurus. What could we say instead of using that word? Well, co-governance, as proposed by this Government as a solution to apparently resolve Māori rights and interests in fresh water actually, according, to the Hon Nanaia Mahuta, the former Minister—she admitted that there are no rights and interests in three waters assets built after 1840. So the entire premise for introducing co-governance—50:50, unelected, undemocratically appointed iwi tribal elites on to co-governance entity boards; there’s no justification for it. Even the former Minister Nanaia Mahuta agreed. The ACT Party would say, drawing from our thesaurus, that that is gaslighting nonsense.

Then we come to funding and financing. Well, the Minister today, Kieran McAnulty, responsible for this bill, tried to claim that even though the bill extinguishes the rights of water entities to undertake partnerships, that joint ventures and council-controlled organisations would allow partnerships to continue.

Well, you only have to read the bill; refer to the Partnership Law 2019 Act. It says very, very clearly that those types of partnerships are public-private partnerships (PPPs), which allow PPPs or their shareholders to make a profit, and won’t be allowed by this bill. I don’t know what to call it, but it sounds to me like the Minister said one thing but the bill says another.

Then we come to the technical issues. How is it that having been told by submitters all the technical challenges of taking water services assets off councils—who are responsible for land use planning and development consenting—taking the water assets off them, which they should be planning to deliver in order to deliver more serviced land, and then adding a stormwater component, taking the stormwater component off local councils and handing that to the entities—it creates all kinds of implementation risks and issues. Well, instead of resolving them through the bill, as difficult as it could be, the Minister and the Labour Government have simply kicked it down the road to these things called “relationship agreements” that water service entities will have to enter into with transport agencies, with councils, with those running parks and reserves, for example—kicking it down the road.

This bill does not resolve the fundamental problem: how do you deliver more serviced land to enable housing growth so that young Kiwis or people moving to a new town can get a home at an affordable price so that they can choose where they live and they’re not stopped from doing that or unreasonably held up from doing that because of the cost of housing? All of this water infrastructure is only to do one thing: it’s to enable serviced land for housing and business growth. That is all it is for. There is an economic and social benefit to it. If this bill doesn’t solve that problem, what’s the point? It will go in the bin. That’s why ACT will repeal it.

So what is the alternative? Well, the alternatives have been canvassed as we worked through the bill. How could we deliver new infrastructure to provide for housing growth? How could we maintain assets in an acceptable way so that we don’t have waste-water overflows onto beaches or into rivers? What we could do is allow for voluntary shared services agreements between councils. It’s already working very, very well between Auckland’s Watercare council-controlled organisation and the Waikato District Council. It’s working so well that the Waikato District Council asked the Finance and Expenditure Committee to please let them join the Auckland and Northland water service entity, because they’ve already got a relationship. But no, this Government has its own way of doing things. They’re not going to listen to what’s practical and what works. ACT would.

Then we think about how we fund and finance all of this work, whether it’s $120 billion or $180 billion. Well, what ACT says is that central government should share half the GST back that’s collected on new builds every year, because the Government takes about $2.5 billion in GST on new housing construction activities, keeps it all for itself, and wastes it on goodness knows what. Instead, ACT would say return half of that $1.2 billion to councils around New Zealand. For Auckland it would be around $400 million a year. That would cash flow the borrowing needed to improve the assets, because if you can leverage $400 million into $1.6 million or $2 million with the kind of leveraging that this bill proposes that water service entities will get, then we can do it already—we can do it already. We would also expand the exemption for domestic water suppliers to 30 end users so that rural and small water users are not captured by this enormous regulatory red tape and cost.

ACT’s plan would deliver serviced land for housing in an affordable way, not so that new owners are faced with an $85,000 development contribution cost, like those proposing to live and work in Drury south. ACT’s plan would give confidence to business that they can access water at an affordable price, invest in their operations, and invest in their people. ACT’s plan is a recipe for a much better water outcome. Thank you, Madam Speaker.

Hon EUGENIE SAGE (Green): Tēnā koe, Madam Speaker, thank you. The Green Party’s position on the programme of change in the water services era is a nuanced one. We supported the Minister’s amendment to this bill, because it does improve the bill and it better integrates the changes that are happening in water services with what is happening with the Natural and Built Environment Bill and the big Resource Management Act reform. We have opposed this bill because we are still fundamentally concerned about the scale of corporatisation that it involved. We supported the Water Services Entities Amendment Bill, because it increased the number of entities from four to 10, so that it had that better connection with local communities that so many submitters and so many councils called for.

But the scale of corporatisation here—I’m surprised that the National Party is proposing to repeal the bill, because these corporate entities are exactly the sort of entity that National normally supports, and would have no hesitation about seeking to privatise or partially privatise if—in the unlikely event—it became the Government. So we sought, in earlier bills to have an entrenchment provision, and I rebut what Nicola Grigg said; that was responding to the substantial public concern about water assets needing to remain in public ownership. It was flagged during our alternative view in the select committee report; it was well flagged, it was not done in secret. It’s unfortunate that that was walked back, but we accept that that was the decision of the Parliament. The costs involved in this programme of work are substantial. They have been premised on the principle of balance sheet separation so that there is no association with the councils and the ability of councils to really influence the decisions that the water services entities take on the $150 million to $180 million investment that seems to be needed. And the composition of the regional representative groups with strong representation for mana whenua is part of that distancing from the councils and distancing from the decision makers.

This balance sheet separation has been fundamental to the legislation, but it is something that the Greens dispute. We don’t think that other options were adequately looked at. The Watercare model is performing well in Auckland, with two waters. In Christchurch, I have the benefit of getting clean water from the services delivered very effectively by the Christchurch City Council. Larger councils are quite competent and can do this. Other options, like having the Crown back councils or council-controlled organisations to do more investment—as we’ve seen in Scotland, where the Crown there does back the investment and infrastructure of the Water Commission in Scotland. Those models weren’t adequately explored. The Department of Internal Affairs and its consultants have done a huge amount of work, so the changes have become a bit like a steamroller: they have kept on going. There have been promises made that it will prevent rates blowing out—what will happen if that doesn’t happen? The cost of actually then continuing to implement the reforms, particularly in the storm water space, is something that the Green Party is really concerned with. We want to see a much greater investment in nature-based solutions and we’re concerned that, as more extreme weather events cause more rainfall, more risk of flooding—that engineer-dominated entities will fall back on traditional solutions of pipes, because generally, in the short term, they are cheaper, but not in the long term.

We want to see strong Government policy to ensure that we get a movement towards spongy cities, because those investments in spongy cities—in green space—improve city amenity and are cheaper in the long term, and they’re good for our mental health and wellbeing. This is a major change. It will be some time before all of the benefits that have been promoted—whether or not they actually occur. Auckland Council was said to be more efficient at the big unitary model; the costs involved haven’t necessarily borne that out. But the major reason we are opposing this is because it separates stormwater from councils and the key role that councils have in place-making their control over the levers and the planning tools, and the fact that the entities might have relationship agreements and have to work those out with councils and with the managers of roading corridors. All of this creates quite significant transaction cost.

And I think there is a big issue as well—not only the transaction costs, but the increased debt that the balance sheet separation will enable, and we will go on to debate the next bill in terms of consumer protection and efficiency. The scrutiny that the Commerce Commission provides over the levels of debt that the water services entities incur is absolutely critical so that we avoid making those mistakes that have happened with the big private entities in the United Kingdom, and those becoming virtually bankrupt because of the level of debt that they have incurred. Bigger entities tend to go for bigger infrastructure solutions when smaller ones can be just as effective. We need to ensure that there is a diversity of options, particularly in the stormwater space—and not just ones that rely on big pipes. So we’re not supporting this bill; we think that other options should have been investigated more and that this has become a bit of a steamroller.

TERISA NGOBI (Labour—Ōtaki): Mālō e lelei, Madam Speaker, and thank you for the opportunity to take just a short call on the Water Services Legislation Bill. I’’ll start by saying I understand why the National Party and the Opposition oppose this bill, and that is because this bill looks after all New Zealanders, not just a certain rich few. Currently, we know that what is happening to our pipes needs cleaning up. We know that the status quo cannot continue, and if it does, only the certain rich few will be able to afford clean drinking water.

But you know what? On this side of the House, the Labour Government are here for all New Zealanders, not just the few, and so on this side of the House we believe to make sure that all New Zealanders can expect to have clean drinking water—that’s right, all New Zealanders. We also believe on this side of the House that with the drains, they shouldn’t be so rundown that they are flooding people’s properties. We want to look after all New Zealanders and make sure that we clean all the pipes up, and that is why this is a good piece of legislation. That is what this Labour Government’s doing, supporting all New Zealanders. I commend this bill to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on the Hon David Bennett for 5 minutes.

Hon DAVID BENNETT (National): Well, we’re going to look after all New Zealanders, solve all things for everybody, all at once, all without any costs and all without any implications and all because we’re so perfect and aren’t we lovely? And shouldn’t we all believe in the all-powerful Government of the day?

Well, that’s the Labour rhetoric that those members of Parliament have been told, caucus after caucus, by their senior leaders: “Don’t worry about the economy. Don’t worry about your seats. Don’t worry about any of that. It’s going to come right. The economy is going to come right.” Do not listen to Grant Robertson. He’s been feeding you that line all year. It’s time to wake up.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! The member will come back to this particular bill. It’s not a general debate.

Hon DAVID BENNETT: Well, this bill is for all New Zealanders at all times and to be all-conquering. That’s what the Labour Party is saying, and it is a dream. They are falsifying the future for themselves and they have got reality coming in a few months’ time.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! The member will come back to this bill. He’s spoken for a minute—not actually about this bill. Come back to the bill.

Hon DAVID BENNETT: OK. If we—

Erica Stanford: Terisa Ngobi didn’t talk about the bill.

Hon DAVID BENNETT: Ha, ha! Yeah. Yes, but if we look at the bill, it is classic Labour Party policy. It is centralisation. It is taking from communities that have actually invested in those assets over time, putting it into one pot and saying that it’s going to solve all the issues that the country faces. That’s the Labour Party’s plan.

The reality is, first of all, you’re taking from councils that have made good investments. Secondly, they can’t answer the question about how much it will actually cost to do up the really big things. How much will it cost to do up the stormwater in Auckland? They can’t answer that. They refuse to answer that, because they know it’s well in advance of any money that will come from putting all the rural communities that have done well with their water schemes together to pay for those big urban costs.

Shanan Halbert: Which ones?

Hon DAVID BENNETT: Which ones? You ask, and OK, we’ll go through all of the ones that submitted, and many of them are—South Canterbury: in that area, many of those submitted that they had a perfect scheme. Whangārei was a great example. That member’s from Auckland, he’s in the Greater Auckland water scheme now, and Whangārei came to the Finance and Expenditure Committee and said, “Our water scheme is really good. We’ve invested heavily. We don’t need to now cross-subsidise Auckland’s under-investment.” That is what Whangārei said, and Whangārei is the council that came in front and did that. So when that member asks what councils submitted and what did they say, well, that’s what they said.

They all said, also, that the Minister came and saw them. He did this glorious tour, you know, around the country and was listening to all their views. But then the legislation was completely the opposite—completely the opposite. Never took any of their views into account. It was false. It was just an attempt to placate those communities. That’s what they were doing.

This is a symbol of the failures of this Labour Government. It shows all the hallmarks of everything they’ve failed at. It’s late, it’s centralised, it doesn’t work, it’s unfunded, and it’s got no actual direction to it. It is just a wish list on a piece of paper. That’s all it is, and that’s all they’ve got because they don’t know how to do anything. They haven’t delivered one thing in Government apart from destroying the New Zealand economy, and that is the only thing that this Labour government will be known for.

This bill is really just an example of what a failure they’ve been. It’s a disaster for water services in New Zealand. It’s never going to see the light of day. It’s going to be reversed in a couple of months’ time. It’s a complete sham, waste of time—whatever you want to call it. At the same time, any real issues in the water scenes of New Zealand haven’t been dealt with by this Government when they should have been dealt with. So there’s no way we’re going to support it.

HELEN WHITE (Labour): I just want to take a short call and respond to some of the contrasts we’re seeing between the two major parties here. I listened to Matt Doocey talk about the Waimakariri, and then I googled the Waimakariri. It’s a river that is called “cold, rushing water” in Māori—that’s the translation. But immediately I came across a spot called Thompsons on that river and people can’t swim there anymore. My friend in the House gave me pictures which I was looking at of dark water coming out of pipes, quite close by, as I understand it. There are water notices in that region. This is not, as Matt Doocey characterised it, something looking for a problem, etc.; this was a problem. This is a problem for New Zealand. We need to fix the water supplies and the processes in this country, and Labour is the only party that’s going to do that.

NAISI CHEN (Labour): Madam Speaker, I once said that water is probably the most unsexy topic we can talk about here in this House, but this is something that we can no longer ignore when we have people who are dying because of polluted waters, when we have people on boil-water notices there is something we need to do about it.

I sat here and listened to lots and lots of speeches from the other side of the House. Labour has promised this week to teach financial literacy to students; I do think the National Party needs to listen to that as well. The whole point of having balance sheet separation is so that we can increase either the debt or the investment that we put into our water infrastructure. Making sure that if local councils hit their debt ceilings, the only way of collecting more rates is not the way that they’re limited to investing and providing good infrastructure for the rest of New Zealand. Making sure that we can give the basic human right of access to clean, healthy water to New Zealanders is a fundamental job that the Government will have to do, so that’s why I commend this bill to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Speaker. That was a good example of why we do need financial literacy training, I suppose, but a little bit irrelevant to the actual bill, because what we’ve got here is a terrible piece of legislation. The Government are doing anything they can to distract from this horrible piece of unworkable legislation that will not deliver improved outcomes for New Zealanders. Sadly, we’ve seen, time and again, a Government that will introduce a piece of legislation, take every opportunity to make it longer and more burdensome than it needs to be, and ultimately end up delivering more cost and less benefit for New Zealanders, and this is a clear example of that. It is centralising the water systems.

Actually, I haven’t heard the other members talk about three waters. That was the name that was given early on in the piece, and I do just want to mention that, because it is about the three waters, and what we’ve seen consistently is strong opposition to the proposals that have been put forward. This Government, despite all of that, have decided that they still know best; they will centralise it all and take over yet another area. Like we’’ve seen with the health sector, like we’ve seen with the polytechnics, centralisation seems to be the only solution this Government has. It’s a typical arrogant approach that you see does not deliver better outcomes for Kiwis, and Kiwis are getting tired of this. They are sick and tired of a Government that does not listen to their voices, does not hear what they have to say, and, ultimately, impacts their lives and their ability to get on and succeed.

Fortunately, we will repeal and replace this terrible piece of legislation. If we’re fortunate enough to be in on 14 October, it’ll be gone by Christmas. Finally the public will have the opportunity to have confidence again, to have some clarity, to understand that things will be better.

Hon Scott Simpson: Hope is on the way.

TIM VAN DE MOLEN: The horizon looks good, and hope is on the way, Mr Simpson—absolutely.

So, look, we don’t need to continue speaking on this piece of legislation. It is terrible, but it has taken up too much of this House’s time. As I said, it won’t be in place for too long—we’ll be getting rid of it by Christmas—but, frankly, it just epitomises this Government’s inability to deliver better outcomes, as you’ve seen time and time again, legislation after legislation coming through and not improving New Zealanders’ lives. National will get New Zealand back on track, and it is only a few short weeks to wait. So we wholeheartedly oppose this piece of legislation.

SARAH PALLETT (Labour—Ilam): Thank you, Mr Speaker. It gives me pleasure to stand and take a short call on this piece of legislation, the Water Services Legislation Bill, which we have heard the rationale for. Four people died in Havelock North from contaminated water, from campylobacter poisoning that was completely predictable and preventable. Many thousands of people were made sick and many still live with the impact on their lives and will do for the rest of their lives.

This is wholly unacceptable in New Zealand today. The National Party, though? Perfectly fine by them. A boil-water notice is currently in place in Oxford. We’ve heard about how fantastic things are in Waimakariri—they’re not. There’s a boil-water notice in place currently, as we speak, in Waimakariri.

I support this legislation. It will save the ratepayers in Christchurch City $2,680 at a minimum, and in Canterbury $4,780. Thank you.

A party vote was called for on the question, That the Water Services Legislation Bill be now read a third time.

Ayes 62

New Zealand Labour 62.

Noes 57

New Zealand National 34; ACT New Zealand 10; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Motion agreed to.

Bill read a third time.

DEPUTY SPEAKER: I declare the House in committee for consideration of the Crown Minerals Amendment Bill.

Bills

Crown Minerals Amendment Bill

In Committee

Parts 1 and 2, the Schedule, and clauses 1 to 3

CHAIRPERSON (Hon Jenny Salesa): Members, the House is in committee on the Crown Minerals Amendment Bill. Members, we come now to Part 1.

SHANAN HALBERT (Junior Whip—Labour): Madam Chair, I seek leave for all provisions to be taken as one question.

CHAIRPERSON (Hon Jenny Salesa): Leave is sought for that purpose. Are there any objections? There is none. The question is that Parts 1 and 2, the Schedule, and clauses 1 to 3 stand part.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. It is a pleasure to speak on the Crown Minerals Amendment Bill. This is, as you will know, something we don’t support, although we did support the bill through the select committee process to ensure that it got through with its amendments. But we don’t support the bill, as I said. We think it goes too far, and, actually, it doesn’t really address the issues that we have at hand, which are the efficient processing of permits, etc. There’s a heck of a lot in in this bill around iwi engagement and reports and so on, and little at all about other engagement with the community. As we know, mining does have an environmental footprint. Actually, in my experience, the mining sector does a very good job of managing its effects, and, in fact, the restoration of mines that I’ve seen has been really fantastic, in some cases returning them to a better state than they were before.

But I would just like to ask the Minister: what was the rationale to single out iwi and hapū but not other groups? It seems like they have been elevated to a position where their view carries more weight than others, when the environment, in fact, belongs to us all. This isn’t on iwi- or hapū-owned land; this is just land in general. So I would appreciate an answer to that if I could get it.

It’s actually quite long on iwi engagement reports and how they must be drafted etc. So what is the rationale behind that, when there’s no requirement to report on engagement with the community at a similar level and in similar detail as there has been for iwi?

MELISSA LEE (National): Thank you, Madam Chair. It’s often during the committee stage, you are reflecting back to the select committee process, and sometimes with so many bills going through the House you forget what this is about. I think one of the questions that I actually had in terms of the weight that my colleague Stuart Smith talked about, in terms of the engagement with iwi and hapū, in Part 2, clause 11, where it’s amending new section 29C where it talks about where the applicant is a previous or current permit holder, their engagement with iwi and hapū will actually be given due consideration. I’m trying to figure out how much of an engagement that that is, whether it is actually a meeting with the iwi and hapū to say that their interest in this particular activity is enough, or whether it has to be something a little bit more formal and actually stipulating exactly what they are planning. I’m sort of wondering if the Minister could perhaps give us a little bit of guidance on that school.

The other aspect of it is that where a lot of countries are looking at even incentivising exploration in their countries to even provide subsidies to mining companies to actually come into their country—and the reason I say that is because we have moved on from just powering up our heaters with coal or wood, but you know, technology requires a lot of minerals. Even electric vehicles (EV) have a lot of minerals that are actually being used. Even wind turbines require—actually, I think it is something like 220 tonnes of coal to make a particular wind turbine. So when the Minister actually talks about the reason this bill was introduced in the House was because of our commitment to climate change, I sort of wonder whether we are actually not thinking about the full picture.

I think, when you want to subsidise Tesla cars, for example, when you know drivers of EVs are incentivised to actually move to EVs rather than traditional motor vehicle and transport—but the materials that are actually required for manufacturing those EVs actually require a lot of mining. Sometimes I think that incentivising people to mine those minerals in New Zealand, we may do better in terms of our climate change commitment, because we can actually control the emissions and put regulations in place so that our mining companies are responsible. Whereas we are importing goods that have been manufactured in other countries where we can’t actually control the mining of those minerals, and we are importing dirty coal, for example. We’ve actually talked about that in this House before. So I’m wondering whether the Minister had actually given thought to our trade partners in the way that they incentivise mining, whilst this bill basically disincentives mining.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, the bill proposes to amend the purpose of the Crown Minerals Act—to change the purpose, which is “to promote prospecting for, exploration … and [mining] of Crown owned minerals for the benefit of New Zealand.” It seems that the purpose of this Labour Government, as expressed through this bill, is to undermine the business opportunities that lead to economic and social benefits for New Zealanders—as a result of extracting and turning our natural resources into things that people use and consume or that New Zealand manufacturers can export and sell overseas to other users and consumers, who will pay New Zealand money for the benefit of the products that we extract here; add value to here, and then sell.

It’s remarkable that a Government, at a time where New Zealand’s balance of payments deficit has never been higher—it hasn’t been this high in terms of the cash received from selling things overseas compared to the amount of cash New Zealanders have spent buying things overseas; the difference has never been higher. New Zealand is borrowing and spending, as a nation—led by this Government—much more than we are earning in foreign exchange. And yet, Minister, at a time when you would think a New Zealand Government would be doing everything in its power to promote the extraction, recovery, processing, adding value to minerals and resources that the Crown owns and that the private sector is willing to add value to—why wouldn’t the Crown want to promote that at this time? On what basis would a Government seek to undermine the development of these resources and to reduce the potential that by promoting mining and by promoting the recovery of minerals we could actually help to restore some of the economic losses that New Zealand has suffered in the past few years?

So, Minister, why? Please explain, why the change from “promote” to “manage”? Is it because this Government doesn’t really believe that New Zealand can play its part when it comes to climate change? There are many, many businesses—many mining companies who I have spoken to and their staff, their engineers, their scientists, who are passionate about restoring the environment as they go, delivering better indigenous biodiversity outcomes from some of the most fantastic mining and resource development operations in New Zealand, whether it’s OceanaGold’s Globe Progress Mine in Reefton, or others. They’ve said “For goodness’ sake, Simon, please provide a simple pathway. If you promote resource recovery in New Zealand, you’ll put us on a level playing field with our competitors or even our fellow engineers and scientists and mining geologists and all of the people who operate the equipment. You’ll put us on a level playing field. We don’t want to have to uproot our families and go and live in Australia; we’d prefer to stay here in New Zealand”. Minister, that’s what they say.

But it seems like this Government wishes to reduce that opportunity to live and work in New Zealand, to generate high-paid jobs in the regions and, actually, through mining minerals, whether it be gold or silver or platinum, titanium—any of the other rare earth elements that go into the equipment, whether it’s computer chips, whether it’s satellites, whether it’s batteries. Whatever it is, the world needs these minerals. They’re only found in a few places, Minister, and they’re found in only a few places because of the history of the Earth’s development from a geological perspective and a tectonic perspective. The minerals bubble up from the Earth’s crusts, and they’re found in very limited deposits. That’s why it’s important that a Government does promote their exploration and mining so that we can get the benefit out of them, because if a Government won’t promote it, they’re often very, very difficult to get access to and make something of. So, Minister, will you explain why the change in term from “promote” to “manage”?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): There’s a couple of questions in the speeches that we’ve heard that I’d like to address. The first is around the why and the changes to the provisions around engagement with iwi and hapū. So the 2013 amendments to the Crown Minerals Act introduced obligations for tier 1 permit and licence holders to report annually on the engagement with iwi and hapū. This was a change that was introduced by the then National Government to do that. However, what has become evident to us since we came into Government—and in the time that I’ve been the Minister of Energy and Resources—is that that engagement and the quality of it was highly variable. So while there was a requirement that was introduced under the 2013 changes to the primary legislation, that wasn’t occurring. So the changes that are in here around what form that engagement should take, the reporting requirements, and being more explicit about how that relationship needs to be conducted—that is the purpose of the changes that we’re seeing in this amendment here. I think it is fair to say that this is an industry that has some way to go in its journey and its engagement with iwi and hapū and what a 21st century relationship looks like, and this Act will provide a framework around how that can work, and I think the reporting requirements will be absolutely critical.

I did hear in one of the speeches—I can’t remember which; I think it was from one of the National Party members—the disinformation repeated about the record imports of coal that New Zealand is experiencing. I’d just like to point out to that member that she can celebrate the fact that we’re in a 32-year low in the importation of coal in New Zealand, and that largely is because this is a Government that has a plan around what the decarbonisation of our economy—

Hon Member: Imported more coal over the last six years than ever.

Hon Dr MEGAN WOODS: —and what decarbonisation looks like. So while we hear members yelling “more coal”, I invite them to look at the facts and not repeat disinformation. A 32-year low is something that I celebrate, and I think that many New Zealanders should celebrate—

Erica Stanford: What was it two years ago?

Hon Dr MEGAN WOODS: No, it was not two years ago; it’s this year. And, of course, the correlating fact is record-high levels of renewable energy production that are occurring in the New Zealand economy.

The ACT member asked about why—the purpose for the change. Why are we changing to the more benign position in the purpose statement of the Act? Before anyone thinks the sky is going to fall in in terms of this change to a more neutral position, I think it’s really important for members to understand that the Crown Minerals Act is a piece of legislation under which statutory decisions need to be made, whether they’re delegated or made by a Minister. So, therefore, the purpose statement is incredibly important in terms of directing those statutory decisions. But, of course, that purpose statement was only changed in 2013 by the then National government, so it’s been five years of its time in Government, actually, of nine—with the more benign position that we’re reverting to, and permits were able to be issued. What this does is it takes the purpose statement that we’re looking at under these amendments—takes it back to that benign position so it does not have to be the case that the “promote” is the primary consideration that has to be taken into account.

Of course, we will be able to issue permits for all the kinds of mining activities that the member was outlining in terms of the critical materials that are going to be absolutely essential for our decarbonisation journey as a country, for those minerals that we will need for our wind turbines; that we will need for our electric vehicles; that we will need for emerging battery technologies. There is no reason why decisions to grant those permits cannot still be made, and as I said, the previous National-ACT Government worked under a regime for five of its nine years. So if it was so important to that side of the House, it took them five years to make that change when they were in Government—clearly it wasn’t the deciding factor. And in fact, it was after the change to the purpose statement of the Act actually under the previous Government that fewer offshore block offer permits were taken up—fewer offshore oil and gas permits were taken up. It wasn’t about the purpose statement of the Act; it was that there weren’t economic opportunities to be explored there.

So I think we need to keep in perspective the changes that we’re making. This is an important part of how we make sure that our legislation framework is pointing us in the direction of how it is that we do fit in with what the world is doing. New Zealand is not an outlier here. We have the International Energy Agency who is pointing to the kinds of changes that countries need to make, and New Zealand is seen as very much fitting the kind of decarbonisation journey that the world needs to go on. This is a tool, but it still will allow for the kinds of activities we need in respect to Crown minerals that New Zealand needs into its future.

ERICA STANFORD (National—East Coast Bays): I’m just wondering if the Minister could elaborate on one of her comments she made before, and just let us know how much coal was imported last year and what record low does that compare to? So when she says “it’s a record low”, what year is she comparing it to? How much was imported last year and then what year is she comparing that to in terms of “record low”?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Less coal was burnt in the last three months of 2022 than in any other quarter since December 1990. I guess, when you’re talking about a 32-year low and 2022 is the year, it would make sense that 1990 was the date that you’d be using there.

That September 2022 quarter saw just 426,000 tonnes of coals burnt for industry process or electricity generation, so that’s the quantum we’re talking about. But of course, this is a situation where we do need to continue to phase out coal in the economy and that is exactly what our Government is doing. What we have done is we have set an end date for the fact that we will be able to burn coal for industrial or process heat and that is exactly why we are partnering with industry.

But I would like to bring that member back to what we are debating here in this bill. This is about the New Zealand Crown Minerals Act. This is about how it is we grant permits for New Zealand extraction. So while I’m happy to act—as probably what she could have got off Google, in terms of what those dates in tonnages of imports looked like—what this is about is the regime for how it is that we administer the New Zealand Crown mineral estate. What the member is asking about is coal imports, but what I am pleased to report to the House is a 32-year low in the burning of coal in New Zealand.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, thank you—a fascinating insight! And just to bring to your attention, during a debate on the former bill, a Labour MP also used Google to access information during the debate. So this is across the House, the use of information technology, and I’m sure the Minister would welcome that.

Minister, a couple of things: you have raised the issue of record low coal imports, and we assume that relates to a reduction in the need to consume coal for energy and electricity production. So I would always be interested, because you have introduced it into the debate, in how much of that is related to the fact that we’ve had an extraordinarily wet year and that the hydro dams are currently 110 percent full.

CHAIRPERSON (Hon Jenny Salesa): Order! I would like the member to come back to a question that’s within the scope of this bill.

SIMON COURT: Certainly. Well, I shall then. The Minister has raised the issue of critical minerals. The Minister has identified that the minerals that have been mentioned, whether they’re gold, silver, platinum, titanium, selenium, which is used as an agricultural input—all kinds of minerals are available in New Zealand. But in other jurisdictions, Minister—like Australia, for example, the UK, the US, and Canada—they’ve identified a list of critical minerals. Now, in the debate previously in response to a question, you mentioned critical minerals. Minister, these other jurisdictions have identified a critical minerals list that would help a Government agency making decisions about permit applications and how they are viewed against whether the minerals that are proposed to be extracted are critical or not. And there are a whole lot of minerals that only exist in a few places around the world. Rare earth elements, for example, Minister—they go into batteries, they go into electronics, they’re absolutely vital for satellite communications, cell phone communications.

Minister, what progress has this Government made on a critical minerals list? I understand it’s on the work programme. And how will the criticality of minerals be given a weighting when applications, in terms of clause 5, “Section 5 amended (Functions of Minister)”, when a Minister is weighing up permit applications and whether they should be approved? Thank you, Minister.

STUART SMITH (National—Kaikōura): Oh, thank you, Madam Chair. Actually, Simon Court makes a very good point, and I think that it’s well worth exploring, because what we have seen internationally has been a reluctance in the developed world to mine and to process minerals within their own borders. They have effectively exported that mining and the processing of those elements and minerals that are vital for a transition to low emissions to places like China where actually the labour laws are very scant, at best. In fact, the American President, Joe Biden, passed an executive order which effectively made it that any products that come from Xinjiang in China would be required to have an assurance that no forced labour was used in the making of those materials. And for the Minister’s benefit, if she’s not aware, over 70 percent of the world’s polysilicon is actually processed in Xinjiang and made into polysilicon ingots. Sometimes it’s further processed and made into the wafers, and in other cases it’s exported to other nations to be made into those wafers. But what often happens is, in the step before that, some polysilicon goes into Xinjiang and is then blended with the material being processed there. So, effectively, if the solar panels have polysilicon in them, and polysilicon for other uses, it’s pretty hard to ascertain whether it came from that country with forced labour and where forced labour may have been involved in that.

Now, I’ve asked questions about this, but I get the answer that, “Well, we’ve got forced labour regulations.” Well, the Americans did too, but the President has gone another step—a significant one step further. It won’t cover it all, for the reasons I just outlined, but did the Minister put any thought into that when she was having this bill drafted and the instructions to the officials and the drafters? Because it appears to me this does make it more difficult. This does slow it down. It makes it more likely that the rare earth elements, as Simon Court mentioned, and other minerals that we use in everyday life now, are not just used—I will cover this further in my third reading speech, but it’s surprising where some of these minerals are used in products that people—

Hon Jo Luxton: The question?

STUART SMITH: —would not understand. I think someone’s trying to be a chair over there, by the sound of things—I distinctly heard that, but anyway. So I’d really like to know if the Minister did take that into consideration. We did hear from her previous contribution—we now know what the Minister does in her spare time: she watches back episodes of Yes Minister. There was a very good impression of Sir Humphrey with the answer that she gave to my colleague Erica Stanford, and I thought that was quite good, actually, almost an Academy Award performance. But the Minister, if she could just come back with those answers, that’d be much appreciated.

I have another question as well. Under clause 14 we will replace section 41(6) with “(6) Before mining granting consent, the Minister must be satisfied that the transferee is highly likely to be able to comply with—(a) the conditions of, and give proper effect to, the permit; and (b) in the case of a permit as defined in section 89D, the relevant obligations in subparts 2 and 3 of Part 1B.” Well, aren’t they just required to meet those things? Why is it that “the Minister must be satisfied”? Has that been outlined anywhere else in legislation around mining or any other activities, that they “must be satisfied”? And is “must be satisfied” a high enough bar to achieve whatever it was that the Minister was trying to achieve from that particular clause, or was that not one that she actually insisted on? Is that just one that came up? Where was the legislative gap that required clause 14 to be inserted into this bill?

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I want to come back to clause 5, “Section 5 amended (Functions of Minister)”. Because right now, as the Minister of Energy and Resources, you would have the most current and up-to-date experience with the functions of the Minister exercised under this Act. So Minister, I want to ask—when it comes to “The Minister has the following functions” in the current Act, this bill proposed to modify section 5(a). So instead of the functions of the Minister are “to attract permit applications [for Crown mineral extraction], including by way of public tender”—in other words, a Minister to act as an advocate; a business development function for Government. Imagine that. Instead of the Minister acting in that role trying to drum up more business, the Minister will instead be required, “from time to time [to] offer permits for application”. “From time to time”. So instead of “to attract permit applications”—which sounds like business development; getting New Zealand going—“it’s, from time to time, offer permits for application”.

So Minister, I’m interested. I’m sure those who might want to take part in resource development in New Zealand or invest in resource development are interested. I’m sure the engineers, the scientists, the geologists, all the digger drivers, all the jumbo operators—everybody who works in mining in New Zealand—would be interested whether the Minister considers what times “time to time” covers. Does it mean annually? Does it mean every few years? Does it mean when the Minister wants to announce something and so goes somewhere to a small town—maybe on an election campaign—and announces this is now the time we’ll open applications for permits? What is this “time to time”, Minister; and on what basis will “from time to time” permit applications be made available?

Because having all of this power delegated to the Minister to essentially handbrake—essentially throw sawdust into the transmission of—a vital economic activity, which is resource development, Minister—if it’s not a priority for this Minister or a future Minister, “time to time” could mean, well, almost never. Because when you combine the purpose to be amended, with “promote” gone, “manage” in; and then “attracting permit applications” gone. No more business development, no more New Zealand open for business. But “from time to time” we might make a permit application process available.

That really sounds like this Government is proposing to slowly strangle the life out of resource development—out of the gold mining, out of all of that other valuable extraction that goes on in New Zealand right now. In fact, I understand that gold exports to Australia are only second after wine in terms of their value—only second after wine. Who knew that New Zealand’s second-largest export to Australia is gold?

Yet, this Minister doesn’t really seem to have provided confidence to the industry, to the towns where these activities take place, to all of supporting manufacturing sector that supports mining activities around New Zealand, whether it’s in Otago or Coromandel; Waihī or on the West Coast of the South Island; or Waikato, for example, where they do coal mining; or Port Waikato, where they recover and mine ironsand at Tahāroa and turn it into steel at Glenbrook.

Minister, “from time to time” sounds like, “when the Minister gets around to it”, and what this Government have signalled is that they’re not really interested in getting around to helping business, unless it involves handing out money for green projects like an electric arc furnace here or money for a wood-fired boiler somewhere else in order to get some headlines. So Minister, would you explain what you think the implications are of switching from “attract” to “time to time”; and what criteria you would make, or a Minister would make, to determine when the time is?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): By my count, there’s probably three areas of questions that are currently under way.

First of all, there was a question from the member that’s just taken a seat, Simon Court, in an earlier call around the work programme in terms of the critical minerals list. As the member has rightly identified, this is work that our Government currently has under way and it is work that is progressing. It is work that a future Labour Government, after the election, will certainly be looking to further progress. It’s been a priority for us. We established this programme of work under our Government. It’s not work that was under way when we came into Government, so it’s work that we have been able to progress there anyway. Not that that is particularly relevant to the legislation that we have in front of us. It isn’t seeking to make any changes that would impact on that.

The second line of questioning—I’ll go through an order of the clauses that have been brought up on the bill. So there’s clause 5, which the member that’s just taken his seat has asked around the impact of section 5 and how that will operate. Well, section 5, as it is in the primary legislation, in the Crown Minerals Act, currently requires the Minister to “attract permit applications, including by way of public tender”. This is interpreted in the minerals programme as an expectation that there will usually be an annual petroleum exploration permit round or a block offer.

So if you put it together, there’s been three tranches of Crown Minerals Act (CMA) reform. Of course, we made the initial tranche 1 changes that needed to be made immediately after we made the decision to end offering offshore oil and gas exploration permits. That was the immediate change, and the commitment was that we would go through a fuller process for the longer-term changes that needed to be made.

So the clause the member is talking about in his talk about gold isn’t really relevant, because this is about the interaction that is there in terms of the block offer or the petroleum exploration permit round and the interaction there. Clause 5 of the bill alters the function of the Minister from “attracting permit applications, including by way of public tender” to “from time to time to offer permits for application by public tender”. This is done to remove the expectation that there will be that annual block offer as a matter of course. It will enable more discretion in the timing and frequency of future block offers, if there were to be any. Because, as the member will know, prior to the changes that we made under the petroleum programme, there was the expectation of the annual round of block offer.

The other clause of the bill that there has been some questions about, of course, is clause 14 of the bill and this is around decommissioning. So when I say “tranche 3”, this is what we would formally call “tranche 2” of the changes to the CMA but we did do the immediate work that we needed to do around decommissioning. This was really in the wake. We’ve made two changes around decommissioning. There was a hole that we had to plug when we immediately came into Government around the provision of permits.

We found, when we came into Government, there was a big wide open door that had been left by the previous Government, which resulted in the taxpayers of New Zealand having to pick up a bill of hundreds of millions of dollars for decommissioning of a project that they never should have had. This was the responsibility of the permit holder, but adequate protection for taxpayers had not been put into previous changes of the legislation. So we brought changes to the House to protect the taxpayers. This is further strengthening those decommissioning provisions that need to be there.

One of the holes that was left was actually the ability of a transfer of a permit to have the same level of scrutiny as the granting of a new permit in terms of their ability to pay for their decommissioning. I think everyone should—most right-minded people would—agree that if someone is coming in to do business in New Zealand by way of extraction, they have the ability to actually finish the process and pay for their own decommissioning and not leave the taxpayers of New Zealand holding that bill.

So this is further strengthening around those provisions there. It was made for consistency with other provisions that are being made with this bill, just to make sure we’ve got that belts and braces to the protection of New Zealand taxpayers.

MELISSA LEE (National): Thank you, Mr Chair. I’d like to ask the Minister a question in relation to an answer that she gave earlier to a question from my colleague. She mentioned that New Zealand had record low coal importation in relation to the climate change commitments that we were actually talking about earlier. I wonder whether the Minister could actually reflect on that answer and, please, tell me whether the record low coal importation in the last quarter of last year that she quoted was because New Zealand has in fact had record high rain and water, which literally means that our hydro lakes are full and we didn’t have to actually import extra coal—and that in relation to the record high coal importation of previous years, for example, I think in 2020 there were more than a million tonnes of coal that were imported, and in 2021 it was close to 2 million tonnes of coal that were imported.

What that extraction in foreign countries relates to in terms of climate change pollution and emissions and the fact that they have to be shipped to New Zealand to power our plant in Huntly—you know, considering the fact that the Labour Party’s backbone is the union—is it in Blackpool?

Stuart Smith: Blackball.

MELISSA LEE: Blackball. That was actually started by the mining towns and the unions who represented those miners—whether she considers that perhaps having a reserve that is mined in New Zealand will be better in terms of carbon emissions versus what we actually import from overseas.

Hon Dr MEGAN WOODS (Minister of Energy and Resources): I will take a very quick call here to point out that the issues being raised are completely out of scope. This is about the regime and very specific changes that we are making around the New Zealand Crown minerals regime and the way in which that is administered in New Zealand. The member Melissa Lee is asking about importation. That is out of scope of this bill.

But what I will point out to that member—I probably did answer a question and point out that it was beyond what we doing in this bill, but I pointed out the fact that a 32-year loan and the burning of coal in New Zealand was something that I celebrate. What we do also know is that the year before that, it was because of the failure of our gas to provide electricity to New Zealand. It wasn’t so much just the hydro levels; it was also the fact that there were outages in our gas infrastructure as well, which to me points to the need of why we do need to look at how security of supply looks like in the 21st century in New Zealand.

This bill—bringing it back to the bill, Mr Chairman—is actually about setting up the regime for the 21st century. And I’d also like to point that member to the fact that we have a union movement, given she’s so concerned about it, in New Zealand that is utterly concerned with what a just transition for its workforce looks like. It is a union movement that is engaged in the jobs of the future, and making sure that we are putting in the effort to do that. It’s why we saw our mining union attend the launch of the announcement around New Zealand Steel moving from coal to electrification. They celebrate that move because they know that jobs in the future need to be protected, and if we stand by and wait for cliffs, that will not happen and we are not a Government that are prepared to do that.

SIMON COURT (ACT): Thank you, Mr Chair. That was a fascinating insight into the workings of the Minister’s mind! I want to come back to the bill, Minister. Clause 14 amends section 41, the “Transfer of interest in permit”. You made a good point: that it’s important that an operator in the oil and gas industry decommissions a well, decommissions offshore equipment—whether it’s on the sea floor or whether it’s a rig—that they fulfil their obligations to their community and to the environment by making sure that all of those hazards are mitigated, as far as is practical. So it is fair enough that a Minister would have decision making as to whether the transferee is highly likely to comply with the conditions of the permit, particularly when it comes to decommissioning.

Minister, you refer to—without using the words, I understand—the “Tui problem”, which is where an operator sold its interests in a New Zealand business to an overseas company, which then defaulted on its obligations. Minister, I understand that that business has since been sold and that the new owner has in fact made a commitment to fulfil a great proportion of the obligations to decommission and clean up in addition to what the Crown has had to contribute. But that must surely be a very, very rare occurrence.

Minister, in previous amendments to the Crown Minerals Act that you referred to and which this clause 14 further amends, you make the point that a much more rigorous regime has been put in place. But, Minister, isn’t it correct that the regime is now so onerous that it imposes retrospective penalties on directors and on companies, including jail time, if they fail to meet their decommissioning obligations—that it has essentially sterilised interests in oil and gas development in New Zealand? And that even if a company was to sell its oil and gas interests as a going concern, still pumping oil and condensate from New Zealand’s reservoirs, whether its offshore or onshore Taranaki, still getting gas out, supplying it to New Zealand consumers, including businesses and manufacturers—even if they sold their business as a going concern with an existing revue stream, the new owner of the business, even if they decommissioned to the requirements of the permit, the Minister could still insist that the sellers before, the directors of the company that originally owned it, were still liable for any rats and mice or potentially a very, very large bill?

Hasn’t that completely sterilised interests in investing in New Zealand oil and gas? And doesn’t this section 41 amended by clause 14 of this bill, “Transfer of interest in a permit”, further undermine the willingness of international and local investors to actually get our energy out of the ground and supply it to businesses that need it?

GLEN BENNETT (Labour—New Plymouth): I move, That the question be now put.

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

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.

Motion agreed to.

CHAIRPERSON (Greg O’Connor): The question is that the Minister’s amendments set out on Supplementary Order Paper 415 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.

A party vote was called for on the question, That Parts 1 and 2, the Schedule, and clauses 1 to 3 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.

Motion agreed to.

Amendments agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Parts 1 and 2, the Schedule, and clauses 1 to 3 as amended stand part.

Parts 1 and 2, the Schedule, and clauses 1 to 3 as amended agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Greg O’Connor): The committee has considered the Crown Minerals Amendment Bill and reports it with amendment. I move, That the report be adopted.

A party vote was called for on the question, That the report be adopted.

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.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Hon Jenny Salesa): The Crown Minerals Amendment Bill is set down for third reading immediately.

Third Reading

Hon Dr MEGAN WOODS (Minister of Energy and Resources): I present a legislative statement on the Crown Minerals Amendment Bill.

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

Hon Dr MEGAN WOODS: I move, That the Crown Minerals Amendment Bill be now read a third time.

Our Government is committed to transitioning New Zealand to a low-emissions economy. New Zealand has targets to reduce our greenhouse gas emissions with carbon emissions to reach net zero by 2050. We have set a target of 100 percent renewable electricity generation by 2030. On 9 August, I announced that the Government would consult on an ambitious programme of work for this transition—over five streams of energy policy. I want to ensure that the legislation for our Crown minerals is keeping up with the times, and that’s why I initiated the Crown Minerals Act review.

There have already been shifts in how the regime operates as a result of the review. The 2018 tranche 1 amendments put an end to offshore petroleum exploration permitting. The 2020-2021 tranche 2 amendments ensured that petroleum decommissioning obligations sit with the people and companies that profited from these resources and not the taxpayers of New Zealand. This bill concludes tranche 2 of the Crown minerals review by making important incremental amendments while reform in the broader regulatory framework is under way, such as in the resource management system.

A big part of bringing the Crown Minerals Act up to date is to ensure that it is consistent with our push to net zero. The Government recognises the continued importance of petroleum throughout the transition. We also need other minerals for the roading infrastructure and for the clean technologies in our future. But the Crown Minerals Act is out of step with our wider policy settings to get us to net zero. The promotional intent of the Act currently requires the Minister to take certain steps to promote development of our mineral resources, and this includes the expectation that we run an annual block offer for petroleum permits. This is expected regardless of whether it is in the best long-term interests of New Zealand.

Part 1 of the bill proposes changes to enhance flexibility in the way we manage our petroleum and minerals. It would remove that promotional intent to make the Crown Minerals Act neutral so that the development can be promoted where there is a need and minimised where there is not. With these changes in place, the Crown Minerals Act would be better aligned with wider policy settings and this would no longer be in conflict with the wider settings for a net zero transition. The bill strikes that balance by ensuring that continued investment and security of supply for fossil fuels are not put at risk during the transition. But the bill also keeps clear the path for development of other minerals into the future should there be a need, such as for clean-tech minerals used in renewable energy.

Part 2 of the bill makes changes to improve permit holder engagement with iwi and hapū, extending existing requirements that have been in place since 2013. Iwi and hapū reported that engagement quality is highly variable and does not always respect or reflect understanding for their authority, mana, and expertise in relation to the natural environment and their local communities. In part, this is because the Crown’s expectation for engagement under the Crown Minerals Act was unclear. The proposed changes will bring more clarity to iwi and hapū and other stakeholders about how engagement will be reported and how feedback from iwi and hapū can inform future allocation under the Crown Minerals Act. I expect to see an improvement in permit holder engagement with iwi and hapū because of these changes.

Part 2 of the bill also makes decommissioning-related clarification to ensure that there is no doubt over the interpretation of the provisions introduced in 2021. These ensure that industry decommission so that there will be no repeat of the events surrounding the Tui oil field, where the operator liquidated and Government had to step in at a significant cost to the taxpayer—hundreds of millions of dollars to the New Zealand taxpayer.

The select committee reported back to the House with four recommendations, and these were shared with this House during the second reading. As part of the committee of the whole House, I tabled a Supplementary Order Paper that made minor and technical changes to the bill, including moving provision relating to the Minister’s ability to consider past iwi feedback on existing or previous permit holders out of the Schedule of the bill and to new section 29C in clause 11 to increase clarity; clarifying, in section 105(1) in clause 19, what time periods can be described for the purposes of preparing and consulting on draft iwi engagement reports; presenting finalised iwi engagement reports to the chief executive of the Ministry of Business, Innovation and Employment and making the consequential changes to section 33C, in clause 12; and amending the Schedule of the bill to refine the application of new Part 5 inserted into Schedule 1 of the Act, and to remove an unnecessary clause from the new Part 5.

I want to thank the Economic Development, Science and Innovation Committee again for their work and consideration of this bill. I believe that the changes that were made to the bill as a result of the select committee process have resulted in a better and more robust piece of legislation. I want to thank everyone who has contributed to the preparation and passage of this bill. I look forward to seeing the amended Crown Minerals Act serve New Zealanders now and into our future with the development of minerals promoted where they are needed, but clearly charting our pathway of how we achieve net zero in our future. I commend this bill to the House.

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

STUART SMITH (National—Kaikōura): Thank you, Mr Speaker. It is a pleasure to have a speech in this third reading of the Crown Minerals Amendment Bill, which we oppose.

The Minister who’s just taken her seat had a lot to say about climate change and about transition. Unfortunately, this bill is not really going to have much of an impact on that, although it will have an impact on the wealth of New Zealand and New Zealanders. She talked about clause 4, which changed “promote prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand.” to “manage prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand.” Unfortunately, that will have some impact. Semantics do have a practical effect. Unfortunately, the management of permits is anything but efficient. They are not efficient. The delay’s unbelievably long and it is having a deleterious effect on the mining industry. Ironically, as my colleague pointed out, the Labour Party had its roots on the West Coast in the mining industry and now the Labour Party appears to be abandoning its base, leaving their mining past behind—and the hard work and toil of those miners that set up the Labour Party all those years ago.

The transition to a greener economy is essential. We are doing that; it’s an essential part of the modern world. Unfortunately, as part of that, as I alluded to in the committee of the whole—and this has been right across the Western World—we’ve got a bit worried about mining and the impacts that it has. But what we’re doing—we still require all those minerals—is we’re essentially exporting the mining responsibility to people overseas where the environmental rules are not as stringent as they are in the Western World and the labour regulations are not what we would expect here.

In New Zealand, people working in the mining industry earn well above the average or the median. It’s a very well-paid sector to work in, and people’s health and safety is incredibly well looked after. I have been down two gold mines, well underground, very deep in the Waihi mine and also on the Snowy River Mine on the West Coast, not far out of Reefton—fantastic facilities. The attention to detail on the safety of their staff is unbelievable, almost. So they really take that very, very seriously. So, too, do they take the environmental obligations very seriously as well. All of the plans for the restoration of the mining sites are in place in a modern mine when it’s opened. Now, no doubt regulations may change over the time of that mine but they are responsive and the people that handle their restoration are only there for that job. They are not the miners. They are not the people doing the drilling and the blasting, they’re not people operating the machinery, they’re not people operating a trammel mill or the other processes in the mine. They are there to protect the environment and to meet the obligations that any good steward of the land would do, and I have seen that firsthand on numerous occasions.

I’d have to say what a pleasure it was to visit the Stockton mine, and I’d urge anyone who gets the opportunity to go there; they should do that. The professionalism of the people working there and their attention to detail and the way that they go about their mining is something I think we should all as New Zealanders be very proud of. This goes to the transition. The coal from Stockton is metallurgical coal. It is used to make steel, primarily, and in other industrial processes as well, but not just for the calorific value of the heat in the coal; it can be used for industrial processes, as well as other things.

That coal is used by steel mills overseas to lower their emissions. Because of the chemical makeup of that coal on the West Coast, they blend it with other coal and are able to use less coal, in total, to make that steel—and they have lower emissions as a result of that. The emissions from that coal is a significant part of steelmaking. Now, there are some strides being made to make steel without coal. That is in its infancy at the moment. Basically, it’s not taking it from iron ore to steel; it’s the scrap metal to steel stage that’s able to be done more easily, and that is really pretty much in its infancy and the costs are quite high. So I think coal is going to be with us for quite some time to make steel. As my colleague Melissa Lee mentioned earlier, an everyday thing that we think of today, such as a wind turbine, has, on average, 220 tonnes of coal used to manufacture that turbine. We need coal and I know, as a man of the West Coast, you’ll be delighted to know that there are jobs for West Coasters and a future in the mining industry on the West Coast. That’s a message, certainly from this side of the House, that I’d like to get on the record.

But mining goes much wider than people would think. If we do think about batteries—if we think about an alkaline battery, it’s got zinc, manganese, potassium in it; a silver oxide battery has silver, zinc, potassium; a lithium-ion battery has lithium, cobalt and carbon, and it has 28 percent graphite. Graphite is also mined, albeit that in my electorate, at CarbonScape, they are making—right through the process of being able to make, and now trying to commercialise—green graphite. That is from carbonaceous waste into graphite that can be used at a very high purity, higher than most deposits of graphite that are found naturally and mined, and that will lower emissions for batteries. But, VW did a comparison of a battery electric vehicle with a diesel vehicle of a similar size and they found that, for those vehicles over their lives they would have to do 100,000 miles before the EV reached the same emissions level as the diesel. So once they went beyond 100,000 miles, then the EV was actually lower on emissions.

So, just to put these things in perspective; it seems to be forgotten by others, or perhaps it’s not known, and that’s to their shame. But I would like to point out, as I said, mining goes much wider than things like wind turbine towers and batteries. Toothpaste, for example, has fluoride in it, as you would be aware, where they mine for fluoride. Calcium, aluminium, and sodium—all of those are mined for. In deodorant, there’s aluminium and zirconium—all mined. Sunscreen has zinc; electric shavers and toothbrush—[Interruption]

DEPUTY SPEAKER: Sorry, could I just ask those members at the back to move a little closer for your conversation instead of yelling at each other across. I can hardly hear this very good speech.

STUART SMITH: And magnesium is used in anticaking, for foundation powders and creams. Who knew? Titanium is used as a whitening agent in powders and cosmetics, and potassium is used in fragrances and tanning lotions. Iron, of course, is used in cosmetic pigment and metal polish. So all of those things are mined for. Not all of them but a lot of them are available here.

Now, do we want those things that we use to be made ethically? Do we want those things to be made with as little impact on the environment as possible? Do we want those things mined where the mines will be restored in an environmentally responsible and sustainable manner? I would say yes to all of those things, and I think all New Zealanders would say yes to those things. But this Government seems intent on exporting our sins overseas. They want it all to be done overseas and, as I mentioned in the committee of the whole House, the West has made a strategic mistake here. We are now dependent on regimes that are not often as ethical in terms of labour laws and the environmental practices, and yet we seem quite happy to have that happen. Do we care about the climate? Yes, but it is a global issue, not a national issue.

NAISI CHEN (Labour): Thank you, Mr Speaker. It’s my pleasure to be able to support the Crown Minerals Amendment Bill. This is a bill that was considered carefully by the select committee—a great select committee, the Economic Development, Science and Innovation Committee, and I just wanted to thank all the submitters and all of the officials for working with us on this bill. As it has been already canvassed in this House, we made a few more changes and a few more clarifications around some of the clauses in this bill, but mainly this bill is here so that we can make sure that our Crown-owned minerals are there to benefit all New Zealanders, and the management, and the way we manage it can be good for our environment and our economy as well.

We have strengthened the rules of engagement with iwi and hapū; we’ve also made it more clear about what the requirements are for decommissioning, making sure that we give these rights to those responsible mining companies. I just wanted to quote something—as many of us would watch every day—from Air New Zealand: that this land is not just yours or mine, it’s not just inherited from our ancestors but borrowed from our children, and we have a responsibility for future generations in looking after it. That’s why I commend this bill to the House.

MELISSA LEE (National): Thank you, Mr Speaker. I’d like to commend my colleague Stuart Smith, who has articulated brilliantly, and like you, Mr Speaker, I too enjoyed that tremendous speech.

In the third reading, obviously, I’d like to thank my select committee members on the Economic Development, Science and Innovation Committee. As the chair said earlier, we do actually work very cooperatively and efficiently, and I’d like to wish the members—I’m not so sure if I’ll get another chance to wish them good luck in the coming election, because next week is our final week in the House.

But on this bill and the purpose, right from the outset it changes the dynamics of how the industry is supposed to operate. Instead of the Government promoting prospecting and exploring for minerals, it is basically only going to be managing it. So, literally, it is not saying, “Welcome, you are here to explore”—and, potentially, get more minerals that are needed for all of the products that Stuart Smith talked about in his speech. That change is in clause 4.

The other aspect of it in clause 5 is that it also talks about the functions of the Minister responsible for the administration of the principal Act where the attracting of the permit application is now officially cancelled. They’re not going to be attracting it. They’re going to decide “from time to time”, meaning hardly ever, under this Government, because it looks like they’re officially off the target area for the Labour Government for the prosperity of New Zealand. Where other Governments in the world are trying to incentivise mining for minerals and they are even subsidising some of the work that they do, New Zealand is basically saying no, and that is at the cost of us all. I know that the Government actually talks in a very big-falutin way about how they’re committed to emissions reduction, and yet their decision to close down on gas exploration, which other countries support as a backstop for energy, means that we don’t actually have that any more. I think that overseas, they say in Norway—

Stuart Smith: They’ve just reopened.

MELISSA LEE: They’ve reopened, according to Stuart Smith. He’s just told me that.

Hon Member: Oh, Stuart Smith is a very wise man.

MELISSA LEE: He is—well, he is the spokesperson, after all. He knows his business, and I think sometimes I have to wonder whether the Minister does, in fact, know about it.

The issue is that the Minister of Energy and Resources, in her answer during the committee stage, said that it wasn’t part of the debate, but she introduced it by trying to defend her Government’s position by saying that New Zealand has had the lowest importation of coal in the last quarter of last year. I have to remind the members that in 2021, we had one of the highest importation of coal—close to 2 million tonnes—that came into this country from Indonesia, where we cannot guarantee that their exploration methods are as clean as we do it. Why not open the mines here in New Zealand so that we can control the environmental impact? We only do it because we may need it when the water levels in our hydro lakes are down and we need the coal to power our energy, but, instead, we import it from another country where we can’t control the emissions commitment of those countries or the practices of those countries.

Going forward, whether or not it is products that use minerals that we import, we probably, as a nation, need to think about how those products are manufactured in terms of their emissions profile, because that’s the trend around the world. I think we would all support that, but we need to actually think about how we do it in New Zealand. I think we can be better, and all of us can agree to that. But, as Stuart said, do we want to make sure that we support the mining industry to explore and get these minerals out of the ground to, potentially, use for the things that we need, including electric vehicles (EVs) and including silica, for example. I mean, you know, Silicon Valley—we need chips, right? Potentially, we could actually create manufacturing where we filter the silica that we—

Stuart Smith: We could sell them silicon ingots.

MELISSA LEE: Exactly, and we should think about the future. The future is in digital and it needs a lot of minerals. I think that EVs have—how many more minerals?—six times more minerals than conventional cars. I know that earlier I talked about the wind turbines—one wind turbine takes 220 tonnes of coal to manufacture.

Hon Member: So you replace the coal.

MELISSA LEE: I know. But the thing is that we have to look at those costs as well, and perhaps those costs for carbon emissions could be reduced if we did it from New Zealand, rather than importing coal that has a really terrible carbon emission profile, and it has to be shipped to New Zealand as well. That also is a carbon profile addition, rather than things that are dug up from our own ground.

I’m not suggesting we go all foolhardy on coal, coal, coal; I’m talking about minerals. There are plenty of minerals in our Crown land, where we can promote and be responsible in their attraction. I think that the Government could actually do more to support the industry instead of kiboshing it and saying no, and calling them out as if they are bad actors. I think everyone tries to do their very best. Yes, we do get some bad actors, and those bad actors need to be pulled up for their activities and we should make sure that they pay for their bad activity in terms of their pollution. But when we consider the fact that overseas Governments are incentivising minerals mining and trying to make sure that there is competition in the field, I think New Zealand is actually badly served by our Government trying to reduce the amount of exploration. I certainly do not support this bill.

Hon MICHAEL WOOD (Labour—Mt Roskill): One of the worst and laziest debating habits that occurs in this House from time to time is the creation of the straw man. That is the development of an argument that is self-evident but doesn’t actually go to the matter that is under consideration. That is what we have been treated to over the last couple of speeches from the Opposition, who are opposing this bill. The Opposition have waxed lyrical at some length about the fact that extractive industries are important to our modern economy and our modern society. There is not a single member of this House who disputes that in some cases extractive industries are important for some of the things that we enjoy in our societies, and nor does this bill make that claim, yet listening to the Opposition members’ speeches, one might think that.

What this bill simply does is to ensure that we have a Crown minerals regime in New Zealand that ensures that when we do allocate rights to Crown minerals—which we accept in this House it is the purview of the Crown to allocate—that they are managed in a way that is good and to the benefit of our country, and, as the previous Labour speaker Naisi Chen said, with a broader range of considerations in mind, including environmental considerations and the needs of future generations.

What we really got to, and we heard this from the last couple of speakers as they got a bit deeper into their speeches, is the fact that the National-ACT Opposition fundamentally has got to the point where they’ll mouth some words about climate change, but, ultimately, will not actually do anything to change our practices in a meaningful way that would reduce emissions. They want to reopen prospecting for new oil and gas. They want to mine for more gold. It’s good to get the clarity and honesty from the ACT Party, and I give the ACT Party some credit for that. I disagree with them profoundly, but they tend to coat it in fewer weasel words than the National Party. The ACT Party wants to mine for more oil and gas and coal, and that is what we will get under a future National-ACT Government that will abandon all of the meaningful steps that we have taken to actually reduce our carbon emissions.

The final point that I find extraordinary is that we have an Opposition voting against this bill that puts in place stronger provisions around the decommissioning of oil and gas infrastructure. That is a fundamentally irresponsible position because it will leave the Crown in the position of having to take up the costs of that decommissioning in future years—yet another cost that you can add on to the National Party’s uncosted future Budgets.

This is a good bill that means that we can manage mineral extraction in a better way in the future, not close it down—no one’s proposing to do that—and that will reduce cost to the taxpayers through the decommissioning of future infrastructure. It’s a prudent and sensible bill and I’m very pleased that it will pass through the House today.

SIMON COURT (ACT): Thank you, Mr Speaker. Thank you to the previous speaker, the Hon Michael Wood, for acknowledging that the ACT Party does support ongoing development of oil and gas resources and our mineral resources, and that we also have a strong commitment to reducing the effects of greenhouse gas emissions by making sure the emissions trading scheme puts a price on emissions so the incentives to reduce emissions are clear.

That is why the ACT Party says that the provisions of this bill, which further go to restrict access and development of New Zealand’s natural and physical resources—particularly those hydrocarbon resources natural gas and oil which we absolutely depend on for residential heating, generating electricity, and for producing manufactured goods like methanol; like paper from our timber and forestry, and so on—that we continue to have an adequate supply of those resources at a cost-effective rate.

So let’s come to the problems that this bill proposes to solve and the problems that this bill causes. This bill proposes to amend the Crown Minerals Act, which includes minerals in the ground—things such as gold and silver, for example—and oil and gas. They are all covered by this Act. It enables a more flexible approach to the management allocation of rights to Crown-owned minerals. Well, what it does by removing the word “promote” from the purpose of the bill—“promote” the development of minerals—it, essentially, takes away the “New Zealand’s open for business; we want New Zealand to be a wealthy country so we can afford better social outcomes.” It takes away the “promote” and goes back to “manage”.

Then it says, instead of the Minister being required to make offers to the market to access New Zealand’s Crown-owned minerals—oil, gas, and other minerals such as gold—instead of being required to “promote” that and to provide permitting in a regular and timely manner, it’s going to be “from time to time”. So when a Minister feels like—and we didn’t hear any criteria from the Minister what that might be. Of course, we could expect that under a Government that was supported by the Green Party—which is fundamentally opposed to mining—and Labour, which, essentially, does whatever it thinks will get the kids to vote for it.

If this administration continues along this route, what we can see is an ongoing pathway to reduction in access to affordable oil and gas energy and to the critical minerals that the Minister acknowledged are critical for life on earth as we know it now. Whether it’s medical imaging equipment, satellites, cell phones, or simply the batteries and computer chips in the electric vehicles that one day we’ll all be driving.

We have a choice. Do we go back to a zero-growth, doughnut economy—a circular economy, essentially: limits of growth, some socialist utopia where a centralised government will tell you where you are allowed to live, what car you are allowed to drive, what fuel you are allowed to use—or should we choose, instead, the economic opportunity that developing New Zealand’s resources offers us? Because that’s what ACT would do. We believe that getting the resources out of the ground, turning them into economically valuable goods, trading them with our neighbours and our partners value-for-value actually uplifts all New Zealanders—but particularly those in the regions like Taranaki; the West Coast of the South Island; Southland; Otago; and, of course, Coromandel, where small towns like Waihī benefit from having fantastic high-tech, environmentally friendly operators like OceanaGold operating gold mining in in that area.

So the Minister admitted that this bill is necessary because of something that happened in 2018. This bill backfills and, essentially, resolves a lot of the messy policy and legislative damage caused by former Prime Minister Jacinda Ardern, who announced on 11 April 2018 a ban on oil and gas exploration offshore in New Zealand, quoted at the time, “must start somewhere”, no jobs will be lost, effective immediately. Well crikey, that’s policy on the hoof. Here we are in 2023, five years later, the forlorn Minister of Energy and Resources, Megan Woods, having to come to the House and try to close off some of the issues that that flawed, hopeless announcement has resulted in.

It was described—that announcement—as a major victory by the Green Party leader, James Shaw. Truly, in the Prime Minister’s words, he said it is a “nuclear-free moment of our generation”. Well, this is how it’s going so far—

DEPUTY SPEAKER: Right, Mr Court—

SIMON COURT: Yes, Mr Speaker?

DEPUTY SPEAKER: Back to the bill.

SIMON COURT: Thank you, Mr Speaker. So what does this mean? What does this mean? What is a more flexible approach to management allocation of rights to Crown-owned minerals mean in New Zealand? Well, it means a Minister will have more ability to say no to things, even if they choose to offer permits—even if they choose to offer them.

This legislation does not repair the economic vandalism of that 2018 announcement to ban oil and gas exploration. It does not help the environment long term, because all emissions in New Zealand are covered by the cap under the emissions trading scheme, which the Minister of Climate Change can set. If they wanted to reduce emissions, they simply reduce the cap and the number of credits that are auctioned under the emissions trading scheme. It does not reduce carbon emissions by a single tonne. That is a fallacy; that is gaslighting.

But what it certainly does do is increase the national security risk that losing our energy independence creates by reducing the amount of oil and gas that we produce here in New Zealand. The Minister talked about a gas transition plan. There is no other country in the world that has embarked upon the removal of an energy source like natural gas from its economy and then, having decided they were going to do that, found the rainbow that leads to the field of unicorns where we all live in this just transition world where no jobs were lost.

There is no other country in the world that’s turned off gas. In the midst of a global energy shortage, President Putin having invaded Ukraine and forced Europe to reconsider its own energy transition to increase the volume of renewables, this is what UK Prime Minister Rishi Sunak said recently in relation to their gas transition plan: “We’ve all witnessed how Putin has manipulated and weaponised energy, disrupting supply and stalling growth in countries around the world. Now, more than ever, it’s vital we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy to British homes and businesses.”

Now, a future Minister of energy may well make the same speech with regard to New Zealand. Because if the UK deems it necessary to offer hundreds of licences for exploration in the North Sea to the rest of their natural gas resources, to make sure they have clean and affordable energy, and to make sure that their national security interests are upheld, you know, it may well apply to New Zealand too.

ACT opposes this bill, but we do support a regime where decommissioning the Tui oil field or other installations is carried out to an extremely high standard—but that’s already allowed for under existing legislation. ACT would support engagement with iwi and hapū about natural gas and mineral resources where they have customary rights, where they have a demonstrated property right. For example, Ngāi Tahu in the South Island made the case very strongly when the Government was considering whether mining should be banned or prohibited on conservation land, particularly stewardship land, that there are iwi and hapū in New Zealand that have potentially a right—a property right or a customary right—to access minerals that the Crown owns.

So it is important that the Government engage with iwi and hapū to understand what that property right is. But ACT can’t support this bill because it doesn’t reduce, by a single tonne of carbon, New Zealand’s greenhouse gas emissions capped under the emissions trading scheme; it acts to further sterilise economic opportunities, particularly in regions like Taranaki; it exposes New Zealand to a higher risk of our national security being compromised by energy and materials shortages that we could address on-shore; it increases the cost of energy to homes and businesses; and it risks the leakage or deindustrialisation of jobs overseas. ACT opposes this bill. We’ll repeal the ban on oil and gas should we be in Government.

DEPUTY SPEAKER: The time has come for me to leave the Chair. The House will resume at 2 p.m.

Sitting suspended from 12.57 p.m. to 2 p.m.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. 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 investment to boost the teaching workforce with around 700 new teachers from overseas and 300 new domestic teachers. Within a year, the investment that we’ve made has exceeded the goal of a thousand new teachers. In a global shortage, there is high demand for teachers, so we need to make sure New Zealand is an attractive place to have a rewarding teaching career. While there is, no doubt, more work to do, we’ve made good progress with more than 3,800 more teachers in classrooms since we became the Government.

Christopher Luxon: How did he manage to spend $2 billion more a year on law and order but deliver 107 percent increase in serious assaults, two ram raids a day, and a 70 percent increase in gang members?

Rt Hon CHRIS HIPKINS: Of course, one of the reasons that we know that there are more gang members is that we put more resource into the police chasing gang members and actually making sure that they are being charged. The gang register was only put in place in 2016. Had it been in place for longer under the previous National Government, there probably would have been more gang members on it when we actually became the Government in the first place. We’ve had to do catching up because it was one of the things that the last National Government didn’t do.

Christopher Luxon: How did he manage to spend $5 billion more a year in education, hire 1,400 more public servants, but deliver fewer students leaving school with level 2 NCEA?

Rt Hon CHRIS HIPKINS: Mr Teacher—Mr Speaker, because we are employing—

Hon Members: Ha, ha!

Rt Hon CHRIS HIPKINS: “Mr Teacher”! Slight slip. Because we’re employing more teachers, because we are paying them better, and when he talks about the “public servants”, what he would be referring to are the extra specialist staff, amongst others, but they would be the extra specialist staff employed by the Ministry of Education to deal with the students and to support the students who have the highest learning support needs. We have managed to start getting on top of the significant waiting lists—for example, for some of our most vulnerable young kids who were waiting for far too long to get the specialist support that they deserve.

Christopher Luxon: How did he manage to spend half a billion dollars restructuring the health sector, but every single health outcome—access to cancer treatment, emergency department wait time, surgical wait list, and child immunisation rates—has all got worse; not one single one has improved?

Rt Hon CHRIS HIPKINS: I know the member likes to pretend that the global pandemic never actually happened, but almost every health system around the world has seen indicators around things like elective surgeries and emergency department wait times get worse. And it’s because the health system’s been dealing with a massive influx of people with COVID-19.

Christopher Luxon: How did he manage to spend $2.3 billion more on housing but rents are up $175, the State house wait list is up 20,000, and there are four times as many kids now living in cars?

Rt Hon CHRIS HIPKINS: I’m glad the member mentioned the State house wait list, because under the last National Government, to get the wait list down, they simply deleted a whole lot of categories on the wait list. Those people’s housing needs did not go away; they got more severe. And the reason that we’ve now got people on the more severe State house waiting list is that they simply pretended they didn’t exist under the last National Government. We are building more State houses, more public houses, than any Government since the 1950s. If the last Government had been building public houses at the same rate as we are, there would be next to no people on the State house waiting list.

Christopher Luxon: How has he managed a special skill set to spend more, to hire more, but deliver worse outcomes in crime, worse outcomes in health, worse outcomes in housing, and worse outcomes in education?

Rt Hon CHRIS HIPKINS: If I just take the middle one of those again for a moment and deal with health, the health system has been under enormous pressure because of a global pandemic. I note the member mentioned immunisation rates. Now, that’s an interesting topic given members opposite that could potentially make up a Government, if they are successful, would include apparently a bunch of anti-vaxxers who don’t seem to think that vaccinating kids is a good thing to do.

Christopher Luxon: Why does he measure success by the amount of taxpayer money he spends, rather than the actual outcomes delivered for Kiwis that improve their daily lives?

Rt Hon CHRIS HIPKINS: I don’t, and I’m happy to have the opportunity to recap—for the member—from yesterday some of the highlights of this Government’s time in office: wages growing at 6.9 percent over the last year, unemployment below 4 percent for two years in a row, more Kiwis in work than ever before, 110,000 low-income New Zealand families having cheaper and healthier power because of the Warmer Kiwi Homes programme, and 77,000 fewer New Zealand children living in poverty under this Government. We’ve seen record levels of renewable electricity generation under this Government. We’ve seen significant efforts to improve the quality of the school property portfolio that was so badly run down under the last Government that we had kids parked in hallways, in gymnasiums, and in libraries because they simply did not have enough classrooms. On the international front, we’ve secured more progress on free-trade agreements than any Government in recent New Zealand history, to support our exporters. We’ve got more people in apprenticeships—274,000 people taking up free apprenticeships and targeted trades training under this Government. One thousand three hundred more classrooms—to put a number on the figure that I was using before. Three thousand more teachers in our classrooms—something that we are incredibly proud of. Supporting schools so that parents don’t have to top up school budgets with donations, in the way they had to under the last National Government. Or what about the hundred million free school lunches that have been delivered in our schools? Increasing paid parental leave to 26 weeks. Increasing health funding so that our hospital doesn’t have to go begging. And here’s one for the member, given his announcement: increased Pharmac’s funding by 51 percent since we became the Government. Twelve thousand additional public housing places under our Government, and there are more under construction right now because we want to see Kiwis with a roof over their head. One thousand eight hundred extra police on the beat under our Government. And let’s not forget the record levels of investment in our infrastructure, with $71 billion due to be invested in infrastructure over the next five years as we catch up for the years of neglect of our infrastructure that we saw under the last National Government. There is so much more I could talk about.

Christopher Luxon: So what I would say to you is, why, despite that very long spiel, is crime worse, is education worse, is health worse, and is roading worse; why have we not seen improvement in any of those outcomes at all?

Rt Hon CHRIS HIPKINS: I utterly reject the assertion that the member is making in his question. If he thinks that having fewer children in poverty is a worse outcome, if he thinks that building more State houses since the 1950s is a worse outcome, if he thinks having more teachers in schools is a worse outcome—that could actually explain their track record on under-investment in teachers. If he thinks having more nurses and more doctors in our hospitals is a worse outcome—that could also explain the mess that we inherited from the last Government. We actually think those things are good signs. They are good investments in the future of our country.

Question No. 2—Housing

2. HELEN WHITE (Labour) to the Minister of Housing: What recent progress has the Government made to boost public housing in Auckland?

Hon Dr MEGAN WOODS (Minister of Housing): I am pleased to inform the House that this Government has delivered over 13,000 public houses across the country. In Auckland alone, there’s been an increase of nearly 7,000 public homes. Recently, the Prime Minister and I opened Te Mātāwai, a 276-unit apartment complex in Auckland’s CBD, the largest single-site public housing development in New Zealand’s history. Our extraordinary pace of delivery means that this Government is delivering the most public homes per year since the second Labour Government in the 1950s.

Helen White: How is Te Mātāwai supporting its tenants?

Hon Dr MEGAN WOODS: Te Mātāwai will provide tenants with around-the-clock onsite support, which demonstrates our deep commitment to ensuring those people who need the support in their lives can get it. Around 60 percent of the units at Te Mātāwai are accessible or universally designed and have been recognised with Lifemark ratings of 3 or 4. All of the units at Te Mātāwai are built to Homestar 7 standard, meaning they will be warmer, healthier, and more energy efficient for those who make their homes there.

Helen White: What is the Government doing to help elderly people into public housing in Auckland?

Hon Dr MEGAN WOODS: Kāinga Ora is currently building 236 new homes in Avondale to replace 45 older homes. Of this, 192 of the homes will be retained for seniors housing. Once complete, it will allow Kāinga Ora to replace several ageing senior housing complexes across Avondale and Blockhouse Bay. Kāinga Ora has also worked in partnership to deliver 41 new public homes on Wilson Road, Glen Eden specifically designed for older people. Other examples of Kāinga Ora senior housing that are currently at various stages of development across Auckland include 52 homes on Greenslade Crescent in Northcote and 123 homes in Manukau City’s Osterley Way. We are deeply committed to providing the support needed for those in public housing, including older New Zealanders.

Helen White: How is the Government enabling land for much-needed housing in Auckland?

Hon Dr MEGAN WOODS: The Government has invested $2 billion from the Housing Acceleration Fund into five large-scale projects in Auckland: in Tāmaki, Mount Roskill, Oranga, Northcote, and Māngere. This work, which has been overseen by Kāinga Ora, delivers the pipes, roads, and other key civil infrastructure to allow more than 17,000 homes to be built across Auckland in the coming years to help solve our housing crisis. This work also enables an additional 11,000 homes to be delivered on neighbouring privately owned land. In addition to this work, over $120 million in infrastructure investment through the Infrastructure Acceleration Fund will enable a further 4,000 homes across Auckland.

Helen White: What progress has been made on these Auckland large-scale projects?

Hon Dr MEGAN WOODS: To date, the work under way has seen 82 hectares of land made build-ready to support more than 6,000 homes. More than 2,600 homes have so far been delivered in the Auckland large-scale projects by property developers. These homes are a mix of market and affordable public homes, as the work continues with about another 30 hectares of land to be made build-ready for housing. Our Government is proud of these outcomes.

Question No. 3—Revenue

3. NICOLA WILLIS (Deputy Leader—National) to the Minister of Revenue: Does she agree with the Minister of Finance’s statement that he was “too definitive” when, prior to the election, he ruled out changes to the brightline test, and will the Government’s subsequent changes to the bright-line test result in some New Zealanders paying a capital gains tax on their family home?

Hon BARBARA EDMONDS (Minister of Revenue): I always agree with the finance Minister’s statements in the context that they were made. New Zealand has no capital gains tax on the family home. Further, I have today announced that we will remove the brightline test for owners of flood- or cyclone-damaged properties who take up the voluntary buy-out offer, which is co-funded by the Government and local authorities. We remain committed to supporting those affected by the severe weather events. In some cases, a voluntary buy-out may trigger the brightline test or one of the other tests for land sales. The Government is clear: it isn’t appropriate to apply the brightline test to these property sales because of the impact of weather events. This builds on earlier tax rollover relief changes made in April for the North Island weather events.

Nicola Willis: How can she say there is no capital gains tax on the family home when the IRD has issued specific guidance which says that if a family-home owner is out of their home for 12 months for any reason, they will be subject to a 10-year brightline test, meaning, in effect, they will pay a capital gains tax on the sale of their home?

Hon BARBARA EDMONDS: I repeat that there is no capital gains tax on the family home. I also remind the member that the brightline test was introduced by the National Party, which created this uncertainty. Under National’s rule, the owner must have resided in the property as their main home. The main home exclusion will not apply when only a family member and not the owner has used the property as their main home. So this would’ve been caught by the National rule. Under their rules, if that person was living in the home for less than half the time they owned it, they would have been subject to tax on the entire gain on the sale.

Nicola Willis: Why does she keep claiming that there is no capital gains tax on the family home when the IRD’s explicit guidance about Rebecca says that despite never owning an additional home and having her husband and daughter stay in the sole home she owns, she would have to pay a capital gains tax for the time she was away from her home?

Hon BARBARA EDMONDS: Again, I want to reiterate my earlier comments: there is no capital gains tax on the family home. Section CB16A, which talks about the disposable under the brightline test, the Commissioner of Inland Revenue, not the Minister of Revenue, is responsible for interpreting the tax legislation. The main home should not be caught by the brightline test. This has never been and is not the intention.

Nicola Willis: Does the Minister think it’s fair that a family would have to pay a capital gains tax on the sale of their family home just because one parent needed to move out of home for a period of time due to, for example, a work secondment or a family illness?

Hon BARBARA EDMONDS: What’s not fair is that under the previous rules by the National Government, if a person was living in the home for less than half the time they owned it, they would’ve been subject to tax on the entire gain on that sale.

Nicola Willis: Does the Minister see that the best way to ensure that no family is subject to her capital gains tax by stealth would be simply to take the brightline test back to two years where it should stay?

Hon BARBARA EDMONDS: I absolutely refute the mischaracterisation by that member who says that there is a capital gains tax by stealth. There is no capital gains tax in New Zealand on the family home.

Nicola Willis: Does the Minister realise it’s pretty confusing when she claims there isn’t a capital gains tax for families but explicit IRD guidance makes clear that if a homeowner is out of their family home for more than 12 months for any reason at all—secondment, renovations, damage from a natural disaster—they will be exposed to her Government’s brightline test if sold within the brightline period?

Hon BARBARA EDMONDS: What is confusing is that these are the same rules that the National Party introduced when they brought in the brightline test in 2015. We sought to clarify the rules in 2021 to provide some cushion for those taxpayers. Therefore, once again, I reiterate, there is no capital gains tax on the family home.

Question No. 4—Prime Minister

4. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does he stand by his response “Yes, I do” to my question yesterday asking if he stood by “the factually incorrect statement he made to Newshub on Saturday ‘The idea that you’d make a joke about blowing up an ethnic minority is something that isn’t really funny’”, and does he consider his own statements that the Ministry for Pacific Peoples’ expenditure “isn’t acceptable” to be criticising an ethnic minority?

Rt Hon CHRIS HIPKINS (Prime Minister): Yes, I stand by the statement that such jokes are not funny. All Government spending is open to scrutiny and it’s possible to do that without talking about blowing people up.

David Seymour: Does he stand by the statement—[Interruption]

SPEAKER: Order!

David Seymour: —he made yesterday—

SPEAKER: Sorry to interrupt. Can you ask the question again?

David Seymour: Happy to, Mr Speaker. Does he stand by the statement he made yesterday that “I believe … all political leaders have a responsibility to take care in the statements … they make about all of New Zealand’s citizens and groups, and we have a particular duty of care to ensure that the statements we make don’t inflame tensions”; and if he really believes that, why did he mischaracterise my criticism of wasteful spending at a Government department as an attack on an entire ethnic group?

Rt Hon CHRIS HIPKINS: Yes, and it’s a matter for the member to clarify what it was he was intending when he said he thought that sending Guy Fawkes into the Ministry for Pacific Peoples was an appropriate thing to do.

David Seymour: How can he stand by his statement that “political leaders have a responsibility to take care in the statements that they make” while, at the same time, making factually incorrect statements, and standing by them today, when they introduce race into a debate where it never needed to be?

Rt Hon CHRIS HIPKINS: I know the member seems to want to turn the election campaign into a culture war with himself at the centre of it. We’re actually focused on more important issues, on this side of the House.

David Seymour: Does he stand by his statement in response to questions about Labour’s low polling: “we’re going to fight back”, and is mischaracterising what other people say for political advantage part of this “fight back”?

Rt Hon CHRIS HIPKINS: Of course, as Prime Minister, I’m not responsible for either of those comments. But, yes, of course, I do stand by the first one. With regard to the second one, I’m sure that the parties opposite will be getting more scrutiny—including uncovering the fact that the member himself is being propped up by a bunch of anti-vaxxers.

Debbie Ngarewa-Packer: Tēnā koe e te Māngai. What does the Prime Minister think must be done to stop politically motivated violent extremism that is growing, the white identity - motivated violent extremism that is growing, that relate to anti-Semitism, ant-rainbow, anti-Māori, and anti-Pacific ideologies, as identified in the New Zealand’s Security Threat Environment 2023 report released last week?

Rt Hon CHRIS HIPKINS: There are many things that we can do, but I think one of the things that we can all do as political leaders is to lead by example. The other thing is when we see that behaviour, we can call it out.

David Seymour: Does the Prime Minister believe New Zealanders have a right to an honest, healthy debate this election, and will he publicly commit to promoting that instead of mischaracterising others’ statements and creating a culture of fear?

Rt Hon CHRIS HIPKINS: Yes, I absolutely do and I would like the member to make the same commitment.

David Seymour: Is he resorting to a desperate campaign of fear because his Government has no record to run on and New Zealanders know it and they’re deserting him at the polls by the thousand every week?

Rt Hon CHRIS HIPKINS: Coming from a member who’s being propped up by a bunch of anti-vax conspiracy theorists, I think that question’s a bit rich.

Rawiri Waititi: Does the Prime Minister agree with a judgment that we’ve got the leader of ACT chiming in about law and order but is first to get name suppression for his president for heinous crimes?

SPEAKER: The Prime Minister’s not responsible for that.

David Seymour: Point of order, Mr Speaker. Mr Speaker, I invite you to reflect and perhaps seek advice. The member has just speculated that a particular individual has name suppression and is guilty of heinous crimes. Both of those are in contempt of court, and, due to the long tradition of comity between this House and the courts, to make such statements is deeply disorderly, brings the House into disrepute, and should face very severe consequences from you, Mr Speaker. I can’t believe, frankly, what I’ve just heard. The tikanga of this House is well known and should be respected.

SPEAKER: I’d like everyone to calm down, thank you. I will go back and look at everything that’s happened in question time today. The future of the House is in the House’s hands and every individual member in it. I have—and I have stated this on a number of occasions—allowed supplementary questions to be asked, including the member himself on this very question today, that have been out of order, almost completely out of order, and have allowed the Minister to choose whether or not they want to address all or part of it. I will go back and have a look at that particular one and everything else, but there’s a very clear procedure about what the member is talking about. He has that open to him if he wishes to take that course of action, OK? Raising it as a point of order in such an instance is not appropriate. Are there any further supplementaries on this primary question?

Question No. 5—Health

5. Dr ANAE NERU LEAVASA (Labour—Takanini) to the Minister of Health: What announcement has she recently made regarding improving the mental health of New Zealanders?

Hon Dr AYESHA VERRALL (Minister of Health): Earlier this week, I was proud to announce that the Government’s mental health and addiction programme Access and Choice has hit the 1 millionth support session mark since it started delivering services in 2020. Access and Choice provides support to people experiencing mild to moderate mental health challenges so small issues don’t become big problems.

Dr Anae Neru Leavasa: How many New Zealanders does the Access and Choice programme support?

Hon Dr AYESHA VERRALL: Each month, tens of thousands of New Zealanders are benefiting from this new programme, which offers mental health support in healthcare settings they are used to, such as GP clinics. The wellbeing support provided in general practice alone has population coverage of over 3 million New Zealanders. Figures show that approximately 40,000 to 60,000 sessions a month are being delivered, and this number will continue to grow as the phased nationwide roll-out of services continues.

Dr Anae Neru Leavasa: How has the Access and Choice programme supported New Zealand’s diverse communities?

Hon Dr AYESHA VERRALL: New Zealanders can get free and easy to access face-to-face support from Kaitāia through to the Bluff, and more than 600 locations in between. We have seen great uptake in the number of Māori accessing the service, with 19,700 sessions delivered in May and June this year. We have also seen 4,000 sessions delivered to Pacific people and 9,900 sessions delivered to young people, also in May and June this year. This shows what can happen when we design services with diversity in mind.

Dr Anae Neru Leavasa: How can someone access those services?

Hon Dr AYESHA VERRALL: Access and Choice services don’t require referral and are appealing to a wide cross-section of Kiwis wanting to address mild to moderate mental wellbeing challenges. New sites are also coming on stream every month. Now you can get free and easy to access face-to-face support from Kaitāia through to Bluff and at more than 600 locations in between. To find a provider close to where they live, head to wellbeingsupport.health.nz.

Matt Doocey: In light of the Minister’s response of being proud, how proud is she that under her Government an extra 176,000 people have been unable to get mental health support, with the latest New Zealand health survey reporting that unmet mental health need has increased from 4.9 percent in 2017 to now 8.8 percent in 2022, despite the $1.9 billion somewhere for mental health?

Hon Dr AYESHA VERRALL: We have just described a brand new mental health system in the community that is addressing unmet need, and if we had been in the position that that Government left us in, there would be nothing in the community for mental health. If we go back and turn back the clock in the way National wants us to for mental health, those people would be a lot worse off.

Question No. 6—Police

6. Hon MARK MITCHELL (National—Whangaparāoa) to the Minister of Police: Does she stand by her statement, “It is my view that New Zealanders feel safer”; if so, why?

Hon GINNY ANDERSEN (Minister of Police): E te Māngai o te Whare, for what I believe is the 16th time, I stand by my full statement at the time it was given; it is my view that New Zealanders feel safer with the Government on track to deliver 1,800 extra police. I also stand by my recent comments that it was great to meet in person with Countdown to talk about how we can work together to reduce unacceptable levels of retail crime. I share that member’s concerns about the increase Countdown has seen in stolen goods, physical assaults, thefts, and security incidents. However, rather than just talking about being tough, this Government is resourcing police to work with organisations like Countdown to get on top of this problem.

Hon Mark Mitchell: Well, does she include Countdown employees in those that should feel safer?

Hon GINNY ANDERSEN: I met with Countdown in just the last week, and when I met with Countdown they were also accompanied by the new retail crime support unit which has been advising them, and they have taken into account those security measures. I will also meet tomorrow with police and representatives from 40 retail organisations, including Farmers, Mitre 10, Michael Hill Jewellers, Pascoes, Aura, Kmart, Glassons, and Retail New Zealand. I agree that there is an unacceptable level of retail crime in New Zealand, and we are taking action to get on top of the problem.

Hon Mark Mitchell: Do the 234 Countdown workers that have been assaulted so far this year feel safer now that she has met with them?

Hon GINNY ANDERSEN: This Government has taken action to support retailers with a new retail crime prevention unit and also to support those retailers with additional security features. The actions this Government is delivering to reduce retail crime is far superior to what those policies are, which is solely to introduce boot camps, which was proven by their own appointed science adviser not to work.

Hon Mark Mitchell: Does she think Kiwis feel safer when dairy workers are having to confront armed youth offenders, risking their lives to defend themselves and their businesses?

Hon GINNY ANDERSEN: Absolutely not, and that is why this Government has taken action to introduce a new offence, a ram raid offence, introduced into this House this week. We have also seen record numbers of security installations right across the country. We are working closely with those retail owners so that they are supported and so offenders are brought to account.

Hon Mark Mitchell: Given her single focus on community safety, are communities safer now than when she became police Minister?

Hon GINNY ANDERSEN: There’s always more work to do, and this Government is focused on delivering those results. I think those results of giving retailers clear support, of improving front-line resources with 1,800 extra police, and enabling those retailers to have access to good quality intelligence and advice from police is far superior to the actions that member is suggesting, which is simply to introduce boot camps for youth offenders.

Question No. 7—Agriculture

7. STEPH LEWIS (Labour—Whanganui) to the Minister of Agriculture: What has the Government done to support New Zealand’s farmers and growers?

Hon DAMIEN O’CONNOR (Minister of Agriculture): The primary industries are the backbone of our economy and the Labour Government has always backed our farmers and growers. The full list is too long to read out in the House, but I’ll give you a few examples. Firstly, we’ve successfully implemented a world-first Mycoplasma bovis eradication programme. We’ve co-invested in 267 sustainable food and fibre futures projects alongside industry to lift export value and innovation. We stood up the Opportunity Grows Here initiative to attract Kiwis into the sector and support with labour shortages. We saved Telford and Taratahi from financial ruin and ensured the future of agricultural education. We started On Farm Support and the Career Pathways Scheme. We set aside $6 billion for futureproofing roads and rail infrastructure. We invested $1 billion into developing emissions reduction tools, extension services on farm, and farm sustainability practices, and we’ve secured seven new or upgraded free-trade agreements to give our exporters diversified market opportunities. At every turn, the Labour Government is looking to cement the bright future of our primary industries.

Steph Lewis: What have we seen as a result of this support?

Hon DAMIEN O’CONNOR: As a result of all this great support, we have, firstly, placed more than 16,000 additional Kiwis into primary sector jobs, funded 1,400 people through free agricultural taster courses at Telford and Taratahi—two organisations that the previous National Government had deserted. We have put 44 on-farm support staff on the ground in the regions and they have played a significant role in Tairāwhiti and Hawke’s Bay. We’ve got 50 farm advisers into the Career Pathways Scheme. We’ve established 32 rural hubs to connect farming communities with health and wellbeing support, and we’ve slashed millions of dollars in tariffs off our primary sectors. As a result of this and other support, today I’ve announced the final figure for our food and fibre export revenue ending on 30 June this year: a record $57.4 billion of export earnings. That is 50 percent higher than when we came into Government in 2017. I want to thank the industry and everyone in the primary sectors for helping us achieve that.

Steph Lewis: What are the challenges facing the primary sector?

Hon DAMIEN O’CONNOR: We’ve seen an increase in input prices on farm as a result of Russia’s war in Ukraine and the effect that has had on supply chains—on fertiliser and fuel, in particular. Recently, we have seen commodity prices coming down from their record highs. The markets are also sending strong signals around sustainability credentials and emissions reduction. But some of the biggest challenges that we would have are, firstly, if we ignored the market signals and locked ourselves out of international market opportunities, if we opened the door to foreign buyers and made it uncompetitive for New Zealanders to bid for farms, or if we sold off core infrastructure like roading into the hands of foreign buyers—that’s exactly what National and ACT are campaigning on.

Steph Lewis: Will the Government protect farmers by keeping the conduct of financial institutions Act?

Hon DAMIEN O’CONNOR: Yes. The Labour Government remembers the pain of the interest rate swaps crisis and we would not let that happen again. Thousands of farmers lost hundreds of millions of dollars after being taken advantage of by banks and dodgy operators—that’s why we put the Act in place. We also put in place a Farm Debt Mediation Act in 2019 to ensure that farmers under pressure would get a fair deal from their banks. Anyone who is proposing to repeal those protections would be serving our primary sector poorly. That’s what National and ACT are campaigning on.

Question No. 8—Housing (Māori Housing)

8. TAMA POTAKA (National—Hamilton West) to the Associate Minister of Housing (Māori Housing): Does he stand by all his statements and actions in relation to Māori housing?

Hon WILLIE JACKSON (Associate Minister of Housing (Māori Housing)): I thank the member for the question. Yes, in particular, when I said last week that this Government has done more for Māori than any other Government in history, and I actually referenced the member himself, Mr Potaka. As we all know, the Opposition likes to talk about what members have said in the past, and when Mr Potaka said just last year, this Government has been very much engaged, entwined, and bolted-on to what we’re doing—which is wonderful. Mr Potaka, he also said, “You either love them or you hate them, and right now we love them.” I’d like to thank that member for his ongoing support and love. Kia Ora.

Tama Potaka: How many of the 553 contracted houses have been completed under the iwi prototype scheme and are now occupied by residents and their whānau?

Hon WILLIE JACKSON: As that member well knows—as an avid supporter of this Government, he knows the problems that our people have to go through in terms of infrastructure, whenua Māori; the member knows there’s a range of problems.

Andrew Bayly: What about a number? Spit it out.

Hon WILLIE JACKSON: What we do have is 1,000 houses contracted to 2025—fabulous work done by Minister Henare, Minister Woods, but at the moment we have 70 built.

Simeon Brown: Point of order. The question was quite clear around how many from a particular programme had been delivered, and I didn’t hear an answer to that question. I heard about 1,000-something else—

SPEAKER: I’m surprised you heard anything. You’re kidding, right?

Hon Peeni Henare: Can the Minister confirm that two weather events have impacted on two of the prototypes, and that those prototypes pivoted to help the East Coast in need?

Hon WILLIE JACKSON: I can confirm that, and confirm the support of Sir Selwyn Parata, who has also given huge support to this Government; along with Tuku Morgan, one of the leaders from Tainui; Pita Tipene from the North; Willie Te Aho from the coast; and, of course, we’ve got Jamie Tuuta from Taranaki—and, of course, the member gave his undying support, well, just at the end of last year. I thank him for going for that love and support.

Tama Potaka: How many, if any, of the houses built through the Māori housing iwi prototype scheme now house people who were previously on the social housing register, and does his ministry collect that information?

Hon WILLIE JACKSON: As the member knows, I’m not responsible for the social housing register—the Minister’s over here—and if one day he becomes the Minister of Housing, which I think will be never, he could possibly ask that question. I’m not responsible for that register, but I am responsible for the iwi prototypes. Can I say today, this is the only Government that’s ever had a by Māori, for Māori strategy. The previous Government never put anything in place. Shame on Mr Luxon—he’s responsible. He’s the leader now, but Tama here is a big supporter of what we’re doing, so maybe he can initiate that in 2030 or something when maybe you’ll get into Government.

Tama Potaka: How does the Minister reconcile that answer with his answer to written parliamentary question No. 23271, when he states, “I’m advised that Te Puni Kōkiri does not collect information about whether individuals living in houses funded through the Whai Kāinga Whai Oranga were previously on the Housing Register.”?

Hon WILLIE JACKSON: I’ll just do this slowly for the member, because I have a lot of aroha for the member—I’m not the Minister responsible.

Tama Potaka: How many houses, if any, have been built at Ihumātao?

Hon WILLIE JACKSON: As that member knows, Ihumātao is a unique situation, and our people have five years to build houses, and the member who’s related to some of those people over there, should know better. He’s been very patronising and he’s learnt too many of the dirty rotten National Party tricks—I want the old Tama Potaka back.

Question No. 9—Police

9 ARENA WILLIAMS (Labour—Manurewa) to the Minister of Police: What actions have Police taken to crack down on retail and organised crime?

Hon GINNY ANDERSEN (Minister of Police): This Government continues to take action to assist police in tackling persistent youth offending and to hold to account those gang members and organised crime syndicates that peddle their misery and methamphetamine to our communities. There’s plenty more to do, but this Government takes backing the police and tackling crime seriously. This includes continued roll-out of the Retail Crime Prevention Programme and the fog canon subsidy scheme, the introduction yesterday of the ram raids offending bill, and also supporting police with the resources and the laws they need to continue to crack down on organised crime. It’s very easy to talk a big game in this House, but this Government continues to deliver the rules and the tools to support police in their work to crack down on retail and organised crime.

Arena Williams: How will new legislation help police?

Hon GINNY ANDERSEN: Yesterday, this Government introduced the Ram Raid Offending and Related Measures Amendment Bill to give further tools to police and the justice system to crack down on persistent youth offending. The new ram raid offence is modelled on the existing offence of burglary and will carry a maximum 10-year sentence of imprisonment. Where it does differ is that police now have the discretion to charge 12- and 13-year-olds in the Youth Court, where previously this wasn’t possible. The bill also makes it an aggravating factor in the Sentencing Act to live stream an offence, and for an adult to use a child or a young person to commit a crime.

Arena Williams: How are police helping to support retailers?

Hon GINNY ANDERSEN: The Government has continued to support retailers through both the Retail Crime Prevention Programme and the fog canon subsidy scheme. To date, 16 August, the fog canon subsidy scheme has seen the installation of 1,867 fog canons into small retailer areas, and also a further 137 are booked in. The Retail Crime Prevention Programme has also aided 586 retailers, with a total of 2,198 security interventions, including 519 fog canons, 421 security sirens, 479 alarms, and 423 CCTV systems and system upgrades. These interventions are making a difference. While ram raids do remain too high, I am always wanting to see that the numbers keep tracking down, as we have seen in the past two months.

Arena Williams: What reports has the Minister seen on the success of police charges for serious offences as part of Operation Cobalt?

Hon GINNY ANDERSEN: Operation Cobalt remains a driving force in supressing and also disrupting organised crime and gang-related activity within our communities. As of 17 August, police have laid 48,814 charges, which includes offences such as burglary, theft, fraud, breaches of bail, reckless driving, driving while disqualified, careless driving, and drink driving. These are serious offences and police are rightfully prioritising holding gang members to account—and also affiliates to account. It’s a shame that some people talk down this work in describing these serious offences as minor charges.

Question No. 10—Health

10. BROOKE VAN VELDEN (Deputy Leader—ACT) to the Minister of Health: Is it acceptable that as of July this year there have been 3,361 cases of staff being physically assaulted in Te Whatu Ora facilities, and is it acceptable that this is only 98 fewer assaults than the 3,459 physical assaults that occurred in the whole of 2022?

Hon Dr AYESHA VERRALL (Minister of Health): No, and no. It is never acceptable that someone is assaulted at work. I am assured by Te Whatu Ora that it takes the safety and security of its staff very seriously and is taking a large number of initiatives to keep people safe.

Brooke van Velden: Is it acceptable that, in the first seven months of 2023, seven out of the 20 former district health board districts have already recorded more physical assaults on staff than they recorded for the entire year of 2022?

Hon Dr AYESHA VERRALL: No, it is not acceptable.

Brooke van Velden: Does she believe that Te Whatu Ora complies with the Government’s expectation that public sector employers must “create safe and healthy places of work”, when five Te Whatu Ora employees have been stabbed by a patient since 1 January 2022, and, if not, is it acceptable that any staff have been stabbed at their place of work?

Hon Dr AYESHA VERRALL: No, it is absolutely unacceptable that our staff are treated in that way, and, yes, I do have confidence that Te Whatu Ora works very hard on this problem and has a number of mitigations in place.

Brooke van Velden: What changes will she advocate for to ensure staff safety when providing healthcare to Kiwis, considering the occurrence of 8,600 physical assaults on staff since April 2021 and the absence of national guidelines for responding to violence against staff?

Hon Dr AYESHA VERRALL: There is a number of measures under way already in Te Whatu Ora that I expect Te Whatu Ora to continue to roll out. That includes de-escalation training for staff across hospitals, but particularly in areas of high risk; the presence of over 800 security staff in our hospitals; in areas that are high risk, physical modifications to the environment; not to mention increased efforts put into reporting, which may reflect some of the data the member has mentioned today.

Question No. 11—Local Government

11. Hon EUGENIE SAGE (Green) to the Minister of Local Government: Has he seen the recent report from the Helen Clark Foundation on sponge cities and, if so, has he sought advice about encouraging water-sensitive urban design and sponge cities as part of the three waters reforms?

Hon KIERAN McANULTY (Minister of Local Government): Yes, I have. I have it here. But I only became aware of it because of the member’s question, so I appreciate her submitting that. I have not sought advice on this, however, because it is our view that the reforms do allow for such proposals to be considered by water entities. Specifically, sections 12 and 14 of the Water Services Entities Act set out the objectives and operating principles of the new water services entities. These include clear requirements for the entities to protect and promote the environment, to support and enable our response to climate change, and to have regard in the delivery of water services to green water infrastructure and water sensitive design.

Hon Eugenie Sage: What role, if any, does he consider that nature-based stormwater solutions, such as more green space and urban wetlands, in cities and towns have in responding to a changing climate and more extreme storm events?

Hon KIERAN McANULTY: Well, the report itself, from what I’ve seen, makes for interesting reading. And from the conversations that I’ve had with those within the local government sector already, this is something that is on their radar. But the priorities that the entities will follow are set by the regional representative groups, of which local government each have a seat on there. It’ll be through that venue that local government can highlight the best approaches for their own respective communities.

Hon Eugenie Sage: Does he consider that green roofs, on-site rainwater storage, rain gardens, and more urban trees would help reduce stormwater volumes and improve stormwater management; if so, what action can water services entities take to encourage more use of water-sensitive urban design?

Hon KIERAN McANULTY: Well, I’m certainly not an expert in these things, but those that will be running the operational aspects of water entities will be. And so if they deem these examples that the member has provided as an appropriate approach to stormwater in the respective communities, I’m certain they’ll pursue them.

Hon Eugenie Sage: Does he agree with Dr Yu Kongjiang, the initiator of the sponge cities concept in China, that, and I quote, “We need a paradigm shift in planning and designing our cities to adapt to the changing climate.”, and, if so, what measures will he promote through the three waters work programme to achieve this shift?

Hon KIERAN McANULTY: One of the rationales behind the water reforms is to ensure that local voice and local priorities are at the heart of the decisions made by water entities. We’ve tried to ensure that central government direction of those entities is limited as much as possible so that the priorities of the respective communities within those entities would be reflected. I don’t think it would be appropriate for me to express my opinion or indicate any potential direction, because that wouldn’t be my intention.

Question No. 12—Commerce and Consumer Affairs

12. ANNA LORCK (Labour—Tukituki) to the Minister of Commerce and Consumer Affairs: What benefits have New Zealanders gained from the Financial Markets (Conduct of Institutions) Amendment Act 2022?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you, Mr Speaker. New Zealanders can be confident today that their banks and insurance companies are obliged to treat them fairly and will face consequences if they don’t—

Andrew Bayly: They already have that under the other legislation.

Hon Dr DUNCAN WEBB: —thanks to this vital legislation, Mr Bayly. Since coming into office, the Labour Government has shone a light on the conduct of banks and insurers through conduct reviews, through court cases, and through the establishment of the conduct of financial institutions (CoFI) Act. We have put the onus on banks and insurers to demonstrate that they put the needs of consumers at the forefront of decisions, and we have given the Financial Markets Authority (FMA) essential new powers to hold institutions that treat customers unfairly to account with significant new penalties. This Government’s work on fair conduct is already seeing hundreds of millions of dollars returned to Kiwi consumers by their banks and insurers, and those responsible for unfair treatment are already being discovered and held to account. Everyone on this side of the House should be proud of this fantastic piece of Government legislation.

Anna Lorck: What led to the Government establishing this legislation?

Hon Dr DUNCAN WEBB: Thank you. The FMA and the Reserve Bank reviewed the conduct of banks and life insurers in 2018 and 2019. Since that time, a whopping $161,300,000 has been returned to over 1.5 million Kiwis. In the words of the Executive Director for Regulatory Delivery at the FMA, this demonstrates “the extent of the [weakness] in the systems and processes across banks and life insurers.” and “the significant amount of work required by financial institutions to ensure they are identifying, rectifying, and remediating issues”. The enormous impact of poor bank and insurer conduct on customers is irrefutable, and that’s why this Government took action.

Anna Lorck: What other evidence is there that the conduct of financial institutions Act is necessary?

Hon Dr DUNCAN WEBB: The FMA has taken seven of New Zealand’s big-brand insurers and banks to court for fair dealing breaches and has seen multimillion-dollar penalties handed down to several of these institutions.

Andrew Bayly: But they didn’t do that under CoFI—they did it under existing regulation.

Hon Dr DUNCAN WEBB: Mr Bayly, without this Government’s amendment Act passed last year, the FMA can only act retrospectively once harm to those customers has already been done. There is overwhelming evidence that a proactive, fair conduct regime with powers to monitor, licence, and enforce is sorely needed, the likes of which only the conduct of financial institutions Act provides.

Anna Lorck: Do you have plans to roll back this legislation further?

Hon Dr DUNCAN WEBB: Absolutely not. This Government takes its responsibility for ensuring New Zealanders are protected by our laws—we’re in it for the Kiwi customers who rely on us to make sure their banks and insurers treat them fairly. Where that’s not happening, we will act. We are proud of this critical piece of legislation, and on this side of the House we’ve no plans to repeal it. I agree with Hamish McNicol and Calida Stuart-Menteath, who said in the National Business Review on 18 August that “Ditching CoFI is bonkers”.

Personal Explanations

Hon Michael Wood—Privileges Committee Report

Hon MICHAEL WOOD (Labour—Mt Roskill): I seek leave to make a personal statement.

SPEAKER: Leave is sought for that purpose. Is there any objection? There is none.

Hon MICHAEL WOOD: The Privileges Committee has tabled its report into my compliance with the requirements of Appendix B of the Standing Orders. I thank the committee for their work on this issue.

Their report confirms that I should have declared the shares I personally owned in the 2017 to 2021 period, and that I should have corrected the register of pecuniary interests after I did correctly declare them in 2022 and 2023. I have previously acknowledged this and I would now like to take the opportunity to unreservedly apologise to the House. As the committee notes, this was an error on my part and I deeply regret it. I’ve learnt a clear lesson: in an intense and all-consuming job I lost sight of the importance of these matters and I will prioritise complete compliance in this area as I continue my work in the Parliament.

Again, I thank the Privileges Committee for their considered report on this matter; it points to a number of areas which I believe will be useful to all members. I also take this opportunity to thank a number of members from across the House who have been supportive of me in what has been a challenging issue to deal with.

Bills

Crown Minerals Amendment Bill

Third Reading

Debate resumed.

SPEAKER: The House will now continue with urgency. Before the lunch break, the House was considering the third reading of the Crown Minerals Amendment Bill. We had completed call No. 6. We come to call No. 7. I call Julie Anne Genter.

Hon JULIE ANNE GENTER (Green): Thank you, Mr Speaker. The Green Party absolutely supports this bill, the Crown Minerals Amendment Bill, and is very pleased to see it pass its third reading today. It has been a long time coming. We’ve known for decades that continued use of fossil fuels is at odds with a healthy, stable climate and the sort of future that we want to leave our children and grandchildren.

We’re already starting to see the impacts of climate chaos because we’ve put too much greenhouse gas emissions into the atmosphere, and that has created a thicker atmosphere which is trapping more heat. We’ve seen a record heat dome this week in North America, as well as unprecedented forest fires, uncontrolled fires, burning in Canada. And this, of course, follows earlier severe weather events that have hit Aotearoa New Zealand, including Cyclone Gabrielle and the flooding of Auckland.

These kinds of storms and fires have incredible impacts on people. They take their homes, they can take livelihoods, and they impact on food production. They will certainly be disruptive to the way people live their lives. So the cost of this is enormous and it far outweighs the cost of action and transitioning to an economy and a society, a way of living that is reliant on clean, renewable electricity that we have harnessed from the sun and the wind.

Here in New Zealand, we already have our hydro dams and we do need to be working to increase renewable capacity. But one of the key things the scientists have been telling us for several years now, more than several years, is that we have to stop looking for more oil, coal and gas. That is irrefutable. It is impossible for us to carry on looking for more fossil fuels when we already know the world cannot afford to burn the fossil fuels that we know already exist.

The debate on this bill should be enough for members, members of the public, people watching at home, and voters to understand how stark a difference it will be if we have a National-ACT Government. They are planning to continue exploration for fossil fuels. They see no reason to stop looking for them. They completely misunderstand the science and the clear direction that we’ve been given that says, yes, we’re going to continue using some of the oil, coal, and gas that we already have but we have to stop looking for more. We have to rapidly transition away from using them to have any hope of meeting the Paris Agreement, which was to stay below 1.5 degrees of warming.

Already this year we’re going to hit over 1.1 degrees of warming, I believe, since preindustrial levels, and we’re seeing the sort of chaos it’s creating. Imagine how much worse it will be if we breach that 1.5 degree threshold, or 2 degrees. We’re on track for maybe 3 degrees. Every action that we take from now on has to be aimed at protecting the climate and protecting biodiversity, enabling nature to be restored.

Changing our land use is absolutely essential. Humans are just taking too much from the Earth. We can live in harmony with nature, but we have to draw a line and stop doing the things we know are destructive and counterproductive. It’s that simple. It’s that stark. So anyone who tells you and people at home that it is important for our economy to continue exploring for fossil fuels and to just open the floodgates and promote more mining and extractive industries is just completely wrong, and their values are in the wrong place. They’re probably being paid—

DEPUTY SPEAKER: All right, Ms Genter; we’re here to talk about a bill and we’re going a long way off it. So let’s relate it to the bill, shall we?

Hon JULIE ANNE GENTER: The bill changes the purpose of the Crown Minerals Act so that it’s no longer about promoting, but rather about managing, and that distinction is very important. It doesn’t mean that there will be nothing happening. It does mean that the Crown will be exercising its responsibility to manage how those activities take place, where they take place, whether or not they’re taking place in an environmentally responsible manner or not.

But what the members opposite have said during this debate—that is the National Party and the ACT Party—that they want the Government agencies to be required to promote this sort of extractive industry and exploration for fossil fuels, is just unthinkable to me. It’s completely at odds with the science and what we’ve been told. Most New Zealanders want to have that security—to know that we’re looking after nature, that we’re looking after the climate, that we can responsibly transition to a different way of living. But we can’t do that if all of our Government systems and legislation is set up to carry on the way it was before.

Ultimately, I do believe that ACT and National are completely in denial about the challenge that we’re facing, and this is not surprising because the reason we have a Crown Minerals Act that was requiring, you know, the Government to be promoting exploration of fossil fuels was directly linked to lobbying by the fossil fuel industry, who have denied the existence of climate change and put huge amounts of money into confusing the public about the science of climate change so that they could carry on their activities and continue to make obscene profits from activities that are hurting and damaging the very planet we live on—and it’s threatening our very existence.

So the Green Party is very happy to see this bill. It is of utmost importance that we carry on this trajectory of transitioning to a clean, green way of doing things and it’s the Government’s responsibility to manage how these things happen, and that’s what the bill proposes. Yes, some minerals will continue to be used, but only if they are recovered in an entirely ethical and responsible way. That is why this bill is so important—because it is changing from promoting something to managing it. And managing is responsible; promoting is not.

SARAH PALLETT (Labour—Ilam): Thank you, Mr Speaker. I rise to take a short call on the Crown Minerals Amendment Bill this afternoon, which, as we’ve heard, creates more flexibility of Crown-owned minerals for the benefit of New Zealand.

When I was reading through my notes on this particular piece of legislation, I was struck by the importance of the amendment that allows for the decommissioning-related classification amendment that basically ensures that the likelihood of companies gaining permits to mine in New Zealand that do not have that financial and technical capability to undertake and fund decommissioning will be able to be taken into account.

The very last thing we need is a repeat of events around the Tui oil field—events, I could remind the House, that cost the New Zealand taxpayer enormous amounts of money and created significant potential for risk to our precious environment. That’s why I commend this to the House.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Speaker. Look, I’ve been listening to this debate for some time now, earlier today and more recently this afternoon, but also as the bill has progressed its way through the House. And the more I hear from Government members, the less convinced I am of their real heart and passion for this change that they’re making in the Crown Minerals Amendment Bill.

Now that we’ve got to the third reading stage, and it’s the final part of the legislative process that will see this piece of legislation come into law after the Royal assent, what is it all about? Well, mostly it’s about changing the tone of the existing legislation, and I’ll come back to that in just a moment. The primary purpose of the Crown Minerals Act that we have is to recognise the importance that we as a Parliament, and as a nation—is concerned about its economic wellbeing and welfare places upon the value of minerals that are administered and licensed and levied by the legislation that the principal Act creates.

We have in New Zealand, as have most countries around the world, an understanding that minerals can create wealth, can be an addition, and a practical part of a modern, exciting new world which we all want to enjoy. Pretty much everything that we do in our day-to-day lives has an element that comes from mineral extraction. Whether that’s in the fossil vehicles that some of us still drive from time to time or whether it’s the use of digital devices of the sort that we all find are such an important part of our day-to-day lives, they all contain and involve minerals that have been extracted from the earth. Now, we can as a nation either decide to administer the extraction of those minerals in a sensible, pragmatic, and rational way or we can choose not to.

Now, coming back to what this bill is about, effectively: it simply changes the existing purpose of the Crown Minerals Act as we have it now from promoting mineral extraction to “managing mineral extraction”. Now, some might say, “Well, that’s not much of a change.”, but actually it is. It’s a very important and none too subtle change about the way Government thinks of mineral extraction. And we on this side of the House don’t agree with this subtle and, frankly—well, it’s none too subtle; it’s a blunt attack on the mineral extractions industry.

In my electorate of the beautiful Coromandel, we are fortunate to have a very good operation at OceanaGold. I’ve had the benefit of visiting underground there on a number of occasions and I’ve always been impressed with not only their environmental standards but the way they operate their business, the way it’s conducted, and their genuine concern for the communities that they operate in and the way they conduct their business. That is a net benefit to us all. The good people of Waihī, I think, by and large understand that. Waihī is a mining town. Waihī would not exist if it was not for mining, and it has done so for more than 100 years.

So we can, as I say, choose to carefully, prudently, and effectively manage mineral extraction under the Crown minerals legislation that we have or we can send none too subtle messages of the sort that this Government is intending to do, which actually says, “No, we don’t appreciate your work. We don’t value that. We don’t encourage and promote. We just want to merely manage.” Well, I don’t think that’s good enough. I don’t think that sends the right messages to an important part of our economic sector that in my experience tries to do the right thing.

I understand that the Minister—in fact, my colleague Stuart Smith has made it clear—apparently has never been underground into a mining operation. I would have thought that would be a priority for her and something that, as involved as she is, she would have undertaken to do, because seeing is sometimes believing.

So on this side of the House we are opposing this legislation. We think it sends the wrong messages. We think it is unhelpful, not useful, and we don’t support it.

Debbie Ngarewa-Packer: Tēnā koe.

DEPUTY SPEAKER: Debbie Ngarewa-Packer—the member needs to call.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Yes. Kia ora. Tēnā koe. Tēnā koe e te Pīka. I stand to speak on behalf of Te Paati Māori in respect to the bill before us, the Crown Minerals Amendment Bill, and understand the purposes is implementing the findings of the 2018 review. I note the providing iwi or hapū, whose rohe are included, enabling annual meetings with Ministry of Business, Innovation and Employment, and making explicit that decision makers have regard to feedback from iwi and hapū.

Look, there are a couple of aspects that we want to bring up in this debate, and that’s starting with rangatiratanga. You know it, and we know it, as tangata whenua, that we have rights and interests. The Crown has acknowledged this every time they’ve apologised for breaches of Te Tiriti and iwi settlements—the theft of resources. And like today—even those apologies are happening—we’re seeing that they’re trying to improve legislation that hasn’t addressed some of the Tribunal findings from the Wai claim 796, where it was found that Māori had Treaty interests in petroleum, arising from the loss of their land before 1937, and the expropriation of the Petroleum Act, and also the Crown’s royalties and 11 percent ownership in Kupe gas field, which could have been included in settlements like Ngāruahine iwi—in fact, Taranaki iwi katoa.

So here we are today, being asked to support this proposition instead of what we should be doing, which is addressing the fact that there are changes to the block offer regime which are now out of date and not fit for purpose, especially if no ban on onshore exploration has been proposed, which iwi and hapū have been discussing with the Government now for more than two years. While annual engagement reports, which iwi are supporting—that is not a fundamental change or a big enough change that we needed to see happen.

There need to be legislative backstops to enshrine the best practice of engagement with iwi throughout the entire permitting process, which includes a partnership approach with the Crown to agree on designated mining permit areas and collective decision making on planned work plans. We think there should have been an authentic partnership model for Taranaki specifically, who everyone seems to acknowledge are experts, but is way overdue. This could be a model for co-governance—Oh! Dare I say—and partnerships. There has been a complete missed opportunity to review the Crown Minerals Act in conjunction with the Resource Management Act (RMA) reform. And I know we’ve said this before, but it could have included complexity of engagements in the artificial separation of permitting and environmental impact—if we go back and remember, the original Crown Minerals Act and RMA were proposed as one Act, prior to 1991.

From a kaitiaki perspective, I want to highlight that we should not be modernising an outdated Act but rather transitioning away from it completely. This would send a clear commitment and connection to climate change, our taiao change, and the overall transition agendas.

We acknowledge that the Government was bold to announce a ban on new offshore permits, but where is the ban on new permits onshore in Taranaki? We need to take a step back and look at a total integrated model, which is ultimately about moving forward with a clear transition away from fossil fuels.

In our opinion, this fails to bring regulation in line with the reality that oil and gas is a sunset industry, and the failure to reform the block offer system and failure to ban new onshore permits in Taranaki sit starkly in conflict with the stated commitments on climate and biodiversity. Based on those issues, we oppose this bill. What we need to see is changes that are really a step in the right direction, that need to be bold. Again, I repeat, while most of the provisions in the bill itself are sensible and should be supported, overall, it is lacking the ambition and vision that is needed to make the necessary transitions away from fossil fuels and towards real Crown partnerships with tangata whenua. Kia ora koutou.

Dr ANAE NERU LEAVASA (Labour—Takanini): Thank you, Mr Speaker. It is a pleasure to take a brief call on the Crown Minerals Amendment Bill at third reading. I just want to say a huge thankyou to the Minister, the Hon Dr Megan Woods, for also answering those questions in the committee stage as well and also to the select committee for their work in ushering this bill.

This bill does a few things, and one of them, of which those across the House have also mentioned as well, is about making improvements to our permit licence holders, as well as permit applicants, to engage better with iwi and hapū to ensure the engagement demonstrates their respect for the authority, mana, and local expertise. I think this is one way to make sure that we strengthen our relationships with local iwi, and leveraging off their knowledge and experience within that area as well.

One of those ways that we can do that is requiring permit holders to share annual reports on iwi engagement to relevant iwi and also for them to agree on that. So there are many things. I commend this bill to the House.

HARETE HIPANGO (National): I stand as the last speaker for the National Party in opposition to the Crown Minerals Amendment Bill. For members of the public who may be listening in, this is the third reading, which means that after the completion of the debate before the House, this bill will go to the Governor-General for Royal assent for it to be passed into law. And the bill is going to pass into law because it has the numbers of the Government and—anticipated—the Green Party, all of whom have addressed the House this afternoon.

By way of process, just before it came to the third reading, there was the committee of the whole House that reported back from the select committee, which was the Economic Development, Science and Innovation Committee. The report back to the House from that committee was that they were unable to agree whether the bill as had been presented in its original form should pass, and on that basis recommendations were for further amendments to the bill. Now, I did not sit on that select committee; my colleagues Barbara Kuriger, Melissa Lee, Stuart Smith, and the Hon Michael Woodhouse did, and three of those members did, in parts, during the time that this bill was considered by the select committee. That bill was referred to the committee on 22 November last year. Public submissions were invited before the closing date of 23 January this year. There were 334 interest groups who did make written submissions and oral evidence was heard from 17.

The position that the National Party arrives at, and really the thrust of this bill—which is an amendment to the Crown Minerals Act 1991—is to enable greater flexibility for allocating and managing Crown-owned mineral rights, improve permit and licence holder engagement with iwi and hapū, and clarify decommissioning-related obligations. So the National Party has expressed concern because the key element is a shift and a change in the purpose to the Crown Minerals Act. Therefore, clause 4, which is one of the amendments under the bill, is to alter the purpose of the principal Act, which will no longer include a requirement for the Crown and Minister to “promote” prospecting for, exploration for, and mining of Crown-owned minerals for the benefit of New Zealand. So it’s to alter and amend the purpose of “to promote” and instead, under the amendment, with this bill passing into law, require the Crown and Minister to “manage” prospecting for, exploration for, and mining of Crown-owned minerals for the benefit of New Zealand.

The main objection that the National Party has to this bill is that it will impact on Crown royalties that are drawn as a result of the promotion of licences for exploration for mining. And it may have been addressed in this House but I’m going to recap because Crown royalties are a little bit like taxes and we have a Government here that is very keen on taxing New Zealanders in this time of a crisis of cost of living. So Crown royalties that are extracted under this bill—this Government has been in power and had the luxury of having $51 million worth of royalties from Crown mineral extraction during the period of 2017 to 2021. Under this amendment, which will come into law, the Crown royalties will reduce significantly. To the year 2022, the Crown is estimated to receive just under $10 million in royalties from coal and mineral extraction, a significant reduction from the take of $51 million during the period of 2017 to 2021.

This legislation will mean that the Crown will not promote mining and, hence, revenue from royalties will inevitably decrease. The impact of this amendment to the Crown Minerals Act is a reality for New Zealanders to be aware of. As the Reserve Bank has recently said, we are likely heading for a recession and Government debt is incredibly high. Royalties from Crown minerals are welcomed, have been welcomed under this Government, and are now going to be depleted and diminished, effectively reduced and extracted from the tax pūtea—or from the Crown kitty. So royalties from Crown minerals have been welcomed under this Government and have provided solid revenue for successive Governments. That will change.

The other change that will come about—and, again, it has an impact on the local economy during this time of a cost of living crisis. Let’s take it back to local towns. I heard my colleague the Hon Scott Simpson reference Waihī, known as a goldmining town previously—historically. So, most of New Zealand’s mines are situated in the regions. More than 4,700 people are employed in the sector, wages are high in the sector, and also the regional impact is significant in areas where there is mining. For example, mining is 21.3 percent of the GDP of Buller, on the West Coast of the South Island; 22.7 percent of Hauraki’s GDP; and 30.8 percent of Waitaki’s GDP. This bill will affect local communities and people with their jobs to provide for their families in this crisis, in a country where we have an endemic of a cost of living hitting us. So this is one of the significant reasons why the National Government is opposing this bill; if the Crown does not promote mining, as is in this legislation, our regional economies will suffer and those earning high-paying jobs will go overseas. That’s just part of it—the select committee report identifies the concerns expressed from the National Party. And in summary, to emphasise and reiterate that the National Party does have a concern and does have a lens and a protective blanket and cloak around environmental considerations.

This legislation also adds more bureaucracy and layers of consultation which will ultimately make it expensive but also tardy and delayed for business to be done. So it was interesting, part of the debate that I listened to from my office, not having been a member on the select committee to be present to the whole of this debate before the House, is that we had a member, the Hon Michael Woods—and for the benefit of New Zealanders, the title “Honourable” is an indicator or signals that that member has served in a ministerial capacity as a Minister. So my colleague the Hon Michael Woodhouse sat on the select committee and has ministerial experience. The Hon Michael Woodhouse stood in this House earlier this afternoon and talked from his perspective and the Government’s perspective that the “weasel words” of the National Government—the “weasel words”; not honourable words to be expressed from an honourable member. But for the benefit, again, of members in this House and New Zealanders—weasel words: words or statements that are intentionally ambiguous or misleading. There is nothing that’s intentionally ambiguous or misleading about the National Party’s opposition to this bill. And it’s interesting that that member stood in this House but half an hour ago to apologise to the House for ambiguous statements—

DEPUTY SPEAKER: Ms Hipango—on topic, please.

HARETE HIPANGO: Mr Speaker, to say that it’s all very well for a member to stand and rise in this House and cast aspersions towards the National Party, to assert that the position taken is one of being misleading and ambiguous—it’s most clear that the reason for the National Party’s opposition to this bill is because of the economic impact it will have on regional communities, it will have on this country, and also that the party is very mindful of its environmental duties and responsibilities of care. In concluding, the National Party does not support this bill.

TĀMATI COFFEY (Labour): And the Labour Party does, because it is really important that we make sure that we’re doing the best for New Zealanders, that we are actually taking our foot off the pedal when it comes to our emissions. We need to give support to the agencies that help to decide how hard and how fast we go in this space, and that’s what this bill is intending to do. Bringing iwi and hapū into the decision-making process is really important; giving them the ability to call for reviews in that process is also really important. It has support from this side, it will become law, and I look forward to it. I commend it to the House.

A party vote was called for on the question, That the Crown Minerals Amendment Bill be now read a third time.

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.

Motion agreed to.

Bill read a third time.

Bills

Water Services Economic Efficiency and Consumer Protection Bill

Second Reading

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you, Mr Speaker. I present a legislative statement on the Water Services Economic Efficiency and Consumer Protection Bill.

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

Hon Dr DUNCAN WEBB: That is excellent. I move, That the Water Services Economic Efficiency and Consumer Protection Bill be now read a second time.

This bill is part of a suite of legislation designed to give effect to the water services reforms. It introduces an economic regulation and consumer protection regime with the Commerce Commission as regulator, which will ensure the new entities promote the long-term interests of consumers by providing services that are efficient, effective, and responsive.

New Zealand’s water infrastructure and services are not meeting the needs of our communities in that the quality of service does not reflect what consumers demand. There has been long-term under-investment in water infrastructure, there are inefficient pricing practices and a lack of transparency around costs, and there are mounting concerns about the capability of the water services sector to deal with Government and community expectations.

The Water Industry Commission for Scotland estimated the investment required to deal with these issues in New Zealand is between $120 billion and $185 billion. This investment needs to be made for the health and wellbeing of our water and our people, now and into the future. The water services reforms will ensure the costs paid by households remain at a reasonable level while these investments are undertaken. The new entities will provide the scale and operational efficiency to provide high-quality water services at a price that is much more affordable for New Zealanders in the years to come.

This bill will subject the new water services entities to an economic regulation and consumer protection regime with the Commerce Commission as the regulator. The commission has experience in implementing economic regulation in other utility sectors such as telecommunications, electricity, and fuel, as well as enforcing consumer protection legislation. A Water Services Commissioner will be appointed to ensure the new economic and consumer protection regulation role is given the focus and prominence it requires. The wider water services reforms will ensure that New Zealanders benefit from upgrades to water infrastructure. The bill complements the wider reform package by providing for economic regulation and consumer protection, including minimum quality standards and dispute resolution.

I would like to thank the members of the Finance and Expenditure Committee for their consideration of the bill. I would particularly like to acknowledge the chair, Ingrid Leary, and the former chair, Rachel Brooking. Thank you both for ensuring the bill undertook a robust and democratic process. Further, given that the committee was considering this bill and the Water Services Legislation Bill, I want to thank the committee for the extensive work—and I do know it’s very hard—that went into considering submissions and providing recommendations on both of these bills at the same time.

The committee considered 136 written and 65 oral submissions on this bill. I thank those submitters for their thoughtful and extensive feedback—hearing from the public is key to our democratic process. Every comment that submitters made was considered fully, and the resulting changes have significantly improved this bill. I would also like to thank members of Waikato-Tainui, Maniapoto, Raukawa, Te Arawa River iwi, Tuwharetoa, and all representatives of iwi that have participated in this process to date for their constructive and thoughtful engagement. It has resulted in improvements to the bill I present today.

On 7 June, the committee reported the bill back to the House, recommending several amendments which I endorse, and I would like to mention a few of those key amendments. The committee recommended an additional qualification for the Water Services Commissioner, who will be responsible for the commission’s functions under the bill. We established this role to recognise the impact that water infrastructure has on water quality and the importance of Te Mana o te Wai. The committee also recommended that knowledge of Te Tiriti and its principles and perspectives of Māori and tikanga Māori should be added to the list of qualifying domains for the position of commissioner.

The committee made several recommendations to strengthen the commission’s oversight of the entity’s obligation to promote urban growth under the Water Services Entities Act 2022, including mandatory disclosure requirement relating to how an entity is fulfilling its obligation in relation to growth; ensuring the Minister and the commission take into account the obligations of the entities in relation to supporting and enabling planning processes, growth, and housing and urban development; providing for the commission to monitor compliance with the development code that entities are required to make under the Water Services Legislation Bill and provide enforcement mechanisms for contraventions; and making it explicit that a developer is a consumer.

In supporting equity and fairness across the reforms, the committee recommended that the consumer dispute resolution service should be aimed at handling small disputes in a more accessible way than the courts. This involves allowing both parties to appeal, and capping compensation at $50,000 to enhance alignment with other schemes. The bill empowers the commission to establish minimum service standards through a service quality code, with the committee suggesting inclusion of a non-exhaustive list of code topics for improved guidance during its development.

Additionally, the committee recommended that the commission prioritise safeguarding vulnerable consumers’ interests in the delivery of water services. Thanks again to the committee’s efforts. I think this bill will provide greater benefits to New Zealanders. Continuing to progress this bill will ensure that water services are meeting the needs of our people and our communities for generations to come. I commend this bill to the House.

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

ANDREW BAYLY (National—Port Waikato): Thank you, Mr Speaker. Oh, this has been a disastrous process. We’ve had the two water services bills and now we’re into this one, the third one—the treble. I think there’s been a lot talked about the water services bill today. If people are beaming into this wonderful debate this afternoon, we’ve been debating under urgency because the Government’s got its timing all wrong and it’s shoving through all this legislation. We’ve been doing it this morning on the water services bill for, oh, probably at least four hours, I think—I’m just looking at my colleagues here.

So this is the last bill in the triumvirate of water services rationalisation proposed by the Government, and, you know, it’s incredibly contentious. The Minister talked about savings of $120 to $180 billion, dreamt up by someone in Scotland. There’s a lot of dispute, a lot of economic dissension on those estimates. We asked other people to be involved in it. I know there are other economic agencies who have looked at it on behalf of councils. They considerably dispute those figures put forward by the Scottish regulator.

This wonderful thought that you can go ahead and spend millions on creating new offices in Auckland, which one of the entities already has—committed significant amounts of money setting up a new office even though Watercare is just parked up in Newmarket in big new offices. No, that’s not good enough for one of these ones—they’re going to have new ones, brand flash new CEOs, and because they’ll have more employees and all that sort of stuff, they’re going to be paid more; you can guarantee it, if this ever came to light. All this cost, this wonderful cost, and, you know, there’s multimillions of costs being incurred in setting this up, let alone just the regulatory process—multimillions, if not tens of millions, that have been involved in this—and somehow, miraculously, the Minister’s trying to claim in his speech that, you know what, everyone’s going to be better off. Well, we don’t agree with that.

Some of the submitters were very thoughtful, very professional, and actually very experienced in these matters. I think the first issue with the water changes is the impact on councils. Not only is there the transfer of ownership of those water assets out of councils back into a new entity with all this diffused ownership structure—regional committees and all that sort of stuff—it does give rise to who owns these assets. No one, through all this process—and I’ve been involved in it right from the start—not one official, not one Government Minister, has ever been able to explain to me who will own these assets. If you look at the definition of ownership in a share—the legislation talks about a share—you must be able to exert some control over that share. That may be through governance, through management, or by financial support—all that sort of stuff.

Of course, the structure—that diffused and confused structure—that the Government has come up with, someone has dreamt it up on some whiteboard in the bowels of somewhere, is so convoluted that no one can point to me and say who will own those shares. If you cannot exert control or some form of influence, if you can’t do all of those three things, if you look at the definition of a shareholding—that means that you do not have control. Where these assets will park up on someone’s balance sheet, I am totally unclear on, even today, even though I come from the financial services sector and know a little bit about these things. That’s the first thing.

Standard & Poor’s—we started to push back on some of this stuff. Standard & Poor’s directors (S&P)—after we got through a whole lot of mired conversations that we didn’t have any clarity on, suddenly the S&P directors came out and said this will have an impact on the credit ratings of some of our councils. Again, this is a significant thing for New Zealanders, and significant for residents within those boundary areas, because their council’s going to be paying more for debt and it’s going to be more cost, and, of course, we’re going to see the assets transferred off their balance sheet. It is a significant asset transfer from one entity into some other entity with this relationship that’s really bad.

The other thing we’ve heard about was the entrenchment provisions, where the Government tried to very sneakily make sure that these things could never be privatised. Even though we as a party, National, said we weren’t going to privatise it, the Government tried to sneak through a provision around entrenchment, around stopping privatisation, that wasn’t needed. It was totally uncalled for and, actually, it was against the parliamentary rules, where you need to have a supermajority to make those sort of long lasting changes an intention of the House.

But this bill itself is all about economic regulation. Of course, this is one where—guess what!—the Labour Government have gone overboard yet again. This is one heck of a piece of legislation. Normally, when you set up regulatory authorities to look after the water industry, the starting proposition is that you have a whole lot of commercial operators. I know those people over there—I’m looking at the Labour Party members—all hate the commercial sector. But, normally, you’d have a whole lot of private sector organisations out there competing and trying to rip people off—well, that’s what their view is. That’s when you put in place very strong economic regulation.

Hey—guess what!—if we listen to the Labour members, hey, these things are going to be wonderful; they’re going to have all this influence on Aboriginal groups, we’re going to have everyone having a go at it and telling them what they should be doing.

Simon Court: Kumbaya.

ANDREW BAYLY: “Kumbaya”—that’s the right word. And, of course, if that proposition is to be accepted, why do you need such heavy-hitting economic regulation? Because these guys never know when to say “No”. It is not appropriate, Mr Bennett, because no one across the other side sits back and goes, “Do we actually need this? Is there another way of doing economic regulation? Is there a way—do we actually think about the intent of these organisations? Are they being set up to rip people off?” Well, if you take the Labour view, and the Minister’s view just before—no, they’re not. They’re wonderful. They’re going to solve all our issues. But we’ve ended up with regulations that no doubt we’re going to get into. [Holds up bill] That’s the book—that’s the book. And there’s regulations up the wazoo. What we shouldn’t be doing is—actually, all entities need to be regulated to some extent, but the extent of regulations in here is an absolute overkill.

Then—just realising that time is ticking on—I think the other thing is the need to determine who the regulator is. The regulator is someone who is going to be set up under the Commerce Commission—they’re going to be an appointment of the commissioner. The thing I find interesting is the requirements of the commissioner, and I’m just going from memory here. First of all, they must have expertise in the water services industry. Well, I think, if you’re going to be a commissioner, that would be a pretty good start point. In the next point, it then goes on to say, well, you could also be someone with experience in any other industry—not just one but any other industry. Not just the water industry but any other industry. That means you can be a politician like Mr Nash, who’s just joined us. When he leaves here, he can be a commissioner because he’s got experience in other stuff. You’d be a great water commissioner because, at the moment, you’d meet the requirements, Mr Nash. Or you could have experience in commerce—you’ve got that too.

DEPUTY SPEAKER: No, no, no, no, Mr Bayly. I hate to interrupt your flow—“you” is me.

ANDREW BAYLY: Oh, yeah, sorry. But Mr Nash, we were talking about here. Mr Nash—he’s got experience in commerce, he’s got experience in economics. Have you got experience in law?

Hon Stuart Nash: I have!

ANDREW BAYLY: Mr Nash—and accountancy. Mr Nash. I reckon Mr Nash should be the next water commissioner, because he doesn’t have to have experience in the water services industry. Mr Nash has come out of the forestry industry, but that does not matter, because you can have experience in any other industry. That’s how ridiculous this is. This is ridiculous. Put a common-sense lens over this. This is why the Labour Government has got into such problems, because these people don’t sit down and apply a bit of common sense. Anyway, I’m looking forward to the committee of the whole House.

INGRID LEARY (Labour—Taieri): I’m very disappointed that the previous speaker wasn’t as enthusiastic about the Water Services Economic Efficiency and Consumer Protection Bill as he was in the Finance and Expenditure Committee, where he actually contributed quite a bit to some of the substantial changes, including making the dispute resolution more robust and that it proactively take into account the need to identify classes of vulnerable consumers and take their interests into account. Also there is a change to clause 74 where complaints can be taken by consumer groups. We think this also increases the consumer protections in the bill.

The really interesting discussion that I thought the previous member would pick up on is around the presumption in the bill when it came to us that there would be price quality regulation. Now, that presumption is still mainly there and that’s good. It sends the right signals around price and quality to the market, but it also means that there can be baseline data gathered and that the commissioner in its determinations as it gets that data can decide in the case of each of those entities whether price quality regulation is needed or at what point. Now, I think that’s a really useful and flexible change to the legislation, because what it means is it doesn’t assume price quality. There’s a signal to ensure that the providers act appropriately, but in the event that more competition comes into the market just through the other interventions and certainly through the exposure of data that will be provided through information disclosure, there is some flexibility for the Commerce Commission to respond accordingly. That’s good regulation. It’s something that Mr Bayly contributed to robustly in the discussions and it’s a shame not to see that reflected in the House today.

MELISSA LEE (National): Thank you very much, Mr Speaker. It is lovely to hear Ingrid Leary, the chair of the Finance and Expenditure Committee, complimenting my colleague Andrew Bayly. He is very passionate about these topics and no doubt he actually wanted to improve the bill and I acknowledge the chair and thank her for acknowledging the Opposition’s contribution to make the bill better.

So when I was listening to Andrew Bayly, apart from going half deaf because he’s very loud, very loud—ha, ha! I am just always very in awe of his passion when he speaks on these topics and what he reminded me of—as I’m a person who comes from the visual sort of industry before my time in Parliament—when he was talking about how this bill actually is wasting a lot of time in terms of flash offices or whatever, I just had this picture of an empty office space down in the viaduct when the former Minister of Transport actually decided that he wanted to create a walking and cycling bridge and he actually rented a big office space and paid couple of million dollars for it and it sat empty, and then the policy got cancelled. That’s such a waste.

As Mr Bayly said, on this side of the House we are opposing this bill. On economic regulations, we actually believe in sound economic and commercial regulation, including that economic regulation and consumer protection is actually paramount. We really believe in that, but we believe that it has to be for the right water services entity and the local councils that own the water assets, not the three waters bill. In a cost of living crisis, I think it is paramount that the Government becomes like a parent, in a sense, in a household, that they lead by example. And when the Government is seen as not being very cautious or responsible in the manner that they actually spend taxpayers’ money, I think people, citizens, will be very disappointed and it is not actually a good example.

So the Water Services Entity Bill—not this one, but the Water Services Entity Bill passed its third reading in December of 2020. This particular bill, the Water Services Economic Efficiency and Consumer Protection Bill, is “to provide the independent commercial scrutiny of the entities.”—and I’m reading from the bill notes. It actually establishes a new set of economic regulations on the entities and consumer protection for the water services sector with the Commerce Commission as the regulator, with the appointment of a new Water Commissioner. I think that’s literally what Mr Bayly was actually talking about, that anyone with experience but without necessarily having worked in the water industry can actually become the commissioner. That seems a little odd.

The reason why I say that is recently in this House—not so recently—when we were debating another bill in relation to the RNZ and TVNZ merger, they had consultants who were actually brought in to help the officials and members of Parliament who were debating the issue. Not one of the consultants who were brought in actually was an expert in media, nor public media or broadcasting. That would seem really ridiculous that people who the Government who spends taxpayer money is actually consulting had absolutely no experience in the subject matter that we were actually writing legislation about and debating in the Chamber. This seems like another one where just anybody could potentially be the commissioner, and that is a little bit worrying.

There are actually several regulatory impact statements that I actually would like to quote, if I may. The regulatory impact statement states that there is a huge transitional uncertainty created because of the reform, and I quote, “Over time it may become evident that the scope or form of economic regulation is not in the best interest of water consumers.” is actually one.

The other one is that in the regulatory impact statement officials have actually warned that changes can be put on tenants via higher rents with substantial risks—and some prices increase significantly due to under investment and uncertainty. And when you actually create a mega entity, actually four entities—

Hon Member: Ten.

MELISSA LEE: Sorry, 10—10 entities. Obviously, I wasn’t part of the select committee. I think that when you actually consider that, it’s a humongous cost to the country. And when a lot of the consultations and public consultations through the select committee where people actually feel that their views and their opinions actually didn’t matter, because of the way that the Government seemed to be ramming legislation through this House, it is rather disappointing. Not just disappointing. It is quite shocking that we are here under urgency debating yet another water services bill in the House.

When you actually talk to local government and people who are in the regions, they actually feel that their assets have been stolen by Government. They want to own their own assets and they need the Government to assist them. Some of them have great water services, but there are those that who actually need help. For that, we will make sure that we have the right legislation when we are in Government after 14 October to make sure that the people of New Zealand can rely on decent and good water services legislation rather than this three waters legislation that this Government has produced. On that note, I do not commend this bill; I oppose it.

ANNA LORCK (Labour—Tukituki): Thank you, Mr Speaker. It is with great pleasure that, having to see these water bills through to where they are—to know that, now, we can say to ratepayers that not only will their rates go down and cost less from what they would be, we are also making sure that we have the regulator to make sure that the charges that are put on our water consumers are absolutely on point. It has been a long time coming. I know that in my electorate in Hawke’s Bay, the four councils that are part of this are absolutely looking forward to seeing affordable water finally delivered for our region. Thank you, Mr Speaker.

SIMON COURT (ACT): Thank you, Mr Speaker. The ACT Party has a differing view. It’s here in the report back to the House from the Finance and Expenditure Committee. I do want to thank the officials for the efforts they made to respond to the many questions that the ACT Party had about the legislation. I also want to acknowledge the hard work of Ingrid Leary as chair of the Finance and Expenditure Committee, because she had a very difficult job to do—to inquire about all the flaws in the legislation, which was legislation proposed by her own Labour Party, and do it in a way that was even-handed and allowed for the best possible discovery of the issues with this bill. So it’s wonderful to see that in Parliament, through parliamentary process, there can be an even-handed approach to assessing the costs and benefits of legislation.

On balance, ACT will be opposing the legislation but we do agree there’s a need for an economic or infrastructure regulator. What is the problem to solve? The problem to solve is that for decades local government has failed to invest in infrastructure in a way that keeps up with growth and maintains the assets that they own and that the Local Government Act already requires them to maintain and to provide for, to make provisions for, to renew and replace as infrastructure ages.

So the ACT Party engaged constructively throughout the entire three waters reform process and we continue to engage constructively with officials, with submitters who came to the Finance and Expenditure Committee, in an attempt to discover how to make a regulator of infrastructure assets work.

Now, the problem is no action has been taken by this Government or previous Governments to enforce the law. When it comes to the Local Government Act, councils have not been following the law. Some of them might know where the pipes are broken. They might know where the waste-water pump stations are failing and leaking into waterways. But the Government—central government—hasn’t used any carrots or any sticks to get them to follow the Local Government Act provisions, which require them to maintain their assets and make provisions. And yet here we have a whole reform programme designed to solve a problem that the law says should already be solved. Remarkable. Imagine that. So the current system is not up to scratch. This Government’s reforms will not help. In fact, they’re likely to make it worse.

The Government has established the Commerce Commission in the role, an awkward role, of having to be a market regulator that’s not just regulating a market—in fact, they’re not regulating a market at all. There is no market for a monopoly water services provider. There is no market for somebody to come and lay an alternative water pipe in your street and supply water to your house.

This is a monopoly, so the Commerce Commission is required to regulate a public service and regulate infrastructure—infrastructure quality, mind you; not infrastructure investment, not infrastructure pricing, not weighted average cost of capital but the quality of infrastructure provided for the money that water service entities will allocate. But they don’t have the competency of the tools to carry out that role.

We’ve heard that they’re proposing to hire up to 25 people to establish a unit to act in this regulatory role, and yet there other organisations that already do this within Government. The Office of the Auditor-General already audits local government, councils, against their long-term plan and whether they are meeting their objectives, whether they are in fact investing in infrastructure to meet growth, fulfilling their obligations to their communities, and doing what they say they do. The Auditor-General often reveals that they’re not, and yet the Government hasn’t taken any action against local councils, as I’ve pointed out, under the Local Government Act, to rectify that.

But the most awkward thing of all for the Commerce Commission and for the people who work there, is that this piece of legislation requires them to become a regulator of tikanga Māori. How is it possible that if you’re an economic regulator and an infrastructure regulator, you are required to determine whether a water service entity is respecting the Treaty, giving effect to Treaty obligations and Te Mana o te Wai? Well, how on earth are they supposed to do that? Te Mana o te Wai relies on a spiritual belief in mauri, or the life force of the water—water comes from some heaven and ends on Earth, and has a life force. I mean, anyone who’s seen the Star Wars trilogy or the prequels or the sequels would be familiar with the term “life force” but who knew that in 2023 an economic regulator of water infrastructure is going to be required to work out whether water companies are fulfilling their obligations not only to work out whether these entities are meeting their Treaty settlement obligations—potentially as having some function of the Crown—but also whether they’re taking care of the life force of the water. As far as I was aware, as a civil engineer, infrastructure is pipes, manholes, drinking-water treatment plants, waste-water treatment plants, stormwater overflows, culverts, and all of those things. The water that flows in them is only fit to drink, fit to flush, or fit to use for industry. As far as I’m aware, there is no engineering of scientific test for the life force or the mauri of the water.

While it is entirely acceptable that one culture in New Zealand believes that water has a life force, it is completely unacceptable to require infrastructure regulators or economic regulators to have to take account of spiritual matters when they’re working out whether people are paying a fair price for water.

Then we get to the next problem with incorporating Te Mana o te Wai in the way water infrastructure is managed. Te Mana o te Wai, through applying a life-force test, actually means that instead of just fixing up the pipes and the waste-water discharges to meet an ecological test—are the fish in the stream OK; is it safe to swim in, is the water safe to drink?—they will have to platinum-plate, cultural-plate a tikanga cost on to water infrastructure. Nowhere else in the developed world would a society impose this cost on to households, on to business, and on to New Zealanders present and future.

This bill is a recipe for a decline in New Zealand society. ACT supports the three waters reform objectives: to deliver high-quality water infrastructure to enable growth, to enable land to be serviced for more affordable housing. There’s no good in putting through legislation that entrenches excessive costs in providing water infrastructure to new housing, new subdivisions, or to parts of our existing cities where we want to build up, say, around public transport hubs or around town centres. It’s very, very expensive already to build network infrastructure in those locations without adding a spiritual dimension to decision making around water. This will be impossible for the Commerce Commission to regulate. They’re going to spend time and money, they’re going to hire people, and unfortunately for the Commerce Commission and any individuals who take up these roles, should there be a change of Government, this bill, the parts of it that relate to tikanga and Te Mana o te Wai and all of those metaphysical things will be repealed and those roles will be made redundant.

It’s not just ACT saying that this piece of legislation doesn’t work. I can quote from Water Magazine, the July/August issue, where a gentleman by the name of Andrew Stevenson, who’s worked for the Commerce Commission and is a specialist in regulating infrastructure, says that water services providers will have to publish asset management plans which actually don’t meet the commission’s specifications as set out in the bill. They won’t align, these asset management plans required by this legislation; they won’t align with local government or similar financial systems as the regulator is focused on different outcomes and applies different principles. Imagine that—three years of talking about water reform and this legislation, the last bill in a series of four, pushed through by Labour today under urgency, doesn’t even address the most basic issues about how you align the need to invest in infrastructure with the regulator whose job it is to oversee whether that investment lines up with the land use planning and with the need to provide water infrastructure for affordable homes and so businesses can access water for business. We will oppose this bill.

Hon EUGENIE SAGE (Green): I’m pleased to take a call on the Water Services Economic Efficiency and Consumer Protection Bill. The Green Party is supporting this bill, because one of the fundamental tenets of the whole reform is that if you create larger entities, they will be more efficient, they’ll be able to borrow more. So there will be less burden on councils and a recognition in the supporting documents that councils, because of rates and the community response to rates, have often been reluctant to raise the rates or spend much rates on infrastructure. With these bigger entities, that obstacle and constraint is seen to go. So therefore, with bigger entities you really do need a strong consumer protection and advocacy regime, and mechanisms for resolving disputes between consumers and the entity.

That’s what this bill provides. As others have noted, there was good debate in the Finance and Expenditure Committee. And like others, I acknowledged the chair, Ingrid Leary, and the former chair, Rachel Brooking, for their leadership on this and encouraging that degree of debate.

The previous speaker talked a lot about the Commerce Commission. The Commerce Commission regulates industries like the telcos, like gas, and so it’s entirely appropriate that the economic regulation should come under the Commerce Commission, and with a specific Water Services Commissioner. The committee, in considering the bill, included some additional criteria about the expertise that that commissioner should have. So the Greens are confident that that person will have the specialist knowledge that Melissa Lee talked about.

There are other improvements to the bill that occurred through the select committee process, in terms of—there was some concern that water services entities in the form of Watercare had not always been as responsive to developers’ requests for new infrastructure. So there are specific new provisions in the bill which have a dispute resolution process around developers’ requests for infrastructure. But the Green Party really believes that the commission and the Water Services Commissioner have got to look very closely at things like private plan changes, ad hoc requests for subdivision development and the infrastructure to facilitate that, to ensure that is not imposing big costs on the entities from putting new services in place.

In some of the previous debates, members have referred to a number of boil-water notices as justifying the need for the establishment of the entities. Those boil-water notices in Canterbury are often the result of inappropriate agricultural intensification and a failure to control land use, so the water services entities won’t in themselves have that regulatory power over land use. That’s a key issue for the new regional planning committee, through their new plans, and of course regional councils under the Resource Management Act.

We really do need to protect source waters in order to reduce the costs for entities, and reduce the cost of the provision of services. If they have to substantially treat a lot of water, run osmosis filters and the like, that will increase the charge to consumers and it will then be difficult for the dispute resolution service, for the tribunal that’s being set up there, to actually have those charges reduced, because they go back to a fundamental inappropriate management of land use and an unnecessary contamination of water.

The bill was significantly improved through the select committee, through the service quality code that’s now proposed in terms of consumer complaints, the way in which the dispute resolution service would work, and also the establishment of a separate consumer advocacy agency, recognising that that was not really the normal responsibility of the Commerce Commission. So it is a bill that we really need with this economic regulation, and consumer protection with the establishment of the 10 new entities, and the Green Party supports it.

HELEN WHITE (Labour): Hello. It’s really nice to take this call and to be able to actually express my respect for the honourable member that’s just sat down, the Hon Eugenie Sage, who is in her last few weeks in this House and she is still tenaciously contributing in everything, and we are really grateful for what she has done, including on this committee. It was a very constructive discussion over this bill in the Finance and Expenditure Committee and it was quite a creative one. We really thought about the issues, particularly with regard to power imbalance. One of the things that came out of that was a really strong discussion about the role of the Consumer Advocacy Council in making sure that consumers were protected but also the Commerce Commission’s role in doing so. I commend this bill to the House.

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

JOSEPH MOONEY (National—Southland): Thank you very much, Madam Speaker. I rise for a brief call on the Water Services Economic Efficiency and Consumer Protection Bill. It’s not one that I have been on the Finance and Expenditure Committee for, but I will make some comments—

Hon Rachel Brooking: Oh, you’ve missed out.

JOSEPH MOONEY: —in respect of this. I’ve “missed out”, I’ve heard from the other side, from my colleague Rachel Brooking, I think. But, look, the National Party does not support this bill. The National Party will repeal and replace three waters, including this one. We do believe in sound economic and commercial regulation, including economic regulation and consumer protection, but for the right water services entities and local councils that own the waters. It’s an important point: the local councils that own the waters, not three waters, not these mega-entities that are going to be part of this proposal.

It’s interesting, if you’re reading the departmental disclosure statement, which notes that the three waters service delivery reforms will result in significant changes for the water sector, with the creation of four water service entities that will serve as 85 percent of New Zealanders, that it does say, “We anticipate that there will be some uncertainty for the entities about what the new water service entities will inherit. They will inherit various systems and processes and water service assets in varying conditions. We therefore expect that the water service entities will need time to gain comfort with the new structure of the sector, their own internal processes, their assets, and their regulatory requirements. It is also possible that this uncertainty could lead to some water service entities acting too cautiously, focusing on compliance with little regard to efficiency in an effort to avoid any risk contrary to the provisions of the Act.”

I’ll just pause on that point to note that this is one of a trilogy of different bills that are quite significant in and of themselves and have had significant changes over the course of the last year or so as the Labour Government has pushed through this three waters proposal that they are now enacting into law shortly before an election.

Unfortunately, one of the problems with this very significant piece of work is that it has pushed this through the select committee in shortened time frames, which has given little opportunity for many of the affected communities and parties to actually make substantive submissions and to iron out the significant and substantial difficulties that have been identified with these bills. Frankly, it is not good lawmaking to push through such a significant piece of work without getting sufficient feedback from the communities who will be affected by this. The fundamental challenge and problem is that this is shifting the assets from those communities who have built them up over many generations into a completely new model and then expecting that there’s going to be an economic benefit from it.

I note this point which I started with in the departmental disclosure statement that the uncertainty about these new processes may lead or could lead, as was identified here, to some water services acting cautiously, focusing on compliance, with little regard to efficiency. Obviously, one of the main points that has been used to push this through is that it supposedly will be more efficient and, therefore, will be less costly. However, that appears to be unlikely, as this is likely to be more complex and more costly, and that is, unfortunately, the last thing that New Zealanders need right now in a cost of living crisis.

So this is one of a number of actually very complex pieces of legislation that is going to take a huge amount of work for people to try and get their heads around. But I will say that there is an election coming up very shortly and there will be an opportunity for New Zealanders to vote for a new Government, and I can say that if it’s a National-led Government, this will be repealed.

RACHEL BOYACK (Labour—Nelson): Thank you, Madam Speaker. It’s a pleasure to take a short call on the Water Services Economic Efficiency and Consumer Protection Bill. Can I just begin by pushing back a little on the previous speaker, who claimed there was a truncated process here. This bill was introduced to the House in December 2022. It is now eight months later, and we are considering it for its final stages. So I just want to push back that there hasn’t been considerable analysis and consultation on this bill over the last few months.

This bill is a critical part of our water reform programme. It’s important that with the introduction, obviously, of the affordable waters reform, we have a system to ensure that economic regulation is in place to protect consumers. I note that the economic regulation regime that we’re introducing through this bill is similar to the existing economic regulation regimes that are under Part 4 of the Commerce Act, which regulates electricity line services, gas pipeline services, and specified airport services. The approach is also similar to the regulation of fibre fixed-line access services under the Telecommunications Act.

This bill will complement the drinking-water safety and regulation oversight that’s provided by the water regulator, Taumata Arowai. It will ensure that consumers are protected through our reform. It’s an excellent bill, and I commend this bill to the House.

DAN ROSEWARNE (Labour): It’s my pleasure to take a short call on the Water Services Economic Efficiency and Consumer Protection Bill in this second reading. This bill is part of the wider water services reforms launched by the Government in July 2020. It’s absolutely long overdue. It will reduce rates for our households and it will be well received by the people of Waimakariri in particular. So I commend this bill to the House.

STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. It is a pleasure to take a call on the Water Services Economic Efficiency and Consumer Protection Bill—and I had to read that because I’ve just this minute got it in my hand, essentially.

All this suite of bills around three waters have come about from what occurred in Havelock North a few years ago now. It was a terrible event, and I think we all agree on that, but, essentially, that came about because the Ministry of Health weren’t doing a great job of regulating and inspecting water right across the country, effectively. In fact, there were very few prosecutions at all from them over the years, and, as Havelock North showed us, there was a need for oversight and some rigour in that area. That was a very poorly managed wellhead. Anyone who’s had anything to do with wells will know that you have to keep stock away from those things, and it is not only the management around that wellhead but the way the well has been secured around the ground itself is also very important, and that was clearly lacking.

That was a terrible event, so something had to be done, and there’s no doubt about that. Everybody agrees about that. However, this suite of bills has gone way too far. There’s regulatory overreach and they’ve gone way beyond the safety issue that triggered these bills to come into being. While this one was introduced in December 2022, I believe, we are now rushing it through its last stages in urgency, and you’d have to wonder why, or I certainly wonder why.

Rushed legislation is seldom good legislation. There are often occasions when it has to be done, like with the Christchurch earthquakes or like with the Kaikōura earthquake, when there was a real need that had to be addressed immediately. But often those are very short-term pieces of legislation where we come back later and do a better job. But this legislation is meant to be the first and final, but it’s riddled with holes.

I mean, some of the issues in this around all the committees—I heard my colleagues earlier on in the day talking about all of the problems with them. It’s quite shocking, really, on some of them. For example, the regulatory impact statement states that there is huge transitional uncertainty created because of these water reforms: “Over time, it may become evident that the scope or form of economic regulation is not in the best interests of water consumers.” Well, that’s the whole point of this legislation as being in the best interests of water consumers, and yet, clearly, the regulatory impact statement sees a real risk there that this is not in the best interests of water consumers.

The regulatory impact statement also warned that changes can be put on tenants via higher rents, with substantial risks and it says that some prices could increase significantly due to under-investment and uncertainty. These are mega-monopolies that are going to be set up to manage water. Now, the Commerce Commission will have a role to play in that, and we know that with the lines companies, for example, they come underneath the Commerce Commission’s purview to make sure that they don’t gold-plate investments and, indeed, that they don’t under-invest in their assets, and that whatever they spend, of course, goes back to the consumers in the form of fees. But this does not give us any comfort that these mega-monopolies are actually going to do a very good job.

So it’s really overregulation, but the issue that I think really upsets people, or grinds their gears, if you like, is some of this stuff around the mauri of the water and the Treaty requirement for the Commerce Commission. I want to touch on this. Look, I totally get and respect the Treaty, and I totally get and respect Māori views on things, but the mauri of the water and so on is included in this bill. You can’t measure the mauri, and so if you can’t measure it, I don’t know how you can manage it. So that’s a real problem for us, because we want legislation that works, and I would wager there’ll be different definitions of that.

I mean, this is, essentially, vitalism. Most cultures—almost all cultures—had a form of this in part of their development, and then they’ve moved on from that and embraced science, which we pretty much work on today. So is that better? Well, it is from a regulatory and a legislative point of view. What people’s personal beliefs are is their business, quite frankly, and I accept that and celebrate it. But we have to make laws. We have to make legislation that New Zealanders have to live by and will have to pay bills upon, and, essentially, this legislation puts so much uncertainty into it.

The Commerce Commission will have a huge job trying to control these entities to ensure that New Zealanders are not being charged too much and that these entities are investing the right amount, but it has to have regard to the Treaty. Well, how does that actually affect how they are going to invest, or ensure that they aren’t under-investing? I don’t get that. I’m not aware of the Commerce Commission having any Treaty requirements that I’m aware of, and I’ve certainly looked at it a fair bit around the energy sector, so I imagine—I haven’t seen any reference to it, so I don’t think it’s there.

Look, I get that we want to have a New Zealand flavour on all of our legislation, and that’s good to a point, but we have to be practical about these things. So I do not support this bill.

ANGELA ROBERTS (Labour): Thank you, Mr Speaker. I rise to take a call, the last call on this second reading, and I just want to take a moment to thank the select committee. It was obviously a robust process and they made some great changes to this bill that will ensure that we have good, strong regulation and consumer protection.

I am a little confused though, that people are worried about having the inclusion of Te Ao Māori or matauranga Māori or, you know, that you can’t actually make good economic decisions and still consider Te Ao Māori. I challenge the other side of the House to go and have a little look at our Māori economy that’s worth $70 billion; it’s growing, it’s resilient, and it’s global. I don’t think that this is a bad thing for a commissioner to have access to, and because of that, I commend it to the House.

DEPUTY SPEAKER: The question is, That the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.

Amendments agreed to.

A party vote was called for on the question, That the Water Services Economic Efficiency and Consumer Production Bill be now read a second time.

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.

Motion agreed to.

Bill read a second time.

DEPUTY SPEAKER: This bill is set down for committee stage immediately. I declare the House in committee for consideration of the bill.

In Committee

Part 1 Preliminary provisions

CHAIRPERSON (Hon Jenny Salesa): Members, the House is in committee on the Water Services Economic Efficiency and Consumer Protection Bill. We come first to the debate on Part 1.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. I thought it would be useful, just whilst we have a chance, to just say a few introductory comments on the bill. Obviously, this is the last of the pieces of the puzzle to ensure that New Zealanders get safe, affordable, and reliable water services that support good health in a sustainable environment.

The aim of this bill and the other bills is to improve New Zealand’s water services system, which is made up of drinking water, waste water, and, of course, stormwater. We know that up to $185 billion in infrastructure is needed over the next 30 years to address historic under-investment. The increased size and scale of these water entities is the key to attracting this level of investment, and this reform will ensure that water infrastructure and services are planned, maintained, and delivered so that these critical services are affordable and fit for purpose. This bill establishes the Commerce Commission to oversee the economic regulation and consumer protection regime for the water entities and this will ensure that consumers directly benefit from these reforms and the delivery of affordable and high-quality water services.

Before I draw the committee’s attention to some of the more notable features, I do want to repeat my thanks to the Finance and Expenditure Committee for its scrutiny of the bill and its considered amendments, and all those people who submitted on it.

The affordable water reforms brought to light issues in the water sector that are often associated with critical infrastructure systems that have natural monopoly characteristics. These include service quality not reflecting community expectations, long-term under-investment in infrastructure, inefficient pricing that lacked transparency, and concerns about the capability of the sector to respond to consumer demands. It’s important that New Zealanders receive water services that meet their expectations now and into the future. For these reasons, this bill establishes an economic regulation and consumer protection regime, with the Commerce Commission as regulator.

This regime is an integral part of the water reforms to protect New Zealanders from the sort of harms that can occur when essential service providers have substantial market power and consumers are unable to switch providers. How the bill addresses this is that alongside Taumata Arowai’s focus on water quality, the economic regulation and consumer protection regime will promote the long-term interests of consumers in water services and ensure the new entities provide high-quality services at affordable prices. It will put protections in place for consumers so they can expect high-quality service when they contact the water supply with a query or complaint, clear communications about network outages, and transparency from their supplier about how water services are built.

The Commerce Commission is a high-performing regulator with experience regulating other essential infrastructure services and ensuring consumers are treated fairly. A Water Services Commissioner will be established within the commission to reflect the unique nature of the water sector and the vital importance of water, guided by the fundamental principle of Te Mana o te Wai. The scope of the Consumer Advocacy Council will also be broadened so that it can advocate on behalf of water consumers, and an independent consumer dispute resolution service will be established to resolve disputes between consumers. I look forward to answering any members’ questions.

SIMON COURT (ACT): Thank you, Madam Chair. Thank you, Minister, for taking one for the team, taking this bill up so that the ACT Party can ask some hard questions. Minister, how is an economic regulator supposed to regulate Māori tikanga—Te Mana o te Wai, spiritual concepts in water? How is an economic regulator supposed to work out—if the Minister truly believes what he’s said, that tikanga and Te Mana o te Wai is the primary reason for these water infrastructure reforms, how is it that an economic regulator saying, “Well, I’m looking at a $100 million proposal from a water services company to invest in a sewage treatment plant or a drinking-water plant but then I have this other report that says, actually, because of tikanga it’s going to cost $150 million.” Because that’s exactly the situation that the Palmerston North District Council is in right now, Minister; that’s the situation they’re in right now. They are being required, because of the need to meet the obligations under the Resource Management Act to meet Te Mana o te Wai obligations, to invest an enormous amount more, maybe even double the amount so that they could get a waste-water treatment plant to service the current and future growth needs of Palmerston North. They had a quote of about $200 million to start with; once you add in Te Mana o te Wai, it’s closer to $500 million.

This legislation, Minister, will further entrench flawed concepts like Te Mana o te Wai which says, “Anyone making a decision about water has to first regard the health of the water, its spiritual health or mauri—its life force—above the needs of communities for drinking water and above the needs of communities for economic and social development.” What country on earth—what developed country on earth is incorporating spiritual concepts in decision making around water? Well, New Zealand has under this Labour Government. And if there’s not an opportunity to change the direction of this Government in October, if that opportunity is not taken up by the voters, we could be on a slippery, slippery slope to having decisions about how water is allocated, about how pipes are built, about the cost of all our infrastructure, dedicated by people who are unappointed and unelected on co-governance panels in the water service entities, and, of course, will be unappointed—will be appointed but not elected—onto the Commerce Commission’s water commission.

Now, Minister, when we look at what else is wrong with this Commerce Commission approach, a gentleman by the name of Andrew Stevenson, who worked for the Commerce Commission, has pointed out some fatal flaws with this legislative approach. Andrew Stevenson says there will be a limited ability to have independent oversight of large projects and less opportunity for community input compared to the original intent of the regulation—less opportunity for community input, less oversight of large projects. Minister, it’s large infrastructure projects where things can typically go more wrong than simply doing routine maintenance on stormwater and waste-water pipes. And yet this legislation, according to an expert who’s worked in the water industry and in the Commerce Commission itself developing regulatory pricing models, has said that it’s not fit for purpose.

This gentleman Andrew Stevenson also says that if the purpose of the economic regulation is that providers will have to develop asset management plans and documents to meet the Commerce Commission’s specifications—but that’s different from the asset management plans that are required under the legislation that sets up the water service entities. Minister, this bill is being rushed through under urgency today. It is incomplete, it is incoherent, it introduces vague spiritual concepts into economic and infrastructure regulation—

Hon Willie Jackson: Oh, sit down.

SIMON COURT: The Hon Willie Jackson knows it, that’s why he’s moaning and groaning. Not even the Hon Willie Jackson knows how it’s going to work. Minister, would you share with the House, with the people watching today: how is an economic regulator supposed to regulate tikanga?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. First of all, I think it’s important to recognise that this legislation is about economic regulation, and the member’s comments strayed fairly well outside of the bill. And I certainly don’t think it’s a vague spiritual notion to say that the rights of Māori to the protection of their taonga accorded under Te Tiriti are to be protected in this bill. It’s quite clear that that obligation sits with the entities themselves—

Simon Court: Only because you made it so.

Hon Dr DUNCAN WEBB: —and under clause 5, if the member were to read it, rather than jibber-jabbering from the corner, he would understand that the Commerce Commission has a role to make sure that its function is discharged in light of the water services entities’ obligations to take into account the principles of the Treaty and also, of course, Te Mana o te Wai and any settlement obligations. And I am surprised that a member from a party that prides itself on private property and rights doesn’t recognise that the rights accorded Māori under the Treaty are just as important as the individualistic private property rights that the ACT Party sings for so loud. So I’m very proud that this bill properly protects, preserves, and enhances Te Mana o te Wai, because that’s the right thing to do.

In terms of the wider point he made about not having community input into larger projects, again, I think he’s talking about a different piece of legislation which quite appropriately provides for widespread community input, and in this piece of legislation—which is about economic regulation, about ensuring appropriate price and quality regulation—that this is quite appropriately addressed.

CHAIRPERSON (Hon Jenny Salesa): Before I call the next member, can I just say that at 4:45 p.m., which might be while you’re making your contribution, we will go to valedictory statements.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I see this debate’s got off to a flying start! Of course, I was very intrigued with the Minister’s introduction when he said this is the third leg of the puzzle. I would actually say it’s a very confusing puzzle; it’s normally called a conundrum, which means there’s no resolution—you can’t find the end of the puzzle. At least I acknowledge the Minister in the chair. I know it’s a difficult time for him. We’re going to have a long time on this tonight. I presume that’s why Willie Jackson’s turned up just now so he can help the Minister solve all these wonderful issues—the intellectual highlight here!

But, look, the first thing I want to ask about is we are talking about—and this is the Labour proposition that we’re going to set up these entities with really confused governance structures. We don’t know who owns them. And then we’re going to pile on this massive regulatory economic oversight. I think the question for the Minister is what other models did the Labour Government actually contemplate? Because this is not an industry where we’ve got a whole lot of people, a whole lot of players, commercial operators out there trying to rip off customers and consumers. The model that Labour has put forward is one where we’ve been told, time and time again, it’s all going to be in the best interest of consumers. Miraculously the water rates are going to decrease, and yet the Government wants to overlay on top of that this really extensive economic process and regulatory burden on these four or 10 entities—whatever might happen; it’s not going to happen under us.

And when I look at the roles of the commission, I find it quite staggering. This is for entities that are not meant to be out competing. They have no obligation, no determination in the bill to compete. What they are: they’ve been set up under the Labour Government to look after certain geographical areas. There’s no cross-competing over borders, nothing like that, and yet we’ve got a commission—I was just looking at the rights and functions of the commission under clause 4(1)(b) “to carry out inquiries, reviews, and studies (including international benchmarking)”, it can act as a regulator—well, gee, it does that for certain! It can issues warnings, reports, guidelines, making comments, it can perform and exercise duties and powers, it monitors compliance—it just goes on and on and on.

My first question to the Minister is: why on earth has the Labour Government decided that we need this over-the-top form of economic regulation on what would otherwise be reasonably benign organisations that are not meant to be out there competing, not meant to be out there ripping it off? If we listened to the member and actually to the Minister talking about the benefits of these types of organisations, it is way over the top. Can the Minister please explain that?

MATT DOOCEY (National—Waimakariri): Oh, thank you very much, Madam Chair. Good choice. Look, I wanted just to thank the Minister. Very brave for a Labour MP to front up the issue of three waters—the way it’s gone down like a cup of cold sick among the public. I just wondered if he could confirm that the former Labour Christchurch Mayor Garry Moore said publicly that he resigned his Labour membership because of three waters—would never vote for Labour again.

ANDREW BAYLY (National—Port Waikato): Well, thank you, Madam Chair. We were hoping the Minister was going to jump up in front of this wonderful audience and explain why this economic regulation was required. And Mr Grant Robertson coming in to rescue him—Mr Robertson rescuing us. So can you explain—just carrying on what I was talking about before—why have a definition of “competition” which means workable and effective competition when each of these entities are not in the game of competing with each other across geographical boundaries, about competing for customer base? Why do you have such an onerous form of economic regulation when that form of competition does not exist under the model that the Labour Government has put forward, and so many people have said that is a poor and bad structure, ripping off the assets of residents and putting them into unaccountable entities?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Mr Bayly, I’m surprised, given your apparent background as a merchant banker, that you’re not aware of the wide-ranging economic regulation we have across a number of industries like telecommunications and electricity where natural monopoly or a definition of workable competition issues throughout. This is a very normal form of economic regulation in exactly these kinds of situations.

CHAIRPERSON (Hon Jenny Salesa): Members, the time has come for me to leave the Chair for valedictory statements from members. This committee is suspended.

House resumed.

Valedictory Statements

Valedictory Statements

SPEAKER: Members, the House is resumed for the valedictory statements. Members, following the valedictory statements, the House will suspend for the dinner break and will resume in committee on the Water Services Economic Efficiency and Consumer Protection Bill at 7 p.m. I call on Todd Muller to make his valedictory statement.

TODD MULLER (National—Bay of Plenty): Whilst this boy from Te Puna might have dreamt of being a President of the United States, it was the Mayor of Te Aroha, my grandad, Henry Skidmore, that planted the seed of purpose in my teenage mind. Seared in my memory were my grandad’s trips to collect the mail, years after he had retired, and shaking hand after hand of that community as he slowly walked back to his car. It was genuine affection from him to them and much in return. I saw, in my grandparents, how fulfilled one can be through a life of service.

By my late teens, I was determined to one day stand in this place—so determined, in fact, that according to Michelle, on our first date, I used that pretty cool pick-up line about how much I wanted to MP. Clearly I was a keeper.

For some reason known only to her, that did not put her off and, 25 years later, here we are. And it is in thanking Michelle that I want to start. I think this House knows it hasn’t been the smoothest of rides over the last nine years—in fact, at times, pretty dire—but Michelle kept our family together through it all, under the most intense of stress. She prioritised everyone else at the expense of her own health and career. Thank you for your intuition, selflessness, and being the glue for our family. In a world that feels increasingly conditional, your love was unconditional and, in a very real sense, I can stand, still, here today, because of you. I love you.

To Aimee, Bradley, and Amelia: from little kids having their photo taken with John Key nine years ago to the remarkable young adults that you are today; my choices have been tough on you all, even tougher than Dad talking about you now! But thank you for your love and support. Aimee, I so love your humour and immense work ethic; Amelia, your passion for theatre, singing, and your insights on life; and Bradley, our Aquinas College captain of the first 11 football team—Aquinas captain of the basketball team who broke his leg on Friday in an interschool competition two weeks out from the national qualifiers, watching now in Tauranga. Your courage and resilience that you are demonstrating right now is an example to me. Mum and Dad are so proud of you all.

To my dear Mum, Trish, who has personally lived every political twist and turn and media interview as only mums can, thank you for your constant love and support, especially in the last six years without Dad at your side. We have all missed his wisdom and love but I, like you, can sense his guiding force still. To my brothers Gavin, Craig, Nathan: thanks for always reminding me that brotherly familiarity and depreciating wit, normally at my expense, is a love all of its own.

To my close friends Lain Jager, Mike Graham, Sarah Paterson, Hamish Crafar, Lewis Graham, and Carrick Graham. Thank you for caring for me and bringing a large disinterest and buckets of humour to the machinations of day-to-day politics, which was hugely appreciated.

To my Papamoa staff over the last nine years, Nigel, Raiha, Jo, Karen, and Greer. Nine years of constituent advocacy, nine years of making a difference in helping those most vulnerable navigate an often bewildering array of public agencies. You have changed people’s lives.

To my Wellington staff: Stefan, Sharon, Aaron, Megan, Nikita, and Jess, thank you for your remarkable commitment and passion to bring the very best of yourself to the job.

Special hugs to Claire and Celia, for the tears and laughter and most extraordinary loyalty to Michelle and I. To my long-time supporters Jim and Joan Bolger, Sir Paul and Cheryl Adams, Sir Dryden and Margaret Spring, Craig and Shayne Greenlees; my Tauranga mafia mates Grant Eynon, Mike Chapman, Doug Voss, and Sir Peter Trapski, thank you for your remarkable belief in me and for your consistent perspectives, insight and support.

To the GGPA—you know who you are—thanks for having my back through thick and thin. To the many parliamentary staff I have met and chatted to over the years, from security, to messengers, to the Chamber staff, to the cleaners, thank you for your quiet, humble service, and for sharing some of your own stories with me—a welcome drop of perspective in a place that can easily lose it.

To my local National Party members, thank you for being there for Michelle and I, through the remarkable highs and lows of these last nine years. The commitment of your often precious time to advance our party’s values is a treasure I will never forget. Thank you to Sean, Mary and Jim, Sandie, Bonnie, Valda, Don, Pam, and Jacci.

To my Bay of Plenty electorate, it has been a genuine honour to represent the community I have lived amongst for 50 years. We fought hard for each other—petitions and protests for more roads, schools, health services, police—with some success but Tauranga is a city that continues to grow significantly faster than the infrastructure and services provision and, frankly, it’s time for a National Government. Talking of future National Governments, can I personally thank you Christopher and Nicola for your private support and values-based leadership. I do deeply thank you. You are a partnership that this country desperately needs.

Well, it has certainly been a ride, but I wouldn’t change a thing—well, apart from perhaps a few less colleagues to get mistaken for! Earlier last year, I arrived in Christchurch and jumped into a taxi and headed north. The local taxi driver, disconcertingly, spent more time looking at me than he did the road, for many, many kilometres. After quite a while, he got up enough courage to turn to me and say, “It is an absolute honour to have you in my car, Mr Luxon.” I felt I couldn’t disappoint him so I to him, “No, no; I’m your local MP Matt Doocey.”

So, in the spirit of valedictories and the knowledge that what I am going to say can be attributed to at least two others, I would like to share some highlights and reflections. I hope political colleagues, the wider House, and media can see these comments for what they are—personal not political, conciliatory not critical, wary but not lacking in hope. I have two highlights I wish to reflect on. Firstly was the negotiation of the zero carbon Act with James Shaw. It was tough; we didn’t get everything we wanted but we were focused on delivering something that would stand the test of time, a framework that would give New Zealand surety that this Parliament and those to come would prioritise climate action.

Whilst I don’t agree with pretty much everything the Green Party stands for, I want to acknowledge James as a gentleman and a friend. However, while we have embedded a useful advisory structure it will become increasingly meaningless if we don’t follow its advice. I believe the Climate Commission must mature into an institution that this House respects. But that respect will come from telling truth to power. That truth will be uncomfortable for us all. I’ve just got to try and grab a water here for a moment, excuse me.

It’s a thing I’ve always had from my father—shaking hands when you have a water; he’s thinking of me. That truth will be uncomfortable. The nations of the world will not keep global warming to below 1.5 degrees, rather they will overshoot 2 degrees by some measure. As the global climate continues to warm, New Zealand will bear significant costs due to the impacts of climate change and attempting to adapt to it over time. These impacts, on our coastal and stretched infrastructure, will dwarf the medium-term challenges and costs of emission reductions. I hope the commission’s future advice will include principles that could inform how we could share this adaptation cost within and between generations in an equitable manner, because, with the possible exception of agriculture, we will be a technology taker, so we need to balance our international obligations with our capacity to scale up new technologies at pace.

We are a tiny country seeking to play a meaningful role in global action on climate, but we must be realistic about our size, distance from market, infrastructure vulnerabilities, and balance sheet capacity. But all that strategic context cannot mask the inevitable: we must reduce our gross emissions and seek efficient ways to offset them in the short term. It is a challenging path for a country so small and so distant, but it will become impossible if dispassionate assessments of complex options provided by the Climate Change Commission get drowned out by simple tag lines of denialism or catastrophisation, or even “kick it down the road” - ism.

As we sit here today, we cannot meet the gaze of our youth on climate action and that should not sit easy with us. The achievement I am most proud of was becoming the leader of this great National Party. I walked into a school hall 34 years ago as a young man, seeking a tentative political home and found New Zealanders who were hard working, entrepreneurial, deeply caring for their communities, and I felt immediately comfortable. To become leader of New Zealand’s most successful political movement was humbling and exciting in equal measure, but as is well documented, such sentiment was quickly subsumed by anguish and horror. As I slowly pulled the pieces of my life together, I struggled with regret and loss.

I turned up here late-2020 caught between trying to apologise and rebuilding a career, walking around constant triggers of what might have been. There were many messages of support from this place, which I was grateful for, but, unfortunately, behind the public utterances of many, there remained a persistent view that somehow having a mental breakdown was a function of poor political execution, as opposed to a contributor to it. I acknowledge this is a sensitive space, but we should be open about the unique challenges of experiencing poor mental health when you are a political figure. It is important to provide suitable space for rehabilitation, including some distance from scrutiny and accountability. We do that for cancer; we should do it for poor mental health.

In my case, that largely happened with the mainstream media, but less so with some in my party still coming to terms with a terrible 2020 result. I hope that when the occasion arises in the future, for it surely will, empathy replaces silence, and understanding—blame.

To the many hundreds of New Zealanders who have reached out to me over the last three years, nearly all of whom spoke of their own moments of suffering and hope, thank you for your care, for your searing honesty and words of encouragement. Please know that apart from my family, friends, and professional support, there was no greater comfort or contribution to my recovery than those messages—especially your words of hope despite your often very private hell.

This needs to be the bipartisan cause. I commend MPs for establishing a cross-party committee on mental health, but we are losing New Zealanders, every day, including a friend of mine just last week. We can’t care for them to the level they need, and we have to fix it. When you or someone you love is suffering, you don’t care about political blame, you don’t care about policies or working groups or reviews or dollars to be spent over the next four years; you just want someone to help—you just want the pain to stop. We have to support the many hands that can reach out to them. Thank you Sir John Kirwan, Mike King, and many others for your relentless pursuit of the care of others. Because you walked it, survived it, but most of all shared it, many others stand up, still—kia kaha.

Finally, there is a broad change occurring in New Zealand that concerns me, and I can sense in our private moments, concerns many in this House. There is anger at a level I have not seen before. Boiling frustration, weaved through the personal conversations of many of our fellow New Zealanders. From this discontent swells greater partisanship, which is fuelling a level of political toxicity that is corrosive to our society.

I think the most explicit example of community division at the moment is the issue of Māori and economic and political aspirations. There are two polar opposite views that are pulsing through our communities. One: that this country is being radicalised by the Māorification of our society, and the other is that we are very slowly, but inexorably, moving to a Treaty-centred future which was imagined in 1840.

From these opposing philosophies emerge policies calling for the Treaty’s impact on New Zealand’s life to be seriously curtailed, and policies that seek to apply Treaty principles more broadly to guide all we do in this House. There is a building resentment that fundamental legislative changes are occurring without due consultation, and there is intense frustration that the promise of 183 years ago continues to be denied. As we would hope in a representative democracy, these perspectives are not only represented in this House, they sit side by side, but their world views could not be more at odds.

How we deport ourselves on this issue matters. We are a House of Representatives, political debate in this unique New Zealand cauldron should be strong, ideas tested, and their articulation critiqued. But we must ask ourselves: are we standard bearers of civility and decency or amplifiers of division? We set an example here, and the ability to temper our language when we are fighting for closely held beliefs is not a weakness, but a strength. We need to model the capacity to disagree with respect.

The two great tribes of New Zealand politics—the Labour Party and the National Party—have a real responsibility here. As collective representatives of the significant majority of the country, we need to be mindful of where these debates and policies are taking us. One of the great examples of bipartisanship of the last 30 years has been our focus on settling historical Treaty claims—often in innovative and inclusive ways. But the areas of common agreement around the role of the Treaty in New Zealand are being eroded by increasingly fierce and partisan demands and responses.

We progress as a society when the centre holds, whilst slowly moving that centre to reflect the changing nature of our aspirations and beliefs. But if the centre collapses because the extremes are too unyielding, or either one of the main parties rapidly moves to embrace that extreme, we put the bonds that bind our society at great peril. But the political centre has to move as well.

I believe one person, one vote is the bedrock of democracy, but bedrocks can be built on, so where there is inequality in political representation, we should be open to ensuring these voices can see a pathway for greater representation. For if our political institutions are to endure, they must reflect our changing country.

In 1993, I voted against MMP; I was fearful that the National Party’s political power was going to be diffused. I was right, it has been. We lost the clean efficiency of majority Governments, but gained the capacity to govern taking into account a more diverse range of perspectives. The future is more of that, not less. Framing Māori aspiration as a binary choice between radicalism and conservatism is as dangerous as rapid changes to our institutions without due diligence and consultation.

So I ask the two great tribes of New Zealand politics to quietly begin refreshing and strengthening their relationships across the aisle on this kaupapa, and work together to allow the centre of NZ politics to move but also to hold.

But enough of my reckons; it is time to leave. So with a sense of immense pride, love of family intact, close friends still close, and many handshakes and nods as I walk around my community, I will take my leave. I have done some things well, some less well, but I gave it my best. My grandparents were right: there is much value in a life of service. Thank you very much.

[Applause]

Waiata—Tauranga Moana

SPEAKER: I now understand that folks in the gallery will be departing and we’ll have Mr McKelvie’s friends and family locate themselves in the gallery.

IAN McKELVIE (National—Rangitīkei): Thank you, Mr Speaker. This is kind of the time when you know there’s no going back—ha, ha! I’m done.

Oddly enough, I’ve lived my 28 years in public life with a lot of things in the back of my mind—but one in particular, by an unknown author, has stuck with me. It goes like this: “I have wept in the night for the shortness of sight that to somebody’s need made me blind. But I never yet shed a tear of regret for being a little too kind.” Now, anyone who knew me in my 20s would not believe that this is the same person they knew then. That’s the effect life experience has on one; it’s also why this place needs people with life experience, because we change a lot from our 20s and 30s to our—I’m not going to say how old I am—to our 70s, ha, ha!

When I entered this place, I had no great expectation that I would have a profound impact here. So, as I leave 12 years later, I can only hope that I have enabled others to live a better, more enabled, and independent life than they could before I came. I hope that I have been able to give more Rangitīkeians hope and aspiration to achieve, to enable them to feel better about life, and to encourage them to visit and speak to their MP at any time in the hope of making their country a better place for them and their families to live.

I have never been a pothole-and-road man or a person who worries about the cost of a council lunch or the colour of the library door; I have always been much more interested in where we want to be in 20 to 30 years and how we get there. As such, I joined the National Party and came to Parliament, having been elected as the member of Parliament for Rangitīkei in 2011, having previously served nine years as the Manawatū mayor, a role I really enjoyed but needed to move on from, as I don’t believe mayors should stay around for much longer than nine years—probably nor should backbench MPs.

One of the principles I brought to my public life was never to deny a problem or failing, to admit to a problem, and get on with fixing it. I have to say one of the greatest downfalls of successive Ministers in this place is their failure to recognise or admit to a problem and getting on with fixing it; after all, they have the power—and some, the ability to do so. It seems we are able to go on blaming previous administrations for years and years. If I had a piece of advice for members of Parliament it would be that: don’t blame the others, don’t hide from the problem; admit your shortcomings, and use your considerable influence and power to change what you can while you are here. One further piece of advice is: never be convinced by a senior Minister to swim in a very public place—ha, ha!

If I have a single regret on leaving this place, it is that I have been unable to encourage more collegiality within and some degree of common acceptance universally around the big decisions facing us—climate change, child welfare, family violence, and progress on environmental changes needed to ensure our futures as a world-leading food and fibre producer, and that’s not to mention health and education.

Sadly, I have to report that I have failed in the collegiality thing; however, it is not for the lack of trying, meeting with MPs across the House; the former Speaker Trevor Mallard—who inexplicably wanted the best for this place but showed it in very odd ways at times!—participating in cross-party events, select committee, and Speakers’ tours, even cricket tours. That cricket tour allowed me to have lunch at 10 Downing Street, and, on the same day, attend the bulk of the infamous world cup cricket final at Lord’s—stuff dreams are made of for a romantic like me. All of this to pretty much no avail, and if you go back to my maiden speech, it was all about “creating more collegiality in Parliament”.

One big issue I want to comment on before I leave this amazing place is the wellbeing of MPs and their staff. In my experience, we generally look after each other pretty well; we also look out for each other when personal wellbeing is at stake. There are two matters which break these boundaries and cause much stress. One is thinking that staff of politicians can be politically neutral while working under a party banner—it is just not plausible.

The second is the extreme and unacceptable prying into the private lives of MPs which has no relevance to their ability to perform the roles they are elected to undertake. This would never happen in the corporate world or down on the farm, and it shouldn’t happen here. If we don’t reach some agreement as a society as to the boundaries here, we will undermine democracy and chase the very people we want running for Parliament away for good. We come here accepting the risks but our friends and family do not, and it is totally unacceptable that they should be compromised by the fact we choose to serve.

You might ask what I’ve been doing in this place for all those years—well I wonder that as well! But I’ve ended every day in politics wondering if I have done enough, wondering what I could have done better, and if I could have done a little bit more to help people; even wondering at times if I am a very poor actor. I have listened to so many people tell me how to do things better, with great ideas for the future, and, consequently I might ask of all of you, as I leave here, what are you going to do about it? Because we all come here knowing what needs to be done—we just take such different paths as we strive to put it right. I hope you will forgive me for stealing a phrase from a great New Zealand retailer Alan Martin—who most of you won’t remember—“It’s the putting it right that counts”.

One thing I have been doing here is passing two members’ bills, with a third picked up by the Hon Andrew Little with help from the Hon Kieran McAnulty and planted in a Government bill all under a Labour Government. These concerned three subjects very dear to me: horses or racing, livestock, and dogs. That’s why we come here, to promote the issues we’re interested in, and it does show that collegiality is achievable if one chooses to work at it.

One role I really enjoyed was my short time in the Speaker’s Chair as a temporary Assistant Speaker. The help I got from the team behind the wall in the Clerk’s office was amazing, and there is no doubt they could make any person appointed to the Speaker’s role look great—that is no reflection on you, Mr Speaker, ha, ha! Sorry to give your secret away!

Whilst on the people behind the wall, there have been so many who help us on a daily basis, from the security team; to those who clean up after we leave for the day; to the messengers; to the House team; to the select committee staff, who are amazing; to the team in Bellamy’s—you have been so kind to Sue and I, and I thank you.

Another role I particularly enjoyed was my spokesperson for seniors—it’s quite appropriate, I imagine—and subsequent involvement with our National SuperBlues, a wonderful group of older New Zealanders. It’s been an amazing experience talking to older New Zealanders. It’s interesting what you find out.

I am a farmer, born a farmer, and never intended to be anything else—oh, how life can change. As such, I recognise that change is essential to achieve our aspiration to be the world’s cleanest and greenest food and fibre producer, and it needs to be done in an incremental manner that most can agree to. To achieve this, we need a plan bought into by the majority of this House, particularly the two major parties and all businesses and producers affected by it. It has to allow those businesses and those responsible for the implementation of change to be able to plan and budget for the future with certainty, to know the plan is achievable, and to be confident that achieving this will ensure they are valued and have a business with a certain future. One Government starting these processes and the next one stopping them will never see us making the progress our farmers deserve.

Whilst on the topic of agriculture, I will quote from my maiden speech. I said, “I want to make a plea for us not to encourage, through suspect policy, the planting of pine trees on land that can be used for food production”. How prescient that proved to be, as we continue to allow the planting of pine trees in the permanent forest sink on land that should otherwise be available to agriculture and the productive forestry sector. This is one of the biggest single challenges we face in New Zealand with respect to our future as a food-producing nation, and one that must be resolved urgently—and will be by a National Government when elected in October. Having said that I also firmly believe that the emissions trading scheme has a place in our climate change response.

I have spent a lot of my time in Parliament sitting on select committees and have had the privilege of chairing two of—one while in Government and one whilst in Opposition. As I leave here, I am sad to say that they do not work any better than they did when I arrived. By that I mean, they miss the opportunity to achieve much more for New Zealanders because of the partisan nature of them. Were they able to operate in a semi-bipartisan manner, doing what is best for the legislation or the inquiry or financial review in front of them, we would produce a much better result, for the Parliament, the Government and the people of New Zealand.

This approach to select committee work would also help maintain a very strong democracy, which I believe is being weakened by the day in New Zealand. Remembering whatever the select committee does can be overturned by the Parliament—or the Government of the day—if so desired. The Minister concerned would then have to have a much stronger and more public reason for doing so, and that would be great for democracy and the legislation concerned.

I have seen so much legislation bulldozed through select committees and returned to Parliament, only to need a quick and poorly-thought-out fix at committee stage or need to be returned to Parliament shortly after Royal assent. Haven’t we seen, this very day, an ill-considered and ill-conceived water legislation rushed through the select committee under urgency, only for a 250-page Supplementary Order Paper to be dropped on the Parliament a few days later. A four-year term would make that process much easier.

One of the things many will have noticed is my reticence when it comes to asking questions of Ministers, and I will explain this very quickly. One of my early questions was to a Minister—who shall remain nameless—a primary and three supplementaries. Being a new and very clever MP, I listened very carefully to the answers, knowing that the Minister concerned had answered the third supplementary in the answer to the second. I did not ask the third—and amid much glaring from the Minister concerned, I sat staunchly in my seat. Needless to say, I didn’t get a question for another 18 months.

I have been privileged in my time here to have been looked after by some amazing people, hereby Fiona Julian, Leanne Marshall, and Ainslie Newell—who has put up with me for the last 11 years—in the electorate offices by Norma Humphries, Jacky Short, Suze Redmayne, Hilary Webb, Bernadette McIlwaine, Jane Cameron, Leanne Marshall, and the Taumarunui version of the MP Kay Kidd, who’s been with me from the very start.

I have also been fortunate to have had two excellent policy advisors here in Ben Henderson and Jamie Allan; and voluntary and special ones in Grant Hadfield, Simon Taylor, and Wiremu Te Aweawe—and, of course, I’ve got a vintage model on some days in Rob Webb. I have also had four great youth MPs in Jacinta Gulasekharam, Ben Henderson, William Wood, and Daisy Tumataroa, all of whom I am sure will make a great impression on New Zealand during their lives—possibly as a result of that experience.

A few words about my Rangitīkei electorate, who without the great support of, I would not be here today. Electorate chairs, the late Bruce Mills, Gary Massicks, Jamie Cunningham, and Shelley Dew Hopkins, all of whom have been great support to me; my campaign chairs Simon Taylor, Jamie Cunninghame, and Grant Hadfield; my campaign organisers Kathy Johnson and Adrienne Pierce; and my sign teams bosses, the late Mervyn Craw, the late Johnny Monckton, the late Brendon Mickleson, the late Bruce Mills, the late Anton Smith, and the late Neville Wheeler—it’s a very tough job, that sign job! And those surviving—there have been some—in Cameron McKelvie, Greg Weston, Mark Monckton, Jamie Cunningham, and Shelley Dew Hopkins.

Special people in Elaine Wheeler, Jacqui Campion, Marion and Bill Abbiss, Diana Hansen, Claire Hare, Jane Bolton, Stuart Picken, Norma Humphries; and my late brother BJ, who was both a great critic and a great supporter; my late mother Rosemary, who kept on asking me, when the Labour Government came to power, “Have you seen the Prime Minister today?” I said, “No, Mum, I haven’t!” She’s no longer with us, of course. And so many others who have been special to Sue and I.

I followed a very good MP and senior Minister in Simon Power into this place, and I hope to be followed by an equally good one in Suze Redmayne. I wish her all the best in the upcoming election; I know she will be a star in a future Government—the fact that Simon and I played a role in her education ensures that. Gotta claim it now!

I have always had a good relationship with my neighbouring MPs, and I must mention particularly—because there’s been a number more, too—Tangi Utikere, the Rt Hon Adrian Rurawhe—Mr Speaker—and my own National neighbours Nathan Guy, the late Chester Borrows, and Jono Naylor. We are all loyal to our region. Finally, in this respect, I must mention the person I rate most highly and that’s Dame Tariana Turia—I think she’s the most courageous politician of my time.

Other very important people, especially to our provincial MPs, are our mayors. I’ve had a few—16 in all—and all have worked very hard for our region and been very supportive of me. I must especially mention—because I can’t mention them all—my successors at the Manawatū District Council: Margaret Kouvellis and Helen Worboys, Don Cameron, Andy Watson, Grant Smith, Tracy Collis, and Brendon Duffy.

The class of 2011—I have loved our time with them. We started as a group of nine, grew to 11, and I wish the four of you left standing—Simon O’Connor, Mark Mitchell, Scott Simpson, and Paul Goldsmith—all the best in the upcoming election. I will never forget Paul Foster-Bell’s take-off of Tim Groser or Paul Goldsmith just being Paul Goldsmith—or Maggie Barry just being Maggie Barry, even if it was at 2 o’clock in the morning. Also to demonstrate the somewhat treacherous nature of this job, there have been 98 National MPs here with me; now there are 34 left—64 have been and gone.

When I appeared before the interview panel for selection to become a candidate in May 2011, one thing in particular stuck with me and that was being told by the chair that my wife would play very little part in my political life. Well, I told her that—you can imagine how that went down with her. Of course, she has effectively been the other half of the MP for Rangitīkei for the past 12 years. How lucky have I been to have had a hugely supportive family and Sue, who lived the business for all those years. She has also driven many of the 850,000 km our cars have travelled, just touching the brakes from time to time when she got a little bored—with me sitting on the computer; your head goes up pretty quick when that happens.

I am sure she will miss this place and its people more than I will. She has seen the world while I have been an MP, as is only fair; as we become slaves to our roles, our partners need a life of their own. We will wake up on the morning of 15 October with nothing to do—the first time since we went to school 66 years ago. It will be a new adventure in a life together that has been full of them. To our very adult children—Diana and Thaine, Cam and Rachel, Angus and Harri—and our eight grandchildren, thank you for putting up with the at-times unwanted publicity and the fact that we cannot attend birthdays, sports events, and other family occasions that “normal” people do.

I have loved my time in here, serving the people of the Rangitīkei, visiting businesses, people, and houses all over the country—in fact, in many parts of the world—battling with constituents from all over the place, and some have literally been all over the place. I know and have learnt so much, and as I leave here, I have no idea what will happen to that or what I will do in the future.

I will not be joining the critics of this place on leaving—that’s the job of the press and the voters. Finally, I have served under two great New Zealanders in Sir John Key, Sir Bill English, the unlucky Simon Bridges, Todd Muller—and we just heard today what might have been—and the courageous Judith Collins. I wish Christopher Luxon, Nicola Willis, my 2011 colleagues, and the National team led by Sylvia Wood all the best in the upcoming election. They will make a fantastic Government for all New Zealand, if elected—albeit in very challenging circumstances. Thank you, Mr Speaker.

[Applause]

SPEAKER: I’m going to now ask Ian McKelvie’s family and friends to vacate the gallery so that we can have David Bennett’s friends and family come in. Thank you.

Hon DAVID BENNETT (National): Tēnā koutou katoa. Salaam alaikum. Sat sri akaal. Dajia hao. A recent opinion piece in the Waikato Times quoted from the Shakespearean play Macbeth, saying, “Nothing in David’s political life has become him so much as leaving it.” That commentator never said a truer word. I leave this great Parliament with a new and exciting chapter in life that involves a family. This place has taught me what to value in life. Thank you, Nicky, for being a beautiful, smart, and strong partner. We are very fortunate to be able to build a loving family together. As you all imagine, she is the more rational one of the partnership.

Thank you for the blessing of our beautiful Julia. The little one has been a treasure and continues to bring much joy and love. Julia has a very outgoing personality and loves people—natural political skills!

Thank you to my family who have supported me through this career. To Mum and Dad, thank you for all your support. I would not be here or have had the opportunity to be here without your sacrifices. To my brother Tom and his children, Livi, Greta, and Nicholas—they have grown up while I have been here and are smart, caring, and positive young people with amazing futures. We are very proud of who you all have become.

I would like to thank Nicky’s family, Carol and Bill and Debbie, who have welcomed me into the family and been wonderful to Julia.

I stood for the Hamilton East National Party nomination in 2004 on one platform: to build the road from Hamilton to Auckland. My driver has been to get infrastructure for Hamilton to achieve its destiny. My focus has been on delivery, not stories. I wanted to build the Chicago of New Zealand, an industrial heartland city. Hamilton has a strategic advantage in its proximity to Auckland. The expressway meant we could build the Hamilton, Auckland, and Tauranga “golden triangle”. Hamilton could have easily been bypassed like inland cities around the world. Instead, we have connected through infrastructure to the population centre of Auckland and the export and import centre of Tauranga. As industry relocates to Hamilton, we are seeing Penrose move to Pūkete. Head offices are now coming to the city. Hamilton is booming. The National Party has made this possible through the provision of infrastructure.

Judy Kirk, Peter Goodfellow, Sylvia Wood, and Roger Bridge have all been great support on the National Party board.

Thank you to our leader Christopher Luxon. He is a genuine, driven, and aspirational leader. He will be one of New Zealand’s best Prime Ministers, and I look forward to celebrating your success in October. Thank you also to Nicola Willis, who will make a huge contribution to New Zealand politics. [Interruption] That’s the little one; she’s getting confused. Ha, ha!

I would like to thank my good friend the Hon Judith Collins. Judith took over the leadership with a party and caucus in disarray. As with most times of difficulty, a strong woman is required, and thank you for keeping the party together.

Thank you to the Hon Steven Joyce, who always supported projects for the Waikato. Steven’s understanding of politics and business is a very rare skill.

The Hon Jacqui Dean and myself are the last two remaining members of the 2005 intake for the National Party, and my thanks to Jacqui and the class of 2005 for their friendship over that time.

The Hamilton East electorate executive have been very supportive, and thank you to Bill and Judith Noble, Trevor and Julie Follows, John and Louise Bridgman, Dave and Merle McGall, Ryan Higgins, Lawsen Harte, Marilyn Hemming, and Ron Williams. My special thanks to Stuart Anderson. Stuart has been my campaign manager throughout my time here. His loyalty and political instincts have been invaluable. Thank you, Stuart. Murray Porter, Jon Webb, and Pienaar Piso have always been there to support all my campaigns, and my best wishes to Ryan Hamilton, who will be the next MP for Hamilton East.

Thank you to all members in this House for their service to this country, and my special thanks to the Labour ladies for babysitting Julia so I could do my House duties.

After being elected in 2005, the leader Don Brash sought our portfolio preferences. Transport was mine. The new leader, the Rt Hon John Key, sought our transport policy for the 2008 election. I suggested to the senior spokesperson at that time that we borrow the Australian roads of national significance policy, so the roads of national significance were born. We were to announce the first preferred road from Auckland to Whangārei before the election. As my reward, the expressway was to be a back-up and, through a twist of fate, the Waikato Expressway became the preferred announcement. We wrote the press release as the team drove to Hamilton, and the road was to be built within 10 years and with no tolls. It has been the most transformative event in the history of Hamilton. Waikato-Tainui have benefited greatly, and I would like to thank Kīngi Tuheitia and Tukuroirangi Morgan for their support. Māori have the most to gain from an expanded New Zealand, with their increasing role in land assets like Ruakura.

Thank you to the Waikato Times, who are a strong advocate for the region. They epitomise good reporting, putting both sides of the story together. The impressive editorial teams include Jonathan MacKenzie, Bryce Johns, Roy Pilott, and Geoff Taylor, and the excellent reporters of Aaron Leaman, Natalie Akoorie, Nikki Preston—another one—Belinda Feek, Mary Anne Gill, Elton Smallman, Jo Lines-MacKenzie, Stephen Ward, and Rachel Moore.

Politics is about serving the people of your community. The Hamilton seats are on the front line of the battle of political ideals in New Zealand. I have invited Tim Macindoe and Martin Gallagher here today; we worked as a team over many years. Neither Tim nor Martin had the opportunity to present a valedictory speech—in fact, there has not been a valedictory speech for Hamilton West since 1972. On behalf of the three of us, we thank the people of Hamilton for their support and hospitality. It has been an honour and privilege for the three of us to represent Hamilton. Our thanks for the opportunity to serve our fantastic city. Thank you, Tim and Martin.

Hamilton East is a socially liberal and economically conservative electorate. I am proud of having voted for marriage equality and abortion reform. As Jamie Strange kindly commented in his valedictory, I did a lot of doorknocking—so much, in fact, that one day I managed to interrupt a couple of teenagers who were up to no good and obviously thought I was one of their parents coming home early. I wasn’t sure who was more relieved when I left.

Hamilton East is the only university seat that National has consistently held since 2005. They say you aren’t a true University of Waikato student if you don’t have a David Bennett pen. Thank you to the student union and Nexus magazine for your support.

One of my passions has been in advocating for a more open immigration system. Migrants bring aspiration, a competitive spirit, and they value education. Hamilton’s success is very much linked with welcoming migrants to our city. In serving our communities, my office has had great staff like Marianne Mclean, Victoria Young, Grace Shaw, Katrina McCann, Jan Mudgway, Raiyan Azmi, Alex Dykes, and Jenny Young. We specialised in immigration cases, and one of our special memories involved the Afghan interpreters. Many of the interpreters were relocated to Hamilton, and they were deeply proud of their service. However, they were not entitled to wear any medals. We enabled them to get medals, and now they wear them with pride at Anzac Day services.

I started the speech with the greetings of the Chinese, Indian, and Muslim communities. The migrant communities make up a third of Hamilton East and represent the future demographics of New Zealand, and their support has enabled me to be the longest serving member of Parliament in the history of Hamilton. They are my friends and my supporters, and thank you for your support. And a special thanks to those that have made it here today.

Hamilton has suffered at the butt of many jokes over time. Some thought of us as a “Cowtown”, a bogan capital, and, more recently, as the city of the future. Hamilton, for too long, hadn’t had its fair share. Hamilton is set to become New Zealand’s third biggest city. Both Hamilton and Tauranga will be bigger than Wellington in the next decade. The population of the Waikato - Bay of Plenty region is, effectively, the equivalent of the South Island. Every dollar spent in Hamilton and Tauranga on infrastructure provides a significantly greater return for New Zealand than anywhere else in the country.

New Zealand now has the same opportunity as Hamilton had, when I came to Parliament. Australia, through its “big Australia” policy, along with Canada and Britain, have made the decision to embrace population change. We have a choice of being part of that change or being a feeder for others’ change. The rise of Africa, climate change, and the large populations of Asia will mean over 40 million people will live between Adelaide and Townsville soon. Sydney and Melbourne are projected to be cities of 9 million people each. It will initially be driven through economic reasons, and then security reasons. Australia wants to be a world player and they need a population to do that. We can be part of the Australian eastern seaboard growth and springboard into the Asian-Pacific market. This is the greatest economic opportunity for our generation. The new “golden triangle” is now Greater Auckland, Melbourne, and Sydney.

New Zealand’s ability to produce the scale of population and economy to take advantage of this opportunity is firmly rooted in having a strong top half of the North Island. Auckland’s role in the future of New Zealand is inevitable. As we link from Whangārei to Tauranga, Hamilton’s destiny is secure. We can accelerate the growth in the area and have seven million people in these four large main urban centres. New cities are possible, and Hamilton can be the link for the Taranaki, Manawatū, and Hawke’s Bay to Auckland.

My passion for building a stronger Hamilton hasn’t been meet with a desire for a public profile. Being a Minister was never a priority, but I did have that honour. I’d like to thank the Rt Hon Bill English for the opportunity to serve in his Government. Thank you to Dell Watson and Audrey Malone for your professionalism. It was an absolute pleasure to be Minister of Racing and meet some of the most successful and dedicated New Zealanders. David Ellis, Karyn Fenton-Ellis, Sir Peter and Lady Pam Vela, and Brendan and Jo Lindsay represent the success of our racing industry. Racing is a primary industry that will continue to shine and has great potential if linked to the Australasian market.

I also had the privilege of being spokesperson for several portfolios, and my thanks to leaders, like Bruce Cameron from Zespri, who have made a real contribution to our primary sector.

For me, I defined success in building the Waikato Expressway; the internal ring-route road for Hamilton, just like Melbourne and Moscow; Hamilton as the first broadband city; new secondary schools in the fast-growing north of the electorate; the velodrome; and a rebuilt Waikato Hospital campus. Recent announcements of the Cambridge to Piarere extension of the Waikato Expressway, Southern Links, and the “Shane Reti Medical School” have meant my job in this House is done.

The Waikato has unlimited potential. It has land to grow on. It has an iwi willing to invest. It has the population to deliver results. It has the natural resources to continue to be the food bowl and energy hub of New Zealand. It has the industrial base to deliver for New Zealand. In Hamilton, we have demonstrated the power of promoting location and connecting with other centres, building infrastructure, and welcoming a diverse and growing population.

Thank you for the honour to serve the National Party and the people of Hamilton East in this Parliament. Kia manawanui.

[Applause]

SPEAKER: Can I ask the friends and family of the Hon David Bennett to make space for the friends and family of the Hon Jacqui Dean.

Hon JACQUI DEAN (National—Waitaki): Mr Speaker, we certainly couldn’t start this without my favourite sister being seated in the front of the gallery. Oh, no, that way [Points to the gallery] No—anyway, I’ve got so many of them, just putting it out there.

I was sitting in the hairdresser’s chair—I don’t know if anybody noticed, but I was sitting in the hairdresser’s chair—at about 11 o’clock this morning, after having bunked off my Speaker duties. I wanted to make myself presentable for this important speech—you know, 18 years; maybe I have made a contribution. You know, it’s really important—I just wanted to give it something, and my hair was going to do that. So the hairdresser was back-combing me and he looked at me and he said, “Were you really on Play School?” And I thought to myself, “OK, there are some things you just cannot leave behind!”

When I entered Parliament in 2005, I did that to serve my community of Otago; my province. So I came in as the member of Otago. As electorate boundaries changed, I became the MP for what is now known as Waitaki, which is twice as big and one of the big five blue electorates in the New Zealand Parliament. You know, I’ve always smiled as other MPs in this House talk of “getting around” their electorate. For me, getting around has meant traversing Central Otago, the Upper Clutha and Wānaka, the Waitaki Valley, the Mackenzie Country, East Otago, North Otago, Waitaki District itself, and South Canterbury. That’s nearly 10,000 kilometres of roads in total, and obviously there’s an enormous amount of driving involved in getting around the traps. You know, I can drive for eight hours a day or more in a recess week, and I can do that for a few days in a row. So if my productivity was measured in meetings and engagements and constituency work, it would be a major fail in the business environment—and this news I haven’t shared with my leader.

The real challenge, though, starts in the business involved in travelling to Wellington. So first question: where to fly from? It could be Dunedin Airport or it could be Queenstown. It could be Timaru Airport or Christchurch Airport. So on Monday of a House sitting week, I work my way from my home base in Ōāmaru to say, well, Queenstown Airport, stopping along the way in Ōmārama, Tarras, maybe Cromwell for appointments. Then I fly to Wellington—job done. The next challenge at the end of a sitting week is to decide where to fly back to, and that depends on where in the electorate I need to be on Friday. So the next question is: will my car be at the right airport? Where is my car? And that is the question—quite seriously—that is asked very often.

So for 18 years people have turned to me for help and advice. And while I am the wife of a well-known Ōāmaru lawyer, I do decline to give legal advice. No, I’m not magically a lawyer just by virtue of being married to one, and no, I won’t casually ask Bill what he thinks about a constituent’s issue. Some people have asked me to do that.

I have the most wonderful team: Charlene, Alice, Rachael, Charlotte, Makona, and Sarah. Most of them have been with me for many years and they really know their stuff. Their roles include looking after constituents, managing my diary, and being my eyes and ears around our many communities. And a large part of their work is organising getting me to where I need to be and back again. Although, there was this one time back in 2007 when I was trying to find my way to a tiny remote rural school in the Maniototo in Central Otago. This was way before smartphones and Google Maps. I used an AA road map and it did not go well. So when the maps are folded, they are this big, right? But once you open them to try and find where you’re going to be, you’re dealing with something that is like literally this big; it’s really hard to do while you’re driving. So I set off through Ranfurly, past Gimmerburn and on to a really tiny remote school somewhere—somewhere—somewhere near Patearoa. Well, of course I got lost. Actually, I had absolutely no idea where I was and the stupid map, of course, was no help at all. I did have some signal, that is a miracle in and of itself, so I called the mothership, my Ōāmaru office. All I could say was: “I’m lost”. Pathetic, yeah, I know. To her credit, Char—hi, Char—may well have been rolling her eyes, but her tone was very helpful. Long story short, I didn’t know where I was, she had no hope of knowing where I was, but that was the day she ordered me one of those newfangled satnavs.

So I was sorted—except for the time when we set off, this time all of us in the car, for, again, the Maniototo. The highlight of the trip this time was to be a visit to the new Lammermoor whiskey distillery, literally—literally—many miles from anywhere. Not only did we get very lost, but we took a very wrong turn and ended up travelling on what best can be described as a goat track. It was so rutted it was becoming impossible to literally drive any further, and can I just say that there wasn’t much happy chatter in the car just at that point in time. So we ended up having to reverse back quite a long distance, probably about a kilometre it felt, or more, before there was even enough room for us to safely turn the car around. And we were so late; we were very, very late. But when we finally arrived our gracious hosts plastered smiles on their faces, welcomed us into the distillery, and gave us a nice dram of whiskey, and happiness was restored.

The Waitaki electorate is a special part of the country and one that I have advocated for and championed every step of the way. Over the years there have been issues that I have felt very strongly about and have campaigned tirelessly for. I think of maternity services in Wānaka and Central Otago—I have fought for years for the maternity facilities that this fast-growing region desperately needs, and it’s not the region that needs the maternity services, it’s the mums and the babies and the dads and the families. So I expressed cautious optimism when it was finally announced last year that a birthing facility had been secured and would be open in January of this year after it needed a short amount of renovation. Sadly, my scepticism was justified as this important facility for our mums and babies has still not opened its doors and will not likely do so until next year. How many more babies will need to be birthed on the floor of the midwife’s office or on the side of the road on the way to Dunedin Hospital? I just think it is a failure.

I’ll stay on health; recently many of you will have seen the headlines around Oamaru Hospital and the repeated closing of its emergency department during the night hours due to a locum doctor shortage. Just to give you a little bit of background on that, when Healthcare Otago withdrew from health services in 1998, Waitaki District Health Services rose from the ashes. It is a company owned by the local community through the council. Waitaki Health Services took over the provision of health services for us, and ever since then successive mayors, including Mayor Gary Kercher, council, and Oamaru Hospital themselves have had to fight endless, endless battles to get adequate funding. I just feel throughout that time that Oamaru Hospital has been very much the poor cousin to other health facilities elsewhere. You know, recent closures of the emergency department are heartbreaking—heartbreaking. Hospital management have tried everything. It’s particularly galling for the Ōāmaru community to have to compete with Te Whatu Ora for locums. How can that be?

Part of the problem has been immigration policy. This has meant that the doctors and the nurses that we need have gone elsewhere these last couple of years. The region I have been very proud to represent has been held back by immigration settings which I don’t believe in any way meet the needs of our local community and our local economy. Aged care, hospitality, agriculture, horticulture—they’ve all suffered from lack of workers. Just while I’m at it, we now have a proposed housing and commercial development just out of Cromwell being opposed by Waka Kotahi because it would mean that people would be too reliant on private vehicles. What? We have no public transport!

It’s not like Mayor Tim Cadogan and his council haven’t tried. Any Government—and I mean any Government—needs to understand what life is like in places like Central Otago, where there is a chronic and severe shortage of housing for workers. With 3 to 4 percent growth year on year, we just need to plan for that, and we need to make it possible, because if we don’t allow these projects to proceed, if we don’t allow for more housing, affordable new housing, New Zealand will never be able to thrive in the regions. And I’m here for the regions.

So I want to acknowledge the mayors and deputies here today. Look, I’ve so appreciated your willingness to work with me on matters that have been large and small across many years. It has been most helpful.

Well, just to brighten things up, I want to acknowledge the members of the Kurow community who staged not one, not two, but three separate events to celebrate the opening of the new Kurow bridges. Full credit to them—they knew how to lobby me, they knew how to lobby our Government, and they sure as heck know how to party. Shout-out again to the council and all of those who worked so hard in the establishment of the UNESCO Waitaki Whitestone Global Geopark. That is a significant, significant thing to happen for New Zealand and Australasia. It is the first in our part of the world. Again, you’re it—you’re it, you guys up there.

Meanwhile, back in Parliament, early on in my career, I tried and failed twice to get Easter trading reform through the House, with two members’ bills. I had more success with increasing the fines for the smuggling of native species, and failed again with another member’s bill which aimed again to protect native species. I’ve sat on many select committees over 18 years, chairing four of them, and I’ve really enjoyed the collegial and challenging nature of the work.

Occasionally, though, there is some high drama in select committees—actually, it can be a lot of fun, select committees. We were in Christchurch with the Environment Committee some years ago hearing submissions on Resource Management Act reform. The room was absolutely packed, and submitters and supporters were making some very strong points and the passion really just began to build. The chair was Nicky Wagner, and she kept things well under control, but, ultimately, things did get a bit too fiery so, as chair, Nicky did all she could do and she stood, suspended the meeting, and cleared the room so that everybody could cool off. Look, I just want to thank you, because I will never forget the professional way that the clerk of the committee faced the crowd. She wasn’t a big lady, but she faced the crowd and she calmly, with authority, cleared the room so that we could all go, “That was intense.” and then start again.

I asked for the job of an Assistant Speaker, and I’ve relished the role. My family in the gallery, including four of my five siblings, may well say that the role allows me to indulge my bossy tendencies, but I couldn’t possibly comment. Members may think that when I’m gazing into the middle distance with sort of an unfocused stare while they’re speaking that there’s not much going on in my head. Well, I can assure you there is. There’s a fast and furious internal conversation going on, and it goes something like this: “Are they speaking to the bill? No, they’re not speaking to the bill. I just wish they would speak to the bill—how much time have they got left to go? OK, they mentioned the bill; that’s OK. They’re not straying too far from Standing Orders. Oh, good grief—they’ve still got two minutes. Never mind. Well, OK, so, who’s speaking next? I’m going to have to remember their name—oh, my dear Lord! I call…” Anyway, on it goes. It is a blast.

You know what, though? I don’t always get it right, and members certainly let me know when they disagree with my rulings—thanks very much. But more recently, as some of the newer members have found their confidence and found their feet, we’ve had some really good, quality debate in this House, and I think that democracy is being well served. I do have a plea: in the debate, in the heat of the moment, let’s just play the ball—let’s just play the ball.

While I’m here, I want to thank, again, the Office of the Clerk—endless source of support and advice. We’d be hopeless without the support of our officials, so thank you all very much.

A cross-party group of us have been considering the Debbie Francis report into bullying and harassment here in Parliament. We’ve made progress, but there is more work to be done. While we’ve established the parliamentary commissioner for MP standards, I believe that more clarity is needed in the expectations of what is good behaviour for all of us who work on the parliamentary precinct and who have signed up to the code of conduct. This is work for the next Parliament, but, you know, it’s a bit like what Patrick Gower said recently: he found himself at times forgetting that MPs were human—I really think that’s something for all of us to think about.

And my family, all of you: I’m beyond thrilled that you’re here, and my friends. Bill, you have been a most patient and supportive husband. Thank you. One of the best things about you, though, is that you intuitively know whether it’s a “put the jug on” kind of welcome when I come home or a “Oh, God, I better quickly knock the top off a nice bottle of pinot gris” kind of a welcome. I mean, the guy is just perfect. My adult children have shared me with constituents, with the National Party, and the wider public for the best part of 20 years. To Mick, Steffy, and Aiden: I’m so proud of you all.

When I first stood for Parliament 18 years ago, Otago was held by Labour, and I was told by National Party whip Simon Power to “just win or else”. Well, I did win, and I’ve won five more times after that, but I have to say, that last election in 2020, oh my God, it got a bit dodgy at times. I’ve done all that with the support of family, friends, and amazing volunteers and supporters. I’d like to thank you all, but I’d like to particularly mention Ele and Grant Ludemann, who have given so much of themselves to the National Party and to causes dear to their hearts. To my littlest sister, Ra, who is so loyal and so politically very astute. For 18 years, she has supplied me with gifts of barley sugars and muesli bars to keep me happy and safe in the car on long trips.

Serving as a Minister in the Bill English Government was an honour and a privilege, and I’m very proud of what our Government achieved in those nine years as we navigated New Zealand through the global financial crisis and built the economy, the strong economy that New Zealand needed. Over the years I’ve held many roles across different portfolio areas and have been absolutely blessed with fantastic support staff in Wellington. Some of you are here today: Gareth, Olivia, Paige, Charlotte, Makona: I want to thank you.

With the election only a few weeks away, I want to wish all the best to the Christopher Luxon - led National Party. Christopher, you are a fantastic leader, and you have a very talented team full of energy, focus, and talent—and soon you will have a caucus full to the brim with new talent, which is good, because there’s going to be plenty for you to do. It’s a true privilege to have been a member of Parliament in the National Party and in this place, and to have made my contribution. I want to acknowledge Madam President, Sylvia Wood, and wish Miles Anderson all the best as he aims to take the seat.

Recently, I was asked for advice on what the new crop of MPs should do when they’re elected. My answer, and I didn’t even give it too much thought, was—well, it was simple: work hard, read your papers, put your phone down, and remember why you are here, and that’s it. Man, it’s been tough sometimes, but I have thoroughly enjoyed it. Thank you.

[Applause]

Sitting suspended from 6.20 p.m. to 7 p.m.

Bills

Water Services Economic Efficiency and Consumer Protection Bill

In Committee

Debate resumed.

Part 1 Preliminary provisions (continued)

CHAIRPERSON (Hon Jenny Salesa): Members, the committee is resumed on the Water Services Economic Efficiency and Consumer Protection Bill. When we suspended the debate before the dinner break, we were considering Part 1. The question is that Part 1 stands part.

MELISSA LEE (National): Thank you, Madam Chair—that was very lucky. I just have a very quick question in terms of Part 1 at clause 3(2)—well, clause 3(1), (2), and (3), I guess. It’s talking about “This Act provides for—”, and this is the preliminary provisions, where it talks about “the regulation of the price and quality of water infrastructure services, as set out in Part 2;”. But the question I have is that in terms of the way that this is actually structured, when the regulatory impact statement actually states that the prices that consumers will pay will potentially be higher, how does the Minister feel that the price regulation in terms of providing quality water infrastructure services are actually looking after consumers when the prices are actually going to be quite high?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): I wonder if the member might just refer me in Part 1 to the exact provision she’s referring to? I’m just struggling to see where in Part 1 that matter is raised.

ANDREW BAYLY (National—Port Waikato): Thanks, Madam Chair. I know we’ve just had a break, so I did ask two questions before the dinner break of the Minister. One is: what were the other models that were considered? Because, as I said prior to the dinner break, where we’ve ended up is with a very heavy-handed regulation environment for these water companies, whether they’re four or 10, or whatever.

Also, there is this definition of “competition” which is included in clause 7 in Part 1, on page 13. So what is the nature of that competition? We know that these entities are not going to compete across borders and we know that they’re not going to compete for consumers. So I’m quite interested to hear at a higher level why the Minister thinks, with that framework around customers and competition in general, that such a heavy-handed approach would be required, because if you look internationally, this is right up there in terms of a comprehensive, overarching sort of type of arrangement to regulate this small number of entities.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): I note for the member that there are two documents. One is Supplementary Order Paper 417, which has been tabled, which contains all the provisions, and it would just be useful, if there’s any reference to that, that we know whether we’re referring to the bill as it was reported back or to the Supplementary Order Paper.

In terms of “competition”, “workable or effective competition” is well recognised as a definition of competition throughout the Commerce Act and elsewhere. It is understood as an effective definition of “competition” throughout the law generally.

In terms of the wider-ranging issues, I don’t see any of that referred to in Part 1. But if there’s anything else in respect of Part 1, I’m happy to respond.

MARK CAMERON (ACT): Thank you, Madam Chair, and thank you, Minister, for coming along. I’m trying to ascertain the role of the Commerce Commission, as you will appreciate, in its normal role of adjudicating how markets work in making sure that they are working in a safe and salient manner, and are abiding by all the things inside the boundaries of the law—now, obviously, the role of the Commerce Commission in this capacity of adjudicating the financial wellbeing for consumers of all things to do with the water services entities legislation. What will it look like in terms of the Commerce Commission, in its role, giving effect to Treaty principles? If you could please answer that. What are those Treaty principles by way of definition, if they in fact have been laid out, and how will the Commerce Commission speak to those when it comes to the very salient issue of the management, the oversight—the financial management and oversight—of infrastructure assets and outcomes?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): I thank the member for his question on Part 1. The issue of how the Treaty principles and Treaty settlements are dealt with was very carefully considered. Obviously, the water services entities themselves have the primary obligation and the primary relationship with iwi, and it was determined that economic regulation and consumer protection provisions for the water services sector must be responsive to the Treaty and to Te Mana o te Wai. The commission is required to take into account the entities’ Treaty-related obligations. So it’s a secondary obligation on the commission itself, but that supports coherency across the wider water services reforms and, of course, recognises the Treaty principle that water is a taonga for Māori.

So the entities’ obligations may warrant higher levels of investment activity. That’s a matter for them in consultation with iwi and through their own structures. It must be considered by the economic regulator when regulating the entities, including when setting price-quality paths, and their other roles as well. It’s entirely appropriate for the Commerce Commission to do so. It ensures that the economic regulation of the consumer protection regime is designed in a way that recognises Te Tiriti and the importance of Te Mana o te Wai to these reforms. It is important that it doesn’t duplicate the roles across the wider regulatory framework. And I just note that the bill also makes it clear that the commission has to have the capacity, the understanding, and the knowledge of the relevant tikanga to discharge that role.

MARK CAMERON (ACT): Thank you, Minister, for a very succinct answer, and I genuinely mean that. Could I add to the line of inquiry? Have the principles of Te Mana o te Wai been defined—yes or no—as you understand it to be so? And if not, and they are still in the process of being clearly defined, in the legislation as written how will the Commerce Commission run oversight in terms of outcomes if those principles are not clearly defined? I mean this with the greatest respect: Te Mana o te Wai statements are quite subjective in this capacity when it comes to the fiscal adjudication and functionality of all things to do with water services entities. If those definitions are ill defined or not clearly defined and subject to subjectivity, you might say, does not that run the risk of the very thing you seek to alleviate? That’s duplication.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): I’d invite the member to read the Supplementary Order Paper which clarifies that Te Mana o te Wai is the meaning set out in the national planning framework made under section 34 of the Natural and Built Environment Act 2023.

ANDREW BAYLY (National—Port Waikato): With all due respect to the Minister, I’m still on the third attempt trying to get him to understand and provide a reason why we’ve ended up with such heavy-handed regulation. I noted, prior to dinner, the functions of the Commerce Commission under clause 4 and the definition of “competition” over the following pages. So what I’m trying to understand is why the Minister thought it is absolutely necessary to have such a heavy-handed approach, when we’ve, essentially, got a small number of entities that do not compete with one another. And what is the issue—how would he define “competition”? Why would that have driven the Labour Government to impose such a heavy-handed regulation? It’s all in the definitions there, so, hopefully, the Minister can answer the question this time.

SHANAN HALBERT (Junior Whip—Labour): Point of order, Madam Chair. I seek leave for all provisions to be taken as one.

CHAIRPERSON (Hon Jenny Salesa): Leave is sought for that purpose. Are there any objections? There are none.

Andrew Bayly: I’m waiting for the Minister, hopefully, to stand at some point. So—

CHAIRPERSON (Hon Jenny Salesa): One moment, please, Andrew Bayly. The question is that Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 2 stand part.

Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 2

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you, Mr Bayly. The reason I wasn’t disposed to answer your question was because it didn’t relate to Part 1, but now that leave has been sought and granted to take the matter as one question, I’m at liberty to answer anything on any part of the bill, which makes life a little easier. The fact of the matter is that this isn’t particularly heavy-handed. It’s a well-recognised method of regulating natural monopolies, which, left to their own devices, have a tendency to act in a monopolistic manner, either by poor investment plans or by excess pricing or by poor service.

So this, as I’ve mentioned already in this Chamber in this committee stage, is used in respect of telecommunications and electricity already—a well-proven, right-sized and appropriately scoped regulatory framework.

ANDREW BAYLY (National—Port Waikato): It’s interesting that the Minister refers to the electricity sector amongst others as being models, but the reality is that those are not equivalent models, because the entities that are running those are commercially orientated companies—the electricity industry, in particular. They are listed on the New Zealand Stock Exchange. They are very large commercial entities and, in fact, they have other operations other than just the regulated part of their business. So I find that example not particularly relevant, because these are, effectively, closed entities. There is no one else with the ability to compete with them, because there is a monopoly over the infrastructure that they have in place.

But the risk of these in terms of shareholder risk, as I’ve said right in my introductory comments before dinner, is that there is no shareholder, there are no accountabilities, there is no maximisation of profit, and you’d have to argue that the maximisation of profit is probably the greatest risk towards needing or requiring a heavy-handed regulation approach. In these situations, we don’t. We have entities that, if anything, are more likely to under-invest rather than over-invest. The pricing aspect of it, which the Minister mentioned, doesn’t really come into play, because there is no issue around profit maximisation or whatever, because that’s not what their purpose is. Their purpose is to deliver the service. Even if they did build up retained earnings, they can’t pay it out to shareholders; they are not accountable to it. Everything would need to be retained within the business and, presumably, be applied to future investments and infrastructure investments.

So, again, I’m trying to understand the concept of competition that the Labour Government is so keen to regulate, because that seems to be the driver. Or is the Minister just saying, “Because they happen to have a monopoly, we need to have a really heavy-handed economic approach to it.”? My experience of regulatory frameworks of water assets around the world, particularly in Australia and the UK, is that you would apply this approach where there are commercial entities, not where they are quasi - Government-controlled closed entities with no real shareholders that will benefit from any additional profit or profit maximisation.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): I thank the member for identifying in there that these are, indeed, not-for-profit entities. They won’t be granting dividends. They are there for the benefit of the community. However, having said that, the expression of limiting excessive profits, which is what this legislation is in part about, is entirely appropriate, and that’s why this framework was adopted. Obviously, in any business like this, there is an equity return, directly or indirectly, from the water services entity. It is conceivable that the water services entity could still earn a higher than normal return in the absence of scrutiny, or, conversely, run a lower than normal effective organisation, which would, again, indicate that competition or a similar framework wasn’t working well.

So this economic regulation framework is designed to allow regulated entities to grow and expand to serve more consumers, but not simply grow on the back of excess profits. This is enabled by allowing more investment, which would increase the size and value of an entity’s asset base to accommodate any new investment.

Part 2 of the bill, which we can now debate, allows the commission to specify its price quality path, the maximum revenues that reflect the expected return. So, yes, workable and effective competition—and you’re right, this is a not-for-profit entity—a little bit different than some of the electricity sector. But anywhere where there is an effective monopoly left to itself, the entities won’t deliver best value or value that’s for the long-term benefit of consumers into the market, so regulation is required and that’s exactly what we’ve got here. I’m confident that we’ve got it right and that the Commerce Commission has the skills, the expertise, the knowledge, and the background to implement this regulatory regime.

MARK CAMERON (ACT): Thank you, Madam Chair. Minister, if we could just go back to the Commerce Commission’s role as a regulator in this instance. It had been offered to me on the back of conversations with Simon Court that they lack the technical capacity to actually understand the state of the infrastructure as we sit here today. There are projections and statements offered to me by him that perhaps, in some instances, the understanding of the assets’ state of repair or disrepair might not be afforded to the Commerce Commission for the next two or three years. In other words, the state of repair as we sit today. So how will the Commerce Commission seek to regulate an industry when the state of asset management, as it is today, is still an unknown reality?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): I thank the member for the comment. It’s an apposite observation that the state of repair of many of our water assets is unknown and that is why, in the initial phase of this regulatory regime, the main power that the Commerce Commission will be exercising—before full regulatory powers come into force—will be information gathering. That will be information gathering on the state of the assets, the pricing regime, the investment required, investment plans in place, and what will be required in future.

So this is a programme which, to be fully rolled out, will take several years, but absolutely right that because of the lack of investment and the diverse nature of these assets being spread around the country—amongst many, many local authorities—we don’t know what we need to know, and that will be one of the first jobs of the commission.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I keep labouring this point about what is the basis of this and the reason for why we’ve ended up with such comprehensive oversight—economic regulation—because that is the platform on which everything else follows.

What I find intriguing is the basis for building the platform, and it’s interesting looking at clause 12, “Purpose of this Part”. It says that “The purpose of this Part is to promote the long-term benefit of consumers of water infrastructure services in markets where there is little or no competition, and little or no likelihood of a substantial increase in competition”. Then it goes on to say that the purpose is to provide “incentives to innovate”, to have “incentives to improve efficiency”, “share with consumers the benefits of efficiency gains”, and “are limited in their ability to extract [excess] profits.” It’s that last one I find quite intriguing because the Minister just referred to it. He said we need to regulate, in effect—I’m paraphrasing—if these entities end up achieving higher than their required returns, that might, in some ways, be damaging.

But the point is—and I think the Minister’s acknowledged it—these entities can’t pay out dividends. They can’t pay out any remuneration to shareholders. The benefit sits inside the entity for the benefit of consumers. If that does build up retained earnings, which I presume these entities can, to meet future obligations—in particular infrastructure obligations, which are often 30 years’ life of these assets—then I find the proposition with that is why I just can’t understand why we’ve ended up with such heavy-handed regulations.

Because this is one of the core differences that we have with the Labour Party in terms of oversight of this. We certainly agree that there should be the oversight, but the model that’s been put forward by the Government is one of a heavy-handed nature, and that’s what I’m trying to ascertain from the Minister as to why he has promoted this, and what were the other options. Because there are many other options you could have put in place, but this is the foundation on which this whole bill rests.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Look, this is the fourth time that question’s been asked and now the fourth time it’s been answered, so I don’t propose to engage in any further discussion on it. If the member wants to know what other options were explored, I invited him to go to dia.govt.nz, where all of the options papers can be found.

This approach is one that’s tried and true, not only in New Zealand across other sectors but in respect of publicly held water entities in Scotland—as the member will know well. Indeed, it drove significant cost savings and efficiencies there. So that’s resulted in significant decreases in the cost of water services for customers there.

ANDREW BAYLY (National—Port Waikato): Well, let’s get specific. Clause 12 that I’ve been referring to, can the Minister define what “excessive profits” means? Just while the Minister’s doing that, can the Minister, again in the same clause, tell me what are the incentives to innovate that’s going to make it and improve efficiency? And what are those sorts of measures?

I think the big issue is actually whether there’s under-investment or over-investment. Under-investment is not meeting the requirements and over-investment is going for gold-plating. I think that’s probably the issue more likely to be of importance when determining the nature of investment spending and ultimately the pricing put forward.

I just want to now turn to clause 15, while the Minister’s contemplating that, hopefully, or should I let the Minister stand? I’m just looking at him there. Turning to clause 15, “Determinations made by Commission under this section”, it talks about “The Commission may make determinations under this section specifying how 1 or more of the following apply to regulated water services providers: (a), information disclosure …: (b) quality regulation: (c) price-quality regulation.”

What I’d quite like, and I think my colleague from ACT was starting to allude to this—what is the linkage and overlap with Taumata Arowai in terms of quality regulation? Because all parties, I think even ACT, supported Taumata Arowai as the regulator in terms of setting standards. What is that interplay between this and the role of the Commerce Commission? Because ultimately it should be for the water services entity to take the instruction from Taumata Arowai and then to put them in place and put the investment frameworks in place to meet those over time. So again, I’ll just leave that question.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): I’ll try—I’ve been given advice, if I’ve got this wrong, but my understanding of Taumata Arowai is it is very much a health standard, and that’s one aspect of quality, quite appropriately set by an independent body. But water service delivery quality comes in many forms. For example, the way in which the billing is done so that it’s understandable to consumers is one form of service quality. Another form of service quality would be consistency and pressure. It doesn’t affect the drinkability or usability of the water, but nevertheless is a quality standard. So, yes, Taumata Arowai has a quality function in terms of water being potable, being safe, healthy, and drinkable, as indeed this water is before us. But overall, in general, there are much wider quality standards and the commission will have a role in determining those.

JOSEPH MOONEY (National—Southland): Thank you very much, Madam Chair. Minister, I just want to ask some more questions around this—the purpose of this part and how some of the issues that were identified in the regulatory impact assessment on this are going to be addressed. The problem definition, I suppose, is that there’s been an establishment of four financially and operationally independent water services entities, which are intended to address current problems of poor water quality in some places and customer service, insufficient infrastructure investment, and inefficient pricing practices. But what they also will do is these four new entities will create natural monopolies and there won’t be necessarily these strong members or directors of those monopolies who will have incentives to ensure that these inefficiencies are addressed, that the community voice is expressed, and ultimately that people get good quality service for a reasonable price.

I’ll just read a little bit of this regulatory assessment. It says “Without economic regulation, the monopoly nature of the entities, combined with the lack of equity market and local government oversight, will likely be detrimental to consumer welfare. This is because the entities will have the ability and incentive to charge higher prices and provide services that are lower quality and less efficient and innovative than what would be seen in a workably competitive market. There is also an inherent power imbalance between large, vertically integrated monopoly suppliers and the consumers they service, creating a risk that customers of the four new entities will suffer unsatisfactory outcomes.”

So if I look to the purpose of this part, which is to promote the long-term benefit of consumers of water infrastructure services in markets where there’s little or no competition and little or no likelihood of a substantial increase in competition, I’d be curious about how this will address these issues raised of a natural lack of competition, or will actually reduce the competition potentially that’s available with these four large monopolies which would have a natural incentive to charge higher prices, offer lower services and less investment.

If I think about my region, I mean, my electorate alone is bigger than Belgium. That’s just one small part of the lower half of the South Island, and we have these large areas where there are very many, many hundreds of kilometres between different settlements, in some cases, across the lower South Island. How will there be the ability to ensure that those areas actually have better investment? Because obviously there will need to be decisions made about where to invest. There won’t necessarily be sufficient capital available for investment in all things. And if I just look at, say, Gore—like, how will the needs of Gore, in terms of this, be expressed in a monopoly that’s also concerned with, say, the needs of Christchurch? So just how are you going to deliver on this issue that’s identified with the natural monopolies that these entities will establish?

CHAIRPERSON (Hon Jenny Salesa): Before I call the Minister, if I could just say to members, there’s been quite a number of questions just about this particular part, clause 12, “Purpose of this Part”. It’s beginning to be a bit repetitive, but I will call on the Minister if he wants to address this again.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. Good to see it comes back down to the interests of Gore. I would invite the member to catch up. There’s now 10 entities, so Gore won’t be part of the same entity as, say, Christchurch, and that was in fact one of the drivers of that under Minister McAnulty, which was indeed to ensure there was a better local voice.

One of the changes there—a separate bill, but happy to just comment on it briefly—was to ensure that each local body would have a voice in the governance structure of those entities. And, of course, ensuring the long-term benefit of consumers, which is this bill—the regulatory aspect of this bill includes all consumers. I note that one of the very good improvements of the Finance and Expenditure Committee was to identify vulnerable customers. Now, that might identify as perhaps people on low incomes, but I think it also identifies people in rural locations who might not otherwise get good access to water services. So those things have been addressed and I think we’re in a good space in that regard.

MARK CAMERON (ACT): Thank you, Madam Chair. Minister, If I could draw your attention back to some remarks you made earlier about the primary role of the Commerce Commission in terms of information gathering, I think you said, and it may take—I’m paraphrasing because I apologise, I can’t remember your exact wording—several years to source the needed information over the state of the assets, their repair or state of disrepair before subsequent regulations came into effect. What sort of cost-benefit analysis has been done as a counterfactual, if any at all, that you want to speak to or are aware of, in terms of how it would stifle investment in infrastructure asset management, water infrastructure asset management, in the interim period, if you’ve used the words “several years”, and what does several years ultimately look like whilst we’re going through this theorised information-gathering preamble to the regulations that follow it?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): If the member wants to see a cost-benefit analysis, they’re all available on the Department of Internal Affairs website, and this debate is not the place for that. In terms of time lines, there are two slightly different time lines, one for Entity A which is the Auckland - Northland entity, which is more prepared to embark on this journey, and the second time line is for the other nine entities.

By way of example, rather than going into every minute detail, up until the middle of 2024, information gathering will go on for Entity A. Then the pre-regulatory period, taking that information and developing input methodologies, models, and so on, so that we can understand how it will roll out—that will occur in 2024 through to June 2026. The first regulatory period for Entity A will start on 1 July 2027, and that’s when the quality regulation will be in place. Then if we’re looking at price quality regulation, that would be the second regulatory period which would begin on 1 July 2030.

ANDREW BAYLY (National—Port Waikato): You made the comment about—something about we’re a bit repetitive, but, unfortunately, I just would note that we’ve agreed that we’re going to do it all at once, all parts, but we’re obviously working our way logically through the bill. I have asked some very specific questions and I’m yet to get a response on them, and I don’t want to keep going back to them, but they have been asked for a reason, namely: what is the definition of excess profit? It’s not a stupid question. What is the return that would be expected of these entities, and above that, what does that mean, “excessive”? Because it does have a play in terms of pricing or the conversation we’re about to have around quality pricing framework, all that sort of stuff. So I would urge the Minister to address some of the specific questions, otherwise I will keep going back to the question.

Now, I want to just move on in terms of the next question around moving into the timing and nature of the input methodologies. Obviously, those are going to be determined by the commission during the initial period—I’m referring to clause 18 here. Can the Minister provide us, provide the committee and, hopefully, some of the listeners with some information on what would be the nature of those import methodologies? Can you give us some examples? Again, I’m seeking specific questions rather than just trying to stand up and give a speech.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you. I am not an expert in input methodologies, nor am I an expert on what profits are excessive. The experts in that are the Commerce Commission. So the reason why I won’t be standing up and telling you an economic definition of what an excessive profit looks like is because that job has been given to the Commerce Commission, who will develop models and methods based on the information they gather to do that. So I won’t be designing input methodologies here, nor will I be determining what an excess profit looks like, because those are the very questions we’re asking the Commerce Commission to look into.

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. And thank you, Madam Chair, for that clarification of the number of entities. I have to say, I did think it was 10, but I picked up the regulatory impact statement from the Table which said it was four. Ha, ha! So it seems there’s some difficulties—and this is prepared by one of the Government agencies, obviously, so there’s some challenges on keeping up with the fast-moving nature of the changes. And maybe we’ve also got this 102-page Supplementary Order Paper that we’ll need to work our way through as well, which brings a number of changes. I’m just going to ask a question—

Dr Tracey McLellan: Enjoy the reading.

JOSEPH MOONEY: Pardon?

Dr Tracey McLellan: Enjoy the reading.

JOSEPH MOONEY: “Enjoy the reading.” Oh, thank you. Yes, it’s 102 pages of reading of this new Supplementary Order Paper that we’ve got here, which has got fairly chunky things in it. But one of the points that was raised, actually—and also in the departmental disclosure statement it also talks about four entities, interestingly, but I’ll leave that for another day. But one of the issues that it raises is that there’s a risk of uncertainty in terms of the economic regulation, which the industry hasn’t been subject to before, which could lead to some water entities acting too cautiously, focusing on compliance with little regard to efficiency in an effort to avoid any risk of contravening the provisions of the Act. And I do note, when I have a quick flick through this 102-page Supplementary Order Paper, that there are some pretty significant penalties in here for individuals—say, $500,000 or $5 million in some cases. So I can certainly see that there’ll be some caution being exercised by those who have decision-making responsibilities in terms of this Act. It may mean they will be focusing on this issue identified here, on compliance rather than efficiencies. And I would be interested in the Minister’s view on how that balance has been struck and what has been done to try to address that concern that was raised in the departmental disclosure statement.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Just in terms of input methodologies, you might want to have a quick look at clause 27, which does give some framework around what kind of things might be in that, and I probably should have referred to that earlier. In terms of the point that this might stifle innovation or be inflexible, that is something that must be held in mind by the regulator. That’s why it’s important that this regulatory regime needs to be flexible to allow for different forms of economic regulation. That’s why we haven’t imposed it. It’s still being designed and applied in a staged approach so as to be able to adapt to the changes as they emerge. So that’s why this bill contains the flexible level of economic regulation to essentially shift up and down as to what’s needed. If the market or the entities operate well, very light-handed regulation would be needed. If it’s clear that consumers aren’t getting a fair deal, then perhaps more will be needed.

But the bill also allows other water services providers such as community and private water schemes to be designated into this regime as well and to the consumer protection provisions if a Minister deems that necessary—so that’s in clauses 139E and 139L. So if a water provider started ripping off its customers and wasn’t regulated, they could indeed be brought in. That’s really just an example of how this is a flexible regime that can be scaled up and down and entities can be brought into it as required to address the concerns that the member no doubt has for his community.

ANDREW BAYLY (National—Port Waikato): Thank you. I love that expression “ripping off customers” that the Minister’s just used. Well, that was my point. Why would they rip off their customers? Because they’re owned by the customers that control them. There is no commercial incentive to rip your customers off. So that was my point earlier, but we didn’t get a definition on that.

In terms of timing, the regulatory period—obviously we have this information-gathering period which, basically, takes three years, and then we move into the next period, which can’t be any longer than six years. Why is the information-gathering process expected to take so long? Because obviously that’s delaying some of the other types of regulation that you might expect to come into play, but it seems to be a very long period of time to capture the information. I take the point—and the Minister is going to stand up, I have no doubt, and say, “Oh, they’re brand new entities, blah, blah, blah.” But all councils have been required to have asset management plans. They’ll have all that sort of stuff that they can pass across. I’m just intrigued why the Government thought that the information disclosure component—the first part of the regulations—is going to take so long. So it’d be helpful for some insight on that.

MARK CAMERON (ACT): Thank you, Madam Chair. Minister Webb, could I please bring your attention to Part 1, clause 8, and, reading verbatim, if I may: “In [the] Act, unless context otherwise requires, drinking water infrastructure services—(a) means … [abstract] storage, treatment, transmission, or transportation”. I’m trying to square away in my mind, in the sphere of the Commerce Commission after the early preliminary information gathering period of time and the state of the assets, quite how transportation plays out in terms of the role of the Commerce Commission in its capacity as a regulator to determine the health—and I’m trying to figure out the right wording here: the health of the infrastructure in transportation of drinking water. Now, what does that look like? How wide will that be in terms of what the role of the Commerce Commission is—means, obviously, and we can canvass it: “treatment, transmission, or transportation”. Well, how wide is the scope going to be in terms of the transportation of mechanised infrastructure, in terms of water infrastructure that’s to do with transportation? I mean, how wide do you want to go?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Just to note, Mr Bayly talked about ripping off customers, and it’s not impossible, for example, that an entity might, sort of, gold-plate infrastructure or even gold-plate—and may well over-invest or, in fact, invest in their own office premises, or otherwise use their assets in an ineffective manner.

In terms of why does information gathering take so long, I think Mr Bayly is over-optimistic about the quality of the information that’s out there already. If anything, this process has shown that one of the critical failures across some local bodies is that they don’t actually know the quality of their own infrastructure and, essentially, the extent and nature of it.

In terms of transportation, now, that’s an example of the drafter being rightly flexible in their approach, trying to make sure that they’re not constraining the entity in the way they move water from one place to another. Transportation could conceivably be through pipes; it could also be perhaps captured by transmission. There are other situations where water might be transported, in fact, by a motor vehicle. But the fact of the matter is it’s a definition which is seeking to capture the movement of water, however that entity might choose to achieve it.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. Well, yes, OK, just carrying on with input methodologies—I’m just wondering whether I’ll rebut some of that, but I won’t. It’s interesting the Minister made the aspersion around the quality of assets, the water and waste-water assets of the councils, and said, “Oh, well, maybe, you know, you’d be surprised.” Actually, when I look at clause 27, at the actual requirements, they’re quite specific. The first one says, “methodologies for evaluating or determining the following”, “cost of capital”—well, that’s not a hard job. If you went to an economist, they could probably do that in a week, because cost of capital for these types of entities, it’s standard practice, very easy. Capital asset pricing model, betas, whatever—they’re all readily available.

The second point, “valuation of assets, including depreciation, and treatment of revaluations”, presumably, that is going to take place anyway, because, as I understand it, these new entities have been set up, they’ll have to set up with new assets, and there will have to be a transfer of value back to the councils as well as an assignment of debt. So, before you can set them up, that would’ve already taken place, I presume, to establish values—otherwise, we really would be ripping off the councils, wouldn’t we, and, ultimately, the residents of those areas.

Third one, “allocation of common costs”, well, yeah, OK, that’s pretty easy. They’re going to be brand-new operations. And “treatment of taxation”, well, I didn’t think there was taxation on these entities. Maybe the Minister can elaborate on what the taxation is. Are these entities subject to tax, and, if so, what’s the nature of that? Are they paying at a corporate rate? Are they paying at a different rate than that?

So there we are—we’ve got four. Maybe I’ll let the Minister respond to those before I’m moving on to the next lot.

MARK CAMERON (ACT): Thank you, Madam Chair. Minister, going back to this transportation issue, leaving aside reticulation, which we can understand going through conduits, pipes, etc., etc., treatment facilities—transportation: would this, yes or no, include trucks? Now, I live in rural New Zealand. Quite often, drinking water is taken via the supplier to households. I mean, we’re on tank water, as you can well imagine. Transportation is, again, very subjective; it’s a very wide definition here. Would it include the regulatory oversight from the Commerce Commission for those transporting drinking water, i.e., on a road network in trucks, quite specifically, or quite separate from a reticulated system? Yes or no, please, sir.

ANDREW BAYLY (National—Port Waikato): I’m just hoping the Minister of Commerce and Consumer Affairs is going to respond to my questions on clause 27. But, anyway, let’s carry on—clause 27(1)(c), because they’re all relevant. So this is the other part of the input methodologies, “methodologies for capital expenditure projects”. So these entities need to provide the following: “(i) requirements that the regulated water services provider must meet, including the scope and specificity of information required, the extent of independent verification and audit,”—so while it’s a lot of words, it’s not that difficult—“and the extent of consultation and agreement with other parties;”. Mm-hmm! OK. And “(ii) the criteria the Commission will use to evaluate capital expenditure proposals;”. So that’s the Commerce Commission actually doing some work. Again, investment in infrastructure projects are pretty standard, sort of, criteria that are used to do it. And “(iii) time frames and processes for evaluating capital expenditure proposals,”. So that’s another major part of the input methodology. Again, that doesn’t seem long.

What I do find fascinating, and I would have thought we might have included in this list, is probably the biggest driver in terms of getting value for money for from infrastructure investment: what the procurement model is. What is the model that these entities are going to use to procure? Do you take the approach that Watercare’s adopted in the last couple of years, to form long-term agreements with a number of large entities and say to them we will commit to doing all our infrastructure with you over the next 10 years? As an example, one of those partners is Downer, and I think Fletcher Construction are in there as well. Or are they going to go down Auckland Transport piece by piece, breaking down motorways into subparts and trying to compete and procure badly, as they do it, down the southern motorways that we’ve observed? But each one of them will have a different outcome. They will be measured differently in terms of what the long-term cost has been—not the short term, the first-up all-up cost, because there will be a maintenance element to it. And so that’s why I’m surprised, also, that the issue around the procurement model wouldn’t have been part of these input methodologies.

But there we are, we got two key sets of import methodologies. I’m really keen to understand what the Minister thinks about them and why it takes so long to get a response.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): It took quite a long time to get to a question there, Mr Bayly. Procurement practices are not part of this bill. That’s part of the Water Services—

Andrew Bayly: Why not?

Hon Dr DUNCAN WEBB: Because it’s part of the Water Services Entity Amendment Act 2023. So catch up on that one. In respect of cost of capital, given that he’s—at least on his web page, it says he was a merchant banker, I think he’d know better than most that the valuation of cost of capital is a much fought-over question and there are many methodologies, and exactly how you look at it is highly sensitive And so that’s exactly why we want an effective input methodology to do that. Other than that, good reading of clause 27.

Mr Cameron, yes, look, water transported by truck—if it’s part of the operations of the entity, it could become a part of the model. But it’s about the regulation of the entity itself and the costs that it has, not third parties who might be doing it in a different manner.

ANDREW BAYLY (National—Port Waikato): Yeah, well, thank you. That was a great response from a professor of laws, but, actually, working out the cost of capital is a very simple exercise. It’s called capital asset price model. It has about four variables: risk-free rate, beta—and it’s a pretty easy model to work it out. The issue is just working out what those inputs are. To a large extent, they remain steady over time in terms of the risk-free rate, and then applying that to the risk factor of the industry—which is, again, a low-risk industry. It has norms, very easy norms—lesson one. So, obviously, the Minister of Commerce and Consumer Affairs doesn’t have much expertise in that area.

I just want to return now to the issue of this duration. So, I presume, because the Minister hasn’t actually answered, from his answers, that he thinks this is all going to take a long period of time. Procurement does actually drive costs of infrastructure and, ultimately, to the price—I make that difference with the Minister. But just turning now to this issue around clause 23 and how it relates to clause 22(1)(a), and determining the duration of subsequent periods. This is, of course from, 1 July 2027, which cannot be any longer than six years—well, that’s what it says in Subpart 2. But in clause 20(2A), it says that this “Commission may set out different periods for different regulated water services providers as the Commission sees fit.” It goes on in clause 23 to talk about the Minister making that determination. Let’s just start with an easy question: under what circumstances or reasons would the Minister contemplate delaying that or changing the date that’s not currently within the three-year periods that are set out in the bill? What would be likely scenarios in which the Minister would contemplate where he might choose to make that change?

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): After receiving and considering a recommendation from the Commission under section 139H; and as satisfied of the matter, set out in section 139H(1)(a); and in relation to a regulated water services provider that services the Auckland and Northland area, which is set out in the bill, of course. Look, in terms of what would I need to do as Minister, or any future Minister, to make a decision, I must say, Mr Bayly, it’s really not helpful to set it out in this forum, because that is a matter of discretion, as bound by the bill, for a future Minister. It would be exceedingly unhelpful to constrain that in any way by, essentially, my reckons on what I think I would do. The basis upon what can be exercised at law is set out in the legislation, but it needs to be those rules which determine that, rather than my opinion of when that might be appropriate.

ANDREW BAYLY (National—Port Waikato): I did ask specifically about taxation. This is clause 27(1)(a)(iv), because it specifically mentions treatment of taxation. Hopefully, he can turn to his advisers and might get a little bit of advice on: what is the nature of taxation; are these entities subject to some form of corporate tax or what form of tax are they subject to? And I see them just turning over a few pages there, that would be great just to give them a bit of time before they brief you, Minister.

I just want to move on now to Subpart 4, new clause 34(2A): “in relation to [the] statutory water … [entities], information required to be disclosed must include information about how the entity is fulfilling its objective to support and enable planning processes, growth, and housing and urban development and, in particular, the entity’s level of responsiveness in relation to those issues”.

Now I’m going back under principal stuff, which I think the Minister might be a bit more comfortable dealing with rather than specifics; what is the Minister’s view around what these water entities must do to fulfil and support those objectives? Is it proactive? Is it reactive? Is it when the conflict comes between whether an entity is going to fund new developments for new housing, let’s say in a greenfields area as opposed to a brownfields infill or as opposed to repairing the pipes by putting plastic down the middle of them to meet the higher pressure standards which the Minister specifically referred to as part of the quality standards—what is the role of the water services entity and how does it balance those competing demands? Because, sure as eggs, those are competing demands.

CHAIRPERSON (Hon Jenny Salesa): I call on the Minister, the Hon Dr Duncan Webb.

Andrew Bayly: Tax, tax, tax!

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Well, you are the party of “tax, tax, tax” and thank you for yelling that out, Mr Bayly.

So it would be expected that these not-for-profit entities would be unlikely to be paying income tax, for obvious reasons, but given how they are being structured it’s likely that they will have residual tax obligations which will feed into the model. So that’s really making sure that the input methodologies are fit for purpose in terms of taking these entities as they come so that the regulated water services providers may have some tax obligations—for example, income derived from regulated water services provided as a trustee—and that’s why there’s the treatment of tax under clause 27(1)(a)(iv). It will allow the commission to specify methodologies which allow it to recognise the impact of tax in its price-quality path determinations.

In respect of the material around the obligation to support and enable planning processes, the member should be well aware, because I think it was after a robust discussion at committee that those provisions were put into this—and I thank the member for his input into that, I believe, on the Finance and Expenditure Committee—and it is appropriate that that is part of the thinking around any role of the commission in regulating the entities to make sure they are discharging the function of supporting and enabling planning processes, growth, and housing and urban development and the entity’s responsiveness in relation to those issues. And then that refers back to the other legislation which is entirely appropriate.

SHANAN HALBERT (Junior Whip—Labour): I move, That the question be now put.

ANDREW BAYLY (National—Port Waikato): I know our Labour members on the other side—we’re at only clause 37 and this bill goes to 146, so I would encourage members on the other side, rather than sitting there passively waiting to go and celebrate and do other things tonight, to actually join in the conversation and actually provide some input.

So I think that was a revelation of the night from the Minister. So I just want to be very, very clear because, you know, I’ve asked this many times of the officials during the process: what is the nature of the ownership and what is the nature of the entity that we’re talking about here with these four-cum-10 water services entities? That, as I understand it, is they are not companies, but they have a special meaning. So I just want to be very, very clear, and I’m looking at the officials here. I presume these entities have to account for GST, but can the Minister just give a straight answer: are these entities required to pay tax on their activities—first of all, in their regulated activities as set out in this bill, and their non-regulated activities which I am about to get in to? But I just want to a very clear answer from you Minister, hopefully, from your officials, and I see they are still debating back there—OK. So I hasten to carry on, unless they are ready to talk?

Dr Liz Craig: No, carry on!

ANDREW BAYLY: OK, I’ll carry on. So this gives rise to clause 35 about goods and services. The reason I was just asking this about non-regulated is: “If the regulated water services provider provides goods or services that are not subject to regulation under this Part … the provider may be required to” provide a whole lot of stuff to the Commerce Commission—consolidated financial statements, reconciliation of information provided, information on the financing of all businesses. Can the Minister help the committee in terms of saying we all understand what the role is of regulated services under the water services: to provide water, waste water and stormwater. So, obviously, the contentious third, but what are the activities that a water company or water services entity is permitted, under this, to be able to do? What would be the nature of those activities—therefore subject to this very specific clause, clause 35? So two big questions, about tax and then secondly about this, and, hopefully, those officials of yours at the back there are going to answer this question.

Wow—I’ve got to keep going do I? Well, a good thing we’re looking ahead, because I just want to give the Minister plenty of time to give us the right answer to this.

Now, I want to turn to clause 38, in terms of monitoring compliance for this section, and this is about the entity providing a quality path which is—as you know, the Minister used one example, pressure. Another one might be water colour, which is a normal one—might be some other stuff. I just would really be keen to understand this overlap with Taumata Arowai, as I’ve talked about earlier, in terms of what that means—because where it says in clause 38(2)(a) “a written statement that states whether the provider has complied with the quality paths applying to that provider”.

So there’s two issues: one has got to comply with Taumata Arowai because that’s the one that sets the standard, and the second one, I presume, is meaning it’s got to comply with the requirements of the Commerce Commission. Maybe the Minister can be clear about that. Then it goes on to say, “a report on the written statement referred to [just above] that is signed by an auditor”. So here we go. We are going to have a written statement done by the company which complies with an independent entity called Taumata Arowai, then it’s got to get an auditor to do it. First question: what’s the nature of that auditor? Is it financial auditor defining on a quality standard, or is it some other auditor? What is the nature of that auditor?

There we are; we have got a couple of questions in there. I can carry on, but, hopefully, now you’ve got some answers to those tax questions, Minister.

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Thank you for your wide-ranging discourse there. Ownership structure issues, which you’ve asked on a number of occasions, are simply not part of this legislation, so I won’t be addressing that. Similarly, the general tax structures are also part of the Water Services Entities Act 2022 and whilst I have addressed it in respect of the input methodologies, the wider tax issues are not.

Clause 35 is simply about disaggregating unregulated from regulated services and sets out exactly how that is to be done. In terms of your questions around clause 38, you’re, essentially, putting, I would say, the cart before the horse because the very question is what those quality standards are. That is the question that is for the regulator to decide, not for me to give my reckon here today.

And as for audit, it’s well recognised that audit is simply a function of accreditation and ascertaining the meeting of standards, and despite your background, there are plenty of auditors out there who are not financial auditors but are quality auditors, and I’m sure the commission will be well placed to identify an appropriate auditor or auditors for the task.

MELISSA LEE (National): Thank you, Madam Chair. I’d like to go to Part 2, clause 39(3), where it actually talks about the “quality path may include—(a) incentives for … regulated water services [providers] to maintain or improve its quality of supply, and those incentives may include (without limitation) either of the following:” and it goes on to talk about compensation schemes that set a minimum standard. I think having targets—I would presume quality targets—is actually a good thing. Quality standards are good things. Service performance is actually having a target to make sure that they perform. I’m trying to find out if the Minister could actually elucidate whether that compensation actually goes out to the customers; if the service targets are actually not met, whether that compensation is indeed to customers who actually pay a price for their water, for example. If the Minister could actually find out in what form that might be in, if that is a case.

The ranking system, I quite like. You know, can we rank the Government in terms of the performance? But I think having a ranking and a rating system is actually a good one, I think, for customers, because I think when the water services are actually not performing well—perhaps if they don’t reach a particular rating or ranking—that maybe the customers don’t actually pay any money for that. Is that how it actually works? I’m trying to actually understand how that all pans out.

ANDREW BAYLY (National—Port Waikato): Well, I must admit I’ve got to compliment the Minister for getting very professional at brushing off questions. I am staggered that the Minister does not know the answer about whether these entities are going to pay tax or not. It’s a pretty fundamental question. Anyway, I am intrigued.

I still want to return to clause 38 because I think this is a classic case of over-regulation. So we’re talking about quality standards, right? About quality or quality regulation. So “For the purpose of monitoring compliance with this section, the Commission may, in addition to exercising…powers under section 98 of the Commerce Act”. This is “in addition”. OK, all right, we’re in the light-handed regulation process here, really. Yeah right. First thing: the company—or the entity; no, it can’t be company because it doesn’t pay tax—the so-called “whatever it is”. Not a Government entity; it can’t be a Government entity. It can’t be a Crown, because the Crown doesn’t own it. It can’t be a TLA—a territorial local authority. It’s something in between there but, you know, we’ll get there. Maybe a Schedule 27 company? I don’t know.

Anyway we’re at that point, right? So doing quality, first thing—I love this—the first thing it’s got to do is provide “a written statement that states whether the [water services entity] has complied with the quality paths applying to that provider:”. OK, cool, cool. So that’s a fair sting. Right, good, got that? Secondly, “a report on the written statement referred to [just above] that is signed by an auditor”—an auditor; an auditor! OK, so the Minister’s sort of implied—well, it doesn’t need to be financial. There’s lots of auditors, but it is an auditor. So it’s got to be an auditor of something “in accordance with any form [prescribed] by the Commerce Commission:” OK, that’s the number two thing they’ve got to do. The number three thing they’ve got to do around their quality: “sufficient information to enable the Commission to properly determine whether a quality path has been complied with:”.

So I think all that means is maybe the commission would say, “Well I know you’ve done the written statement and you had it audited, but you still might have to give us a bit more.” OK, all right, get that. And then (d)—fourth thing—“a certificate, in the form specified by the Commission and signed by at least 1 board member…or, if there is no board, the person who operates the provider,”. All right? Now, wow, that is one hell of a lot of bloody forms, reports, oversight, monitoring. This is what I was trying to say and to ask the Minister at the start. Why are we so heavy handed? Why are there these layers and layers? Why does a board member need to be involved in signing off a quality thing? What is the driver behind this? This is the trouble with—and it just pervades its way through this legislation—these overwritten, over-proscribed, over-egged regulations and controls when you’re talking about, basically, some entity that is not competing with others; it has no incentive. Even if it charges too much, the so-called profits can only be retained and invested in future infrastructure. There’s nothing else it can do with it. It can’t pay a dividend. So, hopefully, the Minister can help us with that.

SHANAN HALBERT (Junior Whip—Labour): I move, That the question be now put.

CHAIRPERSON (Hon Jenny Salesa): The question is that the question will be now put. All those in favour will say Aye, to the contrary No—

Andrew Bayly: Point of order, Madam Chairperson. I thought that one person couldn’t make multiple requests to close the debate—the same person could not make multiple requests to close the debate.

CHAIRPERSON (Hon Jenny Salesa): Yes, people can make unlimited requests to close the debate.

Andrew Bayly: That’s outrageous.

CHAIRPERSON (Hon Jenny Salesa): The question is—that is actually correct. I was in the process of closure. The question is that the question be now put.

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

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.

Motion agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Minister’s amendments set out on Supplementary Order Paper 417 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 47

New Zealand National 34; ACT New Zealand 10; Te Paati Māori 2; Whaitiri.

Amendments agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 2 as amended stand part.

A party vote was called for on the question, That Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 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 2; Whaitiri.

Parts 1 to 5, Schedules 1 and 2, and clauses 1 and 2 as amended agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Hon Jenny Salesa): Mr Speaker, the committee has considered the Water Services Economic Efficiency and Consumer Protection Bill and reports it with amendment. I move, That the report be adopted.

A party vote was called for on the question, That the reported be adopted.

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 Water Services Economic Efficiency and Consumer Protection Bill be now read a third time.

Ayes 71

New Zealand Labour 62; Green Party of Aotearoa New Zealand 9.

Noes 46

New Zealand National 33; ACT New Zealand 10; Te Paati Māori 2; Whaitiri.

Motion agreed to.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: The bill is set down for third reading immediately.

Third Reading

Hon Dr DUNCAN WEBB (Minister of Commerce and Consumer Affairs): Kia ora e te Mana Whakawā. I move, That the Water Services Economic Efficiency and Consumer Protection Bill be now read a third time.

This bill is part of a suite of legislation designed to give effect to the affordable water reforms. It introduces an economic regulation and consumer protection regime, which will ensure that the entities promote the long-term interests of consumers by providing services that are efficient, effective, and responsive. The bill empowers the Commerce Commission to oversee this regime and provides it with the necessary regulatory tools.

We know our water services regime isn’t working as it should be. We know the quality of the service being provided does not reflect what consumers demand. We know there has been systematic, long-term under-investment in water infrastructure. We know that there are inefficient pricing practices and a lack of transparency around the costs of delivering water services. Finally, we know there are mounting concerns about the capability and capacity of the water services sector to respond to increasing Government and community expectations. These new entities will have the size and scale to tackle these issues and attract the $120 to $185 billion needed to address historic under-investment.

However, the new entities will be natural monopolies in the supply of water services where competition is impractical. There is a risk that they will act inefficiently and seek to capitalise on their market power. This bill provides the independent scrutiny necessary to protect New Zealanders from the sorts of harm that can occur when essential service providers have substantial market power and consumers are unable to switch between them.

Consumers deserve high-quality services that are safe, affordable, and resilient. This bill will ensure that the full benefit of the reforms is realised for New Zealanders. It will drive efficient investment and pricing practices and make the entities accountable for delivering service quality levels that communities expect. In particular, the economic regulation provisions in the bill will require the entities to disclose certain information directly, govern service quality, and set a strong efficiency challenge to drive lower prices.

This is the same sort of regulation used in other essential industries in New Zealand that hold monopoly power, including the international airports in Auckland, Wellington, and Christchurch; electricity lines businesses; and natural gas pipeline businesses. Information disclosure regulation will require regulated providers to publicly disclose prescribed information about their performance. The Commerce Commission will undertake a summary and analysis of this information, which will increase transparency and make the entities more accountable to stakeholders. Quality regulation will require regulated providers to meet network service quality standards, while price quality regulation will set both quality standards and maximum allowable revenue or prices that the provider is permitted to recover. The bill provides the commission with the necessary flexibility to use different tools at different times for each of the entities or types of water services. These tools will ensure consumers are receiving water services at appropriate prices and quality standards.

I do note that in light of the Government’s changes to the affordable water reforms, there have been some implications for the timing of when economic regulation is implemented. The entity servicing Auckland and Northland, which will be established on 1 July 2024, will continue to be subject to economic regulation from 1 July 2027. However, the other nine entities, which will be established over a two-year period ending 1 July 2026, will now be subject to economic regulation from 1 July 2029.

The economic regulation and consumer protection regime established by the bill put in place strong incentives for the entities to provide affordable, quality water services. However, if entities do not comply with these requirements, the commission can take a range of enforcement steps, including pecuniary penalty orders, compensatory orders, and injunctions. The consumer protection safeguards will give consumers a strong voice on how water services are delivered, and it will also hold the entities accountable for delivering on community expectations, including meeting minimum service standards. The commission will be required to set a service quality code by 1 July 2027, and the code will cover standards related to outages, faults, minimum flow or pressure rates, billing practices, customer services, and consumer rights, amongst other things. The bill provides for the scope of the Consumer Advocacy Council to be broadened so it can advocate on behalf of water services consumers.

Finally, the bill establishes a comprehensive, independent consumer dispute resolution service so that consumers can easily escalate complaints they cannot resolve with the entities themselves. The service will provide for the resolution of low value—that’s up to $50,000—consumer disputes in a way that is more accessible and less formal than the courts. Together, these economic regulation and consumer protection safeguards will help ensure New Zealanders are treated fairly and receive quality water services which offer good value for money. I’m confident the Commerce Commission will be able to quickly drive improvements to the water services sector to ensure it is efficient, effective, and responsive. The commission is a high-performing regulator. It has proven experience in regulating a number of markets. The bill equips the commission with a range of regulatory tools to expand its remit to cover the water services sector.

To further reflect the unique nature of the sector, the bill establishes the position of Water Services Commissioner on the commission’s board. The commissioner will be responsible for leading the roles and functions of the commission for the sector and will ensure that the commission’s water services regulatory role is given the focus and prominence that the sector requires.

The bill also complements the wider water services framework by requiring the commission and the responsible Minister to take into account the relevant obligations of the regulated water services providers, including with respect to Te Tiriti, Treaty settlements and Te Mana o te Wai, climate change, housing, and urban development. Finally, in recognition that the commission is at the start of its Te Ao Māori journey, the bill requires it to build capability and capacity to ensure it can understand these obligations and effectively engage with Māori.

As I come to a close, I would like to thank the members of this House, and particularly those who participated in the Finance and Expenditure Committee, for their collaborative—

Hon Member: A great committee.

Hon Dr DUNCAN WEBB: —a good committee—and thorough consideration of the bill. Thank you in particular to committee chair Ingrid Leary and the former chair, the Hon Rachel Brooking. I would also like to extend thanks to the submitters on the bill, to Parliamentary Counsel Office staff, the Commerce Commission and its officials, and all officials, who all made a significant contribution to its workability.

New Zealanders deserve to have safe and affordable drinking water, waste-water and stormwater services that meet their expectations now and into the future. The bill will safeguard and enhance these critical water infrastructure services by providing necessary scrutiny of these entities’ operations. It’s a critical part of the affordable water reforms and it will help to ensure that the new system is efficient, effective, and responsive. I commend this bill to the House.

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

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Speaker. This is obviously the final leg of a final piece of legislation.

Before I start talking about the bill, I just want to put on record just what’s gone on and taken place before with regard to discussion on this bill. By agreement with the whip from Labour and the National Party whip, we agreed to take all clauses as one. We did that mutually. What happened was that after entering into that relationship of good faith, the debate on this thing was closed down after 40 minutes, and it was a breach of utmost bad faith, particularly by the Labour whip. But to have 40-odd minutes—45 minutes—debating an extensive bill that has been months and years in the making and to have it curtailed, even though we’d—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order!

ANDREW BAYLY: —had some arrangement—

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! The member is actually now questioning the ruling, and the timing is actually not correct. The debate on that particular bill was well over an hour, because we had begun debating it before we went to dinner.

ANDREW BAYLY: Madam Speaker, I’m perfectly aware of that. We were at clause 39 out of 146 clauses, and that is not the way—

ASSISTANT SPEAKER (Hon Jenny Salesa): The member will come back to his speech on this bill.

ANDREW BAYLY: Yes, OK. I’m glad I’ve got that on the record. So for listeners listening in, this is a shambles of a bill. This is a shambles of a process. This is going to be the touchpoint for the election that’s coming up. It has been the touchpoint for the last two years, as we’ve rambled through the most convoluted, disorganised process, where we have seen thousands of submitters. I’ve been involved in those, being a member of the Finance and Expenditure Committee, across all three bills. This is the final component of it. We have just had an avalanche of submitters who fronted up and who are personally outraged at the thought that their assets are going to be stolen from them and that the arrangement here—this so-called miraculous arrangement that’s going to mean that New Zealanders are better off—is just totally fatuous and incorrect and appalling.

Of course, all of this has hung around because the officials went off and got the Scottish Water regulator to help them formulate that. There was a lot of advice being given around New Zealand, particularly by some of our professionals. There have been big issues around the governance structure, which is very convoluted. There are big issues around the economic assertions made. There’s certainly this claim that the Minister has made in his speech earlier tonight about there being $120 billion to $180 billion of savings, which is just utter tripe, given that most of the expenditure that a water services entity will undertake—whatever it does, most by far, is the greatest portion of that is infrastructure. To get that level of savings would mean that you wouldn’t, perversely, be investing in infrastructure, because that is the key determinant of the cost that these entities will have to incur if they’re going to meet their requirements.

So it is a shambles—a shambles—and this particular piece of legislation is like all of what the Labour Government has done during the course of its term. It’s come out with this massive mallet to smack in to some form of regulation, rather than it being judicious, careful, and thoughtful about what is the nature of the regulation.

We of course accept regulation. It needs to be in place, but it needs to be balanced, it needs to be appropriate, and it needs to provide the right incentives for entities to be able to operate without an overreach of regulation, and that’s where we’ve ended up with this. We’ve had many submitters submitting on it to that effect, and it just goes together with the other two bills that have been ripped through under urgency. This has been ripped through under urgency in the dying days of a Labour Government, and it is a shocking piece of legislation.

I’m glad that National will repeal this three-waters proposal and we’re going to scrap all these mega-entities. We are going to restore council ownership and control. We will set strict rules for water quality and for infrastructure investment, and we will ensure water services are financially sustainable. There are ways of doing that, but, unfortunately, this Labour Government has gone down a path that most New Zealanders do not believe in and do not accept. That’s why even now, when I drove round my electorate last weekend, I’m still seeing anti - three waters signs up in my electorate, because they are absolutely opposed to this.

Members on the other side know this, and when they lose their job, one of the reasons they will lose their job is this appalling piece of legislation on which they did not get the buy-in of the people, the general public of New Zealand. It is appalling, what has happened, and the aspersions on many of the councils—some have been poorly managed; I accept that. But many of them have done a great job, and it will come home to roost for the Labour Government as to what a dreadful piece of legislation it is that they’re proposing. It won’t take place under National, and I’m glad it won’t.

INGRID LEARY (Labour—Taieri): If I may bring us back to this particular bill. When I was watching the committee stages, I observed, really, a number of questions from Andrew Bayly, the member that’s just resumed his seat, that, on the one hand, inferred there was going to be competition under the structures that would be set up and, therefore, the regulation was heavy-handed, and, on the other hand, suggested that there needed to be much tighter regulation. So it is little wonder to me that I sense Minister Webb’s frustration, sitting in the chair, having to repeat the same answers. I was very pleased when the debate was brought to a close.

What I’m surprised that the member didn’t raise, though—the one who’s resumed his seat—is the interplay between clause 45 and section 15. Because it was the Finance and Expenditure Committee, which worked together to ensure the flexibility of the regime, that answered the very questions he was asking, which is how the Commerce Commission would be able to use a phased approach, assume that there would be price-quality regulation, but allow enough flexibility in the legislation to make that price quality happen at the discretion of the Commerce Commission at the right time and based on real baseline data.

That is what is so good about this legislation—that, along with the disputes resolution mechanism, which means that consumers will be able to have ready access to justice and they will be able to be represented by consumer groups as well. It’s a good bill; I commend it.

MELISSA LEE (National): Thank you, Madam Speaker. I think, if I could address a comment by Ingrid Leary, I think the issue that my colleague Andrew Bayly was actually talking about is his frustration because there is actually quite a lot more in the bill that he wanted to speak to, and so did I, and to actually have it closed down seemed a little sudden—especially because it was agreed upon in good faith. Anyway, I’ll move on.

As we actually said in earlier parts during the second reading, I think I actually said something along the lines of the fact that National believes in sound economic and commercial regulation, including economic regulation and definitely consumer protection. But we want it for the right water services entity and for local council and the local people to have a say in determining that. And for this water services three waters bill, right from the beginning, it has been an utter disaster. And this bill, the Water Services Economic Efficiency and Consumer Protection Bill, is no different. It is all part of it. As my colleague Andrew Bayly said, this is the last of the bills that we are debating.

I think the issue that we have is that when the regulatory impact statement also states that there is a huge transitional uncertainty created because of this reform, over time, the scope and form of the economic regulation is not in the best interests of the water consumers. Throughout the committee stages, I think one of the questions that I asked the Minister was in relation to whether through this regulation, what kind of cheaper or—I mean, we were talking about a better quality framework for the water entity, but does it actually mean that the customers are, in fact, going to get cheaper water? I think his answer was: could I please point him to the specifics in the legislation so he could actually answer it, but I didn’t quite get to that.

This bill is not a bill that we support. And considering the fact that we will—the National Government will actually repeal and replace the three waters bill, I see no reason why I should waste more time on this particular bill. Thank you very much.

ANNA LORCK (Labour—Tukituki): This is the trilogy of bills that will finally deliver affordable water reform and water infrastructure for New Zealanders. It has been one of the most significant pieces of legislation that this Labour Government has been able to deliver, which will ensure that ratepayers are able to afford the infrastructure that we need for safe drinking water, for improved stormwater, and for our waste-water systems.

This all started from my electorate of Tukituki, under the Havelock North water crisis. This legislation will ensure we do not have another Havelock North water crisis in New Zealand. That is the reason that I have absolutely supported this bill right from the beginning, and I commend it to the House. Thank you, Mr Speaker.

SIMON COURT (ACT): The ACT Party has engaged constructively with officials, with the Government, with the water sector, and with councils right through the process of the three waters reform. ACT agrees there’s a problem to solve when it comes to delivering infrastructure in an affordable way to enable land for housing and business to be developed in an affordable way. Because the whole purpose of three waters infrastructure is not so that engineers have some fun stuff to do pouring concrete and laying pipes. I mean, it is a whole lot of fun watching guys drive diggers—and girls; in fact, it doesn’t really matter what gender they are—and build infrastructure. But that’s not why we do it. It’s to deliver social and economic benefits to communities. It’s to deliver land that can be built on for housing or business.

Unfortunately, this bill, while it attempts to create an economic regulator to work out what’s the right amount of money to invest in infrastructure, it fails the mark on a number of points. That’s because it gets confused by Labour’s confused and incoherent policy agenda around three waters. Imagine if Labour had said, “We need to find out what the condition of council’s pipe network is. We’ve heard it’s really bad. There’s drinking water running down the street in Wellington.” In fact, about 30 percent of the drinking water that’s treated and supplied runs down the street and never gets into a home or into a tap or a glass of water. You can go to places like West Auckland where I live—there’s regular waste-water overflows from the waste-water network there—and, of course, North Shore beaches and other places, metros and the regions around New Zealand.

Now, if Labour had wanted to find out how bad things were and how much money to spend on the networks, or whether smaller councils actually do need direct financial support or grants or whether, in fact, you could share some of the enormous amount of money that central government collects from building houses in New Zealand. About $2.5 billion a year is collected by the Government; that’s the GST on the invoices that builders send when they build a house—$2.5 billion a year. What ACT says is that a Government should return half of that to local government to build infrastructure.

So the Government could have said, “We need to find out more about the problem and we need to provide some revenue from what we take from the building sector. All of that building and housing that imposes costs on local government, we should share some of central government’s revenue back with them.” But they didn’t do that. Instead, they came up with an incredibly complex, unjustified co-governance proposal that’s turned into one of the most divisive political proposals ever laid on New Zealand by an ideological Government that got itself so bent out of shape and tied itself into a pretzel trying to explain the rationale behind co-governance in three waters.

Hon Peeni Henare: Don’t get salty.

SIMON COURT: So bent out of shape, the Hon Peeni Henare. I’ll tell you what, because if there was a case for iwi Māori to have their rights and interests in freshwater assessed by a Government or a court, this Government would have done that. But this Government doesn’t care about property rights. It doesn’t really care whether iwi Māori, hapū, marae have property rights in water, because if they did they would have said, “Hey. Let’s explore that.” But they’re too gutless—they’re way too gutless to have that conversation. Instead, what they did was come up with—

Hon Peeni Henare: ACT supported the Waikato River settlement.

SIMON COURT: The Hon Peeni Henare raises a good point about the Waikato River: a Treaty settlement identifies rights and interests and allocates them. What this Government has done instead is try to say that water infrastructure, sewerage pipes, drinking water plants, all of that stuff built after 1840 somehow should be subjected to co-governance because there are rights and interests that iwi Māori have in these assets that are of greater weight than normal or other New Zealanders.

When I asked the Hon Nanaia Mahuta about that, she replied “No”. They do not have rights and interests above anyone else, any other ratepayer in their community. In reply to a written question, that is what the Hon Nanaia Mahuta said. At that point the tied up pretzel that Labour had got itself in should have been binned. But no, they persisted with their co-governance agenda. That is one of reasons why Labour will lose the next election.

Now I want to come to the member Anna Lorck, who made a comment. Anna Lorck, along with other members of the Finance and Expenditure Committee travelled to Hawke’s Bay and we heard from councils and submitters.

Anna Lorck: I didn’t need to travel; I live there.

SIMON COURT: Oh, the member certainly did travel with the Finance and Expenditure Committee, even though it might have been just down the road from her house. What they told Anna Lorck is that “We reject your co-governance agenda. We reject your centralisation agenda.” The Hawke’s Bay councils, including the regional council, central Hawke’s Bay, Napier, Hastings, what they said, Anna Lorck, was, “We’ve already solved the problem that the Havelock North inquiry told us that we needed to solve. We formed a voluntary regional alliance where we’re pooling our resources and we’re getting on with the business of funding, financing, and fixing our three waters infrastructure.” That is why they said: “We don’t need these water reforms, Anna Lorck.”

Now, I don’t know what Anna Lorck went back and told her caucus, but, whatever it was, it wasn’t enough to convince the Hon Nanaia Mahuta, the Hon Kieran McAnulty, or whoever the Prime Minister was at the time. Because the same confused pretzel policy appears here in the Water Services Economic Efficiency and Consumer Protection Bill. As a result, Anna Lorck and a whole lot of Labour MPs are going to lose their seats in about seven weeks’ time.

What would ACT do? Because that’s what New Zealanders want to know. What would an alternative Government have done with three waters? Well, this is what ACT says.

DEPUTY SPEAKER: Well, no. The rest of the people might want to know. The House wants to know what is in the bill and everything relates to the bill.

SIMON COURT: Well, let’s come to the role of the Commerce Commission. The Commerce Commission is going to carry out a discovery process over three to four years to find out what the actual asset condition is of all of these pipes in the ground. Now, imagine that. They could literally ring up the councils and say, “Could you send us your information?” They’d get it the next day. But it’s going to take three or four years. If there are gaps in information, how do you close those gaps? You send out all of the CCTV and jetting trucks to CCTV your pipe networks. In about a year, you could have a complete up-to-date asset management database for all of the three waters infrastructure in New Zealand. It might cost a few tens or even $100 million to do it across the country. You could do that in a year. No. In two to three years, the Commerce Commission is going to faff around and work out how to do it.

Now, if the Government was serious about working out how much money should be spent on building three waters infrastructure, there’s a test for that. Currently, councils plan where people could live—it’s called spatial planning or urban planning, district planning, regional planning. It shows where the people are going to live and how many are coming. In Auckland where I live, in the north and west another 250,000 people are projected to come and live there between now and 2050. Therefore, we know we need to provide 250,000 peoples’ worth of water infrastructure. Work it back from 2050. I’m a civil engineer. I reckon I could ring up a few firms and ask them to give us a ballpark price. That’s how easy it is to work out how much money should be spent on infrastructure.

Then you say, “How much to maintain it?” Well, you work out how many trucks, how many people, how many visits they’re going to do a week. You work back from there. No. The Commerce Commission’s going to spend another three years after they get the information. We’re talking nearly 2030. If this Government was serious about fixing three waters infrastructure, they could have gone back to 2020 when they came up with the original concept for the reforms, and they could have issued an instruction to councils: “Update your asset management system. If you can’t afford it, come to us, we’ll find a way to pay for it.” If you can’t afford growth to fund growth, guess what? A sensible Government would have taken advice from economists and said, “We’re prepared to share some of the revenue central government gets from building and construction, just like ACT would have”—$1.2 billion a year to cash flow the borrowing.

Now, I’ve heard from Hon Kieran McAnulty: “$1.2 billion, that’s not enough. This is an infrastructure deficit of $120 billion.” Well, guess what, Labour; guess what? $1.2 billion a year, leveraged at the same rate as this reform would allow for, somewhere between four and six times revenue delivers you somewhere between four and six times $1.2 billion. Somewhere around $6 billion or $7 billion a year in additional borrowing if local government had access to the revenue that ACT says they should keep. All of these problems are able to be solved.

And that’s before we get to telling a Commerce Commission that they need to somehow work out whether a water service entity is upholding the Treaty of Waitangi, enforcing tikanga, and somehow working out whether they are spending enough money and time on guaranteeing that the spiritual life force or mauri of the water is sufficient. ACT will repeal this legislation, the rest of the three waters reforms, and replace it with our own. It’s on our website: ACT.org.nz.

Hon EUGENIE SAGE (Green): Tēnā koe, Mr Speaker. Thank you. Pleased to take a call on the Water Services Economic Efficiency and Consumer Protection Bill. This is the last in four major bills making major changes to drinking water, waste water, and stormwater. Though the Green Party has opposed some of those bills, I do acknowledge the huge amount of work which Minister Nanaia Mahuta and then Kieran McAnulty and officials have put into this big tranche of legislation which creates substantial change in the way our drinking water, waste water, and stormwater is to be managed.

The previous speaker, Simon Court, did not mention anything in this bill. This bill is important because the big thrust of the reforms is to move to these 10 entities. They are natural monopolies. Councils have a very limited ability to influence the entities’ performance, the way they carry out their responsibilities, or require any changes to the entities’ operational documents—things like their asset management plan, their funding and pricing plan, their infrastructure strategy. And given that you’ve got limited ability of councils to influence a natural monopoly delivering an essential service, there needs to be economic regulation and consumer protection, particularly as they’re not—well, they are publicly owned; they’re not directly accountable to shareholders, and they’re not operating in a market and they don’t have to pay a dividend to their shareholders.

But I was a bit puzzled by National’s contribution because Mr Bayly was talking about competition in the committee of the whole House, as if more competition would be desirable. So that makes me question what National’s changes would be to the water services regime and whether they are really interested in privatisation and will take this corporate structure and then privatise it. So we do need economic regulation so that the services that the entities deliver to consumers are cost-effective, and that we have transparency and accountability in the way they deliver those services.

So the bill is intended to ensure that the objectives of the reform are delivered: increasing infrastructure investment and ensuring that the pricing practices for those services are efficient. So the Ministry of Business, Innovation and Employment’s view, as the department advising the Finance and Expenditure Committee, was that this bill would promote the long-term benefit of consumers. There was also a note that there is, of course, a trade-off between regulation, the cost of implementing that regulation and its benefits. This will cost about $10 million, we were told, over two years to develop the information base on which any regulations would be based, and then cost $7 million to $10 million annually to implement. And recognising, too, there’s quite a lot of flexibility in what the Commerce Commission can do, because the entities are differently sized, have different circumstances, so the bill does provide for that.

It enables the commission to issue guidance, input methodologies, and determinations around how the water services entities would implement the charging principles and any regulations made under the Water Services Legislation Act now. It is similar in terms of the way the Commerce Commission regulates fibre, gas, telcos, and it does have this provision for a specialist Water Services Commissioner and also for a dispute resolution tribunal for any disputes around pricing, for example, between consumers and the entity.

So it’s not the job of the Commerce Commission to regulate drinking-water quality—that’s the job of Taumata Arowai—but the two entities will work together. We do need this consumer protection and we need an economic regulator of the entities, so the Green Party is supporting the bill.

DAN ROSEWARNE (Labour): We know that our water services sector is not performing as well as it should be. We know that the quality of service being provided does not reflect what consumers demand and we know that there has been systemic long-term under-investment in our water infrastructure and we have seen the effects of that at a local level. So this bill introduces an economic regulation and consumer protection regime, which will ensure the entities promote the long-term interests of consumers by providing services that are efficient, effective, and responsive. So I commend the bill to the House.

DEPUTY SPEAKER: Five-minute call—Chris Penk.

CHRIS PENK (National—Kaipara ki Mahurangi): Oh, thank you, Mr Speaker. I can assure you, it won’t be all of five minutes. It’s standard to get up and say it’s a pleasure to speak on a certain bill, but it’s not really a pleasure to speak on this one. I’ve heard so many other people speaking on it that I don’t think I can improve much on the contributions, at least the ones from this party.

The politicians have had a lot to say on three waters and various bits of legislation associated with that. The people will get their say on it soon enough. While I don’t pretend that the whole thrust of the general election is a referendum on three waters, it does nevertheless go to some of the themes that will decide how the country wants to be taken forward.

In relation to this space, we say that local control of these assets is still an important value. We think that scrutiny is important. Of course, the thrust of this bill, by its own telling is to provide independent commercial scrutiny, and, of course, that’s the purpose of appointing the Commerce Commission as the regulator.

But we say that other forms of scrutiny are important as well, not only in terms of the election coming up but scrutiny through local government and responsible and accountable government—accountable to the ratepayers, of course, who own the assets—are important values. We think that scrutiny is a more important type. We say that the purpose of this is merely to try to give effect to that which the Government has set up. So it talks about a natural monopoly—well, it’s created a particular form of monopoly. We don’t think it’s very efficient. We don’t think it’s very accountable. What can be done can also be undone; we intend to do that if we should be so lucky as to win the election. I do not commend the bill to the House.

Dr LIZ CRAIG (Labour): Thank you, Mr Speaker. It’s a real pleasure to rise and speak on this third reading of this bill. Basically, what we’ve heard already is that this bill is part of a suite of legislative reforms that are very necessary in terms of providing the water infrastructure that we need.

I just want to congratulate all of the Ministers and the officials that have been involved in getting it to this point, because once we’ve passed this bill, what we’re going to be seeing is a much greater likelihood of having affordable drinking water, affordable waste water and stormwater, and making sure that that’s available to consumers and communities right across the country. And what this bill does is it adds some extra things in terms of making sure that we’ve got greater service quality and we’ve also got consumer rights protections for New Zealanders. So on that note, I am happy to commend this bill to the House.

LEMAUGA LYDIA SOSENE (Labour): Thank you, Mr Speaker. I rise to take a short call in support of this bill, the Water Services Economic Efficiency and Consumer Protection Bill. As we’ve heard from many speakers on this side of the House, it will establish the economic regulator and also protect consumers in terms of much-needed water services, as part of the reforms with the oversight of the Commerce Commission. This bill will deliver improvements for New Zealanders in terms of having tighter regulation. It will be the best option for New Zealanders because our local councils cannot afford the under-investment of water infrastructure. On that note, I would like to finally finish by thanking the Finance and Expenditure Committee members for their work, and also the officials and the submitters. I commend this bill to the House.

Bill read a third time.

DEPUTY SPEAKER: I declare the House in committee for consideration of the Taxation Principles Reporting Bill.

Bills

Taxation Principles Reporting Bill

In Committee

Part 1 Preliminary provisions

CHAIRPERSON (Hon Jenny Salesa): Members, we come now to the Taxation Principles Reporting Bill. We come first to Part 1. This is the debate on clauses 3 to 10, “Preliminary provisions”, and Schedules 1 and 2. The question is that Part 1 stand part.

ANDREW BAYLY (National—Port Waikato): I thought the Minister might be standing up, but no. Look, this is a fascinating bill put forward by the Hon Mr Parker—David Parker—renowned in tax circles for having some extreme views around tax. Of course, he spat the dummy recently, I think, principally around the GST on food—which is a pretty idiotic policy. But he was the main proponent of this. This is his coup de grace, I think, before he leaves this Parliament on this term. Hopefully we see David Parker next term, because I do enjoy him. Even though I don’t share his views, I do have respect for him. At least he has a position on stuff, even if it’s way off in the yonder and most people are not knowing where he is.

But anyway, I think even Labour wonder where he is sometimes with his views on tax. My understanding is they let him, when he had the revenue portfolio, go off and do his little stuff as long as he didn’t make too much trouble. Obviously, he made a bit of trouble around the GST on fruit and veges, because he didn’t accept it and that’s when he left.

Anyway, this bill is a pretty weird bill. Very short. Taxation Principles Reporting Bill. Its purpose is to oblige the commissioner to report on New Zealand’s current tax settings. Why that is required is a moot point. Only because David Parker thought that it should—I’m not sure anyone else had that view. In all of my discussions with tax officials, tax accounting firms, whatever, no one said to me, “You know what, Andrew? We’ve got to do this Taxation Principles Reporting Bill because it is such a pressing thing for New Zealand.”

Anna Lorck: Aw, look up there! [Points to television]

ANDREW BAYLY: Anna Lorck, she’s there. She thinks it would be good. So this is one of these bills that you just wonder why the Cabinet’s shoving it through in urgency now that the Minister’s moved on. I pity Dr Deborah Russell, who’s now in the chair—although she’s a tax expert, I understand. She’ll be loving this.

So there’s a requirement for the commission to report on it. So there’s no need—maybe the Minister can start out by, first of all, explaining why in the dickens does New Zealand need this? By the way, the reporting framework’s quite significant. It’s an annual reporting framework, and then a much more comprehensive one every three years. So why might we have it at least annually? Because tax policy doesn’t move that fast. It’s glacial, it’s glacial. It’s a bit like some of those members—glacial.

So why do you have to do this every year, and what is the difference between what would be reported in the two years when it’s just a bit of a report—apparently. I don’t understand it—and what’s the comprehensive; what would be examples? So, hopefully, let’s see if the Minister can start with that.

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): I’m happy not to debate it because it’s such a sensible bill. Just a few words, of course, introducing this committee stage in the first instance.

As Mr Andrew Bayly has said, this is a bill about reporting on the tax system, so it introduces no new taxes, it doesn’t impose any taxes, it doesn’t adjust any taxes. But what it does do is it requires the commissioner to report on the New Zealand tax setting against a series of principles—recently very well-established principles—by which tax systems should be assessed.

Now, Mr Bayly did say, “What need is there for this report and why should we do this report? Is it worth doing?” I think the answer, straightforwardly, is yes. There is a great deal of information available in a lot of places, about our tax system. It can be dug up through, obviously, the various pieces of legislation. The annual report from IRD every year has a great deal of information about how our tax system is operating, from things like how quickly calls are answered to issues with compliance and so on.

But you can also dig up more information about the tax system in the Budget every year. For example, you can get to the taxation expenditures report, which tells you where there are exceptions to the tax system; where there are special concessions. But in no place do we find, really, anywhere, a report on the tax system itself in an easily accessible form. This is what this report will do.

What it will do is give New Zealanders a series of facts about the tax system—a series of facts so that when people try to comment on tax, when we’ve got commentary going on tax, and not just from tax experts—you see, people get quite scared of a tax and they do get worried about talking about it except in the most simple terms. But because it is a complicated subject, one of the things this report will do is ensure that everyone—ordinary people; people who don’t know much about tax—can actually have access to some really good information about our tax system as a basis for discussing it. So in terms of that, this is what this bill does. It pools that information together in one place.

Mr Bayly wanted to know why we had to report on it every year in the bill. In actual fact, the provisions are that most years there is an interim report, which uses the best information available for that tax year to report on the tax system. But every three years, there is a rather more comprehensive report. So that will enable people to make some pretty good judgments about the tax system instead of just having a whole lot of ready reckons.

SHANAN HALBERT (Junior Whip—Labour): Point of order, Mr Chair. I seek leave for all provisions to be taken as one.

CHAIRPERSON (Greg O’Connor): Leave is sought. Is there an objection? There is no objection.

Parts 1 and 2, Schedules 1 and 2, and clauses 1 and 2

ANDREW BAYLY (National—Port Waikato): Oh, thank you, Mr Chair. That was a good contribution from the Associate Minister of Revenue. It didn’t quite answer the question as to who called for this. As I said before, I’m not aware of anyone who got the old megaphone out there saying, “We just need to have this information.” So that was one point. The second thing, when she said, you know, “People get scared about tax.”, well, I understand why they get scared about tax. As soon as a Labour Minister stands up and talks about tax, they’re now going to get taxed more, because this is what they’ve done. They’ve taxed businesses more. They’ve taxed people more. They’ve taxed everyone more. No wonder everyone’s sphincters start to move when the Labour Associate Revenue Minister starts talking about tax. Anyway, I’ll come back to the topic.

CHAIRPERSON (Greg O’Connor): I’m a little bit worried about your sphincter, actually, Mr Bayly.

ANDREW BAYLY: Anyway—we shouldn’t go there, Mr Chair. Anyway, the other interesting comment the Minister made was that these are well-known principles. Well, I’ve just got to remind the Minister that these are introducing new principles. Interestingly, when we talk about tax, most people refer back to that well-known person Adam Smith in 1776, when he wrote that famous book The Wealth of Nations. I’m sure the Minister’s read it—I’m sure she has; she’s got that look about her. It sets out four principles—and I know she’s very knowledgeable on tax. The four principles are equity and fairness, certainty, convenience of payment, and effective tax administration. That was written back in 1776, a long period of time ago. We have subsequently had successive tax inquiries—some initiated by Labour by the way. We’ve had the 1982 McCaw review. We’ve had the 2001 McLeod review. We’ve had the more recent 2019 report of the Tax Working Group. In Australia, the 2010 Henry tax review. In the UK, the Mirrlees report 2011. They have all endorsed the same principles, based on the same core values of New Zealand around all those four principles. This bill actually introduced some more. So when the Minister makes that claim, first of all, I’ve got to say I’ll refute that claim. So I’d just like her to explain why she thinks we are ending up in the same concepts and why this is such a great thing.

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): I think, if I understood the gist of Mr Bayly’s question—it was a little hard to tell—but he wanted to know why there were some principles other than, Mr Bayly, Adam Smith’s tax principles. [Holds up book] I’m happy to lend it to you, if you like. But some additional ones in addition to Adam Smith. I’m just going to direct Mr Bayly to the 2010 Victoria University’s Tax Working Group. Of course, that particular tax working group was set up by the former National Party, a National Government. As well as having the principles from Adam Smith’s The Wealth of Nations in that particular working group, they also looked at revenue, integrity, compliance, administration cost, and, of course, coherence. So these are not just new principles that have been introduced by us.

We look at the principles that are listed in Schedule 1 of the bill. They are horizontal equity, efficiency, vertical equity, compliance and administrative costs, and uncertainty and predictability. Those come to us from Adam Smith and they’ve been endorsed for a long time and—I was going to say discussed—reinvestigated; there’s a whole lot of literature. So we’re not reaching back to Adam Smith and Adam Smith only. Tax research and contemporary tax research endorses those principles of Adam Smith. But if we do look at the ones that are new, there’s revenue integrity, which is ensuring that the tax system is sustainable over time. Now, that’s in the 2010 Victoria University Tax Working Group, so that’s where that one comes from, Mr Bayly, as well as from other research. But if you’re looking for a source relevant to us, that would do the trick quite nicely.

The other one that is comparatively new—as in it wasn’t in Adam Smith—is flexibility and adaptability. That’s quite an interesting one. We found in recent years of course, that our tax system was set up to deal with brick and mortar systems and trade systems where trade didn’t happen in an instant over the internet. Our contemporary systems don’t deal especially well with new forms of commerce. So one of the things we need to start looking at our tax system with and judging it by is just how well it does adapt to or accommodate or can be adapted to meet these new forms of commerce. So I think that flexibility and adaptability came to us—oh, I’m not sure, but it seems pretty sensible to me. So there you are, Mr Bayly.

CHAIRPERSON (Greg O’Connor): Just before you start, Mr Bayly, just for clarity for those at home: the question is that Parts 1 and 2, Schedules 1 and 2, and clauses 1 and 2 stand part.

ANDREW BAYLY (National—Port Waikato): Thank you, Mr Chair. I’m so grateful for the Minister’s help elaborating on that. I would remind her that the third of Adam Smith’s principles actually talks about convenience and payments, and therefore does provide for the flexibility of moving to different systems. So I thank her, but I just draw her attention to it because I know she’s very interested in those things.

The one thing about the principles that are set out: first of all, I find it slightly arrogant that the Labour Party and Mr Parker, in general, is the one who has decided—and he did, except when I asked him the question directly in select committee—that he had a role in actually drafting these principles, even though there have been a number of very substantial tax reviews that have accepted the four principles of tax, and there’s clarity around that since Adam Smith’s time back in 1776 right through to now; it has been the hallmark of a tax principle.

But, hey, we’ve got a Labour Government who wants to make some changes. So let’s get into a little bit of specific stuff about it. The first thing is the disaggregation of what’s meant by “equity”, and we’ve got the issue of vertical equity and horizontal equity, and I assume—and I’m pretty certain that Mr Parker actually drafted some of this. There is the one issue that talks about vertical equity, about the need to be progressive—tax is progressive if people with higher levels of economic income pay a higher proportion of their income in income tax.

Now, the first question is there’s been a major, major shift in the language that’s been adopted and incorporated in this bill. Normally, when you talk about tax—and even the Minister will know this from her background—you talk about tax in terms of accessible income. This bill introduced an entirely new concept called “economic income”. If I look at the definition of economic income, “Economic income is the way for [entities] to account for changes in the value of a given asset in the market. It generally recognises unrealised gains, in addition to recognising realised gains. A change in market value rather than cash received is the perfect example of an economic income.” This bill nicely slipped through because no one monitors tax, no one thinks about tax. Unfortunately, not enough people are interested in tax and the only time they think about it, as the Minister said—they get scared they’re going to get taxed more. The pernicious nature of this bill is it introduces a whole new concept around unrealised capital gains. And that is one of the key issues around this bill that the Labour Government has tried to slip through in the dying days of its governance arrangements. I’d like the Minister to confirm whether she accepts “economic income” includes, by definition, unrealised capital gains.

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): A couple of things: Mr Bayly has claimed that the principle of Adam Smith’s of certainty will in fact encompass the idea of flexibility and adaptability—

Andrew Bayly: No, convenience of payments.

Hon Dr DEBORAH RUSSELL: Oh, I’m sorry, convenience of payment would—OK, so I’m just going to, having Adam Smith right in front of me—I don’t think that’s actually going to manage that at all in terms of flexibility and adaptability. So you levy taxes at the time at which it’s most convenient for the taxpayer, that’s in the way it’s most convenient for the taxpayer. Classic example of this in our system is PAYE which is, you know, very, very convenient and easily paid by the taxpayer—that is, as employees—because it’s deducted at source. So that’s a classic example of convenience. I don’t see how that encompasses the ways that we need to start to think about the new forms of business, the new forms of commerce, and particularly the forms of commerce which are not conducted with bricks and mortar stores any more.

In terms of that flexibility and adaptability, it’s not just to do with taxpayers finding it convenient to pay their taxes; it’s also to do with Governments being able to levy taxes on forms of business which otherwise escape taxation. So there’s a whole set of things that need to be balanced off there by Governments. It’s also about changing our tax systems. So, of course, all these principles work together. One of the principles we have sitting in there is revenue integrity, and, in fact, one of the purposes of a tax system is to collect sufficient tax revenue that Government can pay for all the things that Governments typically like to pay for: health, welfare, education, and so on. As new forms of business arise, new forms of commerce arise, they may not be encompassed by the tax law we already have—that’s the sort of flexibility and adaptability we need. So that principle of convenience is not just about—it is about taxpayer convenience, but flexibility and adaptability concerns both taxpayers, but also the entities levying the taxation. So that’s why we have a separate principle of flexibility and adaptability. It is not comprehended by the principle of convenience.

Mr Bayly—I think I actually need Mr Bayly to clarify a little. He said that when we’re talking about vertical equity, we normally talk about assessable income, but, actually, I think there is a distinction in tax law, it’s very clear, between assessable income and taxable income. Taxable income is the final amount on which you pay your taxes. A whole lot of income is assessable income, but you deduct a whole lot of stuff from that before you get to taxable income. Now, I know Mr Bayly knows that; I think he just used assessable income instead of taxable income. But the real thing we’re worried about there is the difference between taxable income and economic income, and it’s a critical and important distinction.

The fact is that our tax system in New Zealand is not broad base, low rate, because a whole lot of income is excluded from taxation. Now, that may or may not be appropriate—it may or may not be appropriate. But at the moment—except for the major report which Hon David Parker and Inland Revenue carried out to assess how much income very high-wealth people earn—we don’t know how much income New Zealanders earn because of income that is not included in taxable income. Now, whether or not we ought to be paying tax on that is a different matter. This bill does not have an “ought to pay more tax” in it. All it will do is report on that level of economic income and the level of tax paid in relation to that economic income. It will report on that and then it is up to the people involved who are interested in the issue—journalists, members of Parliament, taxation lecturers, people in the street, ordinary New Zealanders—to debate whether or not that’s appropriate. This bill would not give any judgment about whether it’s appropriate; all it would do is report the facts. That’s why we’re looking at economic income, not just taxable income.

ANDREW BAYLY (National—Port Waikato): Well, thank you. I beg to differ about convenience because convenience can be an online—it doesn’t mean—I don’t know why she keeps talking about bricks and mortar. It’s about the way that taxes can be paid and it could be online, it could be any other business model—seemed a spurious argument to me on that.

But I just want to draw back to this vertical equity because you made the assertion it’s just, you know, passive reporting. Well, actually, that’s not what the description says. The description says the “progressive tax system does not mean that every tax should be progressive, but the overall system ought to be. In practice, wealthy people should at the very least pay no lower a rate of tax on their economic income than middle-income New Zealanders already do.” So, do I take it from her comments that the purpose of this particular section of the bill is that the tax department will be going about assessing everyone’s—and obviously the Labour Government went after certain families—she’d like to see this bill and the annual reporting be specific about both, using her terms, “taxable income”, and also unrealised and realised gains is a separate part to that? Is that what she’s saying very explicitly?

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): No. Just to clarify, the IRD would be using information that is already available to it. So there won’t be an order to—and there are a variety of ways of gathering that information they have, so in fact on that they won’t be going out and trying to assess every single individual’s economic income. Instead, in the way that they already do, and that other entities and people can do, is use the whole suite of data that is available to develop measures, to develop an understanding of all sorts of types of income and tax paid and so on. So that information is already available. It’s just a matter of pulling it together in the reports. And it’s worth noting that, you know, that sort of reporting might actually only come through in the comprehensive triennial report. We’ll see how that develops over time. The idea is just to make sure that we do get that better information about our tax system every three years.

ANDREW BAYLY (National—Port Waikato): So I just want to ask a very simple, specific question: will this bill require the IRD to go out and make an assessment of the unrealised gains, and that individuals or corporations or trusts will be required to pay tax on?

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): On an individual basis, no.

ANDREW BAYLY (National—Port Waikato): Not on an individual basis, for a company, individual, trust—whatever. What would be the—if that’s the answer, no, and she’s saying it’s going to happen at a more global level, how does that take place?

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): Inland Revenue will develop those systems over time.

ANDREW BAYLY (National—Port Waikato): OK. So we’re sounding like very much a politician here. Mr Parker’s sitting over there; hopefully he might join in the debate. It was a very specific question. The term “economic income” has been injected into this bill quite specifically. It has a very specific definition which includes unrealised gains, and so the point I’m making: if you are going to put it in, stand by it and be clear about it, because New Zealanders need to know what would be required by the IRD to do it. You’re talking about using other methods of collecting that information; I didn’t ask about that. I’m asking about what will the IRD report on, annually, in terms of both “taxable income”, using her term, and “unrealised gains” as per that definition I talked about before?

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): As I’ve said, Inland Revenue will be reporting on economic income and that’s gathered from a variety of sources.

ANDREW BAYLY (National—Port Waikato): Does that include unrealised gains? So, again, I’m going to be very specific, does that include unrealised gains?

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): Mr Bayly, I believe you answered that question yourself already.

ANDREW BAYLY (National—Port Waikato): Well, I take it, and I’m just looking around here, I think that’s got to be a confirmation. If I’m making a wrong assertion, because I’d hate to incorrectly interpret the comments from the Minister, but my assertion, my understanding of what she said is that the IRD will be required to go out and assess both taxable income and unrealised gains and look at that in this respect of vertical equity and, at the same time, the same term is used in terms of horizontal equity. This is why it’s such an important aspect to be clear about. So is that proposition—that premise I’ve just said, is that correct, Minister?

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): Mr Bayly, I’ve lost track of the propositions and premises that you’ve suggested. It’s clear that economic income does include unrealised gains. That’s always been the case with economic income. As I’ve already said, all this bill will do is report on it so that ordinary New Zealanders can actually have a conversation about tax. So the bill doesn’t introduce any new taxes; it doesn’t impose any new taxes, it doesn’t require any new taxes, it doesn’t require unrealised gains to be taxed. All it does is report on them.

CHAIRPERSON (Greg O’Connor): Mr Bayly, I’m following this debate and I’m not quite sure whether we can go much further without repetition here. We are hearing this one part and I’ll be very generous, but—

ANDREW BAYLY (National—Port Waikato): Mr Chair, I’ve got acknowledge, I’m going to thank the Minister for being clear that she’s now explicit that it does include unrealised capital gains. So hopefully the Minister can give me a more substantive question: when she talked about using different mechanisms to determine unrealised capital gains as well as taxable income—which is very obvious because the IRD has that information—how will it go about assessing unrealised capital gains? And she’s saying there are other mechanisms to do that; could she be clear about that?

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): This is a very detailed question. Inland Revenue will not be assessing individual taxpayers in order to assess this report, they will be using information which is readily available to them already, for their reporting. They will simply be reporting tax paid against economic income, and against income, all the sorts of information they already have. But in terms of then assessing the tax system and so on, which is what this bill will enable—because it will enable reporting on the tax system—they will simply be using the information that is already available to them. In fact, they are going to use very specific measures, they’re sort of sitting there in clause 13 of the bill, saying “income distribution and income tax paid” so they’ll look at that. They’ll have these sorts of measures available, and those measures will then be used to assess how well the tax system—they’ll be used to report against those key principles. So that’s just exactly what’s going to happen, and the bill is simply going to report on them.

CHAIRPERSON (Greg O’Connor): The question is that the Minister’s amendments set out on Supplementary Order Paper 414 be agreed to.

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

Ayes 75

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

Noes 43

New Zealand National 33; ACT New Zealand 10.

Amendments agreed to.

A party vote was called for on the question, That Parts 1 and 2, Schedules 1 and 2, and clauses 1 and 2 as amended be agreed to.

Ayes 75

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

Noes 43

New Zealand National 33; ACT New Zealand 10.

Parts 1 and 2, Schedules 1 and 2, and clauses 1 and 2 as amended agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Greg O’Connor): Madam Speaker, the committee has considered the Taxation Principles Reporting Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Hon Jenny Salesa): This bill is set down for third reading immediately.

Third Reading

Hon Dr DEBORAH RUSSELL (Associate Minister of Revenue): I present a legislative statement on the Taxation Principles Reporting Bill.

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

Hon Dr DEBORAH RUSSELL: I move, That the Taxation Principles Reporting Bill be now read a third time.

Madam Speaker, honourable members—well, probably, honourable member Andrew Bayly—I thank you for the debate on this bill. The views expressed are important because the tax system is important to New Zealand. So, just for the sake of clarity, I want to provide you with a very brief recap on the measures in this bill and their objectives.

The bill imposes a reporting obligation on Inland Revenue. The bill recognises that all New Zealanders are equal stakeholders in the tax system, and, as such, Inland Revenue would report to the public on a range of tax system measures against a set of agreed tax principles. These reports will set out facts about the tax system that are relevant to the tax principles so that ordinary people can be informed—not just about call wait times and other administrative matters but about the distribution of tax paid and levels of compliance. The tax principles that will be reported against represent decades—actually, centuries—of experience in considering what are the good features of a tax system. They are crucial hallmarks of a good tax system.

The reporting framework will make a great deal more information about the operation of the tax system available to the public, and will, thus, contribute to an improved understanding of tax policy among the general public. The requirement for regular reporting will allow for observation of trends and provide insights into how the tax system is developing and responding to external challenges.

So the bill proposes that IRD reports annually, with a more comprehensive report produced every three years. These reports will be made available to the public, perhaps on the department’s website or—in terms of the comprehensive report, it may be presented to this House. This reporting, based on core tax principles, will supplement other statutory reporting on the administration of the tax system and the Government’s revenue strategy.

Now, this bill is for the benefit of ordinary taxpayers, ordinary citizens. On behalf of New Zealanders and the Government, I want to thank the Finance and Expenditure Committee for their work on the bill and for their valuable recommendations. I also wish to thank the policy officials and drafters for their work in helping to bring this bill to its third reading, especially Adrian Kelly, Murray Shadbolt, and Josh Fowler; their work is very much appreciated.

And, of course, this bill owes its genesis to the insight of the Hon David Parker, and it is an honour to bring it to this third and final reading, and know that he started this process. I commend this bill to the House.

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

ANDREW BAYLY (National—Port Waikato): Thank you, Mr Speaker. Well, another dying act of a dying Government in the final days—a new bill. What a great day we’ve had. Basically, we’ve rammed through two water services bills and now we’re ramming through this Taxation Principles Reporting Bill. Hey, we’ve only got three more days left—or four maybe, if you count the last day.

The first question is: why are we doing this? Why are we doing this? No one’s asked for this tax bill. It has come about through the good work and the enthusiasm of the Hon David Parker sitting over there. He had these wonderful ideas when he was Minister of Revenue, until very recently. I was very disappointed to hear that he had relinquished his post because he had a deep departure over that goods and services tax on fruit and vegetables. I understand why he did that—man of principle.

But talking about principle, I know the genesis of this taxation principles bill was that he is a student of this man called Thomas Piketty who, of course, wrote Capital in the Twenty-First Century, published in 2013. Was that the one you were relying on, Mr Parker? I’m looking over there. I’m pretty certain it was. You know, the whole premise of his work is that the return on capital—and he kept talking about return on capital—if it’s greater than economic growth, that leads to inequity. That’s the prime proposition of Mr Piketty.

So it was an important work. In fact, and I mentioned this in my first speech on this bill, the Washington Post did a review of this piece of work. It said, when it was published, that “Piketty’s work was a landmark”—sorry, I’m just going to do a little bit of a quote here—“in economic literature that significantly improved and expanded upon Karl Marx’s ground-breaking scholarship in Das Kapital.” So here we are. Mr Piketty is going to help New Zealand, even though we don’t have communism. Let’s hope even Mr Parker doesn’t want communism—maybe socialism, but not communism in New Zealand. That is what has driven this.

He did accept, when I spoke to him in the Finance and Expenditure Committee, that he actually had a hand in writing some of this. Again, I’ve got to say, I compliment the Minister. There aren’t many Ministers that sit down at the typewriter probably at about 10:30 at night when everyone else has gone home, sit down and start writing about vertical equity and horizontal equity, because he knows that that is the most important thing for New Zealanders.

So what this bill does is it changes the way that the key principles have overseen the tax system across many jurisdictions. I talked about it earlier, about Adam Smith’s 1776 book which became a hallmark, a fundamental plank to how tax systems were set up in countries. There were four elements. The first one is equity and fairness, the second one is certainty, the third one is convenience of payment, and the fourth one is effective tax administration. Subsequent reviews in New Zealand—some commissioned by National, some commissioned by Labour—have all reinforced those four principles because they are simple, but hey, that’s not good enough for our good man Mr Parker, who came up with these additional ones and then, more importantly, more significantly, introduced a new term called “economic income”. As I said before, economic income, by definition, is the way that entities account for changes in the value of a given asset in the market. It generally recognises unrealised gains in addition to recognising realised profits.

So New Zealand has a system. It’s all about taxable income made up of accessible income and deductible expenditure. What we’ve now introduced in this tax reporting bill—IRD will have to sit down once a year and write a report saying that we want not only to talk about whether our system is capturing those key things and how it’s going about that, but also now moves it into the area of unrealized gains. Of course, that is what the Labour Government has been pushing now, the last election, probably the election before that, and it certainly will in this election. The issue that they want to impose: a capital gains tax in New Zealand. This is a quiet, surreptitious way of introducing it into the system of the IRD to make sure it’s reporting on this very issue.

Now, tax policy is the responsibility of the Government of the time. The current Government, the Labour Government, has chosen to take itself down a certain tax path and that is what it does, and we respect that as the Government. If we are lucky enough to be elected in October, we will choose to go down a different path, which is we want to make sure that more people keep more of their money in their back pocket, and that is simply what people choose to support when they come to election time. That is called democracy. This is something that is trying to embed in the system something that the Labour Government wants to make sure is continuously captured around unrealised capital gains, or, in other words, a capital gains tax. We do not accept it. National does not accept it. We do not believe this bill is necessary. We will repeal it. It’s a waste of time. But anyway, the Labour Government’s going to ram it through tonight anyway.

Hon DAVID PARKER (Attorney-General): As the Minister, the Hon Deborah Russell has said, this is only about a reporting framework. It’s not about new taxes, it’s not about interfering in people’s lives, but it is about reporting on the actual outcomes of the tax system in a robust and complete way.

The member Andrew Bayly is correct that the Adam Smith principles go way back when. But, of course, since then there have been reports in comparable jurisdictions to New Zealand—including the Mirrlees report in the United Kingdom, the Henry report in Australia, and, in New Zealand, reports going back to the McCaw report, followed by two reports that McLeod was involved in, Sir Rob McLeod, followed by the Victory University report, followed by the Tax Working Group that the Hon Sir Michael Cullen chaired—that have elucidated on those principles. They are better described, and I think the expert advice that the Finance and Expenditure Committee had from Sir Rob McLeod was that the principles were appropriate: horizontal equity, efficiency, vertical equity, revenue integrity, compliance, administrative costs, certainty and predictability, flexibility, and adaptability.

Now, it’s interesting to hear from Andrew Bayly—because he doesn’t actually object to the ones that go to efficiency. He is just fixated on people not being able to understand what the actual outcomes are for New Zealand in respect of horizontal equity and vertical equity. Those are the things that the National Party dislikes light being shone upon.

Until the high-wealth individuals report was done earlier this year, New Zealanders did not know that that cohort on average had $256 million of net assets each, yet paid a tax rate of under 10 percent per annum on their effective economic income. Now, Mr Bayly translates that to a statement by the Labour Party that says all unrealised gains should be taxed. That’s never been the proposition from the Labour Party, and indeed the questions that were asked by the Opposition spokesperson on finance, Nicola Willis, in the House today illustrate why this is so necessary. She peppered the Government with questions purporting to say that we have a capital gains tax on the family home. This is one of the ways in which the right always manage to obfuscate on the actual effects of tax rates.

So that’s why this tax principle in respect of horizontal equity says that there are important areas where exemptions to taxing economic income are justified in pursuit of wider social outcomes. For example, not taxing the imputed rent or gains on an owner-occupied house. So this principle would put beyond doubt that, in the view of this Government, you should never tax the family home, whether it’s on capital gains—and yet that party is voting against it. Why is that party voting against it? Because there are other parts of this bill that really worry them, which is shining the light on the true state of affairs in our tax system.

Mr Bayly seems worried that there’s going to be some enormous compliance burden. You know, the study that was produced by the Treasury at the same time as the high-wealth individuals study didn’t rely upon any data of an individual nature. It relied upon survey data through the household economic survey, which the member doesn’t seem to complain about—the household economic survey, which looks into the affairs of people in all stratas of society and which we know is very accurate for nine out of the 10 deciles studied or 18 out of the 20 ventiles studied, as per the Treasury study. They did that on the basis of that information, without having to go to individuals. They then make adjustments to it based on their understandings of other data sets. But they’re not going into individuals and doing as we did with the high-wealth individuals research project, and that is not going to be repeated often.

But that sort of study is necessary occasionally because we know that those survey measures of wealth don’t work at the top end, as evidenced by the fact that the high-wealth individuals study found that the average wealth in that cohort was $256 million per person, including all their trusts and company interests, whereas the household economic survey has only ever found two people with assets of more than $20 million, and I think the figure was something like $36 million. That’s the highest net wealth ever found by the household economic survey. Yet this survey of the high wealthy showed that the average of this cohort was $256 million.

Chlöe Swarbrick: They’re scared of data.

Hon DAVID PARKER: It’s just data—it is just data. The idea that the National Party on that basis would oppose this legislation, when we know that the absence of data has made for a barren and ill-informed debate on taxation in New Zealand, misrepresented by the National Party, as they did this very day in respect of the taxation of the family home in the questions by Nicola Willis—another example just today of why we need this legislation and another example of why the National Party hates it, because this pulls the plaster off. It shows transparently what’s actually going on over time. This is a fantastic bill.

Dr Emily Henderson: Long overdue.

Hon DAVID PARKER: It’s long overdue and I commend it to the House.

PENNY SIMMONDS (National—Invercargill): Thank you, Mr Speaker. Well, I rise to speak in opposition to the Taxation Principles Reporting Bill, and I apologise in advance that it won’t be nearly as animated as my good friend and colleague Andrew Bayly or, in fact, the Hon David Parker were. I have to say that’s the most animated I have seen them. How two men can get so excited over tax is a little difficult for me to see.

But we do oppose this bill because it is simply a bureaucratic make-work scheme, and National will repeal this bill. Goodness knows, this Government, with 14,000 more bureaucrats in place, knows how to make a make-work scheme for bureaucrats, although, sadly, a good number of them are communications staff. But we won’t go any further down that track tonight.

We all know that a good tax system—at least, I did enough in my Accounting 101 to know—should be fair and it should be simple and it should be transparent and administratively easy and adequate to service the country’s revenue needs. But this is where it does get a bit sticky: is that adequate to service the country’s revenue needs when there is a fiscally disciplined Government, or is it adequate to service the country’s revenue needs under an addicted-to-spending Government such as this current Labour Government?

Politicians don’t really need a tax principles Act to tell them that a tax system needs to be fair, simple, transparent, and administratively easy, and—as I’ve already traversed—with the subjectivity of being adequate to service the country’s revenue needs, tax policy does inherently have value judgments. So National doesn’t need a tax principles Act and a bevy of IRD staff running round gathering information.

Actually, I was very interested in the Minister’s description of a high-wealth project. It seems very much more like a high-wealth witch hunt. However, National doesn’t need a tax principles Act to tell us our principles on tax. Our principles on tax are really simple: New Zealanders should pay less tax and keep more of their own money because they spend it better than a Government does.

Quite aside from this bill being unnecessary, it’s also got some significant flaws. It doesn’t provide any details on what the framework is and it doesn’t give any real idea as to what this could be. It doesn’t indicate any level to what degree of reporting there will be.

Let’s be very clear on this one: everyone is agreeing that a good tax system—and I will keep repeating it—is fair, simple, transparent, and administratively easy, but this bill is a bill that a Government would introduce to make the most of misleading claims found in an IRD report. Some people call it a high-wealth project; many of us call it a high-wealth witch hunt. It allows a Government to introduce taxes on the back of misleading claims found in an IRD report on the 311 wealthy families in New Zealand. It’s almost “Shame on them! How dare they be wealthy?”

So this bill lays the framework for a capital gains tax. The Hon David Parker might have had the capital gains tax rug pulled out from under him at this point, but the public should be under no illusion: this bill lays the framework for a resurrection of a capital gains tax.

The public know that Labour can’t be trusted on tax. It was a very, very marginal call for the Hon David Parker to use the IRD, funded by taxes from the public of New Zealand, to investigate the affairs of wealthy New Zealanders and then use that information to inform the Labour Party tax policy.

Changes from the brightline test, from two years to 10, and removing the interest deductibility are things that show the public they can’t trust a Labour Government on tax. In fact, those changes were done in a Supplementary Order Paper—they never went near a select committee.

So we know there are fundamental differences between a Labour Government’s attitude and a National Government’s attitude towards tax. It’s very simple: Labour want more tax—they love tax. They want more of hard-working New Zealanders’ money. They will tax anything that moves; in fact, they’ll tax anything that doesn’t move. They love tax—it’s in their DNA.

A National Government wants less tax. A National Government wants hard-working New Zealanders to—[Interruption] You’d like me to?

DEPUTY SPEAKER: Stick to the bill.

PENNY SIMMONDS: Stick to the bill—thank you very much, Mr Speaker. So it’s very simple: National doesn’t support this bill. We consider it is laying the foundation for simply taking more tax off New Zealanders. It isn’t necessary. We oppose it and, of course, we will repeal it.

INGRID LEARY (Labour—Taieri): Any political party that was interested in fairness and interested in evidence-based policies would love this bill, because this bill puts evidence into the conversation. That’s why it’s being done. Ordinary New Zealanders know anecdotally, they feel that somehow there’s some unfairness in the tax system, and the thing that was revealed in the work led by the Hon David Parker this year was to show the anomaly between the richest 1 percent of New Zealanders paying an effective tax rate of 8.9 percent while most of the rest of New Zealand pay around 22 percent. Now, I don’t call that fair.

The National Party likes to call it fair, and you have to wonder why. If they are scared about putting sunlight on to data, which is what we do for every other policy base that we do in this House—we rely on information and real data—why are they scared to put this tax principles bill through? That’s the question. For too long, there have been assumptions around the tax system, there has been an approach to policy which is pretty much on guesswork, and, finally, we have the intellectual rigour and the data to be able to support an informed debate. That’s all this bill is—no more, no less. We’ve heard unequivocally from our Prime Minister, and again from the Hon David Parker today: there is no intention to put a capital gains tax on the family home. This is simply about transparency and data.

My question to ordinary New Zealanders who might feel that they’re paying an unfair amount of tax compared to the top 1 percent is: what is the National Party, what are the Opposition benches afraid of in this bill?

DAVID SEYMOUR (Leader—ACT): Thank you, Mr Speaker. I rise on behalf of ACT in opposition to this Taxation Principles Reporting Bill at its third reading.

Can I make a couple of observations about procedure around the bill? One of them is just the amount of time that members have spoken. We had, of course, the learned Deborah Russell, who I think may have written a book about tax—I guess everyone has their own interests—and she managed to squeeze out a full three minutes as the Minister responsible for the bill. Then David Parker, who of course is the brains trust and intellectual architect—he managed to squeeze out four minutes out of the allowable 10.

But then there’s Andrew Bayly. He almost got to 10 minutes, but he didn’t actually talk about the bill. Then there was Penny Simmonds—I think she may have got to 10 but I was asleep for the middle eight so I don’t know if she talked about the bill, but certainly not in the first minute or the last minute.

Penny Simmonds: Unkind!

DAVID SEYMOUR: Well, in fairness, the member Penny Simmonds says I’m being unkind. Of course, it is possible the middle eight minutes are interesting. I wasn’t conscious for it. Why is there so little to be said about this bill?

I think the reason is that it is a complete nothing. It’s an exercise in bureaucracy that has been poorly conceived, poorly put together, and actually doesn’t achieve any real outcomes. It’s a bill for people watching along at home—because no one, as far as I’m aware, has really summed up what this bill is about—that requires, as the name would suggest, tax principles reporting. Every year, as an interim measure, and every three years, as a final measure, the commissioner of IRD—in practice, their staff—is required to produce a report on the tax system, commenting on a range of different attributes that people who study these things think are important for a tax system.

So every year—and then in a more fulsome way every three years—the Inland Revenue Department is required by Parliament to report on whether there is horizontal equity, whether or not there is efficiency, whether there is vertical equity, whether there is revenue integrity, compliance and administrative costs, certainty and predictability, and flexibility and adaptability. So in other words, what Parliament is doing tonight is requiring more paperwork to be produced by the IRD.

The question is: what benefit will this bring for people sitting at home who will now, as a result of this law, have to pay for this particular law? Well, they’ll be given a report that somewhat measures how New Zealand’s tax system, at any given time, measures up by those parameters, but it’s of almost no use whatsoever.

For one thing, it’s not actually necessary to pass a law to make it happen. Any Government at any time—so long as they are in charge of IRD, which they are—could request that the IRD evaluate the tax system according to these metrics. What’s interesting is the current Government’s been in place for six years. As far as I’m aware, they haven’t actually taken the time to produce these metrics in any kind of methodical or regular way. So you have to ask yourself, why is it necessary to pass a law for every future Government to do something this Government itself didn’t do?

There’s another interesting thing about how this law came about, and it’s this. There’s a set of rules that are used called the Generic Tax Policy Process. When a Government goes about making tax laws, it is supposed to use the generic tax policy process. The reason that it does that is it’s nice to think that a Government would actually consult all the people affected in an open and equitable and transparent way; get the information from the community about what people want from a new law; and, ultimately, produce tax law that is, well, actually, funnily enough, all the things listed in this bill.

What’s interesting—and it’s been noted by people such as Chartered Accountants Australia and New Zealand, people that actually do this stuff every day, complying with the tax system. Well, the Chartered Accountants Australia and New Zealand point out the enormous irony that the bill that’s about how the tax system should be managed—the principles of taxation in New Zealand and reporting on them—did not use the Generic Tax Policy Process in its own formulation. What they did, instead, was they asked a couple of stakeholders—one of them was CANZ, the Chartered Accountants Australia and New Zealand—to give their view. It was basically inside baseball and the people that were consulted complained that it was just them that were consulted. They said, “Actually, you should have done a more fulsome process.”

That would have been desirable because actually they wanted—or Labour, I assume, would like to create a system of tax principles reporting that has broad-based support from parties across Parliament that everyone can sign up to so it somehow lifts good tax policy above politics. I would assume that’s what they were trying to do. But the problem is that they didn’t even use the correct process for making tax policy in the first place. As a result, it has very little subscription from this side of the House.

One of the results of that—as I’m sure you, like me, are lamenting this time of year is the very, very trickling end of the Bluff oyster season. Well, this bill will last about as long as a Bluff oyster in the sun. Because it’s going to be passed tonight—rushed through under urgency by this Government that knows the writing’s on the wall—and then it’s going to be gone. Because the Government will change and this will be repealed to save the Inland Revenue Department money from not having to produce these reports that have no value. The people on the left know that’s going to happen. That’s why we’re here, sitting till midnight, because they’re rushing as many laws through as possible before they are gone forever, as some sort of desperate last gasp monument-building to this failed Government. But don’t worry, Mr Speaker, this—Madam Speaker, I see you’ve changed—this law [Interruption]—nothing wrong with that, don’t laugh—this law is going to be gone.

Another reason why it should be gone is that it doesn’t do even really basic things. For example, it produces a series of tax principles that it wants reporting on. But as submitters on the bill pointed out, it didn’t actually give any kind of prioritisation. So if you don’t know whether efficiency or vertical equity or horizontal equity is more important than one or the other, or which of the seven or eight principles are most important, then every report is simply going to say that a tax system has somewhat complied with a bunch of principles, but there’s trade-offs between them and you can’t satisfy them all. So without any sense of framework of what should be prioritised, it’s not going to provide any useful information; it’s just going to be a nothingness.

Of course, if there were to be values and priorities put into them, future Parliaments would reserve the right to ignore those values and priorities because here in a parliamentary democracy, people actually—

Helen White: Yes, that’s the point: you get to choose. You just know what you’re doing.

DAVID SEYMOUR: Helen White’s got something to say. What was that?

Helen White: You get to choose, but the public will know what you’re doing.

DAVID SEYMOUR: That’s what Helen White’s saying. But of course, as we’ve already traversed, if Helen White had been listening, then she would know I’ve already said any Government, at any time, could produce a report on these principles. Therefore, the law is completely unnecessary. Her own Government hasn’t done it for the last six years, so they obviously don’t think that it’s important either. However, I’m pleased to see that Helen White has used her short time in Parliament to get no good at heckling whatsoever.

The question that people really have is why is Labour doing this? Why are they putting more cost and more money, more bureaucracy onto the taxpayers of New Zealand for no good purpose whatsoever, that will produce no value, that couldn’t have been produced otherwise if people wanted it—and people don’t want it, because Labour aren’t doing it. They’re here ramming it through under urgency with minimal debate. They can’t even be bothered debating it themselves. Three minutes from the Minister in charge, four minutes from the intellectual architect of the bill—

Hon David Parker: Six! Six.

DAVID SEYMOUR: He’s now saying six minutes. See, inflation is everywhere with this Labour Government. Because just a short time ago he told me it was four minutes; it’s now six minutes. It’s like a crowd at a Labour Party meeting. It grows in the telling every time it’s mentioned.

Nevertheless, I finish by saying this bill is opposed, and it won’t last. In fact, it won’t last as long as a delicious Bluff oyster left out in the in the July sun. It’s going to be gone, gone, gone. A waste of Labour’s time, but no more waste of IRD’s money. Thank you, Madam Speaker.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe, tēnā koutou e te Whare. Just in response, initially, to the points made by the last speaker: if the length of speeches in this place were a determinant of their quality, their substance or their meaning, we really are in the “Upside Down”. Back in the 19th century, we were told, in places like this, in Houses of Parliament across the world, that the introduction of PAYE and of itemising income was going to result in the sky falling in, and those who are wealthy or on high incomes hiding those incomes to do everything that they possibly could to avoid the way that the tax system was going to change. And, of course, it has become a norm for us now to expect that good tax systems across the world see their citizens and their residents, their taxpayers, itemising that income and PAYE being a norm.

We’re hearing exactly the same things from members of the Opposition right now when it comes to the determination of economic income—that doing this itemisation, that providing the sunlight on these datasets and this evidence is somehow going to result in the sky falling in. My question for the members of the Opposition is: “What are they so scared of?” Because if, as they just themselves said—the member Penny Simmonds, and I quote, that “This lays the foundation of a capital gains tax.” We heard similar intimations in the previous readings of this bill, that it’s going to lay this foundation for this mystery tax that is going to come out of nowhere. If it’s laying the foundations for a tax change then surely they understand that what we are looking at here is an evidence base that would rationalise that necessary change mandated by the New Zealand public who would find the impetus for that change on the basis that things are presently deeply unfair.

I just can’t understand what we are hearing from members of the Opposition on this because they have not once gone into any level of detail about any of the seven principles that they oppose. In fact, the greatest level of opposition and detail that they’ve provided, as did the ACT member, is that they are opposed to or somehow don’t quite understand how the trade-offs are going to be reported against. And once again, I would make it just abundantly clear, as the bill itself does, that it is not the role of the IRD to point out where those trade-offs should be but to make explicit that there are trade-offs and that that becomes a political decision.

Of those seven principles—of horizontal equity, the extent to which people with similar levels of economic income—well, you’ll find that it’s defined in the bill, if any of the members of the Opposition would like to read it in contributing to the debate tonight. Then we have efficiency, we have vertical equity, we have revenue integrity, which the member Penny Simmonds also somehow seemed to be really in favour of but hadn’t read the bill, which is actually going to be ensuring that we are reporting against precisely that which she said was really important. We have consideration of compliance and administrative costs. We have certainty and predictability and flexibility and adaptability.

New Zealanders have long had a suspicion that our tax system is unfair but as the former Minister of Revenue, the Honourable David Parker, just laid out, prior to the high-wealth individuals report and project by IRD, and supplementary papers from Treasury, we did not have any meaningful data or insights into the levels of income held at the top end of town, and particularly on that economic income. And what we have with those 311 families surveyed in that dataset are families with an average income of $276 million combined. Prior to that—

Hon David Parker: Wealth, not income.

CHLÖE SWARBRICK: —wealth, rather; wealth between them. Prior to that, we had not previously seen any meaningful data collection of income above or twice, I believe, above $20 million. Again, I would implore members of the Opposition to point us to which of the tax principles they are opposed to because, in lieu of being able to do that, we can ascertain that they believe that these principles are important, which then leaves us with the question of why they are opposed to seeing those tax principles reported against and that information inserted into the public sphere. The only conclusion that you can draw from that is that they want to keep things secret. They don’t want New Zealanders to know this stuff because they don’t want to see the logical and evidential foundation laid explicitly and clearly for that capital gains tax or that wealth tax that they are so ideologically and dogmatically opposed to, regardless of the evidence which, evidentially, they are intent on suppressing.

Then we heard from members of the Opposition that they are going to be repealing this if they manage to be in a position to form the Government. To that effect, I just have to reflect on one of the sentiments that’s never left my mind since it came out of the mouth of Andrew Bayly in a tax debate that we were having a few years ago when he said, and I quote, that “There is such a thing as ‘legitimate tax avoidance’.”, end quote. It’s the quiet part said out loud. We have a tax system that enables the wealthiest in this country to continue to arrange their affairs, their assets, and their wealth in such a way that sees them, as reflected in the high wealth individuals report, paying an effective tax rate less than half of that of the average New Zealander.

So those suspicions that New Zealanders have held for a really, really long time have been confirmed in that high wealth individuals report, and here we have a piece of legislation which will provide us with a reporting framework, sustainably into the future, to enable us to continue to have that evidence-informed debate and, God forbid, a long-term dataset for us to continue having that evidence-informed debate into the future.

This is precisely the kind of thing that any good lawmaker with integrity and with a willingness to look at the evidence to produce public policy should be in favour of. I don’t really think that there’s much else to say here but, as the member David Seymour was saying before, apparently the quality of our contributions are measured by the amount of time that we consume on the clock. But all I’ve got to say is that I don’t know what the National and ACT Party are so afraid of beyond the evidence, which makes it crystal clear that tax settings in this country are unfair, and the fact that when the majority of New Zealanders see that laid out clearly, concretely and tangibly, they will demand change, and that change will not look like the propositions from the National or the ACT Party.

As Jeanette Fitzsimons, the founding co-leader of the Green Party once said, “Sunlight is the best disinfectant.”, and I want to applaud the former Minister of Revenue, the Hon David Parker, for the amount of work that he has done here, laying the foundation for institutional change in reporting and in transparency, which means that we can have better public policy in this country once and for all. Because I don’t know what the point of this place is without that.

HELEN WHITE (Labour): One of the most important things we do as parliamentarians is we tax people. It’s a very serious thing, because people work really hard, and the lower their income, then the more the responsibility is on us to make sure that we what we are doing is fair and reasonable.

What this bill does is it shows us the effect of our tax policies. It shows us whether they’re fair on people, whether they’re a reasonable way to tax our hard-working citizens—and there is absolutely nothing wrong with that. In fact, you’d think it would have been something that we’d been doing for a very long time.

I would wonder at anyone who suggests that it’s a waste of money to report what is actually going on in this country with regard to such an obligation. The parties on the other side of this House ought to be ashamed, because these are our people, these are our country people, and they deserve a fair tax system, but, more important, they deserve to know what is happening in their country and who is paying tax—and if they know, you shouldn’t be afraid if what you are doing is actually fair and honest and consistent with these principles, should you?

This bill is a wonderful thing because it brings our system into the sunlight. It shows us what we’re doing. Then, yes, we can have a conversation, but, if, as the other party suggests—if it were elected we know what would happen: this would be buried, because the last thing that they would want is for New Zealanders to know what was going on in this country with regards to wealth.

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

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Speaker. Well, there’s been a lot of heat but very little light from the other side of the House. I have listened as carefully as I can imagine doing to understand what the point of this legislation is. It doesn’t actually do anything. The best thing that can be said for it, as we have heard from the other side, is it doesn’t raise any taxes. Well, thank goodness for that—finally, something with the word “tax” in it that doesn’t increase the burden of taxation on the average hard-working New Zealander. It also doesn’t lower taxes, mind you, so there’s no relief in sight for the long-suffering taxpayer either.

So the only thing that it does do, if anything, is enable reporting, we’ve heard, or perhaps require reporting. Well, it’s not necessary to enable reporting, because reporting is a thing that can take place anyway. We’ve heard from the other side about this great information-gathering exercise.

Chlöe Swarbrick: Come on, Chris—you’re smarter than that.

CHRIS PENK: I’m not smarter than this, Chlöe Swarbrick, so there—gotcha! We can make light of this, but the point is that enabling reporting is not needed. A witch hunt or a fishing expedition or an information-gathering exercise can take place. It already has taken place quite recently as that; we’ve heard that as part of the justification for this legislation. So do we need it to require reporting? Well, no, because a Minister of the Crown, be it the revenue Minister or anyone else, can require Government agencies to do it. That’s the point of their being.

Chlöe Swarbrick: That’s not for ever, though.

CHRIS PENK: That’s the point of having elections. It’s not for ever, no; we have elections and people can stand for election and they can say that they stand for certain things. As the member of the House is very fond of saying—and she’s right in this—everyone’s got an ideology, there’s politics in everything, and so there should be. We can all be judged on that. We can turn up to the New Zealand people every three years, we can say this is our tax policy, we can say, “Vote for us or don’t vote for us on that basis.” We don’t need a law that says it’s going to be enabled or required that we’re going to have a measuring against these principles. By the way, earlier in the debate—

Chlöe Swarbrick: Which one don’t you like?

CHRIS PENK: Which one don’t I like? My argument is that there’s no need for this legislation. As it happens, there has been a good discussion when—I’ll choose my words carefully—we’re not allowed to refer to the absence of members in the House. Earlier this evening, there was a good discussion about certain principles that were less favoured by Andrew Bayly, our spokesperson in that regard—I’ll defer to him; I don’t know these things quite so well myself, but, I mean, it seems obvious that we can have these debates in a rational environment, in a political setting such as this, and if we have an election, and there’s nothing to stop us getting the data.

Anyway, I’m wasting my time being heckled by Chlöe Swarbrick, because the general public have got a pretty good understanding. I don’t buy the argument that we need this to somehow educate the public. They’ve got a good instinctive feel for tax policy. They know what they like; they know what they don’t like. The Government doesn’t even agree with itself, and it certainly doesn’t agree with its so-called coalition partners or support or whatever—some support they provide. They’re all at sixes and sevens—in this inflationary environment, it’s more like thirteens and fourteens, but after tax it’s probably eights and nines.

The New Zealand public understand tax well. They’re going to make sure that the current Government is the former Government very soon, and then they will understand tax a bit better themselves.

VANUSHI WALTERS (Labour—Upper Harbour): Thank you, Madam Speaker. I’m going to begin by commending Minister Parker and Minister Russell for their commitment to informed governance in an enduring way. Good data requires time, that is entirely the point of this bill. But much like my colleague Chlöe Swarbrick, I’m a little bit perplexed tonight. I’m perplexed by the “Nothing to see here behind the curtain” sort of conversations that the Opposition members have been having this evening. But I’m also perplexed about what it is they actually believe. I can’t put my finger on it. Is it (a) that regardless of what the data shows, this data should never inform governance thinking, regardless of what it shows? Now, that is perplexing. Or is it (b) let’s not look at the data because that might legitimately inform governance thinking? That they don’t want to do that is entirely perplexing. On this side of the House, data is important. On this side of the House, good governance means eyes open to real data. I commend this bill to the House.

Hon PHIL TWYFORD (Labour—Te Atatū): I want to devote and dedicate this very short call to the principle of vertical equity, which is the extent to which the tax system is progressive. Tax is progressive if people with higher levels of economic income—that’s not just earned income from working, but it includes the value of assets—

Chlöe Swarbrick: You’re talking my language.

Hon PHIL TWYFORD: Yup. People with higher levels of economic income pay a higher proportion of that income in tax. A progressive tax system does not mean that every tax is progressive. For example, GST is regressive, relative to income, but the overall system ought to be. In practice, wealthy people should pay no lower an average rate of tax, relative to their economic income, than middle New Zealanders. And that is what they’re afraid of.

BARBARA KURIGER (National—Taranaki-King Country): Thank you, Madam Speaker. Well, I haven’t taken part in most of this debate up until this hour of the night. I guess, on this side of the House, we get the fact that data is important; recording, measuring, and managing is important. However, the arguments that we don’t buy into over here is we had quite a lecture around fairness before. Fairness is subjective, and fairness is related to ideology. Therein lies the difference between one side of the House and the other.

Yes, Governments need to be informed, but when it comes to fairness conversations, we’re always going to have some sort of differing view around taxation systems. Therefore, the National Party opposes this bill tonight.

ANNA LORCK (Labour—Tukituki): I’ve just heard in the House that we can have differences of opinion on what fairness is. It’s something that I think shows such a significant difference between why we need to tax in a way that ensures those who actually earn more pay a better, fairer proportion of tax. One thing I’ve also heard tonight, as the final speaker, is that the National Government keeps saying—

Simon Court: Not yet.

ANNA LORCK: National Opposition keeps saying—but when they were in Government, they increased GST. They said they wouldn’t, they gave New Zealanders a so-called “tax cut”, and then they went back on their word. They said they wouldn’t do anything anymore, and they taxed New Zealanders more GST. That speaks volumes about what the National Party really plans for New Zealand. They cannot be trusted on tax. They will tax, tax, tax Kiwis all the way if they ever—ever—get into Government. I hope they don’t.

A party vote was called for on the question, That the Taxation Principles Reporting Bill be now read a third time.

Ayes 75

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

Noes 41

New Zealand National 31; ACT New Zealand 10.

Motion agreed to.

Bill read a third time.

DEPUTY SPEAKER: I declare the House in committee for consideration of the Land Transport Management (Regulation of Public Transport) Amendment Bill.

Bills

Land Transport Management (Regulation of Public Transport) Amendment Bill

In Committee

Parts 1 and 2, the Schedule, and clauses 1 to 3

CHAIRPERSON (Hon Jenny Salesa): Members, the House is in committee on the Land Transport Management (Regulation of Public Transport) Amendment Bill. Members, we come first to Part 1.

CAMILLA BELICH (Junior Whip—Labour): Point of order. I seek leave for all provisions to be taken as one question.

CHAIRPERSON (Hon Jenny Salesa): Leave is sought for that purpose. Are there any objections? There is none. The question is that Parts 1 and 2, the Schedule, and clauses 1 to 3 stand part.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair, for the opportunity to take a call on this committee stage of this bill and there are a number of questions for the Minister in relation to the bill. Firstly, I’ll note that in Supplementary Order Paper 419 there’s some changes that have been proposed, and I’d be interested for the Minister to take a call and to explain those changes to the committee and what the purpose of those changes are. I think it’s important to have that put on the record given, given that this bill’s already been through a select committee process.

The second question, really, is in relation to the purpose statement or the purpose principle, “Section 115 amended (Principles)”, in clause 9 that this bill changes in terms of the operation of public transport. I’d like the Minister to outline and actually provide some justification for the legislative change. Because what we heard in committee—and we’ve heard in previous debates on this piece of legislation—is that this bill was needed to fix the unreliability in our public transport system. This bill was needed to make sure we could electrify our buses. This bill was needed to make sure that the buses were turning up on time. And the question was asked during the committee stage of officials: did the public transport operating model stop regional councils operating public transport from being able to negotiate electric buses as part of the contract? Did it stop them from negotiating wages as part of that contract? Did it stop them from negotiating terms and conditions as part of those contracts? The answer was very clear from officials that, no, the public transport operating model (PTOM) did not. It did not stop those issues from being contracted.

The Government, in my opinion, used COVID, used the fact that we lost a significant portion of our bus drivers during the COVID lockdowns, to basically try and say we need to change the law. That has been, I think, a misconception of the real issues here. So I’d like the Minister to provide justification as to why those principles needed to actually be changed and why the issue of efficiency and value for money has been reduced from being a top priority to being a low priority in that list of principles.

The next question I’ve got for the Minister is in relation to the question about how this legislation now allows for councils to, effectively, run public transport services in-house without having to go through a tender process. My understanding is that through the regulatory impact statement the officials didn’t recommend that as the option, but that was rejected by the Government and I’d like the Minister to answer and outline to the House why this Government thinks that in relation to the operation of our public transport systems, there shouldn’t be a competitive tendering process to ensure that taxpayers get good value for money.

Hon DAVID PARKER (Minister of Transport): Perhaps dealing with the questions in the reverse order to which they were asked, with the last question answered first: the Labour-led Government believes that we can trust local authorities to efficiently run their public transport services and if they want to run them in-house, they can do. They don’t want to have inefficient or overly expensive public transport services, but they do want them to be sustainable, both environmentally but also financially sustainable.

In respect of the duties or the key principles that are in replacement section 115, the member in his question suggested that the efficiency objective is—well, if I understood his question correctly, he asserted that the efficiency and value for money objective is a lower objective than the others. They’re all ranked equally. The prior system required competition to be put ahead of all of the other principles. Now, efficiency and value for money is given equal weighting. In respect of what were the outcomes of the prior system, yes, the Government believes that the PTOM model did put undue focus on lowest cost tendering that led to unsustainable contractual arrangements by people effectively bidding down labour costs in order to win the contract. And, at the end of that, we were hundreds of bus drivers short and we had lots of bus services that weren’t running in our major cities. As a consequence, public transport became less reliable, and fewer people were using it. That undermined the viability of public transport and it also increased traffic congestion.

Finally, in respect of the issues in the Supplementary Order Paper, they really are all technical. They’re shown in track changes in the Supplementary Order Paper on the Table, and members can see that they are technical with the possible exception of the amendment to section 150, in clause 19, with the insertion of new subsection 3A, as it is currently. The explanatory note says that the insertion of that new subsection 3A into section 150 of the Land Transport Management Act relates to matters the Minister must consider before making the regulations regarding exempt public transport services. Those subsections do not provide the extension of the category of exempt public transport services to include appropriate interregional services. New section 3A provides for how those subsections apply where regulations relate to interregional services.

There was a related amendment made at the select committee, but the consequential amendment to section 150 wasn’t made, and is by the Supplementary Order Paper.

CHLÖE SWARBRICK (Green—Auckland Central): Thank you, Madam Chair. Just for the sake of informing officials at the start of my call, I will be going to Waiheke. So I was obviously, in the last bill just before, applauding the Minister in his former role as Minister of Revenue around the work that he’d undertaken. But in this one, as Minister of Transport, I have got to say he’s been dragging the chain on the issue of the Waiheke ferries, he may know, with the previous Minister of Transport on this issue, as well.

So just for the public who may not potentially be able to follow this one along at home, what we are talking about here is a move away from the Public Transport Operating Model (PTOM), as put in place by the former National Government—then the Minister of Transport, the Hon Steven Joyce. This is the sustainable transport framework, or something along those lines—the sustainable public transport framework—which will allow for councils, finally, local authorities, to run public transport services themselves, as well as a range of other criteria that are outlined in the legislation through regulations. That is the marked change that Simeon Brown was just kind of referring to; the fact that there is no longer this requirement to contract out.

So in the PTOM there are still a number of issues with regard to how the Minister previously could prescribe what are called “exempt services”; services that are not subjected to—even within that contracted out PTOM framework for there to be services that are, for example, meeting cost and servicing requirements for public transport. It’s typically presumed that public transport services operating within the PTOM are those which are considered integral to the public transport routes by local authorities.

We currently have a situation in Tāmaki-makau-rau where we have one outlier amongst routes that are considered integral to the public transport network of that city by the local authority here—by Auckland Transport as the council-controlled organisation for Auckland Council responsible for this—and that is the Waiheke ferry route. That means that the Waiheke ferry route is not subjected to expectations and criteria on servicing and cost. And it has meant that my constituents on Waiheke Island have been subjected to, for at least the past decade, serious concerns with regard to the level of servicing and the cost of that service provision for them.

This has led to Auckland Transport—an organisation not particularly renowned for its advocacy—making it explicitly clear that they need the Government to remove the legacy of that exemption decision, made by the former National Government under pretty dubious means, I have to say. I did an OIA on this and found approximately 300 pages of advice where officials were making it really clear to the former National Minister not to provide this exemption because it would result in precisely the anomalies that we’re now seeing at this point.

But my written questions to the Minister have demonstrated that this shift from the PTOM into the sustainable public transport model is going to see those exemptions grandfathered. So we’re not going to deal with this issue of this one outlying exempted service, which is not even currently required to meet the criteria of the PTOM, which the Government itself is saying is not good enough.

So my question to the Minister is how much longer is it going to take for him to revoke that exemption, which is a simple Order in Council process? I know that only about a month or two ago, we finally had the independent contracted report published. And I asked a range of questions to the Minister on that as well. And it transpired that the former Minister had not undertaken any of the recommendations of that independent report that they had received at the end of last year. So I’m just wondering how much more time is necessary. How much longer are my constituents on Waiheke going to have to wait for that exemption to finally be removed? Because, Minister, the evidence is overwhelming. The report itself made it abundantly clear that there are some very evident things that the Ministry of Transport, that Waka Kotahi can do to start to get the ball rolling on this. But, to date, and as exposed in written questions, it doesn’t appear like too much has been happening.

Hon DAVID PARKER (Minister of Transport): Thank you, Madam Chair. The member is correct that the passage of the Act doesn’t revoke the exemption and that there would have to be an active decision taken in respect of the exemption to revoke it. I’m not in a position to give the member an answer as to when those decisions will or will not be taken, tonight, but I will undertake to get back to the member within two weeks with some further information.

CHLÖE SWARBRICK (Green—Auckland Central): Just in closing this back and forth with the Minister, I wanted to thank him for committing to get back to me on that point. There is an outstanding letter with his office that I sent a few months ago on this issue in particular, so I’d very much appreciate that before the close of House business. Thank you.

SIMON COURT (ACT): Thank you, Madam Chair. Look, it’s wonderful to have a new Minister in the chair, a new Minister of Transport, with an almost unblemished record when it comes to transport. But, Minister, perhaps you’d like to enlighten the House and those at home watching or listening, or maybe those who might click on Parliament TV at some point in the future, to understand how we got to this point. Minister, how is it that when consulting on apparent improvements to the delivery of public transport services in New Zealand—those services which help, you know, workers get to work, students get to school and uni, and so on, how is it that even though the current model requires a competitive and efficient procurement of public transport services, so that ratepayers and the taxpayer through the National Land Transport Fund get value for money and so that public transport users get an efficient service—I mean, we wouldn’t want buses just running around the place empty all day, would we? I mean, no one’s ever seen that, or with one forlorn person sitting in the back of a $100,000 or $200,000 vehicle on some rarely trafficked urban route. What we would want to see is efficient public transport.

So, Minister, perhaps, given that you’re a relatively new Minister to the role, the previous Minister wore a number of different hats, and I’m wondering if maybe you could explain how, in clause 14 of this Land Transport Management (Regulation of Public Transport) Amendment Bill, and the Supplementary Order Paper, which has made some changes to what we saw at the Transport and Infrastructure Committee—how is it, in clause 14(1)A), that this amendment proposes to delete “having regard to the desirability of encouraging a competitive and efficient market for public transport services” and to replace it with “the views of the territorial authorities in the region”. For those laypeople listening at home, that means councils. So, delete “encouraging a competitive and efficient market for public transport”; add in “the views of territorial authorities in the region”. Minister, forgive me, but I assumed that territorial authorities were actually procuring the public transport services, so we would assume their views are taken for granted. I mean, if you’re procuring something like a bus service from the private sector, you would assume that you’ve taken your own views into account when writing the request for tender or the scope of services. But maybe you can’t assume anything in 2023 after six years of a Labour-led Government. Isn’t that right, Simeon Brown? Can’t assume anything.

Then, “After section 124(c)(v), insert: (vi) the views of the public transport workforce and its representative unions”. Now, imagine trying to deliver public transport services for people trying to get to school or uni or get to work across the city—or, as some of my friends and family do, catch a bus on the Northern Express busway from the northern suburbs of Auckland into the city—and it turned out that instead of an efficient and competitive public transport service, what’s going to happen is, after this bill’s passed, somebody’s going to go and ask the union whether they would like to keep working as bus drivers and whether they think the route is the right route, because when adopting a regional public transport plan, it’s the unions that are going to have the final say as to what the bus services and routes look like. Not the customer; not the ratepayer, who’s paying a significant proportion of the operating cost; not the taxpayer, who’s paying an also significant proportion of the cost through the National Land Transport Fund subsidies; not the customer—the union.

Minister, thinking back to a time when there was a former transport Minister who was also the Minister of workplace relations and pushed through the Fair Pay Agreements Act and often talked about himself being a champion of the wakas—perhaps, Minister, this is a mistake. This is a legacy. Maybe this should go on the bonfire of policies that the current temporary Prime Minister, Chris Hipkins, may have wished to put on the bonfire but missed. Minister, would you care to explain how on earth the views of the unions take precedence even over public transport suppliers, those private sector operators who supply the quarter-million-dollar buses, or the customers? How on earth do unions have precedence, Minister?

Hon DAVID PARKER (Minister of Transport): The member’s wrong if he asserts that the public transport workforce has the final say on these matters. It is one of the matters that’s taken into account. Why is that sensible? The member may have recalled some industrial disputes, which was one of the underlying reasons why it was very difficult to recruit bus drivers, because routes were being run in a way that they couldn’t go to the toilet or have morning tea during their shifts because the way in which the schedules were being run didn’t even allow them to go to the toilet periodically. So I have no problem with those viewpoints being taken into account.

In terms of the higher standard that is accorded to principles which are high-level principles that sit over those taken into account in matters later in the Act, those higher-level principles include, at amended section 115, inserted by clause 9, as I already mentioned to Simeon Brown, that “public transport services should be provided in a way that assists—(i) public transport investment to be efficient; and (ii) public transport investment to give value for money.”

CHAIRPERSON (Hon Jenny Salesa): Before I call the member again, I would warn him to be respectful. One of the things he said earlier on was that the Prime Minister is a temporary Prime Minister. He’s not—he is the Prime Minister. You will be respectful.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I just want to come back to this clause 14 which amends section 124 of the primary legislation. As you’ve raised, if bus drivers don’t have time to get out and use the bathroom or take a smoko break or a vape break in between their shifts and assuming that there are already rules and regulations that stipulate how many hours commercial drivers can drive—I understand it’s 11 hours in a 14-hour shift that they’re legally allowed to operate a heavy vehicle and that they must have regular breaks—how is it, Minister, that even though fair pay agreements have been passed, even though there already exist employment laws and this Government has been a Government for six years, how is it, Minister, that under this Government, bus drivers weren’t able to take a toilet break? What responsibility does the Minister take or the Government take for that?

Hon DAVID PARKER (Minister of Transport): Thank you for that question, because it’s what you call a lob at the net. You know, the need for this is illustrated by the fact that under the current system, schedules were arranged in a way that was so impractical. You will get better outcomes if you talk to people as to whether these outcomes are practical. This isn’t about the statutory maximum hours to be worked or the break that’s needed every four hours; it was about simple things like whether routes could be run in a way that were fair to the drivers in order to attract drivers to the routes.

SIMON COURT (ACT): Thank you, Madam Chair. Well, Minister of Transport, thank you for that explanation. Because, of course, an employer who wished to secure drivers to operate vehicles that could be worth a quarter of a million dollars, that meet the highest standards for emissions controls, Euro 5 or Euro 6 turbo diesel buses, or, if they have the ultimate luxury—driving a low-emissions or electric vehicle or hybrid bus around our major metros—you’d think that if a public transport operator, a private sector bus operator, had tendered for a contract, assuming that in order to get paid they would have to deliver a certain number of services that met the schedule and they were there to pick up the passengers, that they would have provided, in their tender offer and in the way they manage their workforce, for regular breaks. Because there has not just been a driver shortage, there’s been a worker shortage in New Zealand. New Zealand’s been in a global war for talent, which includes competent heavy-vehicle - trained drivers—

Hon Damien O’Connor: Oh, here’s the market genius.

SIMON COURT: —heavy-vehicle - trained drivers. The Associate Minister of Transport, the Hon Damien O’Connor, suggests that the ACT Party are full of geniuses. Well, Dr James McDowell here, he does have a degree which might help. I’m a civil engineer and I’ve worked in transportation, Mr O’Connor. But the person here that you should be directing your questions to, Mr O’Connor, is the Minister of Transport, David Parker, who sits in the chair and who has offered himself up for questioning.

So, Minister, I just need to try to get my head around this. A public transport operator has invested millions or tens of millions of dollars in very expensive pieces of equipment—a quarter of a million-dollar buses. They’re air conditioned. They’re state-of-the-art. They have to have a certificate of fitness every six months. The drivers have to have been trained to a heavy vehicle standard. They have to pass alcohol and drug tests. And they have to be paid a reasonable rate. If they’ve immigrated to New Zealand, they have to be paid the minimum wage, according to the immigration—sorry, the median wage. The median wage. According to the immigration expert—one of the ACT geniuses, the Hon Damien O’Connor—they’ve been paid the median wage.

Hon Damien O’Connor: Is that too much?

SIMON COURT: So not only are they well paid—no, it’s not too much. It’s fine. That’s up to the bus company operators.

So here’s the problem I’m failing to understand. This bill proposes that, for some reason, bus companies won’t give drivers a bathroom break, even though this Government’s been in charge of WorkSafe, it’s been in charge of the Ministry of Business, Innovation and Employment, so it could go in and investigate workplace safety issues or a failure to meet minimum standards. Clearly, after six years, that hasn’t been a priority, because here we are tonight, debating a bill that would actually, according to the Minister himself, help resolve the issue of where drivers get to use the bathroom. So I’m really interested, if a bus company operator, who’s invested tens of millions of dollars in equipment, needs to put drivers in the driving seat so they can pick up passengers, so they can then invoice the council, the regional council who’s commissioned them, in order to get paid, I would have just assumed that you’d want to give better conditions to drivers, and that if there was a circumstance where somebody scheduling buses had forgotten to leave enough time for a bathroom break, that’s something that would be brought to the attention of management and resolved quick smart because the last thing you want is your drivers walking away and leaving a quarter of a million dollar bus parked in at the side of the road, so you can’t deliver the services.

Now, the Hon Damien O’Connor, I know you’re not a genius but that’s what the private sector does. They try to put people in the cab so they can operate a bus or a truck so they can deliver the service and then invoice their clients. But, apparently—apparently—this bill has to legislate so they can have a bathroom break, even though this Government’s had all the power to check whether people get a bathroom break, for six years.

Minister, are you absolutely sure that the views of the public transport workforce need to be taken into account when adopting a regional public transport plan because they might not get a bathroom break?

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair. I’d like to take up a couple of points in relation to the workforce shortage that the Minister of Transport raised earlier. Of course, this bill is being promoted by the Government to apparently solve the workforce shortages that we have. I’m not sure, Minister, whether you have seen the news, because, on 16 August 2023, which was—what’s that?—seven days ago, Auckland Transport put out a statement saying relaxed immigration settings help end bus driver shortage in Auckland. So, Minister, the bill hasn’t been passed and we no longer have a bus driver shortage in Auckland. In fact, Auckland Transport is quoted saying, “It was a big help from the government relaxing the immigration settings for bus drivers, and putting in that pathway to residency. We’re applying those learnings to resolving the crisis in [ferries],”. So, Minister, is it that the legislation needs to change, or was it that the former Minister of Transport, who was also the Minister of Immigration, was just a little bit caught off guard and not really thinking about, actually, how he should be talking to himself about the fact that as Minister of Immigration he could solve some of his transport issues? Maybe he was distracted doing other things instead. So I’d like you to answer that question.

The second question is in relation to clause 7, which replaces section 27 with: “Local authority may hold interest in public transport services and infrastructure”. The Minister said earlier, “Well, it’s a matter of trust—it’s a matter of trust. We’re going to trust local government to operate these services efficiently and reliably.” Well, why is it that this Government feels that it can trust local government to operate public transport services in-house efficiently? And now it’s going to say, “Three waters, we’re going to take that all away because we don’t trust you.” So the Government can’t have it both ways. But the point in that is that this bill takes it away from being operated in a competitive tender process, and officials recommended against that. I would like to understand how the Minister is going to measure, under this legislation, whether or not local authorities, if they were to operate those services internally, are operating them in a way which is efficient, providing good value for money, or is he just going to leave it up to “trust”?

Hon DAVID PARKER (Minister of Transport): Thank you, Madam Chair. It is correct that immigration has been part of the answer to resolving the driver shortage—I accept that.

Simeon Brown: It’s solved!

Hon DAVID PARKER: Well, it was solved through Government intervention that was necessary also to provide more money to pay for higher wages to be paid for bus drivers because they had been competed down under the competitive model to a point that the driver—

Simeon Brown: You did that within the Public Transport Operating Model, though.

Hon DAVID PARKER: Well, we had to fix it because the current model—we had to fix it using more Government money because the current model had driven down wages to the point where drivers could not be attracted.

Hon Member: Terrible blimmin working conditions.

Hon DAVID PARKER: It is terrible that that was the position that was reached, and it was a failure of the current model that led to that.

In respect of the matter that that he raised as to clause 14 of the bill, there are lots of cities around the world that own their own public transportation systems, and their public transport systems are quite often better than ours.

SIMEON BROWN (National—Pakuranga): Madam Chair, thank you very much, and I’d like to ask the Minister whether or not the existing legislation allows for public transport operators to be able to put in place, in the tender, particular pay rates? Does the legislation need to be changed in order for them to be able to make the pay and conditions a non-negotiable term?

Hon DAVID PARKER (Minister of Transport): The practice under the current legislation has been to award tenders to the lowest cost operator. The way those operators have lowered their costs is to compete on wages in a way that drove down wage costs to unsustainable levels, that meant that they couldn’t recruit bus drivers.

TERISA NGOBI (Labour—Ōtaki): I move, That the question be now put.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair. My question was whether or not the existing legislation allowed for the wages and conditions to be a non-negotiable term in the tender process.

Hon DAVID PARKER (Minister of Transport): My answer was that it’s the wrong question, because the outcome was the one that I have repeated on a number of occasions, which was that the practice under the current model drove down wages to the point where the bus drivers couldn’t be recruited.

SIMON COURT (ACT): Thank you, Madam Chair. Minister, I just want to come back to clause 6, “Procurement procedures”, before the House moves on to the next part of this bill.

Procurement procedures. So clause 6 amends section 25 of the Land Transport Management Act and it removes the requirement that the procurement procedures under the Land Transport Management Act don’t apply “to [the] procurement of a public transport service.” Now, Minister, we haven’t really had a clear explanation of why that is.

Of course, there’s been some concerns that tenderers have lowballed. If there’s a price-quality component where some of a tenderer’s qualities are evaluated and given a weighting, and the price is evaluated and given a weighting under a typical price-quality tender evaluation process, it may well be that the local council or regional council procuring a public transport contract got the weighting wrong. Maybe instead of the qualities that they could have given more weighting to—like, for example, I don’t know, driver pay and conditions, smoko breaks, bathroom stops, who knows; massages—they could have put anything in there as a quality measure and given it a weighting.

But if regional councils and local territorial authorities didn’t do that and they gave price a greater weighting, well, isn’t that something that the New Zealand Transport Agency—NZTA—through its National Land Transport Fund, through its activity classes for public transport, could have provided some guidance to local government as to what the price-quality weighting could be? Then, wouldn’t it have been far more likely that the type of services offered came in at maybe a slightly higher price but had a different set of qualities.

Minister, if that’s the outcome that the Government wanted, there are a number of different ways to direct it. Yet when we look at section 25, “Procurement procedures”, in the primary legislation this bill seeks to amend, it says 25(2)(a), essentially in approving a procurement procedure, the agency must look at the ability of “persons to compete fairly for the right to supply outputs required for the preferred activities”. Minister, what this will do is it will give councils the almost exclusive right to, essentially, buy services and put the private sector out of business. That’s what they’re afraid of, Minister, and that’s what this bill does. In approving procurement procedures, the agency—we’re talking about the New Zealand Transport Agency, trading as Waka Kotahi—must encourage “competitive and efficient markets for the supply of outputs required for approved activities.” under section 25(2)(b).

Minister, this is a small nation. If we can’t encourage effectively functioning markets for the provision of services—whether it be buses to pick up people and take them to work; or whether it’s for physical works contracts so we can actually build the roads or the bus expressway; or for professional services contracts so that, for example, New Zealand Transport Agency, trading as Waka Kotahi, can actually get some advice about how to procure and maybe add some additional weighting to the quality metrics so that maybe they have a higher weighting than price—Minister, all of these things are available to the agency. They’re available to a Minister who might want to set direction through a Government Policy Statement on land transport, as the Minister did just last week when the Minister released the Government Policy Statement on land transport 2024-27, which included activity classes for public transport, where all of those directions are signals to be given.

Minister, isn’t there a risk that this sets a precedent that by removing the requirement to encourage competitive and efficient markets for the supply of outputs required for transport services, that it actually removes one of the pillars of procurement that the taxpayer demands from a Government that is authorised to spend on behalf of the taxpayer?

Because if we can’t have competitive and efficient markets for the supply of outputs for one type of transport service, Minister, is it likely that will also carry over into other types of transport services? Does this set a precedent, Minister, and was there any other way to achieve this measure?

Hon DAVID PARKER (Minister of Transport): As a matter of ideology, the last National-ACT Government, when they set up the Auckland City, tried to distance the control of the Auckland Council over all the things they owned and ran. That was a matter of ideology from Rodney Hide at the time, trying to force the corporate model upon Auckland City even when they didn’t want it. We’re not requiring them to run any other model, but we’re allowing them to run services as they think fit. They do have to, obviously, meet cost-effectiveness and efficiency objectives as well as other objectives, and a sensibly governed city would.

I would again make the point that there are many other cities around the world, including in the Land of the Free—the United States of America—or many parts of Europe, many parts of the world, where councils run their own public transport systems because they believe it to be more effective.

CHAIRPERSON (Greg O’Connor): The question is that the Minister’s amendments set out on Supplementary Order Paper 419 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 41

New Zealand National 31; ACT New Zealand 10.

Amendments agreed to.

A party vote was called for on the question, That Parts 1 and 2, the Schedule, and clauses 1 to 3 as amended be agreed to.

Ayes 75

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

Noes 41

New Zealand National 31; ACT New Zealand 10.

Parts 1 and 2, the Schedule, and clauses 1 to 3 as amended agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Greg O’Connor): Madam Speaker, the committee has considered the Land Transport Management (Regulation of Public Transport) Amendment Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Third Reading

Hon DAVID PARKER (Minister of Transport): I present a legislative statement on the Land Transport Management (Regulation of Public Transport) Amendment Bill.

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

Hon DAVID PARKER: I move, That the Land Transport Management (Regulation of Public Transport) Amendment Bill be now read a third time.

This bill amends the Land Transport Management Act 2003, replacing the Public Transport Operating Model—sometimes called PTOM—with a Sustainable Public Transport Framework. The introduction of this new framework will support the Government’s commitment to improving public transport in New Zealand. The change is necessary to address systemic issues in the planning, procurement, and provision of public transport. It’s also necessary to set up the public transport system for the growth that we need to both achieve emissions reduction from the land transport system, and address traffic congestion in our metros.

PTOM was intended to increase commerciality of public transport services and reduce subsidies by ensuring competition for the provision of the service, and has not, however, created a sustainable system, it hasn’t adequately protected working conditions, nor has it provided regional councils with the necessary flexibility to tailor public transport services to the needs of their communities. Cumulatively, we’ve seen a degradation of service reliability and we believe a better system can do better.

One of the key issues with PTOM was the negative impact on the workforce. PTOM rewarded operators with low wage costs and resulted in operators struggling to recruit and retain drivers, ultimately resulting in reduced service levels. Auckland bus drivers were already hundreds of drivers short in 2018—which is long before COVID to deal with one of the points raised by Simeon Brown. Operators couldn’t attract and retain drivers because of poor wages and conditions.

To address these chronic driver shortages, this Government had to intervene. We had to fund increased wages and improved conditions over and above the contract prices that have been locked in under the PTOM model. Once wage rates were increased and we were confident the sector was committed to improving driver wages and conditions, we also provided a temporary pathway to recruit migrant bus drivers. However, the sector needs to be sustainable in the long term rather than the relying on ad hoc measures such as we’ve had to adopt to address these systemic issues.

The regulation of public transport bill represents a critical step in setting the public transport sector up for long-term sustainabilities. These longer-term solutions are found in the systemic changes proposed in the bill. We’ve heard the argument that the objectives of the new framework can be achieved through contract variations under PTOM, but rather than relying on a patchwork of measures to try to resolve systemic issues, this Government’s establishing a framework that drives fair and equitable treatment—the work drills through the entire system, through planning, procurement and the operation of services. Embedding these outcomes in legislation will help effect lasting change in the sector.

I acknowledge that PTOM has played an important role in increasing the integration and coordination of public transport networks, the new framework’s not intended to overthrow the PTOM in its entirety. Key successful elements have been retained, such as regional councils remaining responsible for planning and providing services. Efficiency and value for money remain key considerations when it comes to planning, procurement, and investment decisions.

The Sustainable Public Transport Framework refocuses public transport planning, procurement, and operation to strengthen outcomes, support mode shift and accessibility whilst improving environmental and health outcomes. By enabling in-house service provision and public ownership of assets, public transport authorities will have greater flexibility in how they provide services. They will still be able to contract out services. Where a public transport authority chooses to contract out services, ownership of strategic assets like bus depots can reduce barriers to entry, in fact, facilitating increased competition for contracts.

By introducing new transparency requirements, we increase operator accountability, whether the operator is publicly or privately owned. This will also enable benchmarking of service delivery models, and actually will provide information for those who think that these models should always be provided by an outside party—we’ll have real information as to whether, on occasions, council provision is more efficient. By removing the automatic exemption for interregional services and thereby including them in the new framework, we facilitate the development of more interregional services, and more collaborative planning of these services between regional councils.

Overall, this bill will help us achieve better environmental, social, and economic outcomes. I note that the Supplementary Order Paper made some minor and technical changes to ensure consistency across provisions and clarify provisions to ensure they achieved the policy intent. I commend the Land Transport Management (Regulation of Public Transport) Amendment Bill to the House.

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

SIMEON BROWN (National—Pakuranga): Thank you, Mr Speaker, for the opportunity to take a call—

DEPUTY SPEAKER: Simeon Brown.

SIMEON BROWN: Oh, thank you. Thank you a second time, Mr Speaker, for the opportunity to take a call on the Land Transport Management (Regulation of Public Transport) Amendment Bill, which the National Party continues to oppose. We oppose this piece of legislation because it will not fix the issues facing our public transport networks. It will only increase costs; it will not increase efficiency and reliability, and what we will see is actually a degradation of the services given to the public. And, of course, this Government thinks that they know what is best. They think they know how they can fix the problem, and in fact, they’re the ones who created the problem when it came to the unreliability of our public transport services.

This Government’s very quick to blame COVID when it’s helpful, but they’re not very keen to talk about COVID when it’s unhelpful. In this situation, what this Government did is when COVID came along, of course, many people started working from home, and a lot of bus drivers who were in New Zealand left the country because they were here on visas. They left the country and then this Government decided to not let them back in to the country. The former Minister of Transport, Michael Wood, had the illustrious job of also being the Minister of Immigration—and the thing about that is the Minister of Immigration never spoke to the Minister of Transport, and the Ministry of Transport never spoke to the Minister of Immigration.

Barbara Kuriger: Not even in his sleep.

SIMEON BROWN: Well, not even in their sleep! So what happened was, the Minister of Transport would complain about the fact that our public transport networks weren’t operating, but forgot to think about actually—what about allowing bus drivers, ferry workers, and train drivers back into the country so that we can actually make sure the services are able to operate? So instead, he came up with a catastrophisation and said, “The reason why it’s broken is because of the public transport operating model”. And the reason why they’ve always hated that is because it has a word called “competition”: competition and outsourcing the public transport operations to the private sector. This Government thinks everything should be operated by the Government and not be outsourced to the private sector, and they don’t even believe in competition.

I heard the Minister say, “Well, actually, some of the provisions in this bill might enhance competition.” Well, how’s it going to enhance competition when the bill removes the requirement to have regard to the desirability of encouraging a competitive and efficient market for public transport services? How can the bill even support competition when it takes away the requirement for competition to even be considered when it comes to our public transport operating in New Zealand? And the reason why the National Party opposes this is because we actually believe in the power of competition, in terms of actually delivering better outcomes for New Zealanders and actually achieving the outcomes that taxpayers are paying for.

And this Government—they think that money grows on trees. Well, actually, that money needs to be paid for by someone else, and money is coming from the National Land Transport Fund, which, of course, is being paid for by road users. It’s been paid for by people who fill up their car with petrol or people who pay road-user charges—who are then putting that money into the National Land Transport Fund, and a portion of that is then paid to subsidise our public transport networks. Now, this Government sees that fund as a slush fund, and the more that they can siphon away to be used on whatever they think is an important priority—which isn’t our roads—is a good thing—whereas on this side, we think actually, that money needs to be spent efficiently to get outcomes so that we can invest first and foremost in our roads and then in our public transport network. This Government sees it as a slush fund for their priorities, and so this legislation will mean more of that money is wasted on an unreliable service. It will not be reliable, it will not be efficient, it will cost more to run and less people will use our public transport services, and that is not going to deliver the outcomes that we need for New Zealanders. So the National Party opposes this piece of legislation.

And what’s more—not only all of what I have just said, but the Government also then says, “Well, we’re going to let regional councils not even go through a tender process”—not even go through a tender process. In fact, they will be able to just say, “Well, we think we can operate it more efficiently ourselves. We don’t have to test that against the market; we don’t have to test our proposition against the market to see whether it is more efficient or more cost-effective. We just think we’ll be able to run it ourselves in-house.” So there’s not even a requirement to test that against the market, and we think that is also going to lead to an inefficient and unreliable service, because we see what happens when Government gets involved. They think they know best—you end up with what we see right across the Public Service at the moment, where wait times to get anything from the Government have ballooned. It takes longer to get a hip operation, it takes longer to be on the phone to the New Zealand Transport Authority (NZTA) to report a pothole—it’s like half an hour to report a pothole, when it used to be under a minute to call NZTA.

Simon Court: You can fill one in three minutes.

SIMEON BROWN: “You can fill one in three minutes”, says Simon Court, and I know that because he’s a civil engineer; he’s told me that five times tonight. Well, I can tell you, Mr Speaker, this Government has a terrible record when it comes to our public services and delivering outcomes, and this bill will not deliver better outcomes for New Zealanders. The National Party opposes it.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Speaker. Look, I love public transport and it’s a privilege to take another call in this House this week about the Government’s fantastic work to make public transport better in New Zealand. One of the comments that the other side have been making tonight is around their reliance on immigration to solve some of the challenges we have had around our driver shortage in New Zealand. Now, of course there are times when it is appropriate for us to bring workers in from overseas, but one of the problems with our public transport operating model introduced by the National Government is it has led to a race to the bottom on wages and conditions for drivers. One of the important components of this bill is that it will actually enable operators and councils to lift the conditions and wages for drivers, lift the training opportunities, and continue to grow the number of bus drivers that we have in New Zealand. It’s an excellent bill, and I commend it to the House.

TAMA POTAKA (National—Hamilton West): Before I start, I wanted to pay homage to a great man, a legend, a warrior by the name of James Brown—no, not the movie star, dancer, and singer that many of you are accustomed to, but the leader, the erstwhile rangatira of a tribe called Ngāi Tai ki Tāmaki, who passed away in the wee hours of this morning. He was a man who led the tribe from whoa to go, a larger than life personality and someone who was all about competition in the ferry market on the Waitematā and te Pataka kai o Tīkapa Moana, also known as the Hauraki Gulf.

I want to thank the Minister for the opportunity to speak to the Land Transport Management (Regulation of Public Transport) Amendment Bill and echo my Te Pakūrangarāhīhī colleague, Master Simeon Brown, who articulated the sub-optimal use of land transport funds and other funds slushing around for alternative and quite illusory concepts of urbanising the entire Aotearoa New Zealand nation into public transport use in the cities. That’s what it’s really about. It’s not about the efficiency or the competition of public transport; it’s actually about a more sinister dynamic, I’d call it, that’s come out of this Labour Government to try and make everyone urbanites, to try and make everyone townies, to try and make everyone live in the cities and live in public transport.

But, you know, in 2012, we had the Public Transport Operating Model (PTOM), the great National Party under Sir John Key and Sir Bill English, which focused on a commercial basis, value for money, and competitive and efficient provision of public transport. But now we’ve got a new ideology, we’ve got a new way of doing things. Although well-intentioned, the assertion that the PTOM created problems for wages can be addressed without undermining the entire system.

This bill hatches new principles based on mode shift and union appetites. This is a risk space we don’t need to be in because out there will be a wolf—a wolf that is looking for more taxpayers to pay for these crazy ideas. The Bus and Coach Association, they have discredited this idea. They have said that this bill disregards business realities and market dynamics. Uber, the great company that we use from time to time, opposes this bill; it doesn’t provide any scope for innovation. And Fullers360, that well-known Scottish-owned ferry business on the Waitematā says that it appreciates that the Crown and local government need the ability to bring exempt public transport services within local government control, but their experience has been that this almost unbridled power—remember that term “unbridled power” from the former Labour Prime Minister Geoffrey Palmer—leaves an operator with a permanent sword of Damocles hanging over their business. It’s like ram-raiding through the public transport system.

Now, Labour argues that public ownership of assets and in-house delivery are good. I just can’t keep up, because last week and for the last couple of years they’ve been saying on resource management reform and spatial planning and three waters that councils are not so good at doing things, but this week, they are very good and can be trusted on public transport—bizarre flip-flop or flip-flap. Gymnastics all over again.

Now, scrapping PTOM takes public transport backwards. It removes efficiency. It removes a competitive market-based approach to service delivery. It removes transparency. It removes common sense. Even the Ministry of Transport in the regulatory impact statement announced that enabling in-house provision without contracts performs worse than the status quo. But that is exactly the pathway that our colleagues in the Labour Government want us to take now. The sustainable public transport framework will stifle innovation. It won’t win the Nobel economics prize, Mr Brown. It might win the Nobel Peace Prize; we don’t know.

We see this: in section 25 and section 116 of the Land Transport Management Act. In our view, this bill won’t fix the problems around wages and conditions. Immigration is a better way to address those issues. Competition creates efficiency, not regulatory omnipotence and omniscience that this bill brings yet again. It doesn’t like efficiency. Tax more, public transport more, and everyone will be happy. Kei te hē—it’s wrong. Kia ora tātou.

TERISA NGOBI (Labour—Ōtaki): Thank you, Mr Speaker for the opportunity to take just a short call tonight on the Land Transport Management (Regulation of Public Transport) Amendment Bill. I am lucky enough to sit on the Transport and Infrastructure Committee, one of the hardest-working committees, that was able to work through this bill. We heard from over 50 submitters, good submitters, and, of course, I want to thank those submitters for taking the time to submit on the bill.

This bill establishes, as we’ve heard, a sustainable public transport framework that will replace the PTOM—the Public Transport Operating Model—that we have at the moment, which we clearly know does not work, which we clearly know does not support workers. We’ve heard about the terrible working conditions of the bus drivers and so on.

So the sustainable public transport will make sure that we focus on strengthening employee welfare, it improves our environment and health outcomes, and, of course, it improves our public transport. It’s a no-brainer, and I commend this bill to the House.

SIMON COURT (ACT): Thank you, Mr Speaker. Look, it’s remarkable that here we are, Wednesday, 23 August 2023. The House is sitting under urgency to debate a bill around the regulation of public transport, as if this was the most urgent thing that New Zealand faces right now. Not an affordability crisis for people wondering whether to pay a bill or put tyres on the car, not rampant crime, including crime, actually, at public transport facilities like bus stops and bus stations in places like Tauranga and the Bay of Plenty. And certainly not issues of divisive co-governance. No, we are here to debate the regulation of public transport.

What does this bill hope to achieve? This bill hopes to modify the Public Transport Operating Model—a model where councils procure, through a public and open tender process, bus companies to supply buses and drivers to pick up passengers and take them to their destination. It’s worked quite well, apart from a few hiccups. And it’s those hiccups which have given the Government cause and excuse to pass a bill which makes some quite significant changes not just to the way public transport is procured and operated but also has implications for the efficient allocation of taxpayer funds and ratepayer funds to public transport and transport services in general.

So I’m just going to give a quick rundown of what this bill does. It removes the requirement for local councils to tender out for services, which means ratepayers won’t know if the services that are being delivered are being delivered in a cost-effective way. They won’t know because there’ll be no prices to compare. Councils won’t know whether they’re getting value for money because there’ll be no price to compare. Passengers won’t know whether the service they’re getting is value for money because there won’t have been an opportunity for those procuring and delivering and managing your service in local government to work out whether it’s the most efficient way to deliver it.

Because it may well be that a public transport operator—a bus company—actually knows something about passengers, knows something about where people work and live and go to school, knows something about traffic congestion on the route. Maybe they even know something about where people are most likely to wait and congregate for a bus. For example, if there’s a shopping centre where people can wait under cover or maybe grab a coffee or, at the end of work, go to the mall. Maybe public transport private sector bus companies know things that local government transport planners don’t know. That is why we generally tender for services when the public sector is procuring them: to discover the things that central planners don’t know.

Even eloquent, intelligent transport planners like the Hon Julie Anne Genter, who was once associate transport Minister, and will no doubt be offering her own perspective on this bill in a very short amount of time. Not even the Hon Julie Anne Genter has perfect knowledge of where a bus might go, where the passengers might be waiting, and what the intentions are of those individuals who might get on a bus and go somewhere. That is why the public sector issues requests for tender to discover things that the public sector doesn’t know.

Well, if only that’s the problem with this bill. What else does it do? It proposes to reduce greenhouse gas emissions. It can’t reduce New Zealand’s greenhouse gas emissions because greenhouse gas emissions are capped by the emissions trading scheme. Only the climate Minister can reduce New Zealand’s greenhouse gas emissions by allocating the number of credits that are auctioned under the emissions trading scheme every year. If the climate Minister wishes New Zealand’s greenhouse gases to be lower, they can simply lower the cap on our national emissions for any given year. This bill doesn’t reduce emissions at all; it just reduces emissions from a few buses and allows another industrial or private person to emit more carbon as long as it’s within the annual cap.

This bill, apparently, according to the Minister who spoke on the third reading, will reduce congestion. It will allow public transport services to be delivered in a way that reduces congestion. Well, I know the Minister lives in Auckland, but he doesn’t live in the part of Auckland I do: Te Atatū Peninsula in West Auckland. Te Atatū Peninsula has been a blue-collar workers suburb for a long time. A lot of people in Te Atatū rely on the bus to get to school, to get to Henderson town centre or the night markets to do a bit of shopping or to get to the city if they are working in professional or office space jobs.

This is what Auckland Transport and Waka Kotahi have done to reduce congestion using public transport. This is just one example, and I’m sure there’s more to come. Described as “high quality public transport” by the former transport Minister Michael Wood, they’ve built bus stops on the side of the motorway at Te Atatū Peninsula, now they’re building bus stops on the side of the motorway at Lincoln Road. They fully expect that West Aucklanders, working people, will get off the bus on the side of the motorway in Te Atatū Peninsula where 15,000, 20,000, 25,000 vehicles are going past every day, and then cross to another bus stop and then get on another bus. Now, the bus shelters are about as wide as the desks in front of each member of Parliament in this House. That’s how much roof covering you’ve got against a stiff sou’westerly breeze in winter. That’s high quality public transport, according to a former Labour Minister of transport. Has it reduced congestion? No, because the way they’ve configured the bus stops has taken out traffic lanes, which means instead of free-flowing traffic, including buses leaving Te Atatū Peninsula at peak times, now it’s five lanes into two instead of five into three. So even if there was a bus, and we haven’t seen one for a while because they cancelled the services—

Helen White: How does it relate to the bill?

SIMON COURT: —while they reconfigured the bus stops. Hold on, we’re talking about reducing congestion. That’s what the Minister of Transport talked about—

Helen White: How does it relate to what’s in the bill?

SIMON COURT: —instead of—well, hold on. This is Auckland Transport, a council, and NZTA—the Government’s transport agency—co-designing better public transport, Helen Clark.

Helen White: But it’s got nothing to do with the bill, has it?

SIMON COURT: No, no, no, this is what the bill’s proposing more of. A bus would be stuck in the same traffic as all the other cars now. The traffic jam didn’t exist before these public transport improvements. This bill won’t reduce congestion. We have evidence right now of what a Labour Government - led public transport solution for Te Atatū Peninsula in West Auckland looks like. It’s traffic chaos. Buses are stuck in the same traffic as the car. If people ever were to wait at those bus stops which are roundly ridiculed in West Auckland by the working class people of West Auckland—roundly ridiculed—they would get wet in a mild shower, Helen White.

And then we come to the issue of workers’ wages. A Labour-led Government, six years in power, saying this bill is necessary to uplift the terms and conditions and pay of bus drivers. Well, ACT calls nonsense on that because this Government allowed Immigration New Zealand to come to a sector agreement with bus companies and operators and councils to allow them to pay less than the median wage. So I’d like to correct my statement from committee of the whole House when I said “bus drivers are paid the median wage”, this Government, Helen White, who we understand used to be an employment lawyer, should be aware this Government came to a sector agreement which allows migrant workers and local workers to be paid $28 even though the median wage is $29.66. I don’t know, maybe this bill won’t solve that. Maybe this Government could have solved it some other way. Who knows? Maybe the bus drivers will give their party vote to ACT in the next Government because they’ve got more confidence that under an ACT Party Government they’ll get $2,300 as a tax break in the hand every year, up to $78,000, and they’ll be able to decide how they spend their own money.

Well, the truth is the reason that the Government allowed Immigration New Zealand and the bus companies to come to a sector accord is because NZTA and the Government couldn’t afford to pay the bus drivers more. This bill is an incoherent waste of time, pushed around urgency by a Labour Government in its twilight, 2023.

What would ACT do? Well, we’d get on with building the roads, particularly in places like West Auckland, and a north-west busway would be a great idea, extending four-laning through to Kumeū and Huapai where a quarter of a million people are coming to live in the next 30 years, according to the Auckland unitary plan. Currently, their buses are stuck on the two-lane rural roads, the same two-lane rural roads I was commuting to work on in the 1990s. ACT would make sure that the roads are built, that we can restore efficiency and reliability to journey times. So if you are waiting for a bus on a fantastic north-west busway or in Kumeū and Huapai at some point in the future, you’ll know you’ll be able to get your destination on time. That’s ACT’s offer. We reckon Kiwis will give their party vote to ACT.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Mr Speaker, tēnā koutou e te Whare. The Green Party is supporting this bill. It’s been a long journey to get to this point because we’ve known that there needed to be changes to improve the operation and planning of public transport services for quite a long time and it’s ironic, in some ways, that I’ve some of the National and ACT speakers on this bill suggest that things aren’t working that well for public transport at the moment but we shouldn’t change it.

I think everybody knows that things aren’t working very well for public transport at the moment and hence that’s the need to change the framework. Part of that goes back to that ideological decision. I believe it was in the early 1990s that most of these decisions were made by a National-led Government to not allow local authorities to own or operate public transport services, for the most part. I mean, Christchurch was sort of doing it, but for the most part those changes were brought in, and then there was a proposal for changing the operation of public transport at the end of the fifth Labour Government in 2008, and a really good option 3 passed without the public transport management, though. But National repealed that when they got in in 2009 and they worked up this other framework which I don’t think ever had a whole lot of legislation around it. It was more operational or through regulations.

But, fundamentally, what we’ve seen is that if you want to have a well-functioning public transport system with services that genuinely give people choice, it doesn’t work to have a whole lot of different operators. Like, having a whole lot of different private operators is a barrier to the transport planners planning an efficient network everywhere. It was a barrier to bringing in integrated ticketing and integrated fares, and it’s a barrier when the owner of a bus operator suddenly sells it to an overseas hedge fund and then that overseas hedge fund actually doesn’t have any interest in running the service properly. [Interruptions]

No, but I mean, hello. Do National Party members—I mean, obviously National members don’t take the bus, so they don’t understand what happened when Infratil sold NZ Bus and a whole lot of bus drivers left, and then they didn’t even have—like, they had a whole office in Wellington before; they didn’t even have a manager in Wellington for the bus drivers to call because the overseas hedge fund didn’t care and didn’t have any incentive to run a good public transport service. And that’s why it should be directly accountable to elected people at a local level because they have an incentive—a direct incentive—to improve the services to people.

Now I want, for the benefit of the National members who have recently been going around talking about the five countries in the world with the very best roads—Singapore, the Netherlands, Switzerland—all countries that have centrally-planned, excellent public transport. It’s not done through private operators and, you know, less than half the trips in the cities in Switzerland, Netherlands and Singapore—Singapore being the only city—are by car. That’s why the roads are good; this is what we’ve been trying to tell you: if you invest in public transport and operate it properly, so many people take it that then when Hon Judith Collins tries to drive on the road, she will get stuck in traffic.

But they haven’t yet grasped this concept that you benefit the people driving on the roads when you run really frequent, reliable public transport services that are actually connected, and you can’t do that if you have all your services cut up into separate operators. And then when there is a need and suddenly you realise there’s a whole big transport need in one area, the bus operator—you can’t go to them and say we need this many buses and this many drivers. That’s just not how it works.

OK, sorry, I just—you know, they don’t want to know. So, anyway, I mean voters at home should consider this: if you want good public transport services, it’s very important, this Labour Government and the Hon Michael Wood actually did the work on this bill to bring it through. It’s going to pass before Parliament rises. That’s very, very good. If some of the private operators don’t like it, that doesn’t mean it’s not good for public transport services and the people using public transport. Because, when you’re talking about public money on things, if the private operators are raking in big profits and rolling in the money through operating their service, that’s a sign you’re probably paying too much for it. Otherwise, anyway, sorry it’s 11.38 at night.

I just want so much for everyone across the House to understand that we all win from good public transport that’s run for a public good. Even the people who love their cars and want to drive their cars and they’re so close—they’re so close in picking those five countries with the best roads, they almost got it. Because those five countries have the sort of transport policies that the Green Party’s talking about, so if you want good roads you need really excellent public transport. You need excellent safe walking and cycling, You want slow speed limits in your residential areas, so your kids can walk and cycle to school and actually have some car-free areas, because that’s actually good for the businesses down there. And we’re going to have, thankfully, the opportunity for public ownership and public operation of public transport services so that can be run for public good and the people working in that sector can have well-paid jobs, because that’s how you get a workforce of trained people who are there and able to run the services and you don’t have a whole heap of cancellations like we had in the last year.

What would be even better and a really good reason—if the members in the National Party actually care about competition, having private ownership of bus depots and the vehicles is a barrier to competition. If you want to have better competition, it was one of the private operators came to me and he was telling me about Perth. He was from Perth and what they have done in Perth is they weren’t getting enough competition so they said automatically whoever wins the contract gets the right to use the depot, because private ownership of a depot is a barrier to entry for new operators. So if you want to have an efficient, well-run public transport service that’s working well for people, public ownership of the depots as a strategic asset is really, really important. Otherwise you’re not going to get competition, you’re going to get one tender per contract.

I can see I’m not convincing them. So I’m just going to stop and say thank goodness they’re not in Government and God forbid it should happen after 14 October, because those people are incompetent.

HELEN WHITE (Labour): Mr Speaker, thank you. It’s a delight to take a call on this bill. I was on the select committee with the Hon Julie Anne Genter and my lovely friend Terisa Ngobi, who is in the House tonight.

It was a relief to see legislation come through like this, because what this does is it gives choice and power back to the local bodies. Instead of imposing on them a requirement that they must contract out services, it allows them to decide whether they will or not, whether it’s in the benefit of the people who are paying the taxes and the citizens to do that or not. It’s basically a move away from ideology, not towards it.

That choice has turned out to be a good one for places like London, where they own the fleet and then they contract out the service—but the city owns the fleet. Now, there’s a good reason for that. For the layperson, that’s a huge infrastructure that has to be brought, in the case of public transport. So if you buy a fleet of buses or you buy a ferry, it costs a lot of money, and if there’s only one party who’s done that, actually, we’re all a bit vulnerable to that company that owns it. If the council owns it, you’re much less vulnerable. So it’s a much more flexible system, and it’s one thing; they don’t have to choose that, but they can under this.

There’s another flexibility option here, and that is the flexibility of being able to have on-demand services included. It’s another good, modernised move. Nobody should be afraid of this. This is a good bill, and it will make our transport system work much more efficiently. I commend the bill to the House.

Hon JUDITH COLLINS (National—Papakura): I wasn’t going to take call on this bill, but being lectured by Julie Anne Genter about the evils of American hedge funds investing in transport in New Zealand actually requires someone to stand up for Americans, even if she doesn’t want to.

I’ve looked at this bill and it’s really clear this is all about ideology. So we’ve got councils being told that they’re not capable of running water services and now they’re going to run bus services. We’ve got councils now being told that when they want to take over a bus service or run their own bus service, they won’t have to have any competition, they won’t have to cost it out, they won’t have to see what is the best deal for people.

So I would say to these people on the other side of the House who are ramming this bill through under urgency—I mean it’s almost midnight; we’re going to have another midnight session tomorrow night because they want to shove everything through before this election, because they don’t think that they’re going to be around to do anything after it. When I look at them and say, “Have they ever actually contracted anyone to paint a house for them or build a house?” Or do they just go to whoever it is that they know and say, “Just paint it and I’ll pay whatever it is”? Don’t they get a quote? Don’t they even get an estimate? Or do they just say, “Well, it’s other people’s money. It’s ratepayers’ money. It’s all free. Nobody has to pay for it. It’s all free. We’ll just do that, shall we?”

Well, actually, it’s nice to think that, you know, some councils might want to set up their own company to run a bus transport company—they’re stopping them doing it now. But what they’re saying in this bill—shoving through in urgency, a bill that’s all about removing competition, removing innovation. And he’s talked to the submissions from, say, Uber, who I’m sure most of us have used for their transport services: on time, we want it, no fuss, and using technology to bring about a much more friendly service for people. Why are they against it? Because they say it’s going to stifle innovation. And are they right? Yes, they are right, because they are actually leaders in innovation, transport.

We know that in New Zealand there are cars that are the un-driven—or the driverless cars are being trialled at the moment by some of the car manufacturers. We know that there are driverless buses and trains being trialled elsewhere around the world. These are things that are actually coming to us, and local councils are now going to be in charge of putting these in place.

You actually need the people who know about transport to be in charge of transport. You want the people who know about bus services running them, getting schedules on time, who turn up no matter what—I don’t know, these people called “bus companies” who actually know about running buses, who know about what’s needed to maintain buses, what’s needed to have the right staff in place.

Again, this is just another effect of a Government that has been so anti-immigrant, so anti - bus drivers coming to this country, so xenophobic on everything possible, and only now have suddenly rushed around and got some bus drivers. This is a Government that actually doesn’t want competition—the labour force either—and that’s part of what they’re doing here.

So, tell me, where’s their public transport when we have, in Auckland, as we know, Fullers, who are running the ferry services, having had to say they can’t get enough staff so they’re having to close down some services. Is anyone here seriously going to tell me that Auckland Council or Auckland Transport’s going to suddenly find or magic up all these ferry staff? Are they actually—where are they going to come from? The fact is it’s simply not possible.

It is really important that we have competition. It’s like we don’t have one set price for food, or one set price for anything because if we do, as has happened in other centrally planned economies, we end up with not enough of what’s needed, or lots of things that nobody wants and nothing of what people get.

There’s a reason Government should keep out of this stuff, and that’s because they’re incompetent. It’s a Government that’s the least competent Government I’ve ever seen. We’ve had six years of central planning and no delivery. This is just another example of a useless Government bill that, yet again, we’re going to have to overturn after the election.

Dr TRACEY McLELLAN (Labour—Banks Peninsula): Thank you, Mr Speaker. That was a bizarre contribution, but it is quite late at night.

The primary driver, obviously, for this piece of legislation is that the Public Transport Operating Model simply hasn’t worked. It’s been an unmitigated disaster, it is market failure, and it requires the State to step in and fix it. On that reason, I commend it to the House.

STEPH LEWIS (Labour—Whanganui): Mr Speaker, thank you. It’s my pleasure to rise and take a short call this evening. In Whanganui, we used to have trams that went the length and breadth of our beautiful city, but we don’t have those any more. We do have Mabel still, she goes along the awa front, but we need our public transport system to be rebuilt. We need strong public transport networks, and we’ve finally got advocates in Whanganui who are helping to do that in Anthonie Tonnon. So to honour the work that he has done to advocate for public transport in Whanganui, I commend this bill to the House.

SIMON O’CONNOR (National—Tāmaki): Thank you, Mr Speaker. Look, my first pitch, actually, is to Auckland Transport, but seeing we’re talking the land transport regulation, it would be great if they could put another bus on, on Gowing Drive, to get our school kids there. The current buses are packed full. So that’s just a bit of a request to Auckland Transport on behalf of my constituents.

Hon Scott Simpson: Are you sure they’re listening?

SIMON O’CONNOR: I hope they are listening, actually. Actually, they won’t be at this time of night—sad.

Anyway, the idea that somehow removing competition and sending public transport back to councils to organise makes absolutely no sense. I think it’s one of the reasons amongst many that this Government is not only rushing this through urgency, but it’s probably delighted that it’s 10 to midnight so that people don’t understand, again, the core concept that they are removing what is a competitive contractual space back in-house. It just sort of reflects this centralising mind set. The strange thing about it is I think it’s not going to make public transport any more efficient, but this speech is.

ARENA WILLIAMS (Labour—Manurewa): Mr Speaker, thank you for the opportunity to speak on this bill, the Land Transport Management (Regulation of Public Transport) Amendment Bill. It’s a good bill because the Public Transport Operating Model doesn’t work and it needs to be put in the bin. This bill puts it in that place. This is a bill that also is about increasing those things that we think there should be more of in our public transport system like better wages for the bus drivers and choices to be made about how sustainable these can be. So with that, I commend this bill to the House.

A party vote was called for on the question, That the Land Transport Management (Regulation of Public Transport) Amendment Bill be now read a third time.

Ayes 75

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

Noes 41

New Zealand National 31; ACT New Zealand 10.

Motion agreed to.

Bill read a third time.

DEPUTY SPEAKER: I declare the House in committee for consideration of the Local Government Electoral Legislation Bill.

Bills

Local Government Electoral Legislation Bill

Instruction to Committee

Hon KIERAN McANULTY (Minister of Local Government): I move, That it be an instruction to the committee of the whole House on the Local Government Electoral Legislation Bill that it consider and, if it thinks fit, adopt the amendments in my name set out in Supplementary Order Paper 367.

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

Ayes 75

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

Noes 41

New Zealand National 31; ACT New Zealand 10.

Motion agreed to.

DEPUTY SPEAKER: I declare the House in committee for consideration of the Local Government Electoral Legislation Bill.

In Committee

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

CHAIRPERSON (Hon Jenny Salesa): Members, we are in committee on the Local Government Electoral Legislation Bill. We come first to Part 1. This is the debate on clauses 3 to 33—Amendments to Local Electoral Act 2001—and Schedules 1 and 2.

Dr TRACEY McLELLAN (Junior Whip—Labour): Point of order. I seek leave for all provisions to be taken as one question.

CHAIRPERSON (Hon Jenny Salesa): Leave is sought for that purpose. Are there any objections? There are none. The question is that Parts 1 to 3, Schedules 1 to 3, and clauses 1 and 2 stand part.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Madam Chair. At this late hour of the day, we are considering the Local Government Electoral Legislation Bill. There’s not a huge amount in it, but I think it would be worth hearing from the Minister a bit of explanation around some of the provisions, and I suppose I might as well start with a locally focused question to the extent that it relates to Auckland Council and the ability for council to set its own number of councillors up to a certain limit—I think I have read 29, it would be, compared with the current 20. So I’m wondering if the Minister can explain for the committee’s benefit what the reasoning is there as compared with the legislation that set up Auckland Council in a very specific way, presumably for a specific reason.

Hon KIERAN McANULTY (Minister of Local Government): I thank the member for the question—they’re always considered and well articulated. Auckland Council is the only council in the country that doesn’t determine its own number of councillors. It was set up that way in the legislation, but it was an anomaly at the time. I express no opinion or view on the number of councillors that’s appropriate for them, but that’s as it should be. It should be up to them to determine whether their current number of councillors is appropriate for the size of the jurisdiction that the council represents, just like every other council.

CHRIS PENK (National—Kaipara ki Mahurangi): Oh, thank you, Madam Chair, and I thank the Minister for his engagement on that particular point. I put it to the Minister and the committee that whether there should be more or fewer councillors probably depends on who we’re talking about. We’ve all got our favourites and whatever the opposite of a favourite is in that regard. But, actually, I would say that we’ve got a lot of good representatives in local government in Auckland and indeed across the country—some better than others, of course. But the system design—I think the Minister makes a fair point regarding the consistency of the way that the structure is determined.

In relation to the Māori wards element, I note that this is essentially confirmation of a discussion and a policy—indeed, a law—that was set out previously in relation to what was then the upcoming local election in 2022, it must have been. And the change, of course, was not in relation to whether Māori wards could be created but the removal of a requirement for a referendum. I do remember some of the arguments that were made on both sides at the time, and I presume that those still more or less apply, again, on both sides of the argument. But I do wonder if the Minister can explain to the committee the requirement that at each six-yearly interval, the question must be continued to be revisited, notwithstanding the answer might have been “no” previously, and whether that requirement to revisit every six years applies if Māori wards are established. That is to say, will they need to consider every six years whether they should be disestablished?

Hon KIERAN McANULTY (Minister of Local Government): So every council is required to do a representation review every six years. At the moment, now that Māori wards are an option for councils, they don’t have to consider whether they, alongside all the other considerations that are in place, need to be considered. So we’re just putting that in there. It is not a requirement for councils to have Māori wards, I want to be really clear on that. That is a local decision. It’s not something that the Government is proposing to impose on councils, but we’re saying that, if every six years they have to consider all other aspects of representation, now that Māori wards are a thing they should also consider those alongside the other matters.

CHAIRPERSON (Hon Jenny Salesa): Members, the time has come for me to leave the Chair. I will resume the Chair at 9 a.m. tomorrow morning. This committee is suspended. Pō mārie.

Sitting suspended from 11.58 p.m. to 9 a.m. (Thursday)

TUESDAY, 22 AUGUST 2023

(continued on Thursday, 24 August 2023)

Bills

Local Government Electoral Legislation Bill

In Committee

Debate resumed.

Parts 1 to 3, Schedules 1 to 3, and clauses 1 and 2 (continued)

CHAIRPERSON (Hon Jenny Salesa): Good morning. Ata mārie, members. The committee resumes its consideration of the Local Government Electoral Legislation Bill. The question is that Parts 1 to 3, Schedules 1 to 3, and clauses 1 and 2 stand part. I see members are so keen to take a call, especially after the 12 a.m. finish last night!

The question is that Golriz Ghahraman’s amendments to the Minister’s amendments set out on Supplementary Order Paper 358, set out on Supplementary Order Paper 397, be agreed to.

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

Ayes 10

Green Party of Aotearoa New Zealand 9; Kerekere.

Noes 106

New Zealand Labour 62; New Zealand National 34; ACT New Zealand 10.

Amendments to the amendments not agreed to.

CHAIRPERSON (Hon Jenny Salesa): The question is that the Minister’s amendments set out on Supplementary Order Papers 367 and 358 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.

CHAIRPERSON (Hon Jenny Salesa): Golriz Ghahraman’s amendment to insert new Part 1A set out on Supplementary Order Paper 263 is ruled out of order as being outside the scope of this bill.

A party vote was called for on the question, That Parts 1 to 3, Schedules 1 to 3, and clauses 1 and 2 as amended be agreed to.

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.

Parts 1 to 3, Schedules 1 to 3, and clauses 1 and 2 as amended agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Hon Jenny Salesa): The committee has considered the Local Government Electoral Legislation Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Hon Jacqui Dean): This bill is set down for third reading immediately.

Third Reading

Hon KIERAN McANULTY (Minister of Local Government): Thank you, Madam Speaker. I present a legislative statement on the Local Government Electoral Legislation Bill.

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

Hon KIERAN McANULTY: Thank you very much, Madam Speaker. I move, That the Local Government Electoral Legislation Bill be now read a third time.

Our local democracy depends on candidates, councillors, and voters. In turn, those people depend on the electoral system to work well. The changes in this bill are technical, but their effect is that the electoral system will be fairer and easier for everyone to use. The bill achieves this by creating a suitable process for councils to consider Māori representation, giving Auckland Council greater freedom in how it chooses to represent its communities, updating recount rules in local elections, and modernising the system for nominating election candidates. In addition to this, the bill looks at further enabling remote quorum participation, which I will explain.

Firstly, this bill will see that Māori representation is given good consideration at council. For a long time, the voices of our Māori communities were not heard appropriately—or sometimes at all—at our council tables. This absence left issues unsolved and opportunities missed. Fortunately, times are changing. Māori representation in local government is the strongest it’s ever been after this House repealed an incredibly unfair law in early 2021. There are now 34 councils with Māori wards and 66 councillors directly elected on behalf of Māori communities. This bill continues that progress. Councils are already required to review their representation arrangements every six years. They ask questions like: do we need a rural ward? And how many councillors do we need?

This bill bolsters the representation review process. The first step to the process will be a conversation about how the council can best represent Māori. In some cases, that might be Māori wards—but it might not, and that’s all good. No one’s saying that every council has to have Māori wards. The important part is the community conversation. With this bill, councils will know to look in their representation toolbox and have a serious think about what’s best to look after their people, and this is a meaningful change.

Several councils who are required to do a representation review this year are still recovering from the recent extreme weather events. It’s important that they focus on their recovery. To enable councils to do this, the bill will delay the provisions requiring councils to consider Māori representation. These provisions won’t come into effect until the day after the 2025 local elections. Councils would have been required to familiarise themselves with this process and put it in practice from March or April 2023. As it is now July, it made sense to delay these requirements to ensure councils can engage in a full and proper consultation process, especially with the Māori community. Councils can still optionally consider Māori representation this year, and I know several councils are considering this as part of their representation reviews. But again, they don’t have to. That’s entirely up to them.

Next, I’d like to talk about Auckland. The super-city is like no other part of New Zealand. It is large, continues to grow, and faces particular challenges. Auckland is also made up of several unique and distinctive communities. Why, then, is the council limited to 20 councillors? No more, no less. The law has tied Auckland Council’s hands and stopped it from expanding to accommodate the population growth or to implement Māori wards. That’s why this bill allows Auckland to have between five and 29 councillors should they choose to—just like every other council in the country.

Auckland Council shouldn’t be held back as the city continues to grow, as Aucklanders deserve fair representation just like everybody else. We’re also making it easier for Auckland Council to adjust its local board boundaries. These boundaries lined up well with the ward boundaries when the super-city began, but now, because of uneven growth, these borders don’t always align. We’ve streamlined the process to help them match up again to ensure communities of interest can remain together. So with this bill, Auckland’s many different communities can be confident that as they change and grow, their democratic structures will be able to change and grow with them—just like every other council in the country.

Tied results aren’t very common, but they do happen. In the current system, when there’s a tie, the electoral office will draw lots to decide the outcome, such as a coin toss. While there is an opportunity for a judicial recount, it can only be applied for after the coin toss. Imagine getting the job in a very public platform—the mayor of the local council, for example. The successful candidate celebrates, gets shown in their new office, gets sworn in at a public meeting supported by friends and whānau, then, lo and behold, it turns out that they haven’t got the job. Instead, they have to pack up and go home. These are the kind of situations that the status quo can result in, and I don’t think it’s a fair way to treat the willing New Zealanders who run for council. So this bill does three things to solve this problem.

Firstly, it creates an automatic judicial recount when there is a tied election. Secondly, it enables candidates to withdraw after the deadlock tie if they’d rather not have the outcome decided by what is effectively a coin toss. Finally, it slows down the first meeting process so that no one is sworn in until after the recounts are completed. These changes mean candidates will have certainty about whether they’ve got the job, and members of the public will have certainty as to who has been elected.

We’ve also modernised our nomination system. As it stands, candidates need to give written consent to be nominated for local elections. Electronic nominations are allowed in other parts of the law, like when candidates are overseas or in parliamentary elections. Therefore, we are expanding this ability so it is clear that candidates can always be nominated electronically in local elections, making another step in the process much simpler.

Finally, the bill will also permanently enable remote participants in council meetings to count towards quorum. Previously, elected members needed to be physically present at council meetings to be counted towards the meeting’s quorum. While councils can choose to permit remote attendance in standing orders, under the Local Government Act, this attendance doesn’t count towards quorum. However, for the last three years, councils have been able to count remote participation towards quorum to support the continuation of local authority business. This was firstly through the COVID19 pandemic and more recently through the severe weather events.

The temporary settings for the severe weather events will expire on 30 September 2024. I’ve heard strong support from the sector for making this option permanent. It makes sense. Everyone else can do it, so too should councillors. The benefits to making it permanent include allowing councils to meet if travel is disrupted, or making it easier for councils that cover large geographic areas to conduct business. On my tour of local councils, I met one councillor who has to drive 2½ hours to attend meetings. This change will allow them to make a choice that’s best for them and their community.

Again, I’d like to acknowledge the people, local authorities, and organisations who submitted on this bill. I would like to thank Taituarā and Local Government New Zealand, who have asked for these changes, and I would also like to thank Auckland Council and the 19 local boards who made submissions. In particular, I would like to thank the Auckland Council officials who have been working with the Department of Internal Affairs to ensure the changes that impact them most work for them. Finally, I would like to thank the Governance and Administration Committee again for their mahi on this bill. The committee’s recommendations have had a positive impact on it. Working on such a technical omnibus bill is no mean feat.

This bill will help our local democracies run more smoothly and treat those who run for office with greater respect. I therefore commend the bill to the House.

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

JOSEPH MOONEY (National—Southland): Thank you very much, Madam Speaker. I rise to take a brief call on the Local Government Electoral Legislation Bill. The National Party opposes this bill. It’s yet another example of Labour riding roughshod over local government—the Labour Government knows best and will tell the local community what they can and can’t do. This is not good.

National does not oppose Māori wards when they comply with the principles of democracy and are wanted by the community, but that should be a choice for those communities, not a mandate from the Government. While there are some positive elements in the bill that we believe will help local government, we strongly oppose the requirements surrounding Māori seats. It’s just another example, unfortunately, of a Labour Government that thinks it knows best.

It requires councils to consider the introduction of Māori wards every six years and finalise provisions that Labour passed under urgency. So a brief call from me, but it’s one that—unfortunately, another example by the Labour Government where we’re considering a bill under urgency, right at the end of the Parliament, and Labour has shown an increasing tendency to centralise things and tell local communities how they should operate their business. We think that there needs to be localism and local communities need to be able to decide these things for themselves.

RACHEL BOYACK (Labour—Nelson): What an utterly bizarre speech from the member opposite, Joseph Mooney, given that his own community of Southland asked for these changes. The member opposite needs to listen to his community. Coromandel did as well. I’m sure the good Mayor of Marlborough would appreciate this legislation.

This bill ensures there is choice provided to councils. It’s a very straightforward bill. Every six years, there is a review and consideration of how democracy is organised in a local council area. We look at the number of wards, the number of councillors, the geographic boundaries, the voting system, and whether or not there should be Māori wards. It is a choice, and the members opposite obviously aren’t listening to their communities. It will be up to the council to make the determination following consideration, Mr Mooney, so I suggest that you talk to the Southland council, who are one of the organisations who have asked for this. It’s an excellent bill, and I commend it to the House.

STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. I think the 12 a.m. finish this morning has clearly coloured some of the debate this morning. It’s fantastic; I enjoy an early start anyway, so it’s great to be out here.

I note the Minister said this bill is technical; it’s not technical, it’s autocratic. That’s what it is—it’s actually autocratic. We believe in localism on this side of the House and consulting with councils—we do talk to our councils; I talk to mine. What they don’t want is us telling them what to do, and this is exactly what this is doing, it’s telling them what to do. It’s putting in place that every six years they have to put an agenda item on their agenda through this legislation—it’s outrageous. These people are elected to represent their constituents. They’re ratepayers; they should be able to make that call, not us here. That is outrageous, and to put it up there, I’d have to say I think even saying that they have to consult with iwi and communities—that’s round the wrong way. You should have to consult with your community and iwi, in that order, because the community is the majority—covers everyone, and that’s what they are elected to represent. They want to consult other groups? Fine. That’s fantastic. And should there be Māori wards? That’s a decision for the community.

This is the major step towards making that decision for them. I think it’s outrageous and it shows, I think, in the dying days of this Government—thank goodness—they have a priority of trying to bring this up. It really shows, and that’s why we’re getting such positive feedback in the electorate for us coming into Government. People are sick of the ideology-driven Government and so let’s bring on 14 October and see the end, or the back, of this Government.

NAISI CHEN (Labour): Thank you, Madam Speaker. I would just encourage the members of the Opposition to actually read the bill. This is a great bill, especially from someone who lives in Auckland. Currently, right now, the Auckland Council is frozen at 20 people in their council, in the super-city, and we are bringing it up to line so that it actually can grow with the population.

It took us 30 years to get from 3 million to 4 million; only took us 16 years to get from 4 million to 5 million. We have almost doubled the rate of growth in our population and we need the make-up of our local government bodies to be able to reflect that. We need more diversity on councils. We need to make sure that there is an equal voice for everyone in our communities reflected in the Auckland Council.

But what I’m particularly proud of in this bill—I think it’s a great idea—is actually aligning some of those boundaries of our local boards to the councillor wards as well so that there is less confusion in local council and there’s more efficiency through all the different bodies in local council. That’s why I commend this bill to the House.

SIMON COURT (ACT): It is with great disappointment that ACT won’t be able to support this bill, because as an omnibus bill, introduced under Standing Order 267(1)(a), it deals with a bunch of interrelated topics that “can be regarded as implementing a single broad policy” to improve the processes by which individuals and communities are represented through and participate in local government elections—I mean, that sounds wonderful as a single broad policy. It provides councils with an improved process for deciding representation arrangements and makes specific consideration of Māori representation a fundamental step in that process.

Well, the ACT Party believes that all New Zealanders should have equal rights to representation no matter what their ethnicity, and making specific provisions for Māori representation actually sounds quite patronising in 2023, doesn’t it—doesn’t it? It sounds quite patronising—specific representation, in 2023.

When we consider how this applies to Auckland Council in particular, Auckland Council already has two permanent voting members appointed as part of the Independent Māori Statutory Board who sit on Auckland Council, can have a say on matters that affect mana whenua in Auckland, and make sure that if there are Treaty settlements that affect Treaty partners in Auckland, their views are taken account of. That’s important. I mean, that reflects the obligation that Crown has to iwi through the Treaty of Waitangi settlement process.

But the ACT Party doesn’t believe that there’s any justification to force councils to carry out representation reviews with the specific objective of establishing Māori seats for electors on the Māori roll to elect only Māori candidates to Māori seats, because in a city like Auckland there’s over 200 nationalities and languages represented in our city. About 15 percent of Auckland’s population is Māori, but about 15 percent also is ethnic Chinese and speaks Cantonese or Mandarin as their first language. Of course, Auckland has a very large and well-established population of people who have been welcomed from Pacific Island countries over many, many decades, who make up the foundation and fabric of the great multinational, liberal city that is Auckland.

So it seems retrograde, patronising, unnecessary, ideological, almost pathological, the way that Labour is pursuing this divisive co-governance agenda of trying to apply different rights to people because of their ethnicity. It’s almost as if there is some compulsion that Labour has to deliver for a group of elites that, no doubt, exist within the Labour Party as well—a form of separate representation that the Labour Party, in their flawed wisdom, believe addresses some unknown grievance that has yet to be identified as a result of breaches of the Treaty of Waitangi.

Now, if there were breaches of the Treaty of Waitangi by the Crown which then led to a form of redress being establishing specific Māori seats for, say, a region like Auckland, or requiring local government to go through the process of providing for specific Māori seats for electors of the Māori roll, then we would’ve heard about that. There would’ve been a Waitangi Tribunal decision which makes that clear. But that hasn’t been described by the Hon Kieran McAnulty, the Minister responsible for this bill. There is no supporting legal opinion; there’s nothing about that in the regulatory impact assessment or in the legislative statement, so we can only assume that this is part of Labour’s flawed ideological—in fact, given the party’s polling and the way the public sees them right now, an almost pathological obsession with dividing New Zealanders by ethnicity and race, as if seeing identity first before recognising the person behind the identity is some kind of virtue.

Well, the ACT Party says it’s not a virtue. It’s a deep, deep flaw in the approach that the Labour Party and its allies have taken to the way they treat New Zealanders and their individual rights. So the ACT Party will not be supporting this bill, despite the fact that it does provide some flexibility to local government to rearrange boundaries, to reorder their representation in accordance with the population of different districts or regions or suburbs within a region. The ACT Party can’t support it, because of the obsessive, compulsive, divisive co-governance agenda which this bill represents.

Now, fortunately, there may be an opportunity to change the provisions of this bill in the very near future. So while this is being pushed through under urgency today, the people of New Zealand will have their say and have their way at the October general election. There’ll be an opportunity to reverse some of these changes.

So that’s what the ACT Party is offering the people of New Zealand. Give your party vote to ACT and we’ll turn over some of this divisive co-governance nonsense, and we’ll restore the Kiwi dream. One person, one vote; equal before the law—a liberal, multi-ethnic democracy facing forward into the 21st century, not looking backwards 200 years.

Hon EUGENIE SAGE (Green): That preceding speech was a key reason why the ACT Party definitely should not be part of the Government post October. They are not interested in strengthening our democracy; they want to weaken it, and they misrepresent what is in legislation before the Parliament.

This bill is not doing all of the things that the ACT member claimed it was. It is improving the whole process at the review of representation arrangements, to ensure that there is a clear process to consider Māori wards, and that is likely to give Māori greater representation and voice around the table. But it is a process to consider that and to consult with the community. We need that stronger representation so we better have councils who represent their communities. That is quite fundamental. What is the problem that ACT and National have with that?

Chlöe Swarbrick: Democracy.

Hon EUGENIE SAGE: Thank you.

The other issues that this bill is dealing with are things like very logical things to do in Auckland so that the boards can adjust their boundaries. Auckland is the only council that has local boards. They are a key in ensuring that connection with local communities. At the moment those boards have to go through something similar to a whole review, a many-step statutory process that’s equivalent to a local government reorganisation, if they want to adjust their boundaries. So the bill is providing a simple, clear process to enable that to happen so that they represent their communities of interest. This bill is about fair representation and it’s about improving the processes, as the Minister of Local Government has outlined. It’s not what ACT and National are saying it is.

It should go further, though. Golriz Ghahraman had two Supplementary Order Papers, with one to ensure that 16-year-olds could vote and stand for candidates. We’re disappointed that that didn’t pass, but we’re delighted that that is now being looked at, and we also need in local government a move to proportional representation like STV voting systems, because it is with proportional representation that you get much more diversity around the council table, as we have here in the Parliament with MMP.

So this isn’t sweeping electoral reform. But it is a number of useful improvements to actually strengthen the process which happens at representation review, and the Green Party supports it.

LEMAUGA LYDIA SOSENE (Labour): It is my honourable pleasure to speak on the Local Government Electoral Legislation Bill. I came from this world in Auckland Council.

This is a choice that gives Auckland Council the ability to strengthen, and we’ve heard from this side of the House and also our friends from the Greens the reasons why Māori representation is critical at the decision-making table.

So just a couple of reflections. We in South Auckland on local boards—the Māngere-Ōtāhuhu local board; I want to do a shout-out to them—led the way in terms of working within the current system to have mana whenua and maata waka at the table giving their kōrero to us. This bill will strengthen that process. Also, New Zealand is in the South Pacific. Diversity is important for this country. Tāmaki-makau-rau leads the way, and I’m sure our friends across the House—and it’s a shame that Mr Court has gone. We do not assume, because we know; we come from those communities. And so just a couple more points—

Joseph Mooney: Point of order. I think there’s a longstanding principle that members can’t refer to members who aren’t in the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): That’s correct.

LEMAUGA LYDIA SOSENE: I apologise.

ASSISTANT SPEAKER (Hon Jenny Salesa): Thank you.

LEMAUGA LYDIA SOSENE: Thank you for pointing that out, but I just wanted to help my friend over there to understand.

In terms of what councils need to consider, they do need the levers. This bill will do that once it is passed, and do not underestimate the strength in diversity. In Auckland, with the low voter turn-out under the council process, this will help strengthen and help representation around the governance table, to have a fair presentation of not just iwi but those individuals who are interested to stand from a diversity background. This bill will strengthen that. I want to thank the Governance and Administration Committee and also the submitters and the officials. I commend this bill to the House.

ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on Simon O’Connor for five minutes.

SIMON O’CONNOR (National—Tāmaki): Look, that was actually quite a good contribution by that member Lemauga Lydia Sosene as she sat down, about talking about diversity. One of the great things about democracy is that one person gets one vote and those who are interested in standing put their hands up, and if the other people in the community from diverse backgrounds and experiences like them, they get voted on.

It’s quite a novel concept. It started in Greece. It’s been around for about 2,500 years, but the Labour Party has decided, in these dying days, that it’s time to gerrymander the system. Now look, this is not high-level, Republican-Democrat gerrymandering that we see in the United States—thank God. However, it’s tinkering with the system here, and look, there’s that sort of almost quasiOrwellian talk of “Oh, there’s choice and there are going to be options”—there aren’t. OK, if there were choice and options, this would not be a Labour Party bill.

It is a Labour Party bill. It’s gerrymandering. It’s setting a whole set of criteria, and part of the issues too is twofold. One is that this is a change to electoral law. Yes, it’s local government, but, by and large, there’s been a comity across the House. The fact that this side—National in particular—are opposing it should be a signal to New Zealanders that there’s an issue here. It’s not on every aspect of the bill, but significantly for us to oppose it.

Secondly, this is urgency on a Thursday morning on what is I think, the fourth-to-last day of this Parliament. That in itself should be a red light that the Labour Government, with its far left mates in the Greens, are pushing this through. This is not good form and it is desperate stuff.

Look, the other thing I’d just add—and, look, it’s no offence to my Auckland Council and local board people—is that we don’t need to increase it to 29 councillors. Honestly, we don’t. The bureaucracy runs Auckland, in many ways, with thousands and thousands of officials in the council. Yes, we have 20 councillors—and to each and every one of them, thank you for what you do for our city. But, to me, expanding the potential expansion of the council to up to 29 persons doesn’t make any sense, whatsoever. So that’s another reason we’re opposing this.

But, fundamentally, I come back to the key point. This is a Labour Government using urgency in the dying days of its reign to ram through—ram through—legislation. That is not being done in good faith, and it’s at least another reason not to vote for this bill.

GLEN BENNETT (Labour—New Plymouth): I find it so interesting that we have the MP for Coromandel and the MP for Southland in the Chamber this morning. Obviously, their two councils specifically supported and asked for legislation to be passed such as this. They actually championed and pushed for us to make changes in terms of the Local Government Electoral Legislation Bill. So as we hear the rhetoric coming from the other side, I think it’s disappointing the fact that we have two MPs whose councils have actually specifically asked for us to do some work—so we are doing it and we are listening. This is very simple stuff.

The other thing that’s disappointed me was that the other side of the House did not support the remote quorum participation. I think that in this day and age, when we want participation in local democracy, surely simple things like remote quorum participation is a part of it. This is good legislation. I commend it to the House.

TĀMATI COFFEY (Labour): I stand here on behalf of Hinerangi Goodman, who was a councillor that was celebrated after the last local body elections back in 2019. She was elected to be a councillor for the Murupara-Galatea ward on the Whakatāne District Council. She went in, she had her celebration, her friends and her whānau were there, and then she was challenged. There was a recount that had to happen. She lost that recount after she had been sworn in and been there, lifting up her mana in the chambers in Whakatāne District Council, and she had to deal with the shame of having to step down from that position. She lost by one vote, and it was embarrassing because she had to endure a coin toss. There is no mana in a coin toss, and she had to endure the humiliation of having to go through that process because our situation, our processes through Government, weren’t for her. It was embarrassing, it was humiliating, and she is somebody that is well respected in that community. For that reason, I absolutely support the changes that have been made through here.

I commend Taituarā for fronting up and making the series of changes that they have dealt to us, to say “This is what our people want.” The Opposition say that it’s the Labour Party that are doing this. They are wrong on that. Local government support this. Taituarā, who are the Māori that exist within local governments around the country, have supported this. This is a really important piece of legislation. We’re doing it, and I just don’t understand. I think that they’re playing politics for the sake of politics, and I believe that having 66 new Māori councillors sitting around council tables up and down New Zealand is a really positive thing.

And there is a perception amongst Māori communities up and down the country that councils have been the domain of white people for a very long time, that they have been a racist institution which has locked in power for the majority, for the dominant majority in this country, and I find it heinous that the National Party want to support locking in that majority, that dominant voice, into our councils and locking out the voices of Māori, who are finally coming to the table. I commend this to the House.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Speaker. In the dying days, in the last gasping breaths of this failed, horrible Labour Government, they are insisting on continuing with their ideological claptrap, and nothing better represents that nonsense than this bill. Tāmati Coffey, the member that has just resumed his seat, made a strident case for something that already exists, which is the potential for councils to make their own decisions. But only in the befuddled Labour Party’s minds, filled with their own ideological philosophical agendas, would they consider that this is some kind of technical approach.

My colleagues Joseph Mooney, Stuart Smith, and Simon O’Connor have argued the case on this side about why we oppose it. But there is a very simple principle here about democracy, and it’s only in the Labour Party that they feel the need to redefine democracy: one person, one vote. I didn’t ever think that in my lifetime in the Parliament in New Zealand, members on this side of the House would have to stand to defend the basic premises and principles of democracy in the free world. But here we are, in the dying days of this Government, under urgency, having to do exactly that.

The primary point that we object to in this legislation relates to the forced representational reviews and the compulsory consideration of Māori wards. Now, in practice, this is going to require councils to decide not to implement Māori-specific arrangements every six years.

Let me put that in sort of a different context for some of the younger members of the House, who may not understand or perhaps remember a commercial practice that used to occur back in the last century, in, I think, the mid-1960s. There was an organisation called Reader’s Digest that used to actually send out invoices to people and say, “We’re going to send you a subscription to Reader’s Digest unless you tell us you don’t want it.”—unless you tell us you don’t want it! Well, that that practice was outlawed because it was wrong commercially, obviously, just as it is wrong politically to insist that councils do something that by dint of a legislative approach requires them to decide not to implement something unless they decide to do it. It’s completely backwards, and there is a term that that I can’t use in Parliament—about face—so I won’t use that.

We do object to this piece of legislation. We do so on the basis of fundamental democratic principles and institutions that have held not only New Zealand in good order for our entire democratic history, unbroken over more than a hundred years—one of the few nations in the world that can claim that proud right and privilege of having an unbroken democratic tradition—only to be put at jeopardy by an ideologically bereft Labour Government in its dying, gasping last days.

VANUSHI WALTERS (Labour—Upper Harbour): Thank you, Mr Speaker. Yesterday, I used the word “perplexing” when I talked about the Opposition speeches. I think today it’s “confused”.

Let’s be clear: the Opposition talk about democracy, but they’re voting against better representation for Aucklanders on Auckland Council. Let’s be clear: the Opposition talk about supporting localism, but they’re voting against the council’s power to make decisions locally about ward boundaries. Let’s be clear: they talk about supporting democracy, but they’re voting against a very practical change of allowing councillors to participate and have their votes counted online.

There seems to be a collective amnesia on that side of the House where they’ve forgotten how we’ve adapted in the last five years to be able to participate online. This is a confused set of Opposition benches.

This is a fantastic piece of legislation. As an Aucklander, I support it.

A party vote was called for on the question, That the Local Government Electoral Legislation 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.

DEPUTY SPEAKER: I declare the House in committee for consideration of the Fuel Industry (Improving Fuel Resilience) Amendment Bill.

Bills

Fuel Industry (Improving Fuel Resilience) Amendment Bill

In Committee

Clauses 1 to 14 and the Schedule

CHAIRPERSON (Hon Jenny Salesa): Members, the House is in committee on the Fuel Industry (Improving Fuel Resilience) Amendment Bill. Members, we come first to clause 1. The question—

Glen Bennett: Point of order, Madam Chairperson. I seek leave for all parts be considered as one.

CHAIRPERSON (Hon Jenny Salesa): Leave is sought for that purpose. Are there any objections? There are none. The question is that clauses 1 to 14 and the Schedule stand part.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair, and good morning. It’s a fine morning to be the Chamber. I really have a question for the Minister about the minimum required stockholding obligation, which has 28 days of consumption for petrol, on average; 24 days of consumption for jet fuel, on average; and 21 days of consumption for diesel, on average.

I just wonder if the Minister is aware that after the Christchurch category earthquake sequence, it was diesel that was in very short supply—not petrol, but diesel—and that was a significant issue. When a natural disaster happens, why then wouldn’t we want to protect the fuel that enables the emergency services to function fully? Yet we’ve got 21 days of diesel fuel minimum, which is seven days less than the petrol—that minimum stockholding. That just doesn’t seem to add up. Why was that not considered?

I’m sure the Minister was aware of the Canterbury earthquake sequence and what happened there, so I think that’s a major miss, in this part here. So I’d really like to find out what the rationale was for the difference.

Hon Dr MEGAN WOODS (Minister of Energy and Resources): I can reassure that member that the minimum stockholding on the companies is 21 days. But the Government will be procuring an additional seven days to have as a reserve, which will take it to 28 days.

SIMON COURT (ACT): I have a couple of questions for the Minister of Energy and Resources. Minister, submitters raised a number of issues at the Economic Development, Science and Innovation Committee, which I don’t think have been fully addressed, but I would be really interested to get your perspective. Should vessels with fuel on them, sailing towards New Zealand, be included in the minimum stockholding obligation? Because the refineries on the east coast of Australia are just a couple of days’ sail away, and Australia has a much larger capacity not just to produce fuel but to store it. So, Minister, has the ability for stockholding on the high seas between Australia and New Zealand been considered in the stockholding obligation?

Minister, sorry, I thought you were going to pop up and reply to that. I’m not sure if the Minister has been provided an answer by officials, so I’ll ask that again, and then I’ll move on to—

CHAIRPERSON (Hon Jenny Salesa): The Minister is going to batch up the questions and then answer them at the end.

SIMON COURT: OK, great. Thanks. So the other question I have for the Minister is: given that this bill imposes a requirement on fuel companies to build tank storage in order to fulfil a minimum stockholding obligation onshore, all of the associated pipe work, bunded facilities, groundwater monitoring—often not just for the duration of any consented facility but for a long period afterwards—it imposes significant additional cost on an industry, Minister, which many, including the Labour Government, have told New Zealanders that it is facing a twilight.

Minister, you described in the House, I believe, as recently as last night, a just transition towards a low-carbon economy where hydrocarbon-based fuels will no longer be a large part of the energy mix. So, Minister, one of the issues raised by the organisations, the fuel company suppliers, who will be subject to a minimum stockholding obligation, is this apparently difficult to resolve contradiction between the Government’s requirement to hold more liquid fuels onshore at the same time as the Government’s other policies are directing New Zealand towards using less liquid hydrocarbon fuels and, in fact, making it more expensive to do so.

So, Minister, would you help the committee and those who are subject to these obligations to understand how these two policies, which appear to contradict themselves—the Government’s swift push towards low emissions, low carbon, and reduced reliance on what the Minister calls fossil fuels or what other people call highdensity, high-energy liquid hydrocarbons. How does the Minister resolve that policy intent with the—

Chlöe Swarbrick: Who calls them that?

SIMON COURT: Chlöe Swarbrick asks “Who calls them ‘high-density, high-energy liquid hydrocarbons?” Well, the people who manufacture them, Chlöe Swarbrick—the people in the upstream energy industry who get these hydrocarbons out of deep geological reservoirs in the ground, pump them out or have them come out under their own natural pressure via an oil rig, pump them on shore, these high-density, high-energy liquid hydrocarbons, to fuel storage, processing, refineries, for example. Whereas, in New Zealand, these high-density, high-energy liquid hydrocarbons are often transferred by ship to refineries on the east coast of Australia for refining back into refined fuels, Chlöe Swarbrick.

CHAIRPERSON (Hon Jenny Salesa): Can the member come back to his question to the Minister.

SIMON COURT: Certainly. The question is, Minister, that there appears to be polar-opposite policies that the Government is trying to progress with, moving away from her so-called fossil fuels towards a low-emissions light-vehicle and heavy-vehicle fleet, and, at the same time, imposing all of these obligations and costs on the industry to build more storage tanks. Minister, could you explain that problem, how you might resolve those two policy conflicts?

Secondly, Minister, will you explain how these additional costs to the industry are likely to impact on consumers, and how this might add to, say, the cost for a litre of petrol or diesel?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you, Madam Chair. In answer to the first question that the member put, around stock on the water and the extent to which that would count towards New Zealand’s obligations, I think we need to think about this as being on the water within the exclusive economic zone (EEZ) and on the water which is much further out, and it obviously doesn’t provide the resilience that this whole measure is looking to put in. The allowance for stock on the water within the bill extends to the borders of our exclusive economic zone. There’s a careful balance that has to be struck between the flexibility of allowing some stock to be on the water to count towards it, and pragmatism. Obviously, if it’s within the EEZ, it’s pretty close to being landed, but, as we know, it can take time—particularly for jet fuel—once it’s landed to actually be available to use.

In the event of a fuel emergency, New Zealand already has mechanisms in place for Australia to assist New Zealand. We’re both International Energy Agency countries, so that comes there.

In terms of the conundrum that the member is trying to struggle with between the use of fossil fuels and decarbonisation and the transition there, I point the member to the words “the transition”. Nobody has said that we are going to stop using fossil fuels tomorrow; what we have to do is have a managed and planned transition and we need to ensure that we are ensuring resilience for New Zealand as we go through that. That is exactly what this legislation is about.

SIMON COURT (ACT): Minister, just coming back to this question of minimum stockholding obligation for ships that are within New Zealand’s exclusive economic zone being acceptable but those outside not, Minister, it’s about nine days’ sail from Brisbane to Auckland. There are very large refineries in Brisbane. Currently, the average stockholding for petrol and diesel is somewhere between 20 and 40 days, I’m sure, and this bill proposes to increase it, I think, by just a few days for each. But, Minister, if we’ve already got somewhere between 20 and 40 days’ stockholding onshore currently, and refineries in Brisbane are 10 days’ sail away, doesn’t that mean that there is actually no risk to the supply chain that needs to be solved by building tankage onshore—question one—and couldn’t it simply be resolved by allowing for agreements, even agreements with Australia, as you’ve mentioned, to deal with this issue, with no legislation required, no cost to the suppliers, no cost to consumers?

Minister, you also didn’t reply to my question about what is the cost to consumer. How much is this cost of building this additional stockholding going to cost if you average it out per litre of petrol of diesel? Minister, that’s what taxpayers and consumers want to know—how much is the Crown on the hook for and how much are consumers on the hook for? Minister, I’d appreciate it if you’d answer those two questions.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. My question to the Minister is pretty simple: has she been surprised, and, perhaps, shocked, by the actions of Norway and the United Kingdom, who both had curtailed and said they were not going to open up more oil and gas exploration, and yet both of those countries have opened up new licences in the last couple of months? And also the Americans have given the go-ahead for a giant $50 billion barrel oilfield in the north of Alaska. Does that—

CHAIRPERSON (Hon Jenny Salesa): Order! Can the member ask a question that’s within the scope of this particular bill?

STUART SMITH: It is—I am, yeah. So—[Interruption] I think the Chair does that, Minister.

CHAIRPERSON (Hon Jenny Salesa): I am the Chair.

STUART SMITH: Yes, but the Minister was making comments there—gesticulating. So as that—

CHAIRPERSON (Hon Jenny Salesa): Even if the Minister in her response covers a little bit that you might think makes it in order in terms of being in the scope of this bill, this bill actually doesn’t cover that, so I’m asking you to please—

STUART SMITH: I’m coming to that—I’m coming to that. So given that those countries I’ve mentioned, Norway, the United Kingdom, and the US, have decided that their fuel security is such that they have to open up more exploration, does that make the minimum stockholdings that we hold in New Zealand—does she think that makes that more or less tenuous than would have otherwise been? These are recent developments before this bill went to the drafting stages, so was that ever a late consideration in terms of fuel security around the globe?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): In terms of those questions and in terms of the member’s question as to whether this is necessary and could we not do this just with arrangements and do we have enough, I point the member to the fact that this is a framework that we need to put in place to ensure our resilience and not just hope that we have that resilience. I point the member to the situation in December when our jet fuel stocks were well below the necessary levels of fuel resilience. What this bill does is ensure that our stocks will not fall below those requirements that we need. This provides the time, insurance, and security to get those additional ships here with much less chance of disruption. These time frames were arrived at through careful analysis of what we needed to ensure that New Zealand could ensure its resilience.

In terms of the cost, there has also been a careful balance in coming up with the number of days for stockholding—fuel resilience against minimising cost and cost to the consumers. So the average stockholding requirement is based on expert advice regarding the quantity of stocks that are held. Therefore, we expect no new storage is going to be required in order to hold this level of stockholding. Fuel companies may need to change their management practices, but the advice we’re getting is there won’t necessarily be new stockholding requirements.

In answer to the tip of the contribution from the member in the National Party that was within the scope of this bill, the answer is no.

GLEN BENNETT (Labour—New Plymouth): I move, That the question be now put.

SIMON COURT (ACT): Thank you, Madam Chair, and thank you for the opportunity to ask a couple more questions. Minister, that is a fascinating insight, and I’m wondering where the evidence or advice comes from which suggests that no new onshore storage needs to be constructed, because, up until now, we’ve been progressing on the understanding that more tankage, more facilities will need to be constructed. So this is new information—if I’m correct, Mr Stuart Smith, this is new information—that there are no additional facilities that need to be constructed. So I’m really interested as to where that evidence and advice comes from.

Because what companies subject to these obligations have told the ACT Party is that they’re very concerned that the commencement date on which these obligations come into force, 1 January 2025, gives them insufficient time to carry out planning assessments, obtain resource consents to build additional tankage, additional storage tanks onshore, given the fact that the Resource Management Act now includes a requirement for consenting authorities to consider the impacts of climate change and mitigating climate change. They’re very, very concerned that if they go to a local authority or council and say, “We’d like to apply for a resource consent to build new storage tanks for petrol and diesel.”, a regional council and an Environment Court—maybe all the way up to the Supreme Court—says, “Well, actually, no. You shouldn’t be building more tanks to hold petrol and diesel, because that goes against the stated commitments of the Government other policy to mitigate the effects of climate change by reducing the amount of petrol and diesel that is used.”

So, Minister, you’ve introduced new information not just to the debate but to the understanding that submitters had, that they’re going to have to build facilities, and also, how on earth is that possible? I mean, if we’re going to increase the amount of storage of petrol and diesel and jet fuel in New Zealand, how is it that you do that without building more facilities? If you’re simply relying on tankers that are anchored up somewhere off New Zealand’s coast, is that going to be sufficient? What calculation has been carried out? Because if that’s the case, then surely a memorandum of understanding between fuel suppliers and the Government would be sufficient to come to that without having to pass legislation that opposes all of these regulations, all of this cost and industry.

So, Minister, this commencement date of 1 January 2025 is a real concern to organisations that have to plan, consent, design, construct, certify, and then receive fuel. This stuff does not happen in 15 months, usually, Minister—partly because the Resource Management Act makes it very complex, but also because carrying out designs and constructing fuel storage tanks has extremely high risks. Organisations involved in that need to obtain insurances. They need to be able to satisfy their insurers that they’re actually delivering a design that is enduring, that is going to meet earthquake standards and so. And also they have to be able to satisfy their financial backers, because anybody who works for a fuel supplier company in New Zealand would know that when they go back to their parent company and say, “We needs tens or twenties of millions of dollars to build fuel storage tanks.”, they’d say, “In New Zealand? They’ve said that they’re getting rid of fossil fuels. They’ve said that they’re transitioning away from a reliance on high-density, high-energy liquid hydrocarbons in favour of solar power, wind power, electricity.”

So, Minister, how on earth are these companies, which have assumed that they need to build more tanks on shore, supposed to actually comply, have tanks standing up, and have product in them by 1 January 2025, given the resource management constraints and given their need to obtain financing and then, of course, carry out the design and construction? How is this going to happen, Minister?

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. Minister, so this bill aims to ensure that New Zealand has sufficient stocks of diesel, petrol, and aviation kerosene jet fuel to mitigate the risk of plausible disruptions to the domestic or international fuel supplies and sets minimum stockholding levels as expressed in the number of days of demand of consumption required to be covered by each type fuel during the initial period.

I’m just wondering, is there flexibility in this to take into account changing geopolitical considerations? Obviously, there’s the war in Europe, which we have the moment. There’s some other changing considerations. My colleague Stuart Smith mentioned before about Norway, for example, approving more than $18 billion in new oil and gas investments. So there’s some changing geopolitical—fast-changing, actually—considerations at play. Are there provisions in this bill to enable those minimum stockholding levels to be moved up or down depending on those geopolitical considerations?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): In answer to the question that was just asked by the member, no, because that is not the purpose of this bill. This is about our onshore national resilience, which is what New Zealand needs and, probably, if there is a marked change to geopolitical circumstance, makes making sure that there is fuel resilience onshore in New Zealand even more important. Where we take account of the international geopolitical changes is actually in our International Energy Agency offshore stockholding. So in terms of what’s in scope of this bill, no, there are no changes.

In regard to the questions that the member asked about the ability to use existing storage and whether there is no storage. That analysis, of course, comes from the Hale & Twomey analysis, which was made available to the select committee. One of the things in terms of the storage that is available, of course, with the closure of Marsden Point as a refinery is that Channel Infrastructure have made some conversion of the storage facilities there to be storage, which has opened up a number of opportunities there. The legislation does have provision for some exemptions should there not be enough storage. So it has put in place insurance around that, but the analysis that we’ve had with the new facilities with Channel Infrastructure is that we’re not going to require new storage to be built.

SIMON COURT (ACT): Thank you, Madam Chair. Thank you, Minister; it’s very helpful to clarify that and I do appreciate that. So given that Channel Infrastructure, a private company, is building the storage that would mean essentially that New Zealand suppliers of fuel comply, why is this legislation necessary?

Given the Minister’s statement that a private company is building all of the storage necessary and that no additional cost is likely to be faced by the sector, that no additional storage is likely to be built as a result of this legislation passing, or it won’t be needed, why is this legislation necessary? It appears to impose a whole lot of regulatory red tape which will tie up the Ministry of Business, Innovation and Employment, the ministry responsible for administering it. It’ll tie up fuel suppliers in reporting obligations not just to a Government department, which will require the information, but also internally to their own boards, to their own governance entities to demonstrate how they’re complying with it. There’ll be legal costs involved. There’ll be technical risk assessments—all kinds of things involved, by the private sector, in order to demonstrate and to satisfy themselves that they’re meeting their legal obligations. All this has cost, Minister—all this has cost. Yet in response to my previous question, you’ve stated quite glibly, honestly, factually—and thank you for that—that you have had advice that Channel Infrastructure’s conversion of Marsden Point refinery to an onshore storage facility means no additional storage needs to be built. The problem is solved.

Minister, this bill is being passed under urgency. It will be passed today, according to the Government’s legislative agenda. There doesn’t appear to be any need for it. It’s of great concern—the cost this will add to a sector that’s already facing additional costs. Petrol prices in Auckland, for example, are already up over $3.15 a litre for regular 91. Minister, how much is all of this regulatory red tape, all of this cost of compliance, going to add to a litre of petrol and diesel? That’s a question I asked you earlier in the session. We still haven’t had an answer.

So here we are, passing a bill under urgency, Minister, at the direction of your Government, at your direction, the Minister responsible—the Minister of energy, which you say is not necessary now because the obligation to hold more stock onshore is already met. How much is all of this red tape and compliance going to add to a litre of petrol and diesel? I mean, Minister, if Channel Infrastructure are building the tankage and the suppliers are going to comply, why do we need this bill?

Secondly, Minister, if it’s an issue of resilience, if we think about where diesel and jet fuel might be required, Marsden Point, Channel Infrastructure—fantastic. But New Zealand’s subject to seismic risks. We have the Alpine Fault in the South Island. We have the Wellington Fault in Wellington. We have fuel storage at Petone at the north end of Wellington Harbour. How would we know that, in fact, New Zealand has achieved some kind of resilience in the supply of liquid fuels when apparently Channel Infrastructure is going to have enough storage? But what about those places around New Zealand which might be subject to natural hazards?

Resilience isn’t just about ticking some box so you can file a report to a Government department and say you comply or fulfilling some legal regulatory obligation to your own company. Resilience means actually being prepared for disasters and being able to respond and being able to restore basic services like the supply of fuel, not just to retail service stations but also to, say, the hospitals which rely on diesel power generators in the case of power outages; telecommunications, as we saw during Cyclone Gabrielle—absolutely reliant on diesel and petrol generators to keep telecoms networks operating.

So, Minister, this bill talks about fuel resilience. Apparently that’s already resolved by the private sector, but what appears to be missing is any additional improvement in fuel resilience around the rest of the country, particularly in the South Island, in Canterbury, the Wellington region, where they are subject to significant seismic risks and natural hazards, and that may very well be where fuel is needed but fuel can’t get through in the event of a natural disaster. So, Minister, why is the bill even needed when Channel Infrastructure is apparently going to solve it all for us? How much is it going to add to a litre of petrol and diesel? And why hasn’t actual physical resilience been taken into account?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): I have addressed the why in previous answers. I will briefly traverse that for one last time. The reason why is because it is important that Governments ensure security of supply of fuel for a country—to not leave it to chance. I pointed out, in an earlier contribution, to that member the fact that our jet fuel was below the minimum holdings that does provide that resilience for New Zealand—in December of that last year.

In terms of the member’s concerns around the fact that he seems to be under the impression that everything is going to be held at Marsden with Channel Infrastructure, that is not the case and I point the member to the provision within the legislation that provides a clause to provide for a regulation-making power to adjust obligations, and location specific requests could be part of that. Very much the thinking of putting this together is not only resilience in one place, but what does resilience across the country look like, and, indeed, the request for proposal for the diesel stockholdings is about to go out and geographic disbursement will be part of that. So the member can be assured that it has been part of the thinking of putting together the regime.

GLEN BENNETT (Labour—New Plymouth): I move, That the question be now put.

CHAIRPERSON (Hon Jacqui Dean): I’m going to let it go just a little bit longer, but I am listening very closely to new material, and I’ll just see how we go.

SIMON COURT (ACT): Thank you, Madam Chair. I just want to come back to the question that I don’t believe the Minister has addressed, which is: how much is this regulation and red tape and compliance construction operation going to add to the price of a litre of petrol and diesel? Minister, surely there’s been a cost and benefit analysis as part of a regulatory impact assessment. Surely, Minister, officials have provided advice, considering there’s a cost of living crisis. The Government accepts it. The Minister is part of a Government which has reduced GST. It says it is going to reduce the amount of GST paid on fruit and vegetables, apparently because there’s a cost of living crisis.

Minister, surely—surely—there would have been some analysis of the additional cost that this regulatory requirement would impose on petrol and diesel and jet fuel users, because it would seem outrageous in the midst of a cost of living crisis and affordability crisis which every single opinion poll points to being New Zealanders’ number one concern for people who have to make a choice between putting petrol or diesel in a family car or a tradie’s van, or paying a bill, which is what ACT MPs hear about when we go around the country talking to working New Zealanders.

Minister, you have not been able to provide a response to my question, which is: how much will this compliance add to the cost of a litre of petrol and diesel or a tonne of jet fuel?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): I’ll repeat the explanation and the answer I’ve given to an earlier question around what the costs would be. I talked the member through, in my earlier answer, the fact that the number of days in the stockholding obligations were a careful balance between ensuring we had resilience for New Zealand’s fuel supply and minimising the cost to consumers. As I’ve already pointed out to the member, this is not likely, and, in fact, the analysis we have is that it won’t be required for new capital expenditure in terms of storage facilities. So that is not something that will be passed on to consumers.

The thing that will need to change is the management practices. Again, it’s something that I’ve already been over in the course of this committee of the whole House stage. This is unlikely to have any large impact, and if the member is looking for an answer around a sense, he’s not going to get that. But I can tell the member that in terms of the analysis, the impact and flow-on of cost to consumers was utmost in consideration in putting together this regime. It is exactly why the Government is looking to do a portion of the diesel procurement itself—because that really is the resilience piece—to have there the additional seven days that the member had missed that took us up to 28 days of diesel stockholdings. That will be Government procurement, and it is not putting that on to what the fuel companies need to hold, and, therefore, have that pass-on to consumers. So I can reassure the member that all the way through this, impact on cost and minimisation to consumers—the analysis that we have is that this should not have a great impact at all on the cost to consumers. You wouldn’t notice it in the daily fluctuations in the cost of either crude or refined.

GLEN BENNETT (Labour—New Plymouth): I move, That the question be now put.

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

Ayes 72

New Zealand Labour 62; Green Party of Aotearoa New Zealand 9; Kerekere.

Noes 44

New Zealand National 34; ACT New Zealand 10.

Motion agreed to.

The result corrected after originally being announced as Ayes 71, Noes 44.

CHAIRPERSON (Hon Jacqui Dean): The question is, That clauses 1 to 14 and the Schedule stand part.

A party vote was called for on the question, That clauses 1 to 14 and the Schedule be agreed to.

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.

Clauses 1 to 14 and the Schedule agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Hon Jacqui Dean): Mr Speaker, the committee has considered the Fuel Industry (Improving Fuel Resilience) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: The bill is set down for third reading immediately.

Third Reading

Hon Dr MEGAN WOODS (Minister of Energy and Resources): I present a legislative statement on the Fuel Industry (Improving Fuel Resilience) Amendment Bill.

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

Hon Dr MEGAN WOODS: I move, That the Fuel Industry (Improving Fuel Resilience) Amendment Bill be now read a third time.

In November last year, I announced a policy package to improve the resilience of our fuel supply. A key part of that package was an obligation for fuel companies to store 21, 24, and 28 days’ cover of diesel, jet fuel, and petrol respectively on average. The Fuel Industry (Improving Fuel Resilience) Amendment Bill will help ensure we have sufficient petrol, diesel, and jet fuel in New Zealand to weather major disruptions to our fuel supply. Although the risk of such a disruption is very low, it would cost the economy hundreds and millions to billions of dollars, and this is something that we can ill afford at this time.

The obligation falls on fuel importers with access to bulk storage facilities. In New Zealand this includes the five major fuel importers, Z, BP, Mobil, Gull, and Tasman Fuels. The minimum stockholding level at the national level is initially set at 28 days of consumption for petrol, 24 days of consumption of jet fuel, and 21 days of consumption for diesel on average. The minimum stockholding levels have been designed to achieve a good balance between mitigating the impact of a potential fuel supply disruption and of avoiding disproportionate price increases at the pump.

The way that the obligation method is calculated apportions the days of cover based on importers’ average daily throughput. The obligation is therefore spread across the obligator parties in a way that reflects their share of the market and what they are capable of supplying.

The bill has been designed to avoid unintended consequences such as decreased competition or increases in fuel prices. None the less, we will carefully monitor the fuel market after the obligation provisions come into force for any signs that the bill’s provisions are adversely impacting the market. The bill provides for many aspects of the minimum stockholding obligation to be changed through regulation in the future if changes are warranted in response to evolving fuel supply risks and market conditions.

This is an important bill. It seeks to increase New Zealand’s supply resilience to disruption scenarios. Fuel companies strive to operate efficiently in a competitive commercial environment which can incentivise them to minimise their inventory costs and plan for just-in-time deliveries of fuel. While fuel companies have generally had a good record of security of supply in New Zealand to date, the fuel supply industry is evolving and demand for fuels will fall dramatically in the years ahead.

Without the measures in this bill’s intervention, there may be few incentives for a company to hold enough buffer stocks in the country or otherwise limit the extent to which the country is exposed in the event of a major fuel supply disruption. There is no costless option for increasing New Zealand’s fuel supply resilience. However, the potential impacts to the New Zealand economy of a supply interruption would be significant, and that is why our Government has taken action to secure New Zealand’s fuel supply.

I want to thank the Economic Development, Science and Innovation Committee for their work and consideration of this bill. I believe the changes that were made to the bill as a result of the select committee process have resulted in a better and more robust bill, and I want to thank all those who have contributed to the preparation and passage of the bill. I commend this bill to the House.

STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. I, too, would like to thank my fellow members on the Economic Development, Science and Innovation Committee, which is a very hard-working and collaborative committee, and we did give this bill due consideration and we did make some positive changes. While we support this bill, we—as I pointed out in previous readings—believe it was rushed needlessly and it should have had more time to consider things more adequately.

However, that’s as good as we’re going to get, clearly, and we support it with those remarks that I alluded to earlier, and I don’t believe I need to say anymore at this stage. So it’s with that, Madam Speaker, that I commend the bill to the House.

NAISI CHEN (Labour): This is a very good bill, done by a very great select committee, so I too echo that. But, yeah, we are a very collegial select committee and we have made lots and lots of changes to this bill, including the way that we look at the average, the way that we want to be making sure that we delay the implementation to give the industry time to adjust as well.

This is a bill for our times when we face disruptions around the world. We want to make sure that New Zealand sees itself through all of these disruptions well. We need to make sure we keep our onshore supply at a level that we’re all comfortable to be able to support New Zealand through difficult periods of time. It’s great to see the National Party have made a huge “in” on this bill. I do hope for more today. So I commend this bill to the House.

MELISSA LEE (National): I’m a little bit conflicted as to whether I should actually take my mask off, but I’ll keep it on because I’ve got a terrible case of a cold and I don’t want to spread it in the room.

Ricardo Menéndez March: Stay at home.

MELISSA LEE: So—no, I’ve been tested for COVID; it’s not. But without wanting to labour the time, I just want to actually acknowledge all of the Economic Development, Science and Innovation Committee members and the chair, Naisi Chen, who is actually an excellent time keeper. Although, on this side of the House, we were rather concerned about the rushed nature, having actually had only two months to consider the bill when the bill was introduced in June and it’s only August, and we’re actually doing the final reading. We felt that because it was rushed, stakeholders literally only had two weeks to actually make submissions and for select committee to actually consider, and we felt that there wasn’t the robust discussions and understanding of the situation. That was the very nature of our opposition initially, but we actually support where we have come to, and providing fuel security for the industry is actually what we need to do.

I was particularly taken by the submissions from the aviation industry, where they’ve actually had several bad shipments, and their explanation as to why we could not actually include shipments that are on the way to New Zealand in that stock counting in terms of the number of days that it might actually take to get here, the reason being that even though it might have been tested on board those vessels, once it actually lands, it could test negative or positive. So they had to actually have a goodquality fuel stock onshore to make sure that there is no interruption to our aviation industry. I found that quite compelling.

I’d just like to take the final few seconds to acknowledge all of the officials: the clerk of the committee, who has actually been absolutely excellent; the advisers to the committee, who have actually provided all the information; and also the Parliamentary Counsel Office for having actually gone through several iterations of the bill, and actually providing it on time so that we can get it back to the House. On that note, I commend the bill to the House.

Hon MICHAEL WOOD (Labour—Mt Roskill): This is a bill which is fundamentally about the national interest. Our country—as nearly all other countries have experienced—has been through extreme supply change shocks over recent years, caused primarily by COVID-19, but also other events such as the war in Ukraine and the blocking of the Suez Canal. Those events have brought home to us the fact that we can no longer rely on a just-in-time mentality when it comes to critical parts of our supply chain.

The Fuel Industry (Improving Fuel Resilience) Amendment Bill ensures that, for a critical product in our supply chain, we will have greater security of supply. It is a standard and prudent measure that is employed by many other countries, and it will give a range of actors across our economy greater confidence about our fuel supply in the event of future shocks. It’s a good bill; I’m pleased to see broad support across the House. The ACT Party, predictably, is against it, and that points to some of the risks that will occur if the ACT Party is a part of the next Government. I commend the bill to the House.

SIMON COURT (ACT): What the ACT Party has to put up with! What the former speaker, the Hon Michael Wood, clearly admits is that the ACT Party is an acronym that stands for the Association of Consumers and Taxpayers. We only have New Zealand’s best interests at heart—the interests of consumers and taxpayers now and in the future.

Hon Julie Anne Genter: That’s not what Roger Douglas says.

SIMON COURT: The member who’s just entering the House, the Hon Julie Anne Genter, former associate finance Minister, points out that the Hon Roger Douglas is also concerned with the wellbeing of New Zealanders. The ACT Party agrees with him. That is why we can’t support this bill.

The problem to solve is: is there enough fuel stored in New Zealand to deal with some kind of crisis? That’s why the bill is called the Fuel Industry (Improving Fuel Resilience) Amendment Bill. This question came up after the closure of the Marsden Point oil refinery. That was a decision by the private sector to discontinue refining crude oil into petrol, diesel, and jet fuel in New Zealand. Why did they do that? Well, every signal that a Labour-Green—whatever they were—New Zealand First coalition of chaos sent was that there would be an end to oil and gas in New Zealand, and that sent a chilling effect through the willingness of our overseas investment partners and our international suppliers to invest in liquid fuels and resilience in New Zealand.

The Government caused this problem; this bill does not solve that problem. Only the private sector can solve the problem. The New Zealand Government doesn’t refine fuel. The New Zealand Government doesn’t own an oil refinery. The New Zealand Government doesn’t own any oil wells in the Middle East, or even here in New Zealand. The Government can’t solve the problem.

What this bill does is it sets up a compliance regime for fuel companies that the Minister herself, in the chair in the committee stage—just a few minutes ago—admitted had already been solved by the private sector. The Minister herself admitted that all of the infrastructure that sits at Marsden Point has been converted to onshore storage, and that the storage obligation created by this bill will be met by the private sector without this bill even being passed. Imagine that: the private sector delivers what a Government can’t—and ACT says shouldn’t.

The Minister could not say how much the additional regulatory compliance costs will add to a litre of petrol and diesel. That’s what New Zealanders want to know. That’s what the ACT Party—which stands for the Association of Consumers and Taxpayers—wants to know. How much will all this red tape and compliance add to a litre of petrol and diesel, or a ton of jet fuel, particularly for businesses who rely on exporting products out of New Zealand by air freight, or importing them by air freight? The Minister couldn’t answer how much it would cost. The Minister said Kiwis won’t notice at the pump. They won’t notice. They won’t notice in the daily fluctuation of prices. That’s because red tape, regulation, and compliance costs gets bedded into the baseline cost of supplying a good or a service. The Minister wouldn’t notice. I bet the Minister doesn’t even know how much a litre of petrol or diesel even costs.

That’s how out of touch this Labour Government has become. That’s why New Zealanders are overwhelmingly going to vote for a change of Government, and a change of Government that includes ACT sitting around the Cabinet tables so we can deliver real change.

Glen Bennett: Back to the bill.

SIMON COURT: “Back to the bill”, says the Hon Peeni Henare. Another former Minister, Michael Wood. I’ll tell you what New Zealanders will like: to send a bill to this Labour Government for all the wasted work of the last six years and failure to deliver. Look, what have we heard? Aviation fuel supply to New Zealand potentially is at risk. How do you overcome that? Well, a few years ago, a digger put a hole in the supply pipeline from the Marsden Point facility down to the Wiri Oils Terminal in Auckland. Now, building more storage is not going to stop a digger putting a hole in a pipe, if some person driving a digger isn’t careful.

Hon Scott Simpson: Jacinda was going to build a new pipeline.

SIMON COURT: Ah! Apparently, according to the Hon Scott Simpson, the former Prime Minister, Jacinda Ardern, was going to build a new pipeline. Now, I’ll tell you what, the amount of stuff that this Labour Government has announced and failed to deliver, the Hon Scott Simpson, never ceases to amaze me. While the Labour MPs who still hold their seats are sitting there making fun of New Zealanders, and their genuine concern about cost of living, the cost of petrol and diesel, ACT is listening to them.

The aviation fuel industry, through good testing, through good quality assurance, can identify whether fuel is suitable, whether it should be landed onshore or sent back to refineries in Australia for re-processing. It’s very simple. New Zealand is nine to 10 days away from refineries in Brisbane. Adding a few extra days of onshore stockholding is not going to improve fuel resilience for New Zealanders in any meaningful way. That’s what this bill proposes to do.

Then we have to consider all of the other incoherent policies of this Labour Government. While telling industry and telling New Zealanders they should drive less, use less petrol and diesel—trying to shame them out of their private motor vehicles into walking, cycling, and catching buses—at the same time, they say “Oh no, no, we have to store more petrol and diesel onshore because of national security or resilience reasons.” Well, the main risk to national security and resilience has been the Labour Government over the past six years—and don’t worry, Kiwis will soon have a choice about who they feel more comfortable with.

So what are the options for New Zealand? Well, there’s a real issue with resilience, but that actually is more related to natural hazards and to national security and to threats over the horizon than it is to how much diesel can be held at Marsden Point. The real risk to fuel resilience, fuel security, and the ongoing maintenance of core services—can New Zealand keeps the lights on in our regions after a major disaster? We have to think about the Alpine Fault. An Alpine Fault failure could be a magnitude 8 earthquake. It’s predicted to be more likely than not in the next 50 years. If we’re going to improve fuel resilience, then the New Zealand Government of the future needs to consider how they encourage more liquid fuels to be held in more places around the country so that, actually, after a natural disaster, the people of that region have access to diesel—in particular, to stand up generators, hospitals, telecommunications, waste-water and drinking-water treatment plants—and keep those basic core infrastructure services running. That is the issue with resilience, and that is an issue that a future Government would need to address.

Then we actually need to consider what the costs of that are. Well, if it’s about building more tankage, what Minister Megan Woods told us shortly before is that the New Zealand Government is going to pay to build tanks to store up to seven days’ additional diesel around the country. That may well be the right thing to do to keep the generators running after a natural disaster, but that’s not the case that’s been made in this bill, and that’s not the case that the Government has made.

It is disappointing today that only the ACT Party is voting against this bill, unless the Green Party also decides that it’s more important to stick to principle and vote against this bill because they don’t believe in oil and gas in our future, and liquid fuels like diesel and petrol in our future. Maybe the Green Party and the ACT Party can hold hands and actually stand up for what they believe in, even while other parties sacrifice New Zealanders’ standard of living affordability in the middle of a cost of living crisis.

The ACT Party opposes this bill because it imposes unnecessary regulation and red tape. The cost to consumers is unjustified. As the Minister has stated, the private sector has already solved it by building more storage and channel infrastructure at Marsden Point in Northland. There’s no need for this bill; no need for it under urgency. ACT won’t support it.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Speaker. The Green Party is supporting this bill. It does make sense. It’s unfortunate that subsequent Governments over decades haven’t done enough to create a transport system that is more energy efficient, that’s already electrified, that gives people the option to get around and not have to rely on so many private vehicles, because that would mean we’d have a better current account deficit. It would be smaller if we imported less vehicles and fuel.

Some people mistakenly believe that if we had more oil exploration in New Zealand, that would solve our problem of petrol in our cars, but New Zealand has never used the oil that we extract off the coast of Taranaki in cars and trucks; it’s not that type of oil. So the whole idea that we would somehow produce oil here and use in our cars and trucks is misguided.

What we can do is electrify our transport fleet, invest in rail and coastal shipping, make our cities more hospitable for walking and cycling, and provide proper public transport, just like they do in the five countries that the National Party keeps talking about because they’re rated as having the best roads. The reason top executives—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order, order! I hope the member can anticipate what I’m going to say. In the third reading, while this is a summing up of the debate, the discussion must be confined to what is contained in the bill and not what is out of the bill.

Hon JULIE ANNE GENTER: I don’t believe that has applied to previous speakers. I feel there’s some—no, I won’t say it.

ASSISTANT SPEAKER (Hon Jacqui Dean): Good.

Hon JULIE ANNE GENTER: True resilience when it comes to fuel, true resilience for New Zealand will be electrifying our transport system and investing in a more balanced transport system, as the Green Party has long called for. But that will take time and, of course, we need to start now. In the interim, it makes sense to have this provision and I believe it was well supported at the select committee.

TERISA NGOBI (Labour—Ōtaki): Thank you, Madam Speaker, for the opportunity just to take a short call this morning on the Fuel Industry (Improving Fuel Resilience) Amendment Bill. That is it, in a nutshell. The title of this bill does what this bill says it does, right? So it’s about improving fuel resilience.

This bill ensures Aotearoa New Zealand has fuel resilience by ensuring that we have adequate fuel stock. Any major disruptions—although we know there is a low risk of that, however, we’re being prepared—would make a massive, huge, costly debt to Aotearoa New Zealand, in the millions and billions of dollars.

This bill is about looking after New Zealand, it’s about looking after New Zealanders—that’s what we do on this side of the House, that’s what the Labour Government does: it plans and it supports all New Zealanders, and it’s doing that by this bill making sure that we have enough fuel to make sure that we will be resilient. It’s a good piece of legislation, and I commend this bill to the House.

GLEN BENNETT (Labour—New Plymouth): Kia ora, Madam Speaker. I’m glad that I’m able to make a short call on this, because the ACT Party was just speaking so passionately about this—so passionately that they didn’t even participate in the select committee process. That’s how passionate they are about this legislation, obviously.

Last week, I was with executives from Air New Zealand who were asking me, “Have we passed this legislation yet? Because it is necessary.” They have been asking for it, so I’m glad—and I love it when you look at the bill and what it says on the packet is in the tin: Fuel Industry (Improving Fuel Resilience) Amendment Bill.

JOSEPH MOONEY (National—Southland): Thank you very much, Madam Speaker. I rise for a short call on the Fuel Industry (Improving Fuel Resilience) Amendment Bill. This is one that National does support. The National Party does support this as a means to increase resilience in fuel supply. Although we did have some concerns about the speed at which it progressed through Parliament and the time for adequate consultation with stakeholders—noting particularly that suppliers will only have until April 2024, after Royal assent, to comply with stockholding obligations and the industry does have concerns about a requirement to quickly invest in new tankage to meet obligations that could impact consumers through subsequent potential increases to the cost of fuel. Obviously, following the closure of the Marsden Point refinery, along with global events such as the invasion of Ukraine, fuel security and the sovereign risk for the lack of fuel security has been identified as a potential risk, and this bill seeks to introduce minimum fuel stockholding obligations on fuel importers to ensure that New Zealand’s fuel security is not in question.

I just note that this does underpin the continuing importance of oil and gas to New Zealand. We are a country that is trying to transition to alternative fuels and there are some exciting things happening in my region. For example. H. W. Richardson Group is turning some of their trucks, about 40 percent, into hydrogen powered and 60 percent diesel. They have the first commercial hydrogen production refuelling station being built in Gore, which should probably go live this year, I think. We have Fabrum in Christchurch, which is a small hydrogen company that’s doing some pretty exciting stuff and is probably one of the world’s leading companies in this space. There is Mike Casey, with his 100 percent electric orchard in Central Otago, who is doing some quite incredible stuff with integrated energy systems, electrifying the entire production.

But the simple reality is that for the short to medium term at least, we do continue to need oil and gas. We need this to transport products to New Zealand. We need it to transport food and other products around New Zealand to keep our tractors etc. going, and it’s quite critical. I note that Norway is often held up as an exemplar of the shift to new energy systems, with about 85 percent of new cars sold in Norway being battery powered. But Norway has also, this year, approved more than $18 billion in new oil and gas investments to develop 19 oil and gas fields. So I am just noting that this is going to take some time and the reality is that energy is complex and challenging and we need it to keep our economy moving.

We do support this bill as a means to ensure continuing security of supply of fuel in New Zealand to ensure that we keep our economy going, keep the lights on, keep people fed, and keep our economy moving.

SARAH PALLETT (Labour—Ilam): Thank you, Madam Speaker. I’m delighted to stand to take a short call on the Fuel Industry (Improving Fuel Resilience) Amendment Bill. As a Cantabrian who was in rural North Canterbury after the earthquakes, I am fully aware—as are many Cantabrians—of the essential nature of keeping your fuel tanks full. So traumatised, I think, were many of us, that all these years later, we still refuse to actually run with anything less than half a tank of petrol, because we know the importance of keeping our fuel stocks available to us.

So this bill is a complete no-brainer and I’m glad to hear the support from the National Party and it’s extremely interesting to me that ACT opposes it. I commend this bill to the House.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Speaker. We do support this legislation on this side of the House. We do so because fuel security is very important to New Zealand and New Zealanders.

The simple reality is that, in geographic terms, we are at the very long tail-end of the international supply chain network that involves and evolves around the globe. What’s worse and more risky for us is that not only are we at the very longest end of that international global supply chain, but we are a very tiny market at the end of the supply chain. International fuel operators are just international commodity traders and will, at times of stress, reprioritise their supply chain priorities depending on need, as they see it, in commercial terms.

Notwithstanding that commercial operators here in New Zealand will, of course, make prudent decisions to protect their own business and commercial interests, this legislation provides a legislation backstop and a requirement on those operators to do what we would hope would be done, but this provides the guarantee.

Just as an example of how fragile that global supply chain network is, members need only to have a look at what’s currently happening in the Panama Canal: a global hub, where right, at this very minute, there are more than 200 vessels stuck in a queue simply because transit through the Panama Canal at the moment is being impacted by climate conditions, actually. The protracted droughts in that part of the world are meaning that shipping is not able to transit through the canal as it normally does, and that will have a knock-on effect, not only for fuel deliveries but for a range of other trade and supply features around the globe.

Those are some of the basic reasons that we support this legislation on this side of the House. We think that it’s pragmatic and sensible for the New Zealand Government to put in place a range of security issues that are prudent and that are practical, but we know also that the commercial sector will do their bit. So, on that note, I’m happy to commend the bill to the House.

VANUSHI WALTERS (Labour—Upper Harbour): Thank you, Madam Speaker. We do live in a complex world at the moment, and my colleague, the Hon Scott Simpson, has spoken very well to that. We’ve seen the war in Ukraine. We’ve seen COVID. We’ve seen the fact that supply chains have been clogged. We’ve been subject to serious weather events. I think it’s fascinating, for—and I hope people are observing at home—the fundamental issue in terms of governance is resilience, right now.

We have the National Party and ACT members with very clashing views on this very fundamental area of Government. I am the most disappointed with my ACT Party colleague—the ACT Party, yes, but too my colleague Simon Court, in particular. He is a West Auckland MP. Mr Court, I hope you have walked down Don Buck Road and visited those families on lower Don Buck who had their electricity go out, who were reliant on emergency services. I hope you’ve been out further north-west, into Muriwai. I hope you’ve spoken to the community on the ground, who want to make sure that we do have resilience as we face these challenges into the future. This is a much-needed bill, and I commend it to the House.

A party vote was called for on the question, That the Fuel Industry (Improving Fuel Resilience) Amendment Bill be now read a third time.

Ayes 107

New Zealand Labour 62; New Zealand National 32; Green Party of Aotearoa New Zealand 9; Te Paati Māori 2; Kerekere; Whaitiri.

Noes 10

ACT New Zealand 10.

Motion agreed to.

Bill read a third time.

Bills

Resale Right for Visual Artists Bill

Second Reading

Debate resumed from 17 August.

SORAYA PEKE-MASON (Labour): I’m pleased to take a short call on the second reading of the Resale Right for Visual Artists Bill. I would like to acknowledge well-known leader and advocate Rangi McLean, who I don’t know personally but have met on several occasions. He’s an artist, and just last year, Rangi McLean was looking to take legal action against a German artist who stole his tā moko image and is selling it overseas. It is for that reason—and for other artists that find themselves in this situation—that I wholeheartedly support this bill, and I commend it to the House. Kia ora.

TERISA NGOBI (Labour—Ōtaki): Thank you again, Madam Speaker, for allowing me to take just a short call on this, the Resale Right for Visual Artists Bill. I won’t take long, because I was on the select committee that saw this bill through, the Social Services and Community Committee, and one of the things that all the submitters said was, “It’s about time.” It is about time, and that is what this Labour Government does. It listens, it knows what needs to happen in terms of supporting our artists and our creative communities, and we’ve made a real focus on that. I’d like to thank the Minister Carmel Sepuloni for her focus on that community.

This is about making sure that we get it fair and right and equitable. Five percent of the resale cost to the original artist—it should be a given, right? This is already happening all the way over in many places overseas, and so this really just brings us in line with the rest of the world, really. Again, it’s a no-brainer. Again, it is around saying, “Hey, it’s about time that we put things right.” I commend this bill to the House.

SIMON O’CONNOR (National—Tāmaki): This is what urgency has been building up to. This is the—and I’m sure the Minister of arts and myself as a spokesperson would agree—most exciting bill, and actually, quite genuinely, it is. This is a bill that has been by and large well received by the sector, but I only say by and large—there are artists and certainly some resellers who are not happy. We might tease a bit of that out at committee stage, but National remains in support of this bill overall.

Although, again, just to indicate as I have in previous speeches—or speech, actually in the singular—and in the select committee, there’s a little bit of a concern philosophically on this side around the scheme. But really, importantly, as the Minister knows, this is part of our free-trade agreements with the United Kingdom and the European Union, so we have to bring it about. And to that, and not wishing to delay it any further, I’m happy to commend the bill to the House.

SARAH PALLETT (Labour—Ilam): Thank you, Madam Speaker. I’m absolutely delighted to rise in support of this bill this morning. As we’re aware, artists have some of the lowest median incomes in New Zealand, with very few opportunities to benefit from their work on an ongoing basis, which is pretty shameful. Here in the Labour Party, we realise that hearts starve as well as bodies: “Yes, it is bread we fight for, but we fight for roses, too.” Thank you, Madam Speaker.

Motion agreed to.

Bill read a second time.

ASSISTANT SPEAKER (Hon Jacqui Dean): I declare the House in committee for consideration of the Resale Right for Visual Artists Bill.

In Committee

Parts 1 and 2, Schedule 1, and clauses 1 and 2

CHAIRPERSON (Greg O’Connor): Members, the House is in committee on the Resale Right for Visual Artists Bill. We come first to the debate on Part 1.

GLEN BENNETT (Labour—New Plymouth): Point of order. I seek leave for all provisions to be taken as one question.

CHAIRPERSON (Greg O’Connor): Leave is sought. Is there any objection? There is no objection. The question is that Parts 1 and 2, Schedule 1, and clauses 1 and 2 stand part.

SIMON O’CONNOR (National—Tāmaki): Just settling in for a good few hours on this bill—only kidding, only kidding.

Hon Scott Simpson: There’s lots to talk about.

SIMON O’CONNOR: There is, actually. At one level, there is a lot to talk about. But, I mean, look, by and large, this—as I said in the second reading speech and as the Minister knows better than I do and the officials, to acknowledge them—is part of a free-trade agreement.

Look, a couple of questions, Minister. One is actually picked up from a speech by one of your colleagues just earlier about the using, in this case, of a Māori artist’s imagery. Just to be clear, this bill covers the artworks itself, not, if you will, the aspects of that artwork, and that in many ways relates to the purpose too when we look at clause 3(b)(i): “acknowledges and respects the role of Māori as tangata whenua”, etc., etc., which is absolutely appropriate. I suppose the underlying question is, there’s the physical, particular visual artwork—the question is, will aspects of those artworks, if someone chooses to use a particular moko in their artwork, be covered here? Are we creating a little bit of an issue particularly with—is it Wai 262?—the use of what is Māori or Pacific or another culture’s imagery; is that going to be caught up in some way? Will that German artist that was referenced earlier have to pay part of a royalty to the New Zealander because they used an aspect of cultural art rather than the artwork itself? I hope I’m being clear on that—just the difference between concepts and the physical artwork.

Second question is around—oh, yeah, that’s right—the amount of royalties. We’re going for 5 percent—so this is clause 16. Just for the Minister, if she were to address the concerns of some within the reselling space, who would see this ultimately sort of as an imposition and a tax that’s going to be passed on to consumers in some way, that’s going to be ultimately quite a bureaucratic—sorry, potentially could be quite a bureaucratic system. Does she have concerns there?

Something I raised in select committee, I’m now looking at clause 20; it’s around the collection agency. There’s a little concern, certainly on my side, that the agency could almost become too big as it sort of self-generates a lot of work to if not justify itself but also an ever-growing desire to try and garner further information. So I suppose the question there is, does she have any concerns that the collection agency could become too large? And, if not, what does she see as some of the ways to fence that in?

And final question, which you’ll be delighted to know, is, I think—well, not think; I know because I read it. The department’s regulatory impact statement said we’re going to pull in about $700,000 a year, which is—that’s OK. But does she think that’s going to be chewed away by just, again, the process of running the collection agency? Does she have any findings from officials or otherwise to give us a bit of an indication of all we’re collecting is less than a million a year? And, let’s be clear, the artists themselves love it, but less than a million a year less the costs of running the system, do we think this is going to be value for money? So just a few quick questions there.

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): So there are a few questions in there; I’ll do my best to respond to them.

Firstly, with respect to imagery that may be used without permission by an artist, by a business, or by someone else, there are separate copyright rules and laws around that, and so that’s not part of the legislation that we’re passing today. However, I do recognise the concern of the member that raised that in her second reading speech.

Also with the royalty, 5 percent is where it’s being set. This seems to be consistent with other countries who have similar schemes, certainly consistent with comparable countries that we work a lot with. So we’re happy with where it has been set.

There will of course be the deduction for the collection agency that helps to support the ongoing costs of having a collection agency in place. This seems to work well also with other countries. I think the one advantage to being behind, as such, with respect to putting this in place, is that we have had the opportunity over the course of at least a decade—more than a decade, really—to observe other people’s schemes in relation to this, and so have seen what their experience has been. So we don’t have any levels of concern with that. We’re also able to observe their experience with collection agencies. So, again, no level of concern there. Obviously, that will need to be set up and then run. It will be monitored. We have made sure that the Official Information Act can be applied to the collection agency. That was the good work of the select committee in actually interrogating the legislation and how it would be implemented and what the collection agency would look like and what powers we would need to be able to continue to hold the collection agency accountable as well. So we do not have concerns with respect to what that will look like once it’s established.

SIMON WATTS (National—North Shore): Thank you very much, Mr Chair, and I appreciate Minister Sepuloni’s contributions to my colleague Simon O’Connor’s questions, to open them. I have got a question in regards to clause 21(2), and it’s in regards to whether each party must ensure information is collected. I guess, Minister, I think of Depot Artspace, which is in Devonport in my home electorate of the North Shore, and Amy and Tere and Nina and the team down there that do an absolutely amazing job in terms of showcasing both cultural examples of some of our leading artists but actually, in a broader spectrum, what is the best of a community gallery—or two galleries, actually, in respect of that place. But can you just give a little bit of context in terms of what are the potential implications for a gallery such as that, around the information-collection aspect—as my colleague Simon O’Connor noted—around some of that burden? Do you feel that that is going to place a significant burden on a gallery like that? Or whether you feel that galleries such as that should not have any concerns in regards to this legislation—that perspective would be appreciated.

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): The impact on art market professionals was a common concern at the time of introduction of the UK and Australian schemes. Reviews of these schemes show that, overall, the administrative burden is not significant. For example, the 2014 review of the UK scheme found that the median time spent on administration by auction houses and dealers per quarter was 95 minutes and cost around $50 per quarter, adjusted for inflation. Similarly, a review of the Australian scheme estimated two to three hours per quarter, at a cost of about $100. We do recognise, as a Government, that there will be some additional administrative impacts and costs for art market professionals, who will be required to provide information to the collection agency on resales and will be jointly liable with the seller for the payment of the royalty. In establishing the New Zealand scheme, the collection agency will work with art market professionals and businesses to support them to adapt to the requirements of the scheme and reduce administration and compliance costs. The royalty—5 percent of the sale price—is also considerably smaller than fees charged by art market professionals through buyers’ and sellers’ premiums, often at least 17 to 20 percent.

Dr JAMES McDOWALL (ACT): Thank you, Mr Chair. Just a question to kick off to the Minister around the requirement, the need for this bill, and the focus on it being a reciprocal arrangement, which is why, because of our free-trade agreement and agreements—

CHAIRPERSON (Greg O’Connor): The member might just need to speak up or go a little bit closer to the microphone. His voice is quite quiet.

Dr JAMES McDOWALL: I’ll try to speak a bit louder. How’s that? Just a question around the purpose behind this is so that we meet our requirements, our obligations under a free-trade agreement, and the focus has been on it being reciprocal.

So I was just going to query the Minister, then, as to why it isn’t reciprocal, in the sense that, in this bill, it sets a 5 percent fixed amount, fixed rate, whereas if we look at the European Union and look at the United Kingdom, who have the same regime in place in each of those territories by way of Brexit. If we look at those rates, the maximum royalty is 4 percent, but then it’s staggered. It goes down to 3 percent for the next threshold, then down to 1 percent, then to 0.5 percent, then to 0.25 percent, and the total amount of the royalty may not exceed €12,500, looking at the European Union. So that’s my first question. If this is supposed to be a reciprocal arrangement, then why isn’t it the same?

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): Requirements in the NZ-UK free-trade agreement and the NZ-EU free-trade agreement are high level. The bill meets all of these requirements. The requirements are that the bill must be reciprocal, the right is inalienable, eligible works must be an original work of art, the work must be a resale, the royalty must apply to all acts of resale by a person or persons acting in the course of dealing in the business of visual works.

So we did have the opportunity to actually set our own threshold with regards to the royalty fee. My understanding is that we did not look into the staggered proportion or percentage that that member referred to because of the administrative burden that that would put on the system. So there’s already been questions from the Opposition today around the level of bureaucracy and potential administrative burden. Having a flat rate clearly makes that a lot easier to manage, and it’s also a lot easier for people to understand.

Dr JAMES McDOWALL (ACT): I appreciate the response from the Minister. So I guess a portion of that is around going above and beyond, as opposed to just simplifying. I can understand not using the thresholds, because that is added bureaucracy. None the less, our percentage is set higher, so it is a case of why is it above and beyond? And also the fact that there is, in fact, a cap in those jurisdictions that we haven’t adopted.

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): Yes, the member is right. In many overseas schemes, including the UK and some EU countries, there is a cap on the maximum royalty payable. However, the New Zealand market is much smaller and artworks here do not sell for the high prices seen in many overseas countries—although we would like them to.

Not having a cap is also key in ensuring the scheme can ultimately be self-sustaining into the future. As an administrative fee will be deducted from all royalties collected, the administrative fees collected on higher-value sales will help, in many ways, cross-subsidise administrative costs associated with collecting and distributing royalties from lower-value sales. Therefore, in line with the Australian scheme—a more comparable market to New Zealand than the United Kingdom—there will be no cap on the maximum royalty paid.

CHAIRPERSON (Greg O’Connor): The honourable—Dr James McDowall.

Hon Peeni Henare: That’s a long valedictory!

Dr JAMES McDOWALL (ACT): I know. Thank you, Mr Chair. One further question around the setting of the threshold at which artworks are eligible: between $500 and $5,000. That is quite a wide range, and I’m just curious, because the systems are already in place overseas in the UK and the EU, why the Government has opted to take quite a large range there and not actually indicated something a bit more specific.

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): A minimum threshold is necessary because having no threshold—and therefore covering all sales, even those of very low value—is not administratively feasible or cost effective. The bill states that the threshold will be between $500 and $5,000, with exact amount to be set in regulations, rather than in legislation.

I think the range of $500 to $5,000 has been chosen because a threshold lower than $500 would, as I’ve said, be administratively unviable, while an upper limit of $5,000 provides room for upward adjustment in the event of future inflation and/or a substantive market growth. So if we put it in regulation, then what we can do is, over time, if we choose to—it’s much easier to shift that threshold than what it would be if it was set in legislation.

Dr JAMES McDOWALL (ACT): Thank you, Mr Chair. So just on that, is there any indication that the Minister has, as to where—and I understand that it’s going to be in regulations—as to where she, or the Government, would like to see that threshold start?

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): At this point, final decisions on that are yet to be made.

Dr JAMES McDOWALL (ACT): Thank you, Mr Chair. Separate question entirely: something I raised in the previous reading was around will there be any consideration for exemptions—or exclusions, I should say—around, say, an artist that has been imprisoned for whatever, whether they’re still in prison or whether afterwards. Once they’ve finished their sentence, will they still be eligible to keep being paid by the scheme?

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): The answer to that is no.

CHAIRPERSON (Greg O’Connor): The question is that the Minister’s amendments set out on Supplementary Order Paper 413 be agreed to.

Amendments agreed to.

Parts 1 and 2, Schedule 1, and clauses 1 and 2 as amended agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Greg O’Connor): Madam Speaker, the committee has considered the Resale Right for Visual Artists Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Hon Jenny Salesa): This bill is set down for third reading immediately.

Third Reading

Hon CARMEL SEPULONI (Minister for Arts, Culture and Heritage): I move, That the Resale Right for Visual Artists Bill be now read a third time.

It is a privilege to present this bill for its third reading. The Resale Right for Visual Artists Bill represents another significant step in this Government’s commitment to creating more sustainable careers for visual artists. First, I would like to acknowledge some of the people who have contributed to getting the bill across the line. I want to acknowledge the input of all members of this House, the many members of the public who submitted during public consultation, including artists themselves, the Parliamentary Counsel Office, and the work of the officials. I also want to, as I did in an earlier speech, acknowledge and thank the Social Services and Community Committee.

Through this process, I have heard directly from our artistic community, who are thrilled and excited for this legislation as it will make a measurable difference to the way they are remunerated and recognised for the work they do. While this piece of legislation may not seem significant to some, the benefits to New Zealand artists and their families are long-lasting. Getting to this stage has been a long work programme, and I extend my thanks to everyone involved for their input and the work that has gone into getting us here today.

At present, those who buy and sell visual artwork on the secondary market make money on artworks when an artist’s reputation grows. But, currently, none of this profit, which is a result of the hard work and success achieved by the artist, goes to the artists themselves. Under the Resale Right for Visual Artists bill, this will change. This bill will establish an artist resale right in New Zealand, meaning a 5 percent royalty payment will be collected each time an artist’s eligible work is resold. In contrast to copyright, this right is unable to be waivered or transferred away from the artists while they are living, and so the right remains with the artist for their whole life.

Beyond monetary compensation, this bill acknowledges visual artists for the important contribution they make to the social and cultural identity of Aotearoa New Zealand. Over 80 countries around the world, including Australia, the United Kingdom, and all European Union countries, already have an artist resale royalty scheme, and we know, looking at these countries, that the benefits of a resale scheme are far-reaching. For example, from the commencement of Australia’s scheme in June 2010 through to April 2022, A$11 million have been generated in royalties for visual artists. Aboriginal and Torres Strait Islander artists have benefited greatly, representing 65 percent of the artists receiving royalties and receiving 68 percent of the total value of royalties.

It is time that our talented artists receive these same rewards here in Aotearoa New Zealand. In designing the bill, we have drawn on the insights and experiences from countries who have similar schemes in place. However, Aotearoa New Zealand is a unique country with a diverse artistic community, including our very rich and vibrant Māori and Pacific arts communities. The bill has been drafted to reflect this unique context by including the cultural expressions of Māori and Pacific peoples in its definition of visual art and through a series of other design features which seek to ensure Māori and Pacific artists benefit equitably from this scheme. These include the ability for the right to be held jointly, which recognises the social structures within these communities and that Māori and Pacific artworks often have multiple creators, and the ability for private sales to opt in as artworks by Māori and Pacific artists are more commonly sold privately than through the secondary art market.

There’s a requirement on the collection agency to acknowledge and respect the role of Māori as tangata whenua and provide culturally appropriate support. As well as receiving royalties when their artwork is sold in New Zealand, visual artists will also be able to receive royalties when their eligible artworks are sold in countries which have reciprocating artist resale royalty schemes. For example, New Zealand artists will be able to receive a royalty when their eligible artworks are sold in the United Kingdom.

The scheme will also benefit others as well as the artists themselves. Under this bill, artists’ successors or beneficiaries can receive royalty payments for up to 50 years after the artist’s death. This provides an intergenerational benefit and will mean an artist’s successors, including their whānau and iwi, will be able to share in the artist’s creative success.

We have heard concerns that the introduction of a resale royalty scheme may negatively impact our secondary art market and that artworks may be sold overseas or on the black market to avoid paying a royalty. Similar concerns were raised when both the UK and Australian schemes were introduced. However, there is no evidence that people have elected to sell overseas or via private sales so that they can avoid paying the royalty. Instead, we have seen that in both the UK and Australia, artist resale royalty schemes have contributed towards an increased transparency within the secondary art market, and both these markets have grown while having an artist resale royalty scheme in place.

Alongside this bill will sit supporting regulations which are needed to bring the bill into operation. These will set the threshold above which artworks become eligible for the scheme, detail how the collection agency will collect and distribute royalties, and set the percentage of each royalty the collection agency can deduct to administer the scheme. The regulations will also establish a cultural fund through which declined and unclaimed royalties can be used to benefit the wider artist community. Once the bill and regulations are in place, the collection agency will be appointed and the relevant systems and processes will be put in place to enable the scheme to begin operating. I expect this to take between six to 12 months following the commencement of this bill.

This bill has been a long time coming. The Copyright (Artists’ Resale Right) Amendment Bill was first introduced to the House in 2008 but was, unfortunately, not enacted. It was brought back to the political agenda in 2019 as part of our clear commitment to the scheme and to Aotearoa New Zealand’s visual artists.

We had mentioned a couple of times during the committee stage that this is something that we have to do as part of our commitment through our trade agreements. I want to add that it is not just that; it is something that we actually want to do. We value our artists. We value the contribution that they do make. We want to support them and their whānau with their artistic careers, so not only is this part of our commitment through free-trade agreements, it is the right thing to do.

I want to acknowledge the Hon Judith Tizard—I think it was the Hon Judith Tizard—who first attempted to do this back in 2008. I am sure she is watching now and cheering this piece of legislation on. What a privilege it is to stand before the House today some 15 years after the Hon Judith Tizard started this journey through Parliament. It is a privilege to be able to mark this milestone. I commend the Resale Right for Visual Artists Bill to the House.

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

SIMON O’CONNOR (National—Tāmaki): Thanks, Mr Speaker. Look, it’s still no surprise to the Minister in the House that National supports the Resale Right for Visual Artists Bill. Look, conceptually, too, as I’ve said a few times, we don’t by and large have a problem with the overall concept, it’s just been a slight debating point within some sitting on this side of the House whether in fact an artist resale scheme is appropriate or whether or not, you know, if you’re going to introduce the concept to visual art whether it should be expanded into the musical and other collectible areas, too. So for us it’s not so much an opposition to the concept it’s just a sense that there’s a much wider discussion that could be had.

But this has been, ultimately, precipitated by a free-trade agreement, which we do come back to because this is exactly how we’ve come to this space. Importantly, too, with the timeliness which the Government’s operated in I think this has to be in place by February next year. I could be wrong on that, but long and short—we’re bound by trade agreements to get this through, which actually raises a particularly interesting somewhat constitutional question. I raised this in the first reading speech and, again, it’s not opposing the bill, I just think it’s something we need to ponder: that, in effect, this Parliament has been bound, to a degree, to pass this legislation because of an act by the executive, in this case an international treaty. And I want to be really, really clear for the record: that’s not opposing what’s happening, but it’s just an interesting constitutional quirk.

To acknowledge the Minister for Arts, Culture and Heritage, she has picked this ball up quickly and swiftly and brought it to the House and, in a few minutes time, will bring it to resolution. So to acknowledge the Hon Carmel Sepuloni for the work that she’s done as the Minister for Arts, Culture and Heritage. It would be remiss of me to not thank the officials; I think they’ve actually been outstanding. Their knowledge—if they’re still in the back room or wherever, just to acknowledge that what they knew was fantastic, and as we threw curveballs, various questions, or idiocies, they took it with grace. So to acknowledge them and all the submitters.

Look, fundamentally this is actually an important piece of legislation for the sector. It will take some time—particularly for the professional resellers to provide their processes. I do have a question—well, it’s not really a question. I think, ultimately, this is a classic piece of now modern legislation where we’re giving lots of regulatory powers—I think that’s something that the Minister and, into the future, the Parliament will want to look at, and that’s not disparaging those who will be making or operating said regulations. But again, the primary legislation sets a lot of power into regulation.

As I say, we support this bill, we look forward to it concluding, and we look forward to a continuing vibrant visual artistry in New Zealand.

ANGIE WARREN-CLARK (Labour): Thank you, Mr Speaker, a real pleasure to speak on this bill, the Resale Right for Visual Artists Bill. I’m going to take a short call but just want to reiterate the thanks for all who have been involved in this legislation. The Minister, who is wearing some fabulous earrings, by the way, from an arts collective—just noting—has really helped and supported us with this piece of legislation in enabling us to get this through fast.

The bill does three simple things, and I have talked about this in the previous speeches. It establishes the scheme and it authorises a ministerially appointed committee—non-government organisation—but the thing that we’re all delighted about here in this House is it ensures that those artists out there continue to make an income from their artwork. I think about what it must have been like, say, if I had created a piece of art in 2010, for example, when we would have had the scheme in place, had it not been removed from the legislative direction by the National Government, and what it would have been like for an artist who, perhaps created something, made a beautiful piece of artwork and it was sold once and then sold for maybe hundreds of thousands of dollars and onwards and onwards. I just imagine how that must feel as an artist to see their artwork appreciating and not to be able to benefit from that.

So, with that, I would like to commend this bill to the House and to thank all of those for their participation, particularly our officials sitting in the gallery for their wonderful work. Thank you.

CHRIS PENK (National—Kaipara ki Mahurangi): Thank you very much, Mr Speaker. Just a short call from me. As our spokesperson on the issue, Simon O’Connor, has made clear: National continues to support the bill. I’ll join others in giving a shout-out to the local artists of the area that I’ve kindly been given the opportunity to represent; I think about the Art in August exhibition recently in Warkworth for the benefit of local Mahurangi College, markets in various places where great artists and craft workers produce, for example, in Matakana, and the Helensville Art Trail—which are all local institutions.

I think Simon O’Connor makes a very interesting point about the extent to which Parliament needs to respond to the executive treaty-making power. Although, again I emphasise, as he has done, that that’s not a criticism of the substance of the bill, nor even necessarily the process—just to note that agenda setting in the traditional way that local legislation is needed to give effect to or ratify such treaties.

My final comment is that there has been interesting discussion in the House at previous stages, and I understand at select committee as well, about how to define art. Obviously, famously subjective in terms of how one regards art, as good, bad, or even what has the status of art. Some might say that speeches in the House of Parliament attain the status of art, and to avoid ascribing too greater value to this that would put it outside the remit of the bill, I’ll conclude my remarks there, except only to join others in commending it to the House.

Rachel Boyack: Mr Speaker?

DEPUTY SPEAKER: Um—remind me—Rachel Boyack.

RACHEL BOYACK (Labour—Nelson): I can’t believe that you finally did that to me, Mr Speaker, but it’s an honour and a privilege, I think, for every member of the House! It is a pleasure to take a call on the Resale Rights for Visual Artists Bill. May I begin—I am a musician and have a music degree, and actually it’s unusual for me to talk about my actual area of expertise in this House, and it’s nice to be able to do so this morning.

I could give a full 10-minute call on the concept of patronage, but I won’t—but it’s a useful concept to speak about because actually, if we’re serious about this, artists and musicians very often live precarious lives. They have precarious incomes, precarious livelihoods; precarious work. I’ve experienced that myself, including working many, many times as a musician for free. And when compared with sports and with commerce, the arts are very much the poor cousins when it comes to funding, support, and certainty of income. Many of my friends, who I want to give a shout-out to, live precarious lives as artists. I just note the points Mr Simon O’Connor made earlier around music: actually, we have a royalties scheme for music already—unfortunately, it’s often not adhered to. There is so much undermining of artists and musicians in terms of the incomes that they rightly deserve.

This is an excellent bill. It ensures that artists can continue to receive income based on the value of their art that they’ve created, in perpetuity. It’s worked overseas and it will work here and I think it’s a timely reminder to the House that we all have a duty to uphold the lives and the livelihoods of artists. They add enormous value to our nation both here in New Zealand and globally. And I feel, as those of us with high incomes, working in this House, we have an obligation to always ensure that our artists and our musicians are supported so they don’t have to go down a pathway of precarious work. This is an excellent bill and I commend it to the House.

Dr JAMES McDOWALL (ACT): Thank you, Mr Speaker. Like the previous speaker, Rachel Boyack, I myself am also a musician, but I don’t think anything I produce would quite make the cut on the low end of the threshold, so no personal gain from this, I suspect. ACT will continue to support this bill. We support free trade and the free-trade initiatives that the Government has explored and is exploring. We do also understand the frustrations of artists where they see their work, they sell it initially for a set price—it might be a low price, in context—and then in future seeing that being sold multiple times for much higher prices as value tends to appreciate, hopefully, and the frustration that, you know, where’s their slice and, you know, they actually created the work. So we do certainly understand that.

We do also hope this does provide proper remuneration in the sense that it does actually have an impact for those artists, because that has been another one of the core purposes of this bill, to make sure that that funding is there, that they are supported, but I do suspect, with the bureaucracy, which could cause some financial impacts, but also with the infrequency of creating art, that the individual impact, the benefit on artists, may not be as grand as we hope. None the less, the framework is there, so we’ll see how it goes. The Minister for Arts, Culture and Heritage herself stated that compared to the European Union and the UK, sale prices here are not as high, typically.

I do query the impact on galleries themselves, because this is an incentive to sell privately. Galleries are already quite an expensive way to sell artwork. Some of them take cuts of around 30 percent, give or take, and so this is an additional fee on top of that. So you can kind of see that this may actually have an incentive to not use galleries and therefore more artwork is exchanged—not under the table, not in the grey market; it’s still official, but, none the less, less tracked.

The bill, as we’ve just discussed in the committee stage, does go a bit above and beyond, and I appreciate the Minister explaining the thinking behind that. It’s not purely identical to the schemes in the UK or the European Union, but none the less appreciate that New Zealand has had the opportunity to do something a little bit differently.

One concern, I guess, is the ongoing accountability of this fund, particularly when artists cannot be found or their descendants cannot be found. We’ve got a committee that has almost an—and I wouldn’t want to make any accusations, but an incentive to almost not find the artists, because if they don’t find the artists, then they’ve got the option of keeping that money and putting it in the fund and using it for, you know, wider community work in the arts sector, whatever it may be, which is another issue of accountability. But, none the less, you know, the proof will be in the pudding on that to see just how well that’s administered, how well they go about seeking and finding artists to make sure that money’s passed on. If they cannot find someone, does the person who paid that fee have the option of a clawback? Yes, I know that option is in the legislation, but is it up to them or is it up to the committee? It seems like it’s up to the committee, so will there be some sort of fairness or monitoring of that?

Although I wasn’t in the Social Services and Community Committee, I don’t believe there was extensive discussion on some of the unlikely but none the less possible issues around income tax and tax across jurisdictions—also, the issue of money-laundering, which can come, unfortunately, into the art space now and then. As I raised just then in committee stage, the issue of making someone ineligible based on conduct—that’s not an option in this, and I just, you know, urge future Governments to have a think about that.

With that, ACT will continue to support this. We do have concerns; I’ve laid a few of them out. It is a bit of bureaucracy, but we do get it and we do support free trade, so, with that, I commend it to the House. Thank you, Mr Speaker.

CHLÖE SWARBRICK (Green—Auckland Central): E te Māngai, tēnā koe. Tēnā koutou e te Whare. I just wanted to start my contribution on behalf of the Greens, obviously, in support of this piece of legislation by acknowledging the Minister, the Hon Carmel Sepuloni. I know that she has a particular interest and passion for this and I also want to acknowledge her with her other hat as a Minister for Auckland. Because we’ve seen the intersection of those passions most recently with the likes of the announcement around the St James. So I am very privileged to be working with her on those kaupapa.

As many before me have said, this has been a really long time coming, at least 15 years since we saw similar legislation introduced into the House, unfortunately befuddled and obfuscated and ultimately just got rid of by the former Government. But here we are today with full consensus of the House, and I think that that is something worth celebrating. As others have also put on the record, there are at least 80 other countries across the world who have forms of schemes like this. And it does need to be noted that there are going to be challenges and there will need to be ongoing monitoring with regard to the likes of the private sales which others have put on the record as well, as that administration of this scheme.

The Greens would also like to point out that it shouldn’t need a free-trade agreement for the likes of this to be progressing. Once again, the Greens’ position on that free-trade agreement is incredibly well-canvassed, especially from the likes of our spokesperson Golriz Ghahraman on this issue. There’s not a whole lot more to say on this, beyond how fundamentally important it is that we pay the artists who keep the world going around, who colour our lives with so much meaning and offer a mirror up to society to reflect on who we are, who we might want to be, and to offer that critic and that conscience.

I also wanted to acknowledge those who have been engaged in advocating, organising, and working towards seeing this occur for a really long time; particularly here, I know that Equity for Artists is an organisation—Judy Darragh, who I ran into just the other week on Karangahape Road—who have long been talking about the likes of an artist wage; perhaps another issue to put on the table, Minister—as well as Reuben Paterson and Dane Mitchell. There’s a number of other small organisations, grassroots organisations, that are also starting to crop up to organise for better outcomes for artists across the board. To that effect, in my patch, as others have acknowledged in theirs, I’d like to acknowledge Dignity and Money Now, aptly named D.A.M.N., who are organising the likes of Basement Theatre, to see that we continue to value this ecosystem of artists, the techies, and the community who ensure that all of us see the best of ourselves and live our good lives.

There were points made by other speakers throughout this debate, including in the committee of the whole House, that artists’ works tend to increase in value over time and with their reputation growing. Of course, that’s kind of the point of this resale rights scheme, but it does raise the question, I think, of how we support artists at the beginning of their career when they first are starting to flesh out their craft. Because if we are not providing those equitable opportunities to everyone in this country from all walks of life, particularly those from lower income communities, then what we’re doing is suppressing talent, and that talent is everywhere. So, once again, the Greens need to put it on the table that there are far wider discussions to be had, and I was actually really encouraged to hear that from Simon O’Connor from the National Party, that they may be interested in opening the box on how we can support the artists and creative ecosystem in this country. Rachel Boyack from Nelson just also put on the record about the inequities in how we support, for example, sports in this country versus our creative industries.

I was just looking at my phone where in the top left, where usually it would say my mobile provider we have “Up the Wahs!” in there. I don’t know how many other members of Parliament will be joining me at Mt Smart, to cheer on the Wahs against the Dragons on Friday. But it really does draw home the fact that we don’t yet have that national narrative conversation celebration of our artists on that same platform, and we should and we deserve to. And we should reflect on the fact that we had one of the largest sporting events in the world in the form of the FIFA Women’s World Cup here most recently, with all of the eyes on this nation across the world. We can do and achieve those same things in that creative and artist space if we support that broader ecosystem.

DEPUTY SPEAKER: Let’s have a conversation about the bill, though, too.

CHLÖE SWARBRICK: Yes, Mr Speaker, and to that effect, this bill goes some way to ensuring that we have greater outcomes for our visual artists in particular. But there’s still so much more to do for those visual artists, for our musicians, for our theatre practitioners, and for all of the talents and the skills that exist in towns and communities, urban and rural, across this country.

I am proud to commend this bill to the House, and I am looking forward to all the more mahi in supporting this ecosystem in the future.

TĀMATI COFFEY (Labour): Thank you, Mr Speaker. Happy to take a short call on this. I laugh constantly about the kind of political amnesia that sometimes happens in this House. It’s always good to have a little refresher. Because sadly, as our Minister alluded to, this was actually on the cards back in 2008. We were talking about this all the way back then. Sadly, there was a change of Government. Although we congratulate the National Party for supporting this today, it was actually the National Party that dumped it all the way back then, and it’s made Kiwi artists worse off for more than a decade before our Government—that’s right: Labour Government—have picked this up again and actually brushed it off—forgive the pun—and brought it back to the fore.

Let’s just do a little comparison to Australia. In Australia, from the commencement of their scheme in June 2010 to April 2022, A$11 million has been generated in royalties for visual artists. That’s right, we still have this image of the poor, struggling artists here in New Zealand—and part of that reason is because we missed this opportunity back in the day, where we could have grabbed it with both hands and made our artists better off for it. Instead, the National Government dumped it. We’ve picked it back up; we applaud them for getting back on the bus all these years later, but it’s our artists who are front and centre of this conversation. We need to make sure, in this digital age, that actually our artists are getting as much benefit of their original art as possible.

I want to use the example from the Copyright Licensing New Zealand website. On there—for those people that don’t understand what this is all about—they give a really good, clear, crisp example. Here’s the example they give. They say: “[Imagine] you’ve created a series of sketches. Eva buys one from you. A few years later she takes it to an auction house to sell it. Ricky buys it and pays three times the amount that Eva did. The resale royalty scheme, when it comes in, will mean that you, the artist, will be paid 5 percent of the price that Ricky pays Eva.” It’s a stamp on you, as an artist, on your ability to be able to put art out into the world and know that every time it gets reproduced or resold, you’ll get a cut of that art.

I think about all of our struggling artists and I think this is a really good piece of legislation. I wish we had got this off the blocks all those years ago back in 2008, but we are here now. It’s good to remember the past. I commend it to the House.

DEPUTY SPEAKER: This is a five-minute call—Barbara Kuriger.

BARBARA KURIGER (National—Taranaki-King Country): Thank you, Mr Speaker. It’ll be a very short call. I haven’t been involved at all in the preparation of this bill but I commend those who have; neither am I any form of an artist. But I am very pleased to say that, today, National is supporting this bill, and I commend it to the House.

HELEN WHITE (Labour): I want to talk about something we haven’t discussed yet, which is the use of this by groups that are disabled, or what we would call outsider art. I went to a studio last week called Māpura Studios. I also visited Tui Ora studios—both are in the Mt Albert electorate. It’s incredibly work that they’re doing there. They’re studios where people come, often with a disabled relative, or they come as a person who is disabled intellectually or they have had a stroke, and then Tui Ora is dealing with people who’ve had mental illness, and they’re coming to these places and they’re creating beautiful artwork. And they’re often collaborating with their family to create the art, and the works are utterly beautiful. If you go to my Facebook, you’ll see some from Māpura Studios. There’s one that they created when I was there, and were working on, and there’s also ones that they created for a Matariki celebration that they held at Alberton. This work is stunning, and it isn’t really something that they get any income from in this situation.

Imagine if our intellectually disabled people creating this beautiful work, and their whānau creating it with them, were able to have a secure income for the rest of their lives because of the cumulative effect of something like this. And this little bill deals with that. It allows them a stream of income and, in fact, deals with joint ownership. I met a mother and son when I was at Māpura the other day, and the mother was telling me about the work that was being done by her and her son. Her son had actually won a big award—actually, alongside Carmel Sepuloni’s husband. It was an incredible thing for his status that that had happened, and for his self-confidence, and she was telling me about how her family was going through a healing process by doing that art—that it gave her so much healing herself as the mother of that boy to be able to do that work with him, and to see her child happy in that situation was a pretty stunning thing.

So I hope that that kind of art isn’t really treated as outsider art but is seen much more as a legitimate part of the creative process across our community, and I hope that this bill helps create a dignified income stream, an independent income stream, that recognises the value of these people in our community creating this beautiful art, and I commend this bill to the House.

ANGELA ROBERTS (Labour): It’s a pleasure to rise and take a call. I just want to reassure some members on the other side of the House who seem to think the reason we’re doing this is because we have to—some trade agreement. We’re doing this because it’s the right thing to do, very, very clearly. It’s the right thing to do and it’s a good thing to do. I’ve referred to our living standards framework, which really guides Treasury’s decision making about how we ensure improvement in living standards for people, and it talks about the wealth of our society and individual and collective wellbeing and the role that leisure and play and social cohesion and the arts play in that. So it is a good thing to do. It helps the arts, of course, when we support them; they help us to thrive. It is good for our souls when we support these people. There were concerns raised, and I’m reassured when I hear about the 80 other jurisdictions where this has successfully run—the sky hasn’t fallen—including Australia, the UK, and the EU. I feel very reassured that this scheme is built on solid ground and experience.

Finally, when I was the head of arts at a small rural secondary school, I taught students who took what their families often thought was the hard road and went out into the world intending to make a living as an artist. I can remember my own mother saying to me, when I thought I was going to drama school, “There is nothing romantic about starving in a garret.” This legislation helps us to make sure that if they write it, you know that, for our visual artists like our playwrights and our songwriters, they will actually have some additional access to their rightly deserved income. And it is because of that that I thank the Minister for Arts, Culture and Heritage for making sure that this happens, and commend it to the House.

JOSEPH MOONEY (National—Southland): Thank you, Mr Speaker. I rise to make a short call on the Resale Right for Visual Artists Bill. This is a bill that the National Party supports. As has been, I think, mentioned in a few other speeches, this is required by our free-trade agreements and we support it. I would say our artists in New Zealand are actually quite phenomenal and we’ve got some incredible art in this country and it’s great to be able to support them. It certainly has been a challenging few years for many of our artists—among others—in this country. So it’s great that we’re able to do something that can help them. There has been some differences in views about how resale schemes should be established in New Zealand, but this—we do support this.

I’m just going to take the opportunity very briefly, just to do a shout-out to some of the great art in my area of responsibility. In the great electorate of Southland we have Te Atamira, which was founded only last year as a multipurpose arts and cultural space. This was a vision that Carroll Joynes and Abby McCormick O’Neill helped to drive forward, people who have a deep experience in this field in Chicago and the United States and had a vision for that in our region, which very much was supported by our region. Incredibly, 130,000 visits have happened since that was opened only last year, and in fact there’s an exhibition at the moment that’s attracting a very broad—its locals and visitors who are interested in, I think, it’s 11 different artists who are doing some quite fantastic work.

Down in Gore we have the Eastern Southland Gallery incredibly led by a chap by the name of Jim Geddes who’s a living legend. I’ll just say that has an internationally significant exhibitions of the John Money wing and the Ralph Hotere gallery—one of the largest collections of Ralph Hotere in the country. It has had people from around the world and people who are very well-known around the world who have just quietly dropped in and had a look at it. So it’s not always well-known in New Zealand, but it’s very well-known around the world about what an incredible collection it is. The gallery also is responsible for the development and care of the district art collection which focuses on early New Zealand, Southland, and contemporary New Zealand artists.

Just finally, I’ll just mention, also, the Central Stories Museum and Gallery in Alexandra, Central Otago, which is also my electorate. This is responsible for the main public museum and art gallery for the Central Otago region, and currently, as we speak has an exhibition of Winterstellar 2023, which is an astrophotography exhibition which is their biggest and best yet. If anyone doesn’t know, the Southern hemisphere is the best place to see the galactic core, the heart of our galaxy, the Milky Way, and we’re close enough to the pole to see the Aurora Australis, otherwise known as the Southern Lights. Central Otago is one of the best places in the country to see that incredible galaxy that we’ve got out there. It’s great to have artists who reflect on that and bring that vision closer to us.

I think what artists do is help reflect us back to ourselves, and help us reflect on who we are as a people and a nation. So they do a fantastic thing. So, with that, we support this bill.

SORAYA PEKE-MASON (Labour): I’m pleased to take a short call on the third reading of the Resale Right for Visual Artists Bill. I mentioned, earlier on, an example of an artist seeking action for their imagery, which is covered by other legislation—that is, the copyright and intellectual property. We did hear, earlier on, mentioned by my colleague Tāmati Coffey, a perfect example of actually how this works and can work for our artists. Nevertheless, I am delighted that our creative artists and communities have another tool or a lever in which they can stand on. This is significant in terms of sustainable career opportunities for them. It’s significant in terms of the future of our artistic communities and their families and their long-term future.

I want to emphasise the words of the Minister the Hon Carmel Sepuloni, and that was her statement, which I think is very important, that it’s not just for the trade agreement that we do this; it is what we want to do. It is the right thing to do for our artists, for our people, for Aotearoa. A tremendous amount of work has gone into this bill. I want to thank all those involved—in particular, those artistic communities across the motu that have worked with the Social Services and Community Committee, that have worked with the staff, to get us to where we are today. I want to also acknowledge Judith Tizard, who was earlier mentioned, who had introduced a similar bill in the past, which, sadly, got voted out. I also want to acknowledge the artists in Whanganui, where I come from, and across Te Tai Hauāuru. I know and have seen some of the struggles that they experience trying to sustain a career and be creative at the same time. I think that this is an absolutely fantastic piece of legislation. I commend this to the House. Kia ora.

Motion agreed to.

Bill read a third time.

Voting

Correction—Fuel Industry (Improving Fuel Resilience) Amendment Bill

DEPUTY SPEAKER: Just before we go into the next bill, members, when the House was in committee on the Fuel Industry (Improving Fuel Resilience) Amendment Bill, the result of the vote on the question that the question be now put was incorrectly recorded as Ayes 71, Noes 44. The correct result is Ayes 72, Noes 44. The record will be corrected accordingly.

Bills

Sale and Supply of Alcohol (Community Participation) Amendment Bill

Second Reading

Debate resumed from 15 August.

DAN ROSEWARNE (Labour): Kia ora, Mr Speaker. It’s my pleasure to take a call on the Sale and Supply of Alcohol (Community Participation) Amendment Bill. As the last speaker, I think it’s important to finish the second reading by saying that this bill responds to persistent issues with alcohol licensing processes in the Sale and Supply of Alcohol Act 2012. When the Act was introduced over a decade ago, it was meant to give communities a say in the way that alcohol licensing decisions were made in their areas. However, communities themselves have told us that the Act is not working in the way that was intended.

This bill responds to those concerns by making changes to the licensing processes. I particularly like the changes relating to local alcohol policies (LAPs), as it will be easier for councils to adopt an LAP, if they wish, and ensures that they are more effective once they are in place. For too long territorial authorities have worked with their communities to develop policies only to be held up in the appeals process. This has cost ratepayers millions of dollars while delaying and sometimes preventing councils from adopting LAPs at all. LAPs have a role in reducing harm and they are an important way for communities to influence the alcohol licensing decisions in their area. This bill will remove the costs and delays associated with appeals and will ensure that community voices are carried through to licensing decisions.

The Justice Committee agreed by majority with the change allowing anyone to object to an application for an alcohol licence, with a discreet exemption for trade competitors. The recommendation to apply this change regardless of the type of licensing application, be it for a new licence, renewal, special licence, or an application to vary a licence—those conditions come in good time. So it’s for that reason that I commend the bill to the House.

DEPUTY SPEAKER: The question is, That the amendments recommended by the Justice Committee by majority be agreed to.

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

Ayes 75

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

Noes 39

New Zealand National 29; ACT New Zealand 10.

Amendments agreed to.

A party vote was called for on the question, That the Sale and Supply of Alcohol (Community Participation) Amendment Bill be now read a second time.

Ayes 75

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

Noes 39

New Zealand National 29; ACT New Zealand 10.

Motion agreed to.

Bill read a second time.

DEPUTY SPEAKER: I declare the House in committee for consideration of the bill.

In Committee

Parts 1 and 2, the Schedule, and clauses 1 to 3

CHAIRPERSON (Hon Jacqui Dean): Members, the House is in committee for the Sale and Supply of Alcohol (Community Participation) Amendment Bill.

SHANAN HALBERT (Junior Whip—Labour): Point of order, Madam Chair. I seek leave for all provisions to be taken as one question.

CHAIRPERSON (Hon Jacqui Dean): Leave is sought for that purpose. Is there any objection? There is none. The question is that Parts 1 and 2, the Schedule, and clauses 1 to 3 stand part.

SIMON O’CONNOR (National—Tāmaki): Thank you very much. Look, it’s still no surprise to Minister Robertson and, obviously, to the House that National’s opposing this bill. So what are, effectively, three questions from me, Minister: the first is, how is this bill going to deal with existing liquor stores? Because as I read the new section—is it clause 12, where section 133 is being replaced? Long and short, it could potentially—I just want to stress that word, “potentially”—hang existing liquor-licence holders out to dry.

I think, in my own electorate, we actually have—not sure if this is a great thing to confess in the House or not—quite a number of liquor stores throughout the Tāmaki electorate, and, actually, they are well-patronised by locals and well-liked and respected. But a number of them—using this as the example—are very close to the likes of schools and community centres and the like. And, you know, the ones that are coming to mind—I won’t name them in the House per se, but they’ve been there for many, many years and are actually well-loved and respected, not just for what they’re selling but also for the people that they are. There’s a risk, or a perception of a risk, that they’re going to potentially lose their liquor licences with this new community participation amendment bill going through. So I’m wondering if the Minister can give us—or them, in particular; and too my constituents in Tāmaki—some surety that they’ll be able to continue so long as they’re continuing in good practice.

The second is around objections. As you read through the bill, basically, anyone in the country anywhere can put in an objection. So, again, a local Tāmaki liquor store in Saint Helier’s could have someone—no offence to my excellent colleague here, Penny Simmonds, but someone in Invercargill could be complaining about the liquor store in Saint Helier’s or Glen Innes or Ōrākei. Does he see any potential issues there, and whether or not he’d be open to change that or at least put something in to push back on vexatious and, I would argue, irrelevant engagement?

And the last is around the new section—sorry, clause 14—apologies, it’s the new section 203A. I hope I can articulate this question well. It is a concern that so many conditions are being placed on the licensing committee to make sure someone feels happy giving their submission, that it could almost become counterproductive. And what I mean by that is everything from the time and the layout of the venue, the time table, the languages used. I mean, in themselves there’s nothing wrong with that, but, to be slightly facetious, if someone walks in and decides they don’t like the colour of the carpet, does the committee have to, basically, dissolve and set things up for the permission of the submitter? That’s where I’m trying to get to, actually. Is the law—and particularly that clause—setting things up so that a submitter really dictates how these events are structured? Because as I read the legislation, they are. The submitter holds a lot of the power, because the committee has to, as it says, “establish appropriate procedures to consider the applications.” And it’s all based, after that, on, effectively, the person giving the submission. So yeah, does the submitter hold all the cards around how and where the process should be held?

Hon GRANT ROBERTSON (Minister of Finance): At the outset, I’m obviously indicating that I’ll endeavour to respond to all questions. I may need a little bit of time here and there, given that it’s not a bill that I have been following all the way through, but I’ll do my best to answer the members’ questions as they come forward.

And so clause 12 was the first question that the member Simon O’Connor raised, around the position of existing stores. I do think it’s important to note that while this does now introduce a discretion element in terms of a renewal of a licence, that discretion is not completely unfettered. It’s limited to deciding to renew the application regardless of inconsistency, and the district licensing council may only decline to renew the licence if there is inconsistency around location or density in the local alcohol plan, not other matters like trading hours. This change means that there’s now greater consistency between renewal and new licence applications.

So yes, at a certain level, I accept the member’s point that this introduces something new for an existing licence holder, but what the clause endeavours to do is create a consistent approach. I think the member will know that, as a local MP of some reasonable time, these issues are commonly raised—prior to this bill—around why licences are not renewed. I’ve had plenty of contact from those who’ve had them around their views of district licensing authorities. So, actually, I think the outcome here is a better one that provides for a consistency between the two approaches, but it is limited to those matters around location and density within the local alcohol plan as it stands.

In terms of the question the member raised around objections, I think it would be pretty challenging for somebody to be able to make objections in every case. There’s thousands of these sorts of applications that come through. Really, what we’re trying to do here is strike a balance of allowing more people to come into the process but for the process not to be used for commercial or trade reasons, which is what’s, unfortunately, happened to this point. So our view is that we are enabling community application. It’s highly unlikely that we’re going to see a big flood of objections from people cutting across the country, given the situation, and we do want communities to have the right to be involved.

The final question from the member I will come back to him on, but, quite clearly, whenever there is a committee set up to do anything, it’s a two-way street. The people organising the meeting have to be able to be there and run it, and the people who are participating need to be given a fair chance to participate. I actually think members across the House would, I would hope, celebrate the general principle of the third of the goals of this bill, which is to use technology to endeavour to find ways to make it a lot easier for people to participate in the public process. So I will come back and see if there’s anything further—I’ll get advice on that—but, from my perspective, I think we’ve got the balance right in that clause as well.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. So, just for people tuning in, we’re debating the Sale and Supply of Alcohol (Community Participation) Amendment Bill. I suppose the background to this is concern amongst many in the community around the prevalence of liquor licences—people both on site and off site—in communities, and the desire for communities to be able to set the rules around how many stores they have and where and the hours and the prevalence of stores. The previous National Government introduced legislation around the local alcohol plans and there has been a fairly slow, tortuous, and expensive legal process to get some of those through, so I think there is general agreement that the current system isn’t perfect and it needs improving. The problem is, like in many areas, in trying to improve that situation, this Labour Government has decided, rather than to try and improve that objection process or appeals process to local alcohol plans, they want to just eliminate that entirely, and then, secondly, have taken the opportunity to make a number of changes to the process around liquor licensing, which we think go far too far, and that’s why we’re opposing the legislation.

I want to start with clause 10, amending section 102, which says “Any person”, when it comes to objections to an application. So you’ve got a young couple setting out in life, wanting to open up a new store to sell things, including alcohol, or a restaurant maybe that sells alcohol. So any people may object to an application or a grant of a licence, whether that person is an individual or a group.

Now, in the past, we haven’t allowed groups—as I understand it—to object, and I’d be interested to hear from the Minister what great progress will be made from that. I’d just like to get a sense from the Minister as to (a) what is this going to achieve, and (b) what cost and time is this going to add to the process.

I think we’re all conscious of the cost of living pressures that we live under and we all have to recognise that every time the Government passes more regulation, that imposes more cost on any process and eventually it flows through to the consumers who actually want to buy the beer or the wine or whatever they’re trying to get. So if you’re moving from a situation where, when it comes to getting a licence, having a fairly restricted group of people who are directly affected by a particular proposal having a say—which everyone would agree with—to completely flinging open the doors and saying that if you want to open a restaurant with a licence in Remuera, it’s OK for the anti-alcohol group from Invercargill to come and have their say, and the particular—

Penny Simmonds: Please just give Invercargill a bit of a break, thank you.

Hon PAUL GOLDSMITH: I’m sorry, but it’s possible. To be honest, there is not always a meeting of minds between Invercargill and Auckland. So it doesn’t take too much imagination to realise that there are lobby groups throughout the country who are strongly opposed to any new licences, and it doesn’t take too much imagination to think that they could be quite well organised in that process and that they could use this ability to martial their resources around the country in order to make life as difficult as possible and to line up.

So I want to know what research or evidence has been pointed into the consequences of flinging the doors wide open to anybody and everybody to come in, and what additional cost that will add to any given process in this sense. So that’s just around that question.

Hon GRANT ROBERTSON (Minister of Finance): Just before I address that question, I want to pop back to the last of Simon O’Connor’s three questions, which is that it will be for district licensing committees to decide how to regulate their procedures. So that won’t be something that the submitter has full control over.

It’s actually on that point that I want to pick up on Mr Goldsmith’s points—actually, no, before I do that, we do need to go back to the beginning of where this comes from. One of Mr Goldsmith’s colleagues—I think it was Mr McKelvie in his valedictory speech yesterday—talked about the importance of politicians being able to apply the LV Martin principle: it’s the putting right that counts. I was in this House when local alcohol plans were first being developed, and it would be fair to say that there were some pretty high ideals about what those local alcohol plans would achieve. It would be, to take Mr Goldsmith’s point, accepting some of the differences between different regions and how they might choose to see alcohol regulated within their regions. Indeed, the Invercargill Licensing Trust exists to this day, and there’s a different way of doing it than we already had.

What ended up playing out, however, has been a quite different approach, which has actually seen local communities stymied from being able to have the kind of local alcohol plan that they want. So the bill comes from that basis. It comes from the community returning to Government and saying, “You actually didn’t get this quite right, and now you need to put it right.” That is what has been done here. So I just wanted to say that that is the basis of what is being done here.

In terms of how it will deal with people who would be seen by the member Mr Goldsmith as vexatious in their objections or their submissions that they make: in many ways, select committees deal with this every day of the week. We often get a large number of form submissions that come in on a particular bill, and the select committee makes the decision that, actually, they’re not going to hear from all of those people, because they know that potentially they are not that representative of the wider views, or they can be dealt with by one single submission. So it will remain in the purview of the district licensing committees and appropriate authorities how they manage their hearings, dealing with objectors, and ruling out vexatious objections.

Equally, there are other changes in the bill that also will have an impact, even if there is an increase in objectors—for example, removing cross-examination and unnecessary formality in hearings will also likely reduce the length of those hearings, as well. So we are trying to make sure we facilitate real community participation and get a balance here, and I believe that’s what we’ve struck in the bill.

Hon PAUL GOLDSMITH (National): May I take it from that answer that the Government has done no research into what the effect on the cost of the process would be and that the Minister is not concerned about any person being able to come—and he thinks it will be fine.

Hon Michael Wood: At the cost of 10 years of litigation.

Hon PAUL GOLDSMITH: That member might be tedious, but he shouldn’t throw these things around.

The next question is around trade competitors. So the next question is that a trade competitor may object to an application. We’re not talking about local alcohol plans, we’re talking about licensing applications. Under this legislation, it’s now possible for a trade competitor to object to an application, with two exceptions: if the objection does not relate to trade competition, or to the effects of trade competition. But otherwise, it’s open slather. So I’d just like to hear from the Minister what are the reasons that a trade competitor might come up with for objecting and why he thinks it’s appropriate for Parliament to allow trade competitors to object, given the ingenuity of people to come up with reasons.

We’re thinking about this, and these rules apply not just to setting up a new licence but also renewing a licence. So you’ve got your little store or your restaurant with a licence, and somebody wants to open a new one next door. You’re allowed to go along and say—well, you can’t say, “I object to this licence because I don’t want competition.”. but you can say, “I object to this licence because I’m worried that having two stores in this neighbourhood would be hurtful.”, and in the mind of that person, they wouldn’t be thinking about competition, but they’d be only concerned about the concerns of the community. Is this Government so naive that they think that that’s how it would operate?

That the trade competitor would say, “No, I object to this being opened up next door, not because I don’t want any competition, but because I am worried about the impact of having two stores in this community and we think that that’s an issue. On that basis, we think there will be too many temptations in the way of people in this community and it shouldn’t be opening.” Is the Minister really that naive to think that that wouldn’t lead to some pretty fundamental problems?

The next one is around clause 12 which replaces section 133, which is the renewal of licences where relevant local authority policy exists, and this is, I think, the thing that we most strongly object to. There are two steps in this process. We’re talking about setting up a local alcohol plan and then that goes through, and then, separately from that, there are the district licensing authorities, which actually do the deal about starting up new licences or renewing licences.

The core issue of this legislation is it says that once you’ve passed your local alcohol plan, and if your local alcohol plan says that there shall not be any liquor outlets within a kilometre of a school, for example—and that’s a new rule. It’s come through, it’s been approved, it’s gone through the process, and it’s been adopted. Under this legislation, when it comes to renewing a licence, the district licensing committee may decline to renew the licence if it considers that renewing the licence would be inconsistent with the policy, including the location.

So you’ve been in business for 50 years, you have an impeccable record, and you haven’t had any complaints. You’re just a couple of Kiwis trying to make a living and you’re proud of what you’ve built up—you know, that’s your retirement saving, that’s your plan, and that’s what you’ve done. That’s your business, giving something that people want for purchases, and you happen to be within 800 metres of a school, and then, suddenly, there’s a local alcohol plan that says you cannot be within a kilometre and—whoom-fa! You’re gone.

Hon Grant Robertson: Boomfa?

Hon PAUL GOLDSMITH: Whoom-fa—you’re gone—and how does he justify that?

Hon GRANT ROBERTSON (Minister of Finance): “Oom-fa!”

CHAIRPERSON (Hon Jacqui Dean): No, “Whoom-fa!”

Hon GRANT ROBERTSON: Oh, “Whoom-fa!” It’s important to have that distinction, isn’t it?

Just to pop back to Mr Goldsmith’s previous comment, I’m advised that there has been consultation with local government around the management for objection and concerns about whether or not there’d be a great increase in volume and they have the tools to manage that volume and they are comfortable with it.

On the member’s two points, both of them were raised by Simon O’Connor, so I am now repeating my answers that I gave to Mr O’Connor. But Mr Goldsmith had one new point, and that was his question around trade competitors. It’s just really important to note that I find it somewhat ironic that the member has managed to flip, in two contributions, to two 180-degree opposite positions, which is suddenly he doesn’t want people to be able to be involved at all.

What we have at the moment is a situation where trade competitors have lodged objections that have unnecessarily and unfortunately limited the ability for local alcohol plans to be created. We are making changes that limit the extent that they can object by taking away the ability for that objection to be about trade competition matters. But the idea that they as residents, potentially, in a community would be entirely wiped out from being able to have a view, I would have thought that the member wouldn’t haven’t wanted. He would have wanted local community members to be involved. So there is now a limitation on trade competitors, and that I believe is appropriate, given the problems we’ve had. But that’s balanced against them still having some rights to actually be able to have a view.

Then on the question of renewals, I did answer this for Mr O’Connor earlier. The change here is a discretionary change. It allows a district licensing committee to be able to consider those issues around a local alcohol policy (LAP) around location and density, but not around other matters like trading hours, and, as I said to Mr O’Connor earlier, I’m sure the member is aware that people regularly have to update their licence. Someone who has been in business for 50 years would have had a regular process of having to update their licence, so this is now allowing in that renewal process for the LAP that will have been created to now be taken into account, and thereby a new entry to the market and an existing person will now be treated the same. I actually think that the member, if he stopped and thought about that for a minute, would realise that that was actually a fair process.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. No I don’t recognise that at all. I’m not quite getting a clear reply from the Minister. It may be discretionary that a licensing authority may decline to renew a licence but this legislation gives them the power to decline a licence if it is consistent with the local alcohol policy.

Anna Lorck: That’s the reason for it.

Hon PAUL GOLDSMITH: Yes, I know, and the question I’m trying to get from the answer is how he thinks that is justifiable. Maybe people don’t seem to understand it, but if you’re operating a business where you have your life savings in that business, and you’re trying to figure out whether to continue to invest in that business so it doesn’t look scrappy, or you want to put some money into it, over the horizon you have potentially zero confidence that you will be able to carry on that business next year because the licensing process could take your legs out from underneath you in a way that is not related at all to your conduct in any way. When it comes to renewing a liquor licence, if a store or a restaurant with a liquor licence has a terrible reputation, keeps on breaking the rules, is a centre for endless riots and trouble and strife, and has a reputation for selling liquor to 13-year-olds and all that sort of thing, I think everybody would understand that it would be justifiable not to renew the licence.

But what this bill is doing means that if somewhere in the process a liquor or alcohol plan suddenly decides that there shall be no stores within a kilometre of a school, for example—which they could—when your licence comes up for renewal and you’ve been, for 50 years, 800 metres from the school, suddenly you could be out for no other reason than that. What I want to understand is not whether it may or may not happen; it could happen. The point is that under this legislation it could happen and there would be no way back. So how does the Minister justify that?

My second question, as I have another two minutes, is around clause 12A, where we’re talking about special licences, and, again, any person may object. I’d be keen to hear from the Minister some examples of special licences where this might take place. So, you know, you’re trying to organise a wedding somewhere in a unique position somewhere out in the bush or whatever, out the back of Coromandel, with a special licence, and you can have—

Hon Scott Simpson: There’s some very special licences in the back of the Coromandel.

Hon PAUL GOLDSMITH: You could have a special licence out the back of the Coromandel for a special event, and once more that busybody from Invercargill can come along and object. So I just want to know whether he thinks that’s practical or reasonable.

The next one is section 203A, “Licensing committees must establish appropriate procedures”—this is in clause 14. This legislation brings in a new rule. It does not permit parties or their representatives to question witness of other parties. So I’d be interested to get a clearer understanding of the thinking behind that. So if anybody is wanting to renew their licence—say you’re in Auckland and you’ve been in business for a long time and you’re wanting to renew your licence—and our friend from Invercargill turns up and says, “You’re a crook”, or “You’re a bad influence on the community and you keep selling to under-age people” or whatever, this bill is saying that they should not be allowed to be questioned in any way. That’s it—they say their thing, there’s no questioning, there’s no cross-examination, and there’s no way of testing that in any way. I’d just like to understand the logic behind that.

Hon GRANT ROBERTSON (Minister of Finance): I’ll be brief because we are covering ground that I’ve already covered here. I think the member betrayed himself a little as to what’s going on here when he described the local alcohol policy as liquor plan rather than a local plan—rather than a local alcohol plan. That’s the point.

Hon Paul Goldsmith: You got me.

Hon GRANT ROBERTSON: That’s the point, though, isn’t it, Mr Goldsmith, because this is about reflecting the views of the local community. So when and if a local alcohol plan is developed—and the whole reason we’re here doing this is because it’s been very hard to do that under the legislation as it was passed—it will be reflective of the local community and therefore when it comes time for a renewal of a licence, you would expect that to take into account the views of the committee as now articulated.

And that would be my answer to the last part of the member’s approach as well. This is ostensibly a bill to make sure that the community’s views are heard and that people have an opportunity to do that in a way that is fair and is not about distorting market competition. That is because these are the problems that have existed in the community since the legislation was passed.

So I think the member is philosophically coming at the bill from the opposite direction—which doesn’t surprise me because it would be consistent for the member to do that—of the purpose of the bill, which is to facilitate greater and better community participation. And, Madam Chair, I think I’ve answered his other questions.

Hon GERRY BROWNLEE (National): The question that immediately arises from the Minister’s commentary to the House is: what constitutes the local community? Because if it’s open to anybody anywhere in New Zealand to object, that is not a local community. That is, the prohibitionists in society are given an opportunity to have a rant every time they see someone either going for a renewal of a licence or for a new licence. And then, of course, we also know that under these local alcohol plans, when they’re advertised, etc., the vast majority of people who are quite comfortable with the licensing arrangements in their area don’t make submissions because they assume that this is something that society allows. So those who are opposed tend to have the louder voices.

And I think the problem with this, too, is that not only is that group of people who give their assent—and remember it’s only a few years, certainly in the member’s lifetime, that the whole question of prohibition was taken off the general election ballot each year. The question of whether an area wanted to remain a trust area was taken off that ballot because the assumption was that people, after generations of saying yes, accepted that these facilities would be available in their local community.

Now, the other problem I’ve got with this is there’s no specification in here about who might sit on those licensing applications. Look, the member can laugh, but throughout the country there are people who are in those positions who take extremely dim views of anything that comes out of a bottle, particularly if it’s got alcohol in it. And I think that’s a consideration that needs to be taken into account—should be taken into account.

The idea, too, that someone who’s operated successfully for a long period of time and complied with the law and any conditions of a licence could lose it because of an objection is also very unreasonable. If someone is operating outside the law, they’re acting irresponsibly, they’re behaving poorly, then yes, you’d understand why they would lose their licence or they would have special conditions put on them or whatever. This makes it too easy for anybody to raise objections that could see someone else lose not only their investment, their livelihood, but also a loss in a community. It might be a great win for the small group of people who don’t want it, but there’s been no reference to the larger volume of people who are quite comfortable with that facility being there.

And then I’d raise the issue of—in Christchurch we have, alongside the river in the central city, what was once known as “the strip”; a sort of series of bars, a very well-organised entertainment area. Now with all the laneways and what have you, there are smaller bars all throughout that facility; bars, cafes, small restaurants, etc. What if the local people there decide, or some big objectors get in there and say, “No, we don’t like that.”? Something that the whole city is quite proud of, quite pleased with, but then a small group of people put the knife in and go and convince the local hearing panel looking at the local alcohol policy that it should be shut down.

Now, look, the Minister over there shakes his head and says, “This couldn’t happen”. Lots of things happen as a consequence of law—lots of things happen as a consequence of law and this is a law that’s being imposed on the basis that it’s good for community participation, but essentially is going to ignore the vast majority of the community and simply give a voice—a much louder voice than is reasonable—to those who are opposed to this just on a principle basis. So my question is: what constitutes a community?

Hon PAUL GOLDSMITH (National): Just in terms of the appropriate procedures in proposed new section 203A—“allow for tikanga Māori to be incorporated into the proceedings”—I don’t see “tikanga Māori” defined anywhere. So I’d just like to have a clear definition from him as to what that means, thank you. Well, the tikanga from Ngati Porou might well be very different to somewhere else. So I just want to know what we’re talking about here. That would be helpful—that would be helpful.

Now, the other thing is—and maybe I’m misinterpreting this; it’s possible, who knows?—clause 15A strikes out a whole bunch of things in terms of directions of hearings, and it strikes out clause 205C, giving the power of a licensing committee to decline—may direct that the evidence or the brief be struck out of it is frivolous and vexatious. That’s been struck out, and I just want clarification. Does that mean that they no longer can do that or is it being referred to somewhere else in the legislation?

Hon GRANT ROBERTSON (Minister of Finance): Just briefly on the last point, I’ll check, but I’m sure it is because they do continue to have the right to strike out vexatious submission or to consider a person who makes a submission to be vexatious. So that will already be dealt with elsewhere in the Act.

In terms of the only other new points that the member has raised around tikanga, he actually answered his own question in his statement, which is that a definition of it in the Act would not be reflective of the different tikanga in different parts of the country. It relates to Mr Brownlee’s points, which is that there is still a role here for local government and the entities and committees that get created at a local level. There will be a variety of people with a variety of views on those committees, as there will be a variety of tikanga in different parts of the country. Local authorities and local committees such as this already know how to run themselves. And, normally, it is the Opposition telling us that we should not be telling local government how to do their job, and this bill holds the principle that local government will be able to—

Hon Gerry Brownlee: That’s the job they shouldn’t have.

Hon GRANT ROBERTSON: Well, that may well be the case, Mr Brownlee, but that’s not what this bill is about.

Hon PAUL GOLDSMITH (National): Thank you. Thank you for that non-answer, Mr Chair, Mr Speaker—whatever he is; he’s “Minister”, I think. I suppose the final and broader point—and I don’t know, I sense a slight determination on the part of the Minister to get on with it and just ram all this stuff through one week before an election, and we worry about that. But the broader point I want to make is around the impact that it has on this being an example of a Government that has had a tendency to add regulatory costs particularly to small businesses but all businesses very freely and with surprisingly little thought given to the impact that it has on consumers.

Because ultimately all the cost of this filters through the system and ends up adding to the cost of beer and wine or whatever in this case. But there are many other—countless—examples. If you think in the area of housing, for example, if you pass all the regulations around expectations around XYZ, there’s no magic. It doesn’t come out of the air. Somebody has to pay for it. And then, ultimately, in the case of housing, it ends up with the renters having to pay for it.

So in this area, what we’ve got in total is we’ve got flinging open the doors wide when it comes to any objectors from anywhere. Not just sort of saying it should be individuals who object, but it can be organisations, the temperance union or whatever from anywhere can come and object to anything. And then it lists all the sorts of things that have to happen in terms of translation being offered. It should allow for an unspecified set of tikanga that could be incorporated. So a whole lot of extra ability for these things to go longer and in a more convoluted fashion. The one countervailing thing that the bill does offer is the fact that you can’t ask any questions of the people who make objections, and so you’ve just got to sit there and listen to it and then, ultimately, pay for it.

I suppose the thing that worries me is the kind of assumption that the small-business operations, which are by far and away the largest number of licence holders—small operations, little mum and dad operations—can just soak up all this and if it takes a few days to grind your way through this process, so be it. And if it costs you $2,000, well, so be it and that will magically sort of just appear from somewhere and it won’t have any impact on the costs.

Then, secondly, whether it will have impact on—so, I mean, what we’re trying to achieve is to reduce the harm of excessive liquor consumption in our communities. But we’re also trying to balance the fact that we also want a vibrant hospitality sector. And I’ve heard the Minister in the chair wax lyrical on many occasions, particularly in the context of the Rugby World Cup and FIFA and all that, about how wonderful this is for the hospitality sector and how important the hospitality sector is. Yet at the same time they’re passing legislation which may have an enormously profound effect on participants in that sector if they fall foul of the views of somebody from anywhere and the local alcohol plans, if they are unduly restrictive.

So the two sort of comments that I’d like to hear from the Minister is: how is he so confident that this process won’t lead ultimately to higher costs to consumers and is he confident that the hospitality sector in general is supportive of this legislation and that they’re calling out for it and that they think that they would be treated reasonably under it?

SHANAN HALBERT (Junior Whip—Labour): I move, That the question be now put.

Motion agreed to.

A party vote was called for on the question, That Parts 1 and 2, the Schedule, and clauses 1 to 3 be agreed to.

Ayes 75

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

Noes 40

New Zealand National 30; ACT New Zealand 10.

Parts 1 and 2, the Schedule, and clauses 1 to 3 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Hon Jacqui Dean): Mr Speaker, the committee has considered the Sale and Supply of Alcohol (Community Participation) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: The bill is set down for third reading immediately.

Third Reading

Hon GRANT ROBERTSON (Minister of Finance) on behalf of the Minister of Justice: I present a legislative statement on the Sale and Supply of Alcohol (Community Participation) Amendment Bill.

DEPUTY SPEAKER: That statement is on the parliamentary website—is available.

Hon GRANT ROBERTSON: I move, That the Sale and Supply of Alcohol (Community Participation) Amendment Bill be now read a third time.

The alcohol licensing process is integral to alcohol regulation in New Zealand. It is the process that decides where and when alcohol is sold in our communities: in bottle stores, supermarkets, restaurants, pubs, at clubs, and at large events. It is important that this licensing process works well.

When the Sale and Supply of Alcohol Act was created over 10 years ago, the intention was for communities to be able to have their say on alcohol licensing in their areas. In a broad way, it was intended that communities could help develop local alcohol policies that apply to all licence applications, and, on a case by case basis, it was intended that communities could participate in individual licensing hearings.

There are two important reasons for this. It’s our communities who can best articulate the way that alcohol affects them and their families and whānau. Despite the intention, since the Act came into force, the evidence shows us that licensing decisions are not being made with community input as had been expected. In fact, communities are having far less of a voice than intended. This is not for lack of interest. Individuals and groups are involved in the development of local alcohol policies through consultation, only for those policies to be watered down or abandoned entirely because of appeals. Many individuals and groups seek to be involved in hearings on individual applications only to be told that they don’t have sufficient interest in the application to object.

During the select committee process for this bill, it was clear that many individuals and groups consider that the way the Act is working at the moment means their voices are not being heard. Therefore, I am pleased that this bill is a champion for community voice. The bill makes it easier for communities to have their say in three ways: easier to adopt and apply local alcohol policies, or LAPs, to licensing areas. It does this by removing appeals against LAPs and restoring district licensing committees’ discretion to decline to renew licences if those licences would be inconsistent with the area’s LAP. These changes reduce delays and costs that many territorial authorities have experienced in trying to adopt LAPs, and means that LAPS can be taken into account in more licensing decisions.

Secondly, the bill broadens who can object to licensing applications. It does this by removing the test that people and groups must be able to meet to object to those applications, but maintains narrow exceptions around trade to ensure licensing remains focused on harm reduction. This practically means no person or group will have to prove their interest in the application as they have to do at the moment, which can be particularly excluding. District licensing committees will also have a greater range of information before them to make their decision.

And, thirdly, the bill also makes licensing hearings more accessible and fairer for everyone taking part by changing the way that district licensing committees’ hearings are run. It requires district licensing committees to ensure their hearings avoid unnecessary formality, including by removing cross-examination and allowing for tikanga to be recognised. These changes will make hearings less intimidating and encourage more people to have a say about what happens in their community. By making these changes, the bill recognises the importance of community input in alcohol licensing and that voices of the community are heard.

I acknowledge that interests in alcohol licensing are varied. Our communities also include alcohol licence holders running local businesses, and their voices are important in licensing too. The changes have been carefully considered with this in mind, and this can be seen through the changes the bill makes. One example relates to the changes to local alcohol policies. As a result of the changes, the status of the special consultative procedure is restored. The special consultant procedure is a process which must be used to create an LAP, and it gives everyone an opportunity to say how they want the LAP for their area to look. Removing appeals against LAPs means that different voices all have the same opportunity to contribute in the context of consultation. Community contribution to the development of LAPs will no longer be drowned out by appeals, which tend to be made by organisations representing a narrow set of interests.

The bill’s changes also respect the roles of the decision makers in the licensing system. By removing appeals, the bill respects the role of locally elected representatives to design and adopt LAPs applying to their areas. The changes also respect the discretion of district licensing committees who make licensing decisions on behalf of their area. The community voice is one factor they take into account in their decision making. They also consider other information, including from applicants and licensing inspectors. Like decision makers in other processes, district licensing committees take all the information they have, consider its relevance, and weigh it to make their decisions. The bill respects their role in this process.

As I touched on before, the changes to licensing hearings apply to everybody. It’s not just objectors that can find licensing hearings a stressful experience. We know that licensees can also find them intimidating. The changes this bill makes will benefit them and everyone who attends. All participants should feel comfortable and confident to share their views and not have to worry about getting tangled in knots through the process.

I’m proud that this bill gives communities back their voice within the system, strikes the balance between all interests involved, and respects the role of decision makers in the process. I want to thank the Justice Committee for their work on the bill and all those who submitted and contributed to the process. The changes the committee made as a result of hearing from the submitters have enhanced the bill. I want to acknowledge the previous Minister of Justice for her work in introducing the bill and the current Minister of Justice for the work to complete this. I’m confident that by making these targeted changes to the licensing process, this bill will make a big difference to those in our communities whose views have been excluded for too long. I commend the bill to the House.

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

Hon PAUL GOLDSMITH (National): Well, we don’t agree to this bill and we’ll be opposing it. So this is the Sale and Supply of Alcohol (Community Participation) Amendment Bill. It was introduced by Kiri Allan when she was Minister of Justice.

The starting point is a fair concern around the slow and cumbersome process of the appeals to local alcohol plans, which allow for, in legislation, the community to have a say on what goes on in their community when it comes to liquor licences. These are for all the various off-licences and for bars and so forth in our community. So, yep, we agree with that.

It’s been a very slow process. The Government had a couple of options. They could try and improve the process so that it went more swiftly and that appeals were dealt with in a timely fashion or they could go for the much tougher option, which is what they did, which is to do away with the appeals. Now, the slight problem with the logic of that is that it kind of assumes that councils always make the correct decisions. I just think anybody who lives in New Zealand and is aware of how local government operates would struggle with that idea that the council always gets it right and that the decisions that they make in coming up with anything are always 100 percent right and should never be questioned or appealed. I don’t like to be unkind to our friends in the local government sector, but I think experience would indicate that sometimes they don’t get it right and sometimes, when it comes to reflecting the views of the community, they don’t actually reflect the views of the community but they might reflect the views of themselves and their supporters and their particular concerns, and particular interest groups sometimes have greater weight than others. So that is a very flawed sort of basis upon which to legislate, in my view: that council always gets it right, therefore it shouldn’t be appealed and it should be just accepted.

Then, as well as dealing with that, the Government has made a number of very substantial changes to how the process works in terms of the granting of licences, not just granting of new ones. So we’re talking about the hospitality sector more generally. And notwithstanding Grant Robertson, who will, like I say, be very, very happy to be pictured drinking a beer down at the pub for FIFA or for the Rugby World Cup—and he always talks about how important the hospitality sector is and tourism and all that sort of stuff—this legislation could make life extremely difficult for the mum and dad small-business owners up and down the country trying to just do their business, because it introduces an extreme, arbitrary process when it comes to the renewal of licences, and we just think it goes too far.

Because what it says is if a local alcohol plan, which is gone through by the all-seeing and allpowerful and all-wise council, determines that you should not have a liquor licence within a kilometre of a school, for example, which they might—I could just see it happening—then if you have been in business for 50 years, are 800 metres from a school, and you have a perfect record, you’re loved by the community, you’ve got a great bar or whatever, or you’re an off-licence and you’ve done well, then lo and behold, if this local alcohol plan is passed saying it can’t be within a kilometre of the school, what can happen when you come up for your renewal of your licence is that the district licensing authority may decline your renewal, simply on the basis of that change in the plan. And so the business that you built up for 50 years, gone just like that. Now, that, I think, is an overreach and very unfair.

It may well be that, using that example, there’s another shop a couple of hundred metres down the road that happens to be just outside the boundary with a terrible record, that goes on, carries on fine, but you, with the great record, who happen to be slightly in the wrong place, can be gone.

Then it flings open the doors wide when it comes to objections. It used to be reasonably tightly constrained to people who actually had a clear interest in the neighbourhood and had a reasonable proposition to include anybody or anything from any group from anywhere in the country. And so, lo and behold, you could have a big, long line-up of a well-organised anti-alcohol groups everywhere coming through and making life very difficult.

Now look, there is a place for locals to object, and I think that’s absolutely right and appropriate, but to have no restrictions whatsoever on who can be a part of the process, I think, again will be very difficult to manage in a practical sense. And then they can say whatever they like and make all sorts of allegations about you, and you’re not allowed to cross-examine them in any way, shape, or form. So I don’t think that is a reasonable thing either.

Then, of course, they can incorporate tikanga Māori into the proceedings. I worry about that simply from the point of view, in terms of the basic sort of rule of law, that it should be predictable. People should know exactly what the rules are and how it should be done. And if we’re introducing concepts that aren’t pinned down, can vary enormously, then I think that is a problem when it comes to predictability. It might be a small matter here, but in terms of the broader law within this country, that is a big issue and one that I think needs a bit more thought and care.

And then, finally, when it comes to competitors objecting, I think it’s a ridiculously naive approach taken, which is to say trade competitors can object, but they can’t object when it comes to trade competition. So the person who objects to a store opening up next door can say, “Look, I’m not concerned about the fact that they’re trading, but I just don’t feel like it’s good for the community to have two stores in this area.”, which to me seems to be a ridiculous proposition.

So, Madam Chair—“Madam Speaker” would be even better! Madam Speaker, with that, I finish my speech and we oppose this legislation. We also oppose the fact that it’s been rammed through in the very, very last days of this Government, under urgency. When the sun is sinking on this Government, they are ramming through all sorts of things at the last minute, and that’s a pity.

ASSISTANT SPEAKER (Hon Jacqui Dean): Members, the time has come for me to leave the Chair for the lunch break. We will resume after question time.

Sitting suspended from 1.01 p.m. to 2 p.m.

Personal Explanations

Tim van de Molen—Privileges Committee Report

TIM VAN DE MOLEN (National—Waikato): Point of order, Mr Speaker. I seek leave to make a personal statement.

SPEAKER: Leave is sought for that purpose. Is there any objection? There appears to be none.

TIM VAN DE MOLEN: Thank you, Mr Speaker. Today, the Privileges Committee has presented its report into the question of privilege concerning my conduct towards the chairperson of the Transport and Infrastructure Committee. The Privileges Committee has found my actions to be a contempt of Parliament, and when Parliament sits next week, I will be censured.

Members of Parliament and parliamentary staff should be able to carry out their duties in a stable environment. The report from the Privileges Committee makes it clear that my conduct after the select committee on 29 June had an impact on others that I had not appreciated. Although I have a different recollection of some aspects of the incident, I completely accept the findings of the committee. I apologise to all those who were in the room but specifically to Mr Halbert, who was most impacted by my conduct. I am horrified at the thought of my conduct having been perceived as threatening. This is not at all in my nature, and I’ve enjoyed working constructively with MPs from across the House. Obviously, in this instance, I have fallen short of my own expectations and the expectations of the House.

No one should feel threatened in their workplace, and it was certainly not my intent to threaten Mr Halbert. Regardless, my conduct was not appropriate, and it should not have happened. I would also like to apologise specifically to the select committee staff, who do a wonderful job for us all. I’d like to thank the many MPs that have offered their support through this process. And, finally, I would also like to extend an apology to all members of this House for the impact my actions may have on the perception of parliamentarians and of this House.

Oral Questions

Questions to Ministers

Question No. 1—Energy and Resources

1. GLEN BENNETT (Labour—New Plymouth) to the Minister of Energy and Resources: How is the Government partnering with businesses to reduce their emissions?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Recently, I announced the Government is partnering with a further 17 businesses to accelerate decarbonisation projects, which will cut their use of fossil fuels, reduce emissions, and protect and create highly skilled jobs in New Zealand. Through round five of the Government Investment in Decarbonising Industry fund, or GIDI, these Government-backed projects are estimated to reduce carbon emissions by 67,300 tonnes per year—the equivalent to taking approximately 25,000 cars off the road.

Glen Bennett: What are some examples of the projects supported through GIDI round five?

Hon Dr MEGAN WOODS: Through round five, the Government is partnering with Open Country Dairy Awarua on a significant project to install a large, high-pressure electrode boiler and three high-temperature heat pumps. This alone will contribute over half of the emissions reductions in round five. We’re also partnering with Rainbow Park Nurseries in Auckland, which will be the first in the country to use highly efficient heat pump technology to warm the water that runs through the glasshouses. Rainbow Park have said that funding brought forward their green upgrade by at least four or five years, delivering emissions reductions sooner and when New Zealand needs them.

Glen Bennett: Have any of the projects funded through the Government’s partnership been completed?

Hon Dr MEGAN WOODS: Twenty-six projects funded through the Government’s partnership with businesses have been completed. These include new equipment for energy efficiency and carbon reduction at the Whakatane paperboard mill, an electrode boiler at Meadow Mushrooms in Christchurch, and a biomass boiler at Napier Pine. These projects accelerate emissions reductions while protecting and creating jobs here in New Zealand.

Glen Bennett: How will the Government’s partnerships with business contribute to New Zealand’s emissions goals?

Hon Dr MEGAN WOODS: Across GIDI, we’ve now partnered with 56 businesses on 83 projects to accelerate the decarbonisation of industrial process heat. Once operational, all projects are estimated to result in annual emissions reductions of up to 1.6 million tonnes of carbon dioxide. That is the equivalent of taking approximately 590,000 cars off the road. Anyone who purports to cut this scheme needs to tell us how they’re going to make up for that.

Glen Bennett: What investments is the Government making to support decarbonisation in New Plymouth?

Hon Dr MEGAN WOODS: Oh, an excellent question. The Government is investing in two decarbonisation projects at Taranaki Hospital. These projects will replace the hospital’s fossil-gas boiler with a low-emissions alternative and improve the energy efficiency of the hospital, elevating it to green star building status. Once complete, these projects are estimated to reduce the carbon emissions at the hospital by 10,340 tonnes over 10 years. In addition, the Government is partnering with businesses to deliver 21 chargers to the Taranaki region to support the transition to a lowemissions transport system. These projects will help reduce transport emissions and improve the reliability of electric vehicle transport infrastructure in New Plymouth.

Question No. 2—Finance

2. NICOLA WILLIS (Deputy Leader—National) to the Minister of Finance: Does he stand by all his statements related to Government tax and spending decisions?

Hon GRANT ROBERTSON (Minister of Finance): Yes, acknowledging the context in which they were made.

Nicola Willis: Does he believe he has honoured his commitment not to implement any new taxes this term, and how does he reconcile that with having turned the brightline test into a virtual capital gains tax, having introduced an app tax, new tenant taxes, tried to introduce a wealth tax at the Budget, a KiwiSaver tax, and a jobs tax?

Hon GRANT ROBERTSON: As I’ve noted before to the member, I have been—if we’re going to apply the word “tax” to every single policy or action, I would apply the “waffle tax” to her leader as an example of that. I stand by the programme of work that we have undertaken. We have undertaken initiatives to make our tax system fairer whilst balancing the need to provide good quality public services.

Nicola Willis: Does he think he was honouring his commitment not to implement any new taxes this term when he asked officials from across Government to develop a wealth tax for introduction in this year’s Budget?

Hon GRANT ROBERTSON: As has been discussed extensively in this House, that would not have come into force until after the election, and the public, had it been taken up, would have had an opportunity to decide whether they wanted it or not. In the event it was not taken up, by Cabinet decision.

Nicola Willis: Does he stand by his statement that he was “too definitive” when he ruled out extending the brightline test prior to the election, and can he confirm that if someone today lives outside of their family home for 12 months, for any reason—illness, secondment, bereavement—then they will be subject to a capital gains tax if they sell their home within a 10-year period?

Hon GRANT ROBERTSON: In answer to the first part of the question, yes. In answer to the second part of the question, the rule that the member is highlighting is the rule that the National Party brought in. I will quote from when they bought it in: “The owner must have resided in their property as their main home. The main home exclusion will not apply when only a family member and not the owner has used the property as their main home.” This is what National brought in.

Nicola Willis: Why is the finance Minister trying to blame National for the effect of a brightline test that he extended to 10 years, and a definition of the main home which means that families who live outside their home will now be subject to a capital gains tax?

Hon GRANT ROBERTSON: Because the National Party brought that rule in. The National Party brought in the brightline test; the rule hasn’t changed in that respect.

Nicola Willis: Would the Minister also like to blame National for his extensive reflection on the need for a wealth tax, for his reflection on the need for a KiwiSaver tax that would wipe tens of billions of dollars off New Zealanders’ KiwiSaver accounts, for his decision to increase tenant taxes without a mandate from the electorate, or is it actually his responsibility that those decisions were made?

Hon GRANT ROBERTSON: Over the course of the last six years we’ve worked extremely hard to support New Zealanders through very tough times, including the COVID pandemic and including the period of time now where cost of living pressures are so high. We’ve done that in the context of inheriting a situation where New Zealand public services had been consistently run down. So, yes, we had to invest heavily in health to make sure we paid our nurses properly, to make sure we recruited health staff. We had to invest heavily in education to make sure we didn’t have kids learning in halls and in corridors outside classrooms, and to make sure that teachers are here and that they’re paid properly. We had to invest extensively to make sure that we got away from the National Party policy of selling off public and State housing and, instead, building 13,000 public houses. So, yes, there will always be an element of what we are doing where we have to look back and say, “We are cleaning up the National Government’s messes.”

Hon Damien O’Connor: Has the Minister reflected on or done any analysis on what would happen if there was an increase in the GST across this country?

Hon GRANT ROBERTSON: As the member well knows, that is not something that the Government has increased, and previous Governments who didn’t do that reflection before they went into office and then just did it straight after without telling New Zealanders certainly have something to reflect on.

Nicola Willis: How can New Zealanders trust any commitment he makes on tax when it may be that he takes a detour down the road to Damascus at any juncture?

Hon GRANT ROBERTSON: Mr Speaker—I just didn’t know that had finished—this Government stands proudly on the record we have had of supporting New Zealanders through tough times, making sure we look after the most vulnerable in our community, making sure that we have quality public services available, and making sure that what we do adds up. The member has a set of unfunded promises that don’t add up and place her firmly in the Bermuda fiscal Triangle that Paul Goldsmith created for her.

Question No. 3—Health

3. SARAH PALLETT (Labour—Ilam) to the Minister of Health: What is the Government doing to reduce youth vaping?

Hon Dr AYESHA VERRALL (Minister of Health): Earlier this week, I confirmed a number of new regulations aimed at reducing youth vaping, including proximity restrictions and limiting flavour descriptions. These new regulations build on the previous protections we introduced, including banning sales to under-18s and prohibiting vape advertising and sponsorship. The impact of these regulations will continue to be monitored. Nothing is off the table in terms of what we need to do to make sure we see a reduction in youth vaping while retaining sufficient tools for smoking cessation.

Sarah Pallett: What change is the Government making to reduce the appeal of vaping to children?

Hon Dr AYESHA VERRALL: While some vape flavours are described generically, others are described in ways that appear to be designed to specifically appeal to young people. Studies have found that flavours are important for initiation and continuation of vaping among young people. That’s why we have changed regulations so that vape products and their packaging will only be able to have generic descriptions that accurately describe the types of flavours.

Sarah Pallett: What change is the Government making to make vapes less accessible to children?

Hon Dr AYESHA VERRALL: We want vapes as far from the minds and reach of children and young people as possible. That’s why any locations within 300 metres of schools and marae will be off limits for new specialist vape shops. Limiting the proximity of specialist vape shops in this way is intended to make vapes less visible and accessible to young people.

Sarah Pallett: Why is the Government working to reduce youth vaping?

Hon Dr AYESHA VERRALL: Many of the regulatory controls are there to protect young people from vaping. Youth vaping has grown, despite the laws we’ve brought in to prohibit sales to under18s. Alongside our efforts to reduce tobacco smoking, we want to ensure vaping products are safe, regulated, and are only being used for cessation purposes, as was intended. I’m committed to protecting our tamariki from the risks associated with smoking and vaping products.

Question No. 4—Justice

4. Hon PAUL GOLDSMITH (National) to the Minister of Justice: Does she still believe that the Government has the right priorities in justice?

Hon DAVID PARKER (Attorney-General) on behalf of the Minister of Justice: Yes, including cracking down on gangs whilst also supporting victims of crime. We’ve banned semi-automatics and we’ve toughened legislation on the proceeds of crime but we’ve also passed sexual violence legislation and improved victim assistance schemes and funding for Victim Support.

Hon Paul Goldsmith: Why, when apparently cracking down on gangs, does her Government persist with the goal of reducing the prison population by 30 percent, irrespective of the level of serious crime in our communities?

Hon DAVID PARKER: The proportion of prisoners in prison who are gang affiliates has increased, as has the number of gang affiliates on other forms of sentence. On both occasions, this is in part because the police are cracking down so successfully against gangs, seizing proceeds of crime, firearms, and bringing the full weight of the law against them for their offending.

Hon Paul Goldsmith: How does she reconcile her statement to Newshub: “if there is a line and someone crosses [it,] they are held accountable and they suffer the consequences of committing that crime.” with her Government’s stated goal of reducing the prison population by 30 percent, regardless of the level of serious crime in our community?

Hon DAVID PARKER: I think the answer that I gave earlier addresses that question. There is no doubt that the police have been given more resources to crack down on gangs. They have a serious offending unit that cracks down on gangs and other organised crime. It has resulted in thousands of offences being charged, with those people ending up in prison in the main and sometimes on home detention, as well as the confiscation of many firearms and the proceeds of crime.

Hon Paul Goldsmith: Doesn’t the Government’s prison reduction focus send the message that the Government is less interested in accountability and consequences for crime than it is in achieving its goal of a 30 percent reduction in the number of prisoners?

Hon DAVID PARKER: On this side of the House, we actually leave sentences to the courts. We don’t interfere in that process. I would note that in respect of another party’s announcement recently, the Auckland District Law Society said that if that happened, then this would be limiting judicial discretion in a way that would be an overreach of parliamentary power and that it would be illogical.

Debbie Ngarewa-Packer: Has the Minister received any reports of a member of this House interfering in the police prosecution by contacting prosecution witnesses?

Hon DAVID PARKER: Well, if that was correct, it could be a very serious issue, but I have no particular information on that matter. If the member wants a more particular answer, that could be put down in a primary question.

Hon Paul Goldsmith: Is she concerned that the impression that some people may have gathered that the Government is less interested in the consequences of crime has flowed through to the situation where Woolworths is spending $45 million buying new trolleys to stop people running out of stores without paying—something that means law-abiding Kiwis have to pay more for their fruit and vegetables and groceries?

Hon DAVID PARKER: It might be that that member, like some of his colleagues, never goes to supermarkets, because I know, having been to supermarkets over many decades, that it’s many decades ago that they introduced the same technology to stop those trolleys being taken from the car park.

Hon Meka Whaitiri: To the Minister, in your opinion, is it appropriate for a member of this House to interfere in a police prosecution by contacting prosecution witnesses?

Hon DAVID PARKER: Oh, that’s a very easy question to answer. That would be entirely inappropriate, and I would be surprised if that ever occurred.

Question No. 5—Finance

5. CHLÖE SWARBRICK (Green—Auckland Central) to the Minister of Finance: Does he stand by his statement that “in the economic circumstances that we are in at this time, we do not believe that major tax changes are appropriate”; if so, when would economic circumstances be appropriate for taxing wealth or capital gains?

Hon GRANT ROBERTSON (Minister of Finance): In answer to the first part of the question, I stand by my statement in its full and proper context. In answer to the second part of the question, the member is asking about a hypothetical situation, but I would refer her to the rest of my answer to her question on 17 May 2023, where I went on to say we have made the tax reform that we promised to make at the 2020 election. Future policies are for political parties to make.

Chlöe Swarbrick: What could be a more appropriate time to tax wealth or capital gains, when the Government’s own research shows that the wealthiest 311 families in this country pay an effective tax rate less than half of that of the average New Zealander?

Hon GRANT ROBERTSON: Clearly, the Cabinet decision is that the particularly volatile and uncertain economic environment that we’re living in now is not the appropriate time to make those major tax changes. I would note that since that statement was made in May, we have seen further volatility globally, particularly with respect to what’s happening in China and, indeed, across other parts of the world, and so that part of that statement certainly stands.

Chlöe Swarbrick: Is it not the right time to create a fairer and more equitable tax system when 55 percent of New Zealanders report being in a financially difficult position, compared to the wealthiest 311 families who own $85 billion in wealth, more than the bottom 2.5 million New Zealanders combined?

Hon GRANT ROBERTSON: Well, as I’ve said on a number of occasions in this House, this is a particularly challenging time for many New Zealand households and, indeed, many New Zealand businesses. That’s the reason why the Government has stepped up with significant support over a long period of time to low and middle income New Zealanders, and we will continue to try to find the opportunities to do that.

Chlöe Swarbrick: Is it the right time to tax wealth when Aotearoa’s tax system is ranked 136th in the world for reducing inequality?

Hon GRANT ROBERTSON: Well, I haven’t seen that particular statistic, but I have seen statistics that rank within the OECD around things like the tax wedge, that New Zealand actually compares relatively favourably on. During this term of Government, we’ve sought to make the tax system fairer by increasing the top rate, putting in the trustee rate to reach that top rate as well, and we will continue to look for opportunities to do that, balanced against all of the other needs that we have.

Nicola Willis: Is it the Minister’s position that now is not an appropriate time to introduce taxes of the sort being discussed with the member due to volatility in the global economic environment, and, if so, what are the economic conditions in which the Minister thinks it would be appropriate to introduce taxes of that sort?

Hon GRANT ROBERTSON: As indicated by the Cabinet decisions in May, a time when the global economy is so uncertain, where companies and households have been through very turbulent times, and where there are ongoing significant challenges to the New Zealand economy is clearly not that time.

Nicola Willis: So does the Minister think it would be appropriate to introduce wealth taxes or capital gains taxes if the economic conditions were more permissive?

Hon GRANT ROBERTSON: The Cabinet has taken the decisions that are to be taken in this term of Government on taxation, and there are no further decisions to be taken in that regard. Clarity about taxation is very important, and we look forward to hearing clarity from the National Party about taxation—for example, whether or not the 39 percent top rate is coming back.

Ricardo Menéndez March: Does he agree with 63 percent of people in Aotearoa who think now is the right time to implement a wealth tax to provide free dental care so people don’t have to live with debilitating pain?

Hon GRANT ROBERTSON: As has already been indicated, Cabinet has taken the decision not to implement a wealth tax.

Ricardo Menéndez March: Who is most disproportionately impacted by the current economic conditions that he describes, the one in nine children living in poverty or the 311 wealthiest families in Aotearoa?

Hon GRANT ROBERTSON: Quite clearly, those people who are our most vulnerable are the most impacted by a deterioration in economic conditions, and that’s exactly why, as a Government, I am proud that we have lifted the rates of main benefits, lifted family tax credits, lifted childcare assistance, supported superannuitants, students—all of them—with the cost of living pressures that they’re facing. Those are the things that need to be prioritised over unfunded tax cuts that would deliver significant benefits to the wealthiest New Zealanders.

Question No. 6—Public Service

6. ANGIE WARREN-CLARK (Labour) to the Minister for the Public Service: What reports has he seen about proposals for changes to the Public Service?

Hon ANDREW LITTLE (Minister for the Public Service): Our Public Service supports the Government of the day to implement its policies and programmes. The Public Service does vital work, such as making sure businesses and workers are supported through fair and balanced law; educating our kids; fixing roads, rail, bridges, and houses after natural disasters; and assisting with solving long-term intractable problems like good environmental planning, safe water in the future, responding to climate change, and so on. The latest Kiwis Count survey reported that 82 percent of New Zealanders trust public services, and that compares to the OECD average of just 50 percent. I’ve seen reports on proposals to integrate CERT New Zealand into the National Cyber Security Centre to strengthen the country’s cyber-security resilience and response. That’s a proposal the Government accepted, by the way. Also, I’ve seen reports on proposals to improve national security leadership through organisational reform, something that this Government is doing. But I’ve also seen various reports of proposals to cut 7,300 Public Service workers in the Wellington region and 14,000 nationwide, including halving the Ministry of Business, Innovation and Employment (MBIE) workforce. All of these proposals would make it more difficult for any elected Government to implement its policies and would see significant cuts to vital services that Kiwis and our economy rely on. This Government has no plans to do that.

Angie Warren-Clark: What would be the effects of a reported halving of MBIE public services?

Hon ANDREW LITTLE: MBIE contains a number of functions that are crucial to successful economic activities. Halving MBIE’s workforce would mean it could not have processed the tens of thousands of visas for the FIFA Women’s World Cup that contributed $200 million to our economy. MBIE would not be able to process the hundreds of thousands of other visas which are the basis of our reinvigorated tourism sector or the thousands of working holiday green list and skilled migrant visas for nurses and other health workers urgently needed by our health sector. Halving MBIE’s workforce would limit the support for our film and games industries, which employ thousands of people, or our emerging space industry. It would prevent the new Grocery Commissioner from starting his work to make grocery prices fair and supermarket shopping affordable, and there’s much more. This Labour Government has no plans to reduce the capacity of Government in these vital areas.

Angie Warren-Clark: What would be the effect of some of the other reported proposals about public services?

Hon ANDREW LITTLE: One of the proposals I’ve seen is in relation to the Ministry for Women. That proposal would halt the Women’s Employment Action Plan closing the gender pay gap, which has narrowed under this Government but still stands at 9.2 percent. Another reported proposal, in relation to the Ministry for Pacific Peoples, would mean abandoning the 2,700 people who have enrolled in programmes to support their pathway to homeownership, as well as the 1,350 people that the ministry has supported in jobs over the past year. A reported proposal in relation to Te Arawhiti, the Office for Māori Crown Relations, would significantly slow settling remaining claims related to the Crown’s historical breaches of the Treaty of Waitangi and would slow or stop the work within Crown agencies and departments adopting modern Treaty relationships to address longstanding equity problems. This Labour Government has no plans to reduce capacity in these areas.

Angie Warren-Clark: What other effects would a reported reduction of 14,000 core public servants have?

Hon ANDREW LITTLE: It’s likely that programmes like Mycoplasma bovis eradication and responding to the pandemic and natural disasters could not be staffed. It would also restrict the ability to develop initiatives such as targeted children’s vaccination programmes for those missing out, and policy responses to organised and violent crime. This Labour Government remains committed to having a Public Service able to meet the needs of all New Zealanders.

Angie Warren-Clark: What would be the effect on the Wellington regional economy of a reported proposed reduction of 7,000 public servants who ordinarily work here?

Hon ANDREW LITTLE: The public sector is responsible for 12 percent of the Wellington region’s GDP. The hit to the Wellington economy would be in the region of $1 billion per annum. This Labour Government remains committed to a Public Service providing the services that New Zealanders need and developing solutions for long-term difficult challenges rather than repeatedly kicking the hard policy cans down the road.

Question No. 7—Education

7. ERICA STANFORD (National—East Coast Bays) to the Minister of Education: Will she make the Common Practice Model a legal requirement for teachers to follow, and on what date will the final content of the Common Practice Model be published?

Hon KELVIN DAVIS (Associate Minister of Education (Māori Education)) on behalf of the Minister of Education: On behalf of the Minister of Education, the final Common Practice Model will be released in term 4 of 2023. Teachers are encouraged to use the new maths and literacy curriculum from 2024 and through 2025. It will become a legislative requirement from 2026.

Erica Stanford: Point of order, Mr Speaker. I didn’t ask the Minister about the curriculum; I asked about the Common Practice Model, which is a completely different document to the curriculum. So the wrong question has been answered.

Hon KELVIN DAVIS: I’ll repeat the last sentence: it will become a legislative requirement from 2026.

Erica Stanford: Will the Common Practice Model require Structured Literacy to be used to teach every student to learn to read?

Hon KELVIN DAVIS: It will provide clarity to teachers so that they know what to teach.

Erica Stanford: Can she explain to parents why it is that she’s going to mandate a certain method that teachers will use to teach their children to read, but she won’t say what that method is until after the election?

Hon KELVIN DAVIS: Again, the Common Practice Model will provide clarity to teachers.

Erica Stanford: Can the Minister provide any clarity to this House today on how parents will know, after the election, how their children will learn to read, and whether or not that will be Structured Literacy, which has been shown to be the best way to teach children to read?

Hon KELVIN DAVIS: We always trust the teachers, but when we provide clarity their practice will improve even more.

Erica Stanford: Isn’t the reason that she will not put her neck on the line and state what method of teaching reading will be compulsory prior to the election is because she’s afraid of the controversy and cannot defend her position?

Hon KELVIN DAVIS: No, that’s not the case whatsoever. We’ll trust in teachers and, as I said, the Common Practice Model will provide clarity to them on the best ways to teach.

Question No. 8—Racing

8. TERISA NGOBI (Labour—Ōtaki) to the Minister for Racing: What recent reports has he seen on the New Zealand racing industry?

Hon KIERAN McANULTY (Minister for Racing): Our racing industry is on the charge. This Australian season just gone, Kiwi-bred and -trained horses made up 8 percent of group 1 starters, yet won 30 percent of races. That’s just one statistic to show the quality of the New Zealand racing industry. Racing is worth $1.6 billion to our economy, and that contribution is growing. This positive outlook is confirmed in the New Zealand Thoroughbred Racing (NZTR) statement of intent which notes, “Off the back of the recent approval of the TAB New Zealand-Entain strategic partnering arrangement, our industry has been given an opportunity for significant revitalisation. We now see the dawn of a new era for New Zealand racing, laying a platform for improved professionalism and standards right across the board”. The statement goes on to say, “We are extremely heartened by the strategic arrangement, which has given NZTR the ability to plan with certainty for the next five years, and prioritise key areas of the business to promote growth.” I note this statement was signed off by Cameron George, a person who knows a thing or two about revitalisation. Up the Wahs!

Terisa Ngobi: What feedback has the Minister heard on the TAB-Entain strategic partnership?

Hon KIERAN McANULTY: The leadership of the New Zealand racing codes have told me that the partnership is a game-changer. In my role as Minister, I had to be satisfied the partnership would be to the benefit of New Zealand racing before I could sign it off. The feedback I received on this has been universal. Industry leaders are reporting that stakes are up, funding for world-class harm minimisation is up, and payments to the racing and sporting codes are also up.

Terisa Ngobi: What feedback has the Minister heard on restoring the TAB legislative monopoly?

Hon KIERAN McANULTY: Parliament was clear some decades ago that TAB should be the sole provider of racing and sports betting in New Zealand. This was done to ensure the New Zealand racing industry, one of the smallest in the world, would continue to be one of the best performing. At the time those regulations were passed, the explosion of unregulated, offshore, online competitors was not envisioned. With the Government’s agreement in principle to restore TAB’s monopoly, the industry have reported that this further improves the certainty of funding that goes to racing and sport. This is securing the future for those that love racing and sport, and those that work in the industry. This is another part of this Government’s plan to bolster our emerging and high-performing export industry.

Terisa Ngobi: How many people are employed in the New Zealand racing industry, and what does this mean for them?

Hon KIERAN McANULTY: There are estimated to be around 15,000 people directly employed in racing. Providing certainty over how the industry is funded makes a career in racing an attractive prospect. In particular, racing provides an array of employment opportunities in regional New Zealand. I’m advised that this certainty of funding gives the industry confidence to further develop apprenticeship and training programmes, and to take more young people on.

Question No. 9—Corrections

9. TONI SEVERIN (ACT) to the Minister of Corrections: Is it still the Government’s policy to reduce the prison population by 30 percent over 15 years?

Hon KELVIN DAVIS (Minister of Corrections): When we became Government, there was a prison population crisis—a moral and fiscal failure, according to Bill English—which was predicted to see the population balloon to close to 14,000 people by now, far more than the network could accommodate. The long-term target we set reflected the situation at the time, one that could have seen measures such as triple and quadruple bunking and mattresses in prison hallways, and the possibility of using mothballed boarding schools out in the community. It is important to remember that Corrections does not decide who is sent to prison or for how long. Their contribution to the reduction in the prison population was through improving administrative processes for people eligible for release and also providing housing. The Government will continue to protect public safety and support the justice system to hold offenders to account, and I am progressing no specific policies to further reduce the total prison population.

Toni Severin: Has his goal of 30 percent fewer prisoners in jail led to an increase in gang members and gang associates serving sentences in the community on electronic monitoring from 383 in 2017 to 738 this year?

Hon KELVIN DAVIS: Well, first of all, let’s commend the police for doing a sterling job in arresting those people who are committing crime, those gang members. The proportion of people in prison who are gang members has increased substantially, and, because of the increases in arrests, I guess judges then are looking at various options for sentencing, which does include home detention, which does include incarceration as well.

Toni Severin: Has his goal of 30 percent fewer prisoners in jail led to a situation where 917 violent offenders are in the community serving an electronically monitored sentence?

Hon KELVIN DAVIS: Well, Corrections doesn’t determine the sentence a prisoner receives, but it has prevented about 3,000 people from not being housed in mothballed boarding schools around the country. Now, I’d hate to think about the community’s safety if that had eventuated, as was predicted.

Toni Severin: How is his goal of 30 percent fewer prisoners in jail not an experiment with public safety and an example of the Government failing to do its most important job of keeping people safe?

Hon KELVIN DAVIS: Oh, that’s an insult to the judiciary, who make the decisions about the sentences people receive. Corrections’ job is to house the people that judges send there and they do a good job. They also do a great job in making sure people don’t reoffend, because you can see the reoffending and the re-imprisonment rates have decreased as well.

Toni Severin: Isn’t it the case that we need more criminals, not fewer, in prison, and will he support ACT’s policy of investing $1 billion to build an additional 500 prison beds to ensure dangerous people can be locked away from law-abiding New Zealanders?

Hon KELVIN DAVIS: No, and I hate to think about the amount of taxes they would have to raise and increase and impose on poor working New Zealanders. The operating costs of prisons—I mean, it costs billions not just to build a mega-prison, an American-style mega-prison like they want. It costs billions as well to operate them, huge costs imposed on the community, when we just need to really rely on the judiciary to do the job that they’ve been charged with doing.

Question No. 10—Transport

10. SIMEON BROWN (National—Pakuranga) to the Minister of Transport: Does he stand by the Government’s record on the delivery of light rail?

Hon DAVID PARKER (Minister of Transport): A light-rail connection from the Auckland city centre to the airport is Government policy, as is progressing mass transit in Wellington, and that’s what we’ve been doing. The planning of these major infrastructure projects is critically important. I’m told that his own party now regrets that they didn’t plan for a public transport corridor when they widened State Highway 16, making the job of now adding the much-needed north-western busway both more difficult, more time consuming, and more expensive.

Simeon Brown: Has he seen reports that zero metres of Auckland Light Rail have been built in the last six years, despite this Government spending over $140 million on this programme, and will he stand next to a giant red zero to celebrate this success?

Hon DAVID PARKER: Sometimes that member puts a giant red target on himself. I mean, the member is facile in his assertions that everything is built under National and nothing is built under Labour. It was a Labour Government that planned the Waterview Tunnel; that did most of the work on State Highway 20. It was the National Government that finished it. It was the National Government that started the City Rail Link (CRL) after pressure from Opposition parties. The CRL has largely been completed under this Government. This Government has made major improvements to the State highway network. We finished Transmission Gully, the planning for which started under the prior Labour Government. The construction commenced under the National Government and finished under the Labour Government. These big projects take time and are, in duration, longer than any one Government, and the member needs to concede that.

Simeon Brown: Was he aware that on the day that he announced light rail to Albany that—to the day—exactly six years earlier, Phil Twyford announced light rail to Mount Roskill, and considering the outcome of that light-rail project, what confidence does he have in delivering light rail to Albany?

Hon DAVID PARKER: What I know is that State Highway 16, which is eight-lanes wide now close to Auckland—eight-lanes wide—has been expanded to six-lanes wide further out, and is already getting clogged up because the last, incompetent National Government didn’t design the public transport corridor, didn’t provide for it around the Waterview connection, notwithstanding that they were spending hundreds of millions of dollars on that connection, and, as a consequence, gridlock in Auckland down that corridor is getting worse. And we, on this side of House, have a plan to fix it.

Hon Damien O’Connor: Has the Minister received any reports on the utilisation of large amounts of foreign capital to build our roading infrastructure?

Hon DAVID PARKER: I have seen reports of both funding holes in how other parties are going to fund their proposals, which amount to many billions of dollars, and that overseas capital will be brought in to do it. Of course, the idea that overseas capital is cheaper than Government borrowing is illusory, because the private sector expectations of rate of return are higher. As to where that capital comes from overseas, some people are suggesting Belt and Road, but we’re not.

Simeon Brown: When will he concede that Auckland Light Rail is a failed transport project that is going nowhere, has no funding, and instead invest in the real transport infrastructure projects New Zealand needs, like new roads of national significance?

Hon DAVID PARKER: There are some new roads that are necessary. The Brynderwyns improvement is one good example that this Government is committed to. A major highway project in Tauranga has also been committed to that is necessary to enable more housing. But the member’s assertion that, essentially, roads are the answer is not true in metro areas like Auckland. We have spent billions and billions and billions of dollars on the likes of eight-laning parts of the north-western motorway, and because of that member’s party not planning for it, we’ve already got clogging up of that network, and fixing it with decent busway down that is much more expensive because of the incompetence of that side of the House.

Question No. 11—Youth

11. NAISI CHEN (Labour) to the Minister for Youth: What has the Government done to support our young people to make the most of their unique talents and have a sense of belonging and connection in their communities?

Hon WILLOW-JEAN PRIME (Minister for Youth): Young people represent 17 percent of the population and are 100 percent of our future. As Minister for Youth, I’m immensely proud of what this Government has done to support young people across the country. During this term, we have worked to support rangatahi to be heard through the refreshed Youth Plan, to keep them engaged with education and training through increased funding of the Ākonga fund, and have supported their innovative ideas through the youth enterprise programmes. Over the past three years, we have provided over 220,000 opportunities for young people to engage, supporting well over 100 providers every year to encourage and support the resilience and capability of young people and improve their overall wellbeing.

Naisi Chen: What was the focus of the recently released refreshed Youth Plan and how will it help young people?

Hon WILLOW-JEAN PRIME: Last week, I launched the refreshed Youth Plan, titled Voice, Leadership, Action, which will guide a consistent approach across the youth sector and, along with the Youth Health and Wellbeing Survey, aims to inform the Government’s policies and will ensure we are incorporating feedback from our rangatahi. The voices and leadership of young New Zealanders are key drivers behind the plan, and we all know how effective and powerful change can be when young people lead it for themselves and their whānau, their schools, businesses, and communities. That’s one of the reasons why the refreshed Youth Plan is such a great quality. Our youth advisory group worked on this plan with us—20 amazing young people with diverse knowledge and experience, who I have thoroughly enjoyed working with. We heard from over 1,400 young people from across the motu, and I’d like to take this opportunity to thank them all for their amazing work and contributions.

Naisi Chen: What has this Government done to respond to the emerging needs of young people, especially those who have become disengaged from school?

Hon WILLOW-JEAN PRIME: In 2020, we launched the Ākonga Youth Development Community Fund in response to learners who had been hit hard by COVID and lost connections on their education journey. This fund helps at-risk learners, aged between 12 to 21 years, to strengthen their resilience and reengage with their communities and training opportunities. So far, almost 8,000 young people have benefited from the fund, helping them to reconnect with learning in their communities. Our recent evaluation of the Ākonga fund has confirmed what providers and young people have told us—that the Akonga fund is building the confidence of at-risk young people, fostering their relationships with peers, whānau, and communities, and boosting their motivations and hope for the future. I was so pleased to announce extra funding in Budget 2023, and I’m excited that it will offer a further 5,500 ākonga opportunities through this.

Naisi Chen: In what other ways has this Government supported providers to engage young people in development opportunities that strengthen their wellbeing?

Hon WILLOW-JEAN PRIME: We’ve funded providers from Invercargill to Kaitāia to offer positive youth development opportunities that support young people to succeed in life and enjoy life, including giving them hands-on experiences to prepare them for work. During the past financial year, 160 providers delivered 82,000 youth development opportunities, providers like the Village Collective in South Auckland that I visited. This is just one example of the hundreds of programmes this Government has funded for young people and, through this, expanded their wellbeing and their opportunities to contribute.

Question No. 12—Immigration

12. ERICA STANFORD (National—East Coast Bays) to the Minister of Immigration: How many, if any, accredited employers have had their accreditation removed by Immigration New Zealand, and how many, if any, job tokens have been issued by Immigration New Zealand following an approved job check application from an accredited employer that is under investigation by Immigration New Zealand?

Hon ANDREW LITTLE (Minister of Immigration): In response to the first part of the member’s question, six employers have had their accreditation revoked by Immigration New Zealand and 11 have been suspended, and there are currently 185 investigations under way. To the second part of the question, there are currently 15 open job check applications, covering 87 positions, where the employer is under active investigation. Once a job check has been approved, the employer or their representative issues the job token to the migrant. If an employer has had their accreditation revoked or suspended, these job tokens expire and cannot be issued. Where an employer is under investigation but has not been informed, Immigration New Zealand ring-fences all work visa applications so that no further action can be taken in relation to them until the investigation is concluded.

Erica Stanford: When the Minister said on Radio New Zealand that “Every employer applying for accreditation was required to undergo a number of checks—that they were in business, that the business was viable”, but that not all of those businesses were undergoing the checks that should have been made, what is his understanding of what those checks were and how they should have been carried out?

Hon ANDREW LITTLE: The advice I have had is that there is a set of routine checks that should take place and that those checks have not been taking place.

Erica Stanford: Can the Minister confirm that the routine checks at the accreditation stage that Immigration New Zealand were carrying out were not actual checks but simply a declaration form that businesses filled in online, that did not require any actual documentation, evidenced in his quote to this House a couple of weeks ago when he said, “The advice [that] I’ve had is that employers are to provide a declaration in relation to the standards that they have to meet, which includes employment standards, … about their business.”?

Hon ANDREW LITTLE: The member hasn’t got it quite right. There are a number of requirements that the employer has to meet. Some of those requirements are checked on an automated basis. So, for example, checking the name of the employer against the database that Immigration New Zealand and the Ministry of Business, Innovation and Employment have, against a list of employers who have either infringements against their name, prosecutions, or other negative checks. Then there are checks carried out at a human level to make sure that the documentation is in order. But not all of those checks, according to information received from staff members of Immigration New Zealand, appear to have been carried out. That is why I’ve commissioned a review, an independent review, through the Public Service Commission, to ascertain just what the quality of the processing is of those applications.

Erica Stanford: Did officials inform the Minister about a general instruction from the Deputy Secretary of Immigration New Zealand telling staff to skip checks on almost all applications under the scheme, as reported in Stuff this week, in order to get as many workers in the country as quickly as possible?

Hon ANDREW LITTLE: I’m not aware of any such instruction being given by senior officials of Immigration New Zealand, but that is why I have asked the Public Service Commission to arrange an independent review. That’s in the process of being put in place at the moment. But I do want to remind the member of her position just two months ago on this matter, where she called for a process that was streamlined and did not have bureaucratic tape in the cost out. And I just say this to the rest of the House too—why I think the National Party is weeping crocodile tears on this—that in addition to wanting no bureaucracy at all in this, they voted against worker protection legislation earlier this year that is about giving officials more power to chase up bad employers.