Tuesday, 13 February 2024

TUESDAY, 13 FEBRUARY 2024

TUESDAY, 13 FEBRUARY 2024

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

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.

List Member ELECTED

List Member ELECTED

SPEAKER: Members, I have received from the Electoral Commission a return declaring Shanan Halbert to be elected a member of Parliament to fill the vacancy created by the resignation of the Hon Kelvin Davis from his list seat. I understand that Shanan Halbert is present and wishes to take an Oath of Allegiance. Would he please come forward to the chair on my right.

MEMBERS SWORN

MEMBERS SWORN

SHANAN HALBERT (Labour): Ko ahau, ko Shanan Kiritea Halbert, e oati ana ka noho pūmau taku pono ki a Kīngi Tiāre te Tuatoru me tōna kāhui whakaheke, e ai ki te ture. Ko te Atua nei hoki taku pou.

[I, Shanan Kiritea Halbert, swear that I will be faithful and bear true allegiance to His Majesty King Charles III, His heirs and successors, according to law. So help me God.]

Address in Reply

Presentation to Governor-General

SPEAKER: I have to announce that, accompanied by members, I attended upon Her Excellency the Governor-General with the Address agreed to by the House in reply to the speech at the opening of this Parliament. Her Excellency was pleased to make the following reply:

MR SPEAKER AND MEMBERS OF THE HOUSE OF REPRESENTATIVES:

I receive with much pleasure the Address which has been adopted by the House of Representatives in reply to my speech at the opening of the First Session of the Fifty-Fourth Parliament of New Zealand. I thank you for your assurance that the matters referred to in my speech will receive your careful consideration.

Cindy Kiro, Governor-General.

Hon CHRIS BISHOP (Leader of the House): I move, That Her Excellency’s reply be entered in the Journals of the House.

Motion agreed to.

Speaker’s Rulings

Ministerial Responsibility—Origin of Documents

SPEAKER: I just wish to read a ruling that I said I’d come back to Parliament with at the end of the week prior. Members, when the House last sat, I indicated that I would rule on the extent to which Ministers could be questioned about the origin of documents they use. In practice, a wide view is taken of the concept of ministerial responsibility. Ministers are responsible to the House for all actions taken and statements they make in their capacity as a Minister. Where they are questioned about a matter for which they are responsible, Ministers must give an informative answer. That’s not new; it’s Speaker’s ruling 174/1.

Members also raised the issue of prime ministerial responsibility. The Prime Minister is responsible to the House for all the actions of the Government that they head. However, it’s not reasonable to expect that the Prime Minister will have detailed knowledge of every matter dealt with by the Government. So while it is fine to ask the Prime Minister what they know about the origin of a document used by a Minister in an official capacity, it is reasonable for the Prime Minister to answer that they do not know. My ruling is, therefore, very much in line with the approach of my predecessors. Ministerial accountability to this House is fundamental to our form of parliamentary democracy, and I continue the expectation that Ministers address questions informatively.

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

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

CLERK: Petition of Angela Clifford requesting that the House urgently direct the development of a Government-facilitated food strategy.

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

CLERK:

2022-23 annual reports of the:

Armed Forces Canteen Council

Drug Free Sport New Zealand

Fire and Emergency New Zealand

KiwRail Holdings Limited

Mercury New Zealand Limited

New Zealand Artificial Limb Service

New Zealand Lottery Grants Board

Transpower New Zealand Limited

Treasury, together with the Minister of Finance’s Report on Non-Departmental Appropriations

Government response to report of the Māori Affairs Committee on Māori Climate Adaptation

Vote Building and Construction, Report in relation to selected non-departmental appropriations for the year ended 30 June 2023

Agreement between New Zealand and the Slovak Republic for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance, together with the National Interest Analysis

Second Protocol to the Agreement between New Zealand and the Republic of Austria with respect to Taxes on Income and on Capital, done at Vienna on 21 September 2006, together with the National Interest Analysis.

SPEAKER: Those papers are published under the authority of the House. A select committee report has been delivered for presentation.

CLERK: Report of the Petitions Committee on the Petition of Cheryl Singh.

SPEAKER: There are no bills for introduction. We come now to questions for oral—

Points of Order

Speaker’s Ruling—Request for Ruling on Content of Answers

RICARDO MENÉNDEZ MARCH (Musterer—Green): Point of order, Mr Speaker. Thank you, Mr Speaker. Just in relation to your previous reflections, last sitting week I raised a point in relation to Speaker’s ruling 205/5(1) around Ministers commencing their answers to a question with a political attack. At the time, you mentioned you were going to go back and reflect on it, and I was just wondering whether you had any views on the events of last week and how we’d move forward in relationship to that.

SPEAKER: I will come back to you.

Oral Questions

Questions to Ministers

Question No. 1—Finance

1. SUZE REDMAYNE (National—Rangitīkei) to the Minister of Finance: What recent reports has she seen on New Zealand’s fiscal position?

Hon NICOLA WILLIS (Minister of Finance): I received Treasury’s briefing to the incoming Minister (BIM), which was publicly released a week and a half ago. The BIM told me that between 2019 and 2023, the International Monetary Fund (IMF) has calculated, according to their own cross-country measure, that net debt in New Zealand increased by 18 percent of GDP—18 percent of GDP.

Suze Redmayne: Is that increase in debt greater or less than in other comparable countries?

Hon NICOLA WILLIS: As I said, the increase in New Zealand’s net debt over the period 2019-23 was 18 percent of GDP on the IMF’s measure. Treasury’s BIM tells me that Australia’s net debt over this period rose by only 2 percent, Denmark’s and Ireland’s net debt reduced, and the average increase across 32 advanced economies was only 4 percent.

Suze Redmayne: Was that 18 percent increase in net debt due to COVID?

Hon NICOLA WILLIS: In part, it will have been. But I am reliably informed that all countries in the world suffered from COVID, so COVID is no excuse for New Zealand to have such a large increase in its debt.

Hon David Seymour: Did the previous Government use this extraordinary 18 percent of GDP expansion in public debt to build valuable infrastructure or leave some other legacy that would assist future New Zealanders in paying that debt off?

SPEAKER: It’s very borderline, that question. But a reasonable answer might be forthcoming.

Hon NICOLA WILLIS: The question New Zealanders often ask me is: “Has there ever been a Government that has spent so much but delivered so little”—

SPEAKER: OK, that’s enough of that.

Suze Redmayne: How high is New Zealand’s net debt compared to previous years?

Hon NICOLA WILLIS: Historical comparisons are made a little difficult by the fact that, in 2022, the previous finance Minister changed the definition of net debt in a way that instantly lowered it by about 20 percentage points of GDP. However, if you use the old, established measure of net debt, it is evident that New Zealand’s net debt this year is forecast to be 44 percent of GDP, compared to 22 percent when National left office in 2017. Furthermore, net debt of 44 percent is the highest it has been in New Zealand in 30 years.

Hon Grant Robertson: Can the Minister confirm that two paragraphs below the one she quoted in her primary answer, the Treasury told her in their BIM that “Nevertheless, New Zealand’s debt remains low relative to other advanced economies. The average Government debt among advanced economies in 2023 was 47 percent of GDP, compared with 24 percent for New Zealand.”?

Hon NICOLA WILLIS: The Treasury’s BIM also said, “As a small open economy vulnerable to external shocks and natural disasters New Zealand needs to retain a large buffer for emergencies.” What the member should understand is that New Zealand should always have relatively low debt compared to most other advanced economies, and it is silly to compare New Zealand’s debt with countries like the United States and Japan. That Minister eroded New Zealand’s buffer, thanks to the big spending of the previous Labour Government.

Hon Grant Robertson: Point of order, Mr Speaker. That was a very specific question asking about a very specific paragraph in the BIM that the member’s primary answer was about, and I didn’t receive an answer to that question.

SPEAKER: Well, I don’t think you could say it wasn’t addressed, and I think that’s one of the problems, isn’t it—that often questions are asked that don’t elicit the answer that members wanting—

Hon Member: It was very specific, though.

SPEAKER: It wasn’t that fine.

Hon Grant Robertson: What’s that?

SPEAKER: It wasn’t all of that fine a question—the BIM is quite a lengthy document.

Hon NICOLA WILLIS: Point of order, Mr Speaker. I am happy to keep reading from the BIM to inform the Minister about how this debt came to be and the structural deficit that he left New Zealand in, if he’d like.

SPEAKER: Sorry, that’s not a particularly helpful point of order.

Hon Grant Robertson: Can the Minister confirm that the paragraph after the paragraph that I just quoted in my question says, in part, “the Crown balance sheet continues to have significant resilience and flexibility to respond to future events.”?

Hon NICOLA WILLIS: The member should read the full quote, which also says, “Current spending exceeds current revenues. The Treasury estimates much of this gap is structural, reflecting a mix of short- and long-term drivers. A substantial fiscal consolidation is required”—and that is what this responsible Government is doing.

Question No. 2—Prime Minister

2. Rt Hon CHRIS HIPKINS (Leader of the Opposition) to the Prime Minister: Does he stand by all of his Government’s statements and actions?

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes, and in particular I stand by this Government’s recent actions to begin restoring law and order and cracking down on crime by removing taxpayer funding for section 27 reports to further discount sentences and by chucking out Labour’s prison reduction target. New Zealanders voted for a Government that’s going to restore law and order, deal with victims over criminals, and that’s what we’re going to get on and do.

Rt Hon Chris Hipkins: Who’s correct when it comes to the proposed Government legislation on Treaty principles: the Prime Minister, when he said, “Well, we’ve never been open-minded, we’ve always said there’s no intention, no commitment, no support for it beyond first reading”, or David Seymour, who said, “But ultimately the bit I don’t believe is he won’t change his mind”?

Rt Hon CHRISTOPHER LUXON: Well, we have a coalition agreement that says we’re going to support a bill through to first reading, and that’s no commitment beyond that.

Rt Hon Chris Hipkins: Is David Seymour correct that he’s lost his nerve on the Treaty principles bill?

Rt Hon CHRISTOPHER LUXON: I reject the member’s assertion, but what I’d say is that member should be the one that is nervous, because when Kieran McAnulty starts shaving off that beard, he needs to be ready to go, and, as I would have said, as we observed over summer, who was the de facto leader of the Labour Party? Michael Wood.

Rt Hon Chris Hipkins: Is it acceptable for one of his Ministers to tell the media that the Prime Minister has lost his nerve and he doesn’t believe the Prime Minister is being truthful with the public?

Rt Hon CHRISTOPHER LUXON: Well, I reject that member’s assertion in that question. What I’d say to you is that we are a coalition Government. We are a coalition Government, we have different views and different perspectives, and we are aligned on the things that matter, which is getting things done, cleaning up after your Government’s mess. So that’s what we’re going to get on and do.

Rt Hon Chris Hipkins: Was Newshub incorrect when they quoted David Seymour as saying, “ultimately the bit I don’t believe is he won’t change his mind if the public really wants it,”?

Rt Hon CHRISTOPHER LUXON: Well, I can tell you David Seymour is doing a great job. He’s going to make sure that we get our kids back in school. He’s got special delegation getting kids back into school, which is something that this Government and you as education Minister didn’t care about.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. I accept that my questions are relatively political in nature, but the Prime Minister hasn’t addressed any of them.

SPEAKER: Well, I think you’ve answered your own question, or assertion. They’re political in nature. But if the Prime Minister would like to make a further comment on that previous question? No, he’s all good.

Rt Hon Chris Hipkins: If any Minister other than David Seymour was to claim publicly that the Prime Minister had lost his nerve and wasn’t being truthful with the public, would they still be a Minister?

Rt Hon CHRISTOPHER LUXON: I support all of my Ministers. They’re doing a fantastic job—they’re doing a fantastic job. The only member in this whole House who should be nervous is the person answering the questions.

Rt Hon Chris Hipkins: If David Seymour doesn’t believe the public should be able to trust the word of the Prime Minister, why should the public?

Rt Hon CHRISTOPHER LUXON: We have a coalition agreement; it’s crystal clear. We’re going to support a bill to first reading, and there is no commitment beyond that.

Rt Hon Chris Hipkins: Does he agree, then, with the Rt Hon Winston Peters about David Seymour: “Well, it’s disgraceful that somebody is so desperate.” and “This petty, childish schoolboy behaviour just won’t do.”?

Rt Hon Winston Peters: Point of order, Mr Speaker. This is a matter of chronology. That questioner did not say when that statement was made, and therefore the Prime Minister could not be responsible for that—get a life and learn how this process works.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. It’s immaterial when Winston Peters said that. I didn’t ask him whether he agreed with the Deputy Prime Minister; I asked him whether he agreed with the Rt Hon Winston Peters, who I still believe is Winston Peters, even if he has a different job.

SPEAKER: Well, you’d better ask the question again.

Rt Hon Chris Hipkins: Happily, Mr Speaker—

SPEAKER: But I’ll tell you what, try and keep it contemporary, because going back in history is not good for us.

Rt Hon Chris Hipkins: Does he agree with the Rt Hon—well, it might not be good for the Government, Mr Speaker. Does he agree with the Rt Hon Winston Peters about David Seymour: “Well, it’s disgraceful that somebody is so desperate.”; “This petty, childish schoolboy behaviour just won’t do.”?

Rt Hon Winston Peters: Point of order, Mr Speaker. The Prime Minister is responsible for those obligations and duties that he has undertaken from the day he first took the job on and not a day earlier, and in this case this question should be ruled out.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. Unless the Speaker was to rule out that any statements made by anyone other than a Minister were not the Prime Minister’s responsibility, we couldn’t ask him whether he agreed with anything, and, actually, nor could many of the Government’s patsy questions be allowed by that criteria, either.

SPEAKER: We’ve just had a ruling that makes it very clear that the Prime Minister is responsible for things that relate to his Government or her Government, and there is a point that if the statement relates to a time when the current Prime Minister was not Prime Minister, then that might be the case. But I actually think—

Rt Hon Chris Hipkins: Point—

SPEAKER: Hold on, hang on, wait on—I don’t want to have to stand up on you. I think this is a question that the Prime Minister is probably capable of answering.

Hon Chris Bishop: Speaking to the point of order, Mr Speaker. Clearly, Ministers can be asked about whether or not they agree with statements made by other members, or indeed any members of the public, but it’s useful for the House to know exactly what time period the member is being asked to reflect upon. It may well be that Mr Peters’ comment was talking about the childish behaviour of the Labour Party, for example, but we don’t know because the Leader of the Opposition hasn’t given a time period.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. I’d ask you to reflect on the ruling that you have just indicated, and consider that in light of question No. 1, which was a Government question to the Minister of Finance that was all about a period in which she was not a Minister, and yet she was quoting liberally from a document about something that she did not have responsibility for at the time. If you are ruling that the only thing Ministers can be asked about is stuff that has happened since the election, then the entirety of question No. 1 was out of order.

Hon Chris Bishop: Speaking to the point of order—

SPEAKER: No, I don’t need further on this.

Hon Chris Bishop: It was about the BIM.

SPEAKER: I’ll come to you if I need to, believe me. Firstly, on question No. 1, that question related entirely to reports that the Minister has seen. That’s perfectly legitimate, and then, if you look at all of the supps that came—and I listened to them carefully, and you’ll recall that I did cut one of them off—they were all about the answers given by the Minister, and they related to current figures. So that’s that dealt with. I better hear from Mr Bishop—

Hon Chris Bishop: No, no.

SPEAKER: Oh, you’re over it? OK. That’s—

Hon David Seymour: Mr Speaker.

SPEAKER: Oh, the Hon David Seymour.

Hon David Seymour: Thank you, Mr Speaker—

SPEAKER: Is this a point of order, or what?

Hon David Seymour: I think I might be able to assist with it, yes.

SPEAKER: No, well, I don’t want your assistance. You’re either taking a new point of order or not.

Hon David Seymour: Oh, look, your loss, Mr Speaker.

SPEAKER: I’ve got a very long memory. So could we have the question one more time, and I think it would be useful to put context around that.

Rt Hon Chris Hipkins: Does he agree with the Rt Hon Winston Peters about David Seymour: “Well, it’s disgraceful that somebody is so desperate.”; “This petty, childish schoolboy behaviour just won’t do”?

Rt Hon CHRISTOPHER LUXON: What I’m going to say to you is that this is a coalition Government of three parties. We have different views from time to time, and that’s actually quite OK. It’s quite healthy and it’s quite constructive, and, unlike that previous Government that was all about control and spin and management, I have not heard—in the whole time since he’s become Leader of the Opposition, we haven’t had one question on the economy, not one on health, not one on education, not one on housing, not one on infrastructure.

Question No. 3—Prime Minister

3. DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori) to the Prime Minister: Does he stand by all his Government’s policies and actions?

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes, and particularly in the context they’re made, and particularly about our efforts to try and improve Māori health and education outcomes for young Māori.

Debbie Ngarewa-Packer: Does he agree with Te Hunga Rōia Māori o Aotearoa, the New Zealand Law Society, and the New Zealand Bar Association that scrapping funding for section 27 reports will disproportionately impact Māori, undermine rehabilitation, and lead to higher rates of offending, and, if not, why not?

Rt Hon CHRISTOPHER LUXON: No, I don’t. The reality is that Māori are higher victims of crime than anybody in this country, and we’re making sure that Māori feel safe in their own businesses, their homes, and their communities.

Debbie Ngarewa-Packer: Does he accept that his policy will create a double standard in sentencing: for the wealthy, who can afford to privately fund their own section 27 reports, and for those who cannot?

Rt Hon CHRISTOPHER LUXON: No, I don’t. The intention of section 27 reports was that someone could bring a friend or a family member to speak to their past. That was what was intended to happen. Instead, what’s happened is that there has been a cottage industry of reports, often prepared by people who don’t even know the offender. So the reality is that we’re putting it back to its original purpose. That option still exists and will continue to exist.

Debbie Ngarewa-Packer: What work is this Government doing to ensure that Māori and those on lower incomes will not be unfairly sentenced as a result of this policy?

Rt Hon CHRISTOPHER LUXON: Well, we are making sure that we actually have a fair system. That is fair and stands up for the victims of crime; it doesn’t stand up for the offenders.

Rawiri Waititi: Supplementary—

SPEAKER: Ah—

Rawiri Waititi: You’ve forgotten me so early, Mr Speaker.

SPEAKER: —Rawiri Waititi.

Rawiri Waititi: Does he find it acceptable that Māori women make up 64 percent of the female prison population while Māori men make up 50 percent of the male prison population, and, if not, what are his Government’s solutions to reduce that number and ensure it doesn’t increase as a result of this policy?

Rt Hon CHRISTOPHER LUXON: No, I don’t find it acceptable, and that’s why we’re working so hard on lowering crime.

Rawiri Waititi: Point of order, Mr Speaker. I don’t think he answered that question.

SPEAKER: Yeah, I know, but that’s not the test. What is the point?

Rawiri Waititi: The point of order?

SPEAKER: What is the point of order?

Rawiri Waititi: The point of order was that he didn’t answer the question around whether he finds it acceptable and what is his Government going to do about it.

SPEAKER: Well, I think he did. The Hansard will show that there was an answer to that. It might not be the answer you want, but please carry on. OK, question No. 4 in the name of Ryan Hamilton.

Question No. 4—Health

4. RYAN HAMILTON (National—Hamilton East) to the Minister of Health: What recent announcements has the Minister made to increase the number of New Zealand - trained doctors?

Hon Dr SHANE RETI (Minister of Health): Just two hours ago, the Government completed another key commitment from our 100-day plan, the signing of a memorandum of understanding (MOU) for a third medical school. This is the first step in a process to help increase the number of New Zealand - trained doctors.

Ryan Hamilton: What are the next steps following today’s signing of the MOU?

Hon Dr SHANE RETI: The signing of the MOU enables the Ministry of Health and the University of Waikato to progress with establishing a business case and carrying out a cost-benefit analysis, as described in the National-ACT coalition agreement. This is an important step as our country faces a dire shortage of Kiwi doctors, with many planning to retire over the next 10 years.

Tim van de Molen: What is the significance of the MOU for our provincial and rural communities?

Hon Dr SHANE RETI: Many provincial and rural communities are already experiencing large shortages of doctors, and with many GPs planning to retire over the next 10 years, this issue will only get worse. A medical school which further considers the needs of rural areas will help ease the pressure felt on rural healthcare.

Tim van de Molen: How will this impact New Zealand’s ongoing workforce shortage?

Hon Dr SHANE RETI: New Zealanders have been facing longer and longer delays in accessing healthcare. Tackling the workforce crisis is key to solving this issue. With this initiative we aim to retain more New Zealanders in our domestic medical school programmes, given more than 300 New Zealand students each year have been training in Australian medical schools. We will train more home-grown, culturally competent New Zealand doctors.

Hon Dr Ayesha Verrall: Will the full cost-benefit analysis of the proposed Waikato medical school committed to in the National-ACT coalition agreement include comparisons with the costs and benefits of training additional medical students at New Zealand’s existing medical schools?

Hon Dr SHANE RETI: The Ministry of Health is currently scoping out what the cost-benefit analysis in the business case will look like, and we’ll be happy to keep the member informed as that progresses.

Question No. 5—Local Government

5. Hon KIERAN McANULTY (Labour) to the Minister of Local Government: Does he stand by his statement that he is confident repealing the Affordable Water Reforms will be “cheaper”?

Hon SIMEON BROWN (Minister of Local Government): I am confident that the Local Water Done Well will be implemented cheaper than the previous Government’s three waters reform that cost the taxpayers over $1.2 billion with very little to show for it. My focus is on ensuring this Government delivers what the vast majority of councils have consistently asked for, which is local water done well. It means local assets in local council control, with the flexibility to structure their delivery of services in a way that works best for them and their communities.

Hon Kieran McAnulty: When the Minister uses the term “cheaper”, does he mean cheaper for ratepayers?

Hon SIMEON BROWN: Ultimately, councils set rates for their local communities, and this is about ensuring that councils can access the long-term funding and financing tools that they need so they can deliver the infrastructure. This will be far cheaper than what that Government was proposing—over a billion dollars spent with nothing getting delivered.

Hon Kieran McAnulty: Why won’t the Minister guarantee that his repeal and replacement will be cheaper for ratepayers?

Hon SIMEON BROWN: Well, it will be cheaper for ratepayers, because we won’t be spending a billion dollars—like the last Government did—with nothing to show for it. The last Government thought there was a magic money tree, where they could throw it around and apparently solve problems, but, actually, they didn’t, after six years, even solve this problem for local councils.

Hon Kieran McAnulty: Is he aware of advice from the Department of Internal Affairs (DIA), currently still available on the DIA website, that states what he is proposing as a replacement to the affordable water reforms won’t work and will lead to higher rates for ratepayers?

Hon SIMEON BROWN: Well, there’s a range of advice out there in terms of what the member may be pointing to. But what I would say is that this is going to give councils what they asked for, which is ensuring they can deliver and have the long-term funding and financing tools that they need. Mayors across this country opposed that Government’s plan. They opposed the mega entities and the forced mandated bureaucracies on local communities. We believe in local councils choosing and delivering for their local communities.

Hon Kieran McAnulty: Isn’t it actually the case that the Minister is setting things up so that when rates inevitably rise—unaffordably, for some—he can blame councils instead of taking responsibility himself?

Hon SIMEON BROWN: Well, the last Government said that most of these entities weren’t going to come into force until 2026, so the rates that were being proposed over the next couple of years were actually going to be proposed, regardless of that Government’s reforms. Now, councils are ultimately responsible. We’re giving the long-term funding and financing tools that councils need so they can invest sustainably, in a fiscally responsible manner, in water infrastructure for their local communities.

Question No. 6—Social Development and Employment

6. RICARDO MENÉNDEZ MARCH (Green) to the Minister for Social Development and Employment: Will indexing benefit levels to inflation rather than wages result in lower increases to benefits?

Hon LOUISE UPSTON (Minister for Social Development and Employment): That will depend on the actual increase in inflation and increase in wages in the given year, and, of course, how you measure inflation and wages. For the last 31 of 35 years, main benefits have been indexed to the Consumers Price Index (CPI) as a measure of inflation to ensure they increase with the cost of living. We think it is fair to protect the real purchasing power of those on main benefits, and this is the approach our Government is taking.

Ricardo Menéndez March: Why is it the case, then, that projections given to me via parliamentary written answers show that people will see lower increases to benefits?

Hon LOUISE UPSTON: The difference this year will be approximately $2, and our Government is absolutely focused on, first of all, reducing the number of people on jobseeker benefit, because we’ve seen a blowout in dependency under the last Government, and also we are focused on reducing the cost of living and the pressures that households—those receiving benefits and on low incomes—are facing.

Ricardo Menéndez March: Does she accept that because a person on the jobseeker is likely to be up to $50 worse off by the end of the decade, demand for hardship grants and advances will increase under her Government?

Hon LOUISE UPSTON: So the member is talking about projections 10 years out. If we look at it in the one year, it’s $2—$2 a week. This Government is relentlessly focused on getting the economy back to where it was so there are more opportunities, higher incomes, and the cost of living is not presenting the same level of pressure and hardship that Kiwi families are facing today. That is affecting those on benefit as well as those on low incomes, and there is a need to balance the two.

Ricardo Menéndez March: Why won’t she index benefits to wages or inflation, whichever is higher, to ensure everyone is supported in good and bad times?

Hon LOUISE UPSTON: This Government has made the decision to be consistent, to follow what has been done in 31 of the last 35 years, which is to increase it based on the CPI. What we won’t do is allow a young person who goes on to the jobseeker benefit under the age of 20 to have a forecast of 24 years on welfare—we won’t be doing that.

Ricardo Menéndez March: Is she confident that disabled people are treated with respect and dignity when they are forced to continuously prove lifelong medical conditions to remain on the supported living payment as opposed to going on to the jobseeker benefit?

Hon LOUISE UPSTON: I’m not sure it’s related to the primary, but I’ll answer it anyway. We have a range of policies in place in New Zealand for the welfare system that do two things, and a check-in with front-line staff also ensures that somebody’s needs for support are being met. I think it is fair to working New Zealanders, who fund the welfare system, that we ensure that those who are receiving support have regular check-ins, and in some cases that means reapplying for benefits to make sure that the setting is right.

Ricardo Menéndez March: Why would those regular check-ins include having to continuously prove lifelong medical conditions?

Hon LOUISE UPSTON: That’s the way it’s been for many years, and I don’t forecast it’s going to change.

Question No. 7—Local Government

7. KATIE NIMON (National—Napier) to the Minister of Local Government: What recent announcements has he made about water infrastructure?

Hon SIMEON BROWN (Minister of Local Government): Thank you, Mr Speaker, and thank you to the member for that question. The coalition Government is restoring council ownership and control of water assets by replacing Labour’s three waters legislation. Three waters was divisive and hugely unpopular, and all it would have delivered was a mega - co-governed bureaucracy. We heard the concerns that many New Zealanders had with the proposals, which is why we’re committed to repealing three waters and replacing it with Local Water Done Well.

Katie Nimon: Why is the Government repealing the Water Services Entities Act 2022?

Hon SIMEON BROWN: Well, as I said, the last Government’s proposals would simply have created mega - co-governed bureaucracies and failed to actually address the infrastructure challenges that New Zealand councils are facing. Later today, I will be starting the process to repeal three waters. This was part of the Government’s 100-day plan, and I want to acknowledge our partners, ACT and New Zealand First, for their support in this.

Katie Nimon: What are the next steps in making sure that local water is done well?

Hon SIMEON BROWN: Well, good question. There will be two further bills progressing through Parliament to transition to Local Water Done Well. The first bill will provide streamlined requirements for establishing council-controlled organisations, enabling councils to start shifting the delivery of water services, and a second bill, to provide for a long-term replacement regime, will be introduced in December this year. This will set out the long-term requirements for financial sustainability and provide for a complete economic regulation regime and a new range of structural and financial tools.

Katie Nimon: How will Local Water Done Well help councils prepare for future water infrastructure?

Hon SIMEON BROWN: New Zealand’s water infrastructure is facing significant challenges, and Local Water Done Well will enable councils to have the tools that they need to access long-term funding and financing. Local Water Done Well recognises the importance of local decision-making and flexibility for communities and councils to determine how their water services should be delivered in the future, rather than the Government coming over top, like the former Government.

Question No. 8—Education

8. Hon JAN TINETTI (Labour) to the Minister of Education: Does she stand by all her statements and actions?

Hon ERICA STANFORD (Minister of Education): Yes—in particular, the actions that I took earlier this year to support the roll-out of NCEA level 1. On becoming the Minister of Education, it was very concerning to find that the implementation of NCEA level 1 standards had been rushed without providing key components to teachers, like subject learning outcomes or external assessment exemplars. After being contacted by subject associations and teachers who raised their serious concerns, this Government took immediate actions to produce subject learning outcomes for all level 1 subjects, and we managed to get this work done with the help of those subject associations so they were delivered to teachers at the start of term 1. The New Zealand Qualifications Authority (NZQA) exemplars were not going to be released until May this year, when much of the teaching would have already taken place. On becoming the Minister, I instructed NZQA to urgently expedite the availability of all level 1 exemplars, and exemplars for science standards were available before the start of term 1, while other subjects will become available through February and March—much earlier than the May deadline. This Government wants students to succeed, and we have stepped in to ensure teachers have the tools they need for NCEA level 1, which the previous Government failed to do in their rush to implement.

SPEAKER: I’ll just say to the Minister that that was an exceptionally long answer, and I appreciate it comes, probably, from the ministry and that it’s not unusual for them to write long documents like that—but the Hon Jan Tinetti.

Hon Jan Tinetti: How many schools are currently facing cuts to building projects?

Hon ERICA STANFORD: I’m pleased the Minister—oh, the ex-Minister asked that question. On becoming the Minister, it was very concerning to find that there was an enormous pipeline of school build projects that were not able to be delivered on. Schools had had their expectations raised, buildings costs had skyrocketed, there were properties that were being designed with bespoke arrangements and architecturally designed buildings, schools had had their expectations raised, and there was poor communication. I’d like to just point out that the Minister herself said in a recent article: “You’ve got schools that have been really suffering, and suffering for quite some time”—that is the point. This has been ongoing and left to us by the previous Government, and now we’re having to come to a point where this Government are having to tidy up a list of schools that I am still coming to grips with the total number.

Hon Jan Tinetti: Does she stand by her statement: “You know, it is, and it’s part of, that is, the increasing costs of building, but part of it is because we are building these extremely bespoke classrooms, rather than just going ‘Look, here is option A, option B, and option C.’ ”, and, if so, is she aware that the Ministry of Education currently has a modular-building programme and off-site classroom construction options with a suite of standard designs introduced in 2018, helpfully available on the ministry’s website for her reference?

SPEAKER: Yeah, well, that’s one all, on the question and answer, isn’t it—so the Hon Erica Stanford.

Hon ERICA STANFORD: Thank you, Mr Speaker. I’m pleased that the member asked that question. The point is that the ministry are only just at this point in time starting to roll that out. The pipeline that we are dealing with—that runs into the billions of dollars—includes architecturally designed classrooms that teachers have spent many hours outside the classroom dealing with, and many, many classrooms in that pipeline are in exactly that position. I have now directed the ministry to make sure that we have repeatable modular designs that we can save on these costs, rather than these architecturally designed classrooms that blow out budgets.

Hon Jan Tinetti: What does she say—[Interruption]

SPEAKER: Hang on a minute—hang on a minute. The rules are no talking while a question is asked—some of your colleagues were speaking then.

Hon Jan Tinetti: What does she say to James Hargest College principal and Secondary Principals’ Association of New Zealand executive member Mike Newell, who, when asked about the property cuts, said that “no one seemed to know what the priorities were or [had] been able to sit down with the new minister. ‘So that’s really frustrating that we have a new education minister in there, and we’re unsure of what [her] priorities are.’ ”?

Hon ERICA STANFORD: I have sat down and had multiple meetings with the property team to try and get to the bottom of how it can be that we have such an enormous pipeline of raised expectations that this previous Government was unable to deliver on. I can assure that Minister that I am across the detail and getting to the bottom of this enormous, enormous mess that they have left that we are about to clean up.

Question No. 9—Internal Affairs

9. LAURA TRASK (ACT) to the Minister of Internal Affairs: What recent announcements has she made regarding the royal commission of inquiry into COVID19 lessons?

Hon BROOKE VAN VELDEN (Minister of Internal Affairs): On 2 February, I announced that the Government is delivering on its commitment to enable public input into expanding the scope of the royal commission of inquiry into COVID19 lessons. Both the ACT-National and the New Zealand First - National coalition agreements recognise expanding this scope as a priority. A royal commission is independent, but the Government sets the terms of reference. The current terms of reference of this inquiry were decided by the same Government responsible for the COVID19 response. That’s why this Government is open to expanding the scope of the inquiry.

Laura Trask: Why is the Minister consulting the public on broadening the terms of reference for the royal commission’s inquiry?

Hon BROOKE VAN VELDEN: All Kiwis were impacted in some way by the previous Government’s policies. There were social and economic impacts of COVID19 widely felt throughout the community. For example, in education, I’ve already heard from principals who say they’ve seen the effect of kids not being able to attend school, a lack of attendance, and the ability for kids not to have peer groups that they’ve socialised with. Businesses were having a lack of certainty, stress, and also not being deemed essential businesses. There were Aucklanders who had plunged into extended lockdowns, and people unable to access non-urgent healthcare, like breast cancer screenings that were put on hold. We want to hear from New Zealanders, and it’s essential for New Zealand to know what to do right in the future that we’re asking the right questions now.

Laura Trask: How can the public have their say on the terms of reference for the royal commission’s inquiry?

Hon BROOKE VAN VELDEN: The public can submit through the royal commission’s COVID inquiry website: covid19lessons.royalcommission.nz. The public submissions are open until 24 March 2024, and I would encourage all New Zealanders to have their say. The Government will be considering the public’s feedback before making any final decisions on the scope of the inquiry.

Tanya Unkovich: Can the inquiry’s terms of reference be expanded further than what’s been suggested, based on public submissions?

Hon BROOKE VAN VELDEN: Yes, there were nine bullet points put forward by the coalition Government after consultation in Cabinet. The Government will take public submissions into consideration before finalising new terms of reference.

Tanya Unkovich: Can she provide an update on what the next steps are for the positions and vacancies of the COVID19 inquiry commissioners?

Hon BROOKE VAN VELDEN: There are currently two commissioners for the COVID19 inquiry. The third member of the commission, Hekia Parata, resigned prior to the election. My first steps have been to open up the scope of inquiry by inviting public submissions, but now I’m turning my mind to the membership of the royal commission. I’ve asked for advice on appointments, and I will be consulting with my coalition partners throughout this process.

Rt Hon Winston Peters: On the question of Hekia Parata having resigned, has she found out that, first of all, she was offering her resignation but then the Prime Minister, Mr Hipkins, persuaded her not to proceed with her resignation, but it came too late because the Minister in charge had accepted her resignation and, therefore, there was a fait accompli by mistake? [Interruption] That’s true, and you know—you’re the Minister.

SPEAKER: Well, who’s answering the question here?

Rt Hon Winston Peters: Mr Speaker, I could do both—but just say yes. [Points to the Minister of Internal Affairs]

SPEAKER: Thank you, the Rt Hon Winston Peters. That’s very helpful. We’ll leave it at that, thank you, and go on to question No. 10.

Question No. 10—Transport

10. TANGI UTIKERE (Labour—Palmerston North) to the Minister of Transport: How does he expect Auckland Council to meet the $1.2 billion funding hole over the next four years to meet the costs of transport projects that the regional fuel tax was to fund as priority projects for Auckland?

Hon SIMEON BROWN (Minister of Transport): I disagree with the member’s assertion. Removing the Auckland regional fuel tax will save Aucklanders at the pump $150 million per year, or $600 million over the next four years, not the $1.2 billion mentioned. Around $341 million of regional fuel tax revenue remains unspent, and the Government will ring-fence these funds to deliver the priority projects such as the Eastern Busway, City Rail Link trains, and local roads. If Auckland Council wants to continue to fund cycle lanes, red-light cameras, $500,000 speed bumps, and blanket speed limit reductions, they are welcome to put that proposal forward to Aucklanders.

Tangi Utikere: What percentage of the Auckland regional fuel tax revenue gathered to date has been used to fund projects such as cycle lanes, red-light cameras, and pedestrian crossings in Auckland?

Hon SIMEON BROWN: Well, of the, I think, $700 million that has been raised to date, around $340 million—almost half of it—remains unspent, so that’s a fail on the former Government. The second point is around over $100 million was spent on safety improvement projects, which was basically speed bumps, and then a whole lot of other bus lanes and cycle lanes received funding as well. What we want to focus that money—the remaining funding—on is the priority projects, and not wasting it on low-value priorities.

Tangi Utikere: Point of order, Mr Speaker. That was a very specific question that followed the member’s response to the primary. It was the Minister who cited some of the very items that I’d asked him in my first supplementary. It was a percentage—

SPEAKER: OK, ask it again—just move on.

Tangi Utikere: Thank you, sir. What percentage of the Auckland regional fuel tax revenue gathered to date has been used to fund projects such as cycle lanes, red-light cameras, and pedestrian crossings in Auckland?

Hon SIMEON BROWN: Well, if you look at the amount which is allocated to various elements, over $100 million is allocated to those particular initiatives, but $300 million is unspent, and I would encourage the member to put the formal percentage question to Auckland Council to get the finer detail.

Hon James Shaw: Point of order, Mr Speaker. Just to reiterate the point made by Tangi Utikere, he did ask specifically about the money that has been spent, and that was specific. The Minister did not address the question of what has been spent. He gave an answer about what had been allocated and unspent, and that’s a different question.

SPEAKER: Well, I think if you have a look at the Hansard record, you’ll find he started by saying, on the points that were raised in the question, around $100 million, and I think that’s a reasonable answer.

Tangi Utikere: What commitment, if any, has the Minister given to Auckland Council about his Government’s commitment to Auckland’s transport infrastructure, and what additional funding has he agreed to look into?

Hon SIMEON BROWN: Well, thank you for the question. We are currently working through our Government policy statement on transport, which will include investment in our roads of national significance, which includes projects within Auckland. That Government talked a huge game when it came to Auckland and transport. Remember Auckland light rail—$228 million for consultants; no delivery. We’re going to be a Government that delivers, not just talks.

Tangi Utikere: Point of order, Mr Speaker. Apologies, but, again, this is a very specific question to the Minister about commitments that he has given to Auckland Council. Now, his rhetoric might be fine for himself, but he has decided not to specifically address the question.

SPEAKER: Well, I think he addressed it by saying the Government is currently working through the national transport plan.

Tangi Utikere: What does the Minister say in response to Auckland Mayor Wayne Brown’s view: “this is a problem that can’t be solved just by making cuts. Every Aucklander agrees that our transport system is a mess and it’s going to cost a lot of money to fix. That money must come from somewhere. Unfortunately, the Government has just made it a lot harder for us,”?

Hon SIMEON BROWN: Well, I say to the member that we are not going to be a Government which taxes Aucklanders to fund $500,000 speed bumps—that is not our priority. We want to invest in the infrastructure which actually makes a difference, and that means ring-fencing the remaining funds to the Eastern Busway, the City Rail Link, local roading projects, and we’ll have a range of funding and financing tools which help ensure we have the tools to deliver infrastructure across New Zealand for New Zealanders.

Hon Nicola Willis: How much would an Aucklander driving, for example, a Toyota Hilux or a Toyota Corolla save every time they fill up at the pump, thanks to this Government’s focus on removing the regional fuel tax and helping address the cost of living?

Hon SIMEON BROWN: Well, that’s a very good question, and this is all about the cost of living for Aucklanders. If someone’s driving a Hilux, they’ll save around $9 every time they fill up their car; for someone who’s driving a Corolla, around $5, and that’s money that won’t be funding $500,000 speed bumps in Auckland.

Tangi Utikere: Is it, in fact, the case that his attempt to give relief at the pump on the one hand and his desire to take critical transport projects away with the other is because he has hit his own speed bump and wobbles, and, instead, he is quite content on committing Auckland to more gridlock as a result of the Government’s inability to fund our largest city’s proposed transport projects?

Hon SIMEON BROWN: Well, the gridlock in Auckland was caused by that Government, who spent six years saying they were going to deliver Auckland light rail—$228 million and nothing to deliver. The City Rail Link started by National will be completed by National. We electrified the Auckland rail network. We completed the motorway network. That Government did nothing for Auckland over six years.

SPEAKER: Before I call the supplementary, at the start of the last question there was talk on both sides of the House, so it would have been difficult to single out anyone. I’m just saying, again, that if people are asking a question, they get to ask it in silence. The honourable, the honourable—oh, forgotten it. The Hon Damien O’Connor.

Hon Damien O’Connor: That’s all right. I’m just a new member, Mr Speaker.

SPEAKER: Just for clarity, I’ve known him since 19-whatever.

Hon Damien O’Connor: Yeah, the 1980s. OK, we can’t go back that far, Mr Speaker.

SPEAKER: No, it was actually 1972. Anyway, carry on.

Hon Damien O’Connor: Can the Minister tell us the average price of a litre of 91 fuel in Auckland today, and how that compares to the $2.95 that people are paying in Westport?

Hon SIMEON BROWN: Well, when I drove past the local Z on the way to the airport on Monday, it was around $2.88 or $2.90 a litre for 91.

Question No. 11—Emergency Management and Recovery

11. CATHERINE WEDD (National—Tukituki) to the Minister for Emergency Management and Recovery: What recent announcements has he made regarding cyclone recovery?

Hon MARK MITCHELL (Minister for Emergency Management and Recovery): Firstly, can I acknowledge that tomorrow is the one-year anniversary of Cyclone Gabrielle, which caused much devastation across the North Island. I’m looking forward to being on the ground in Napier and Hastings tomorrow to be with the communities there and to attend their commemoration event in Hastings. The devastation caused by the cyclone was profound, and I’m proud to be part of a Government that is firmly focused on ways that the response can be accelerated so that people have answers and can move on with their lives. I’m pleased to share in the House that, on Sunday, the Prime Minister and I visited Napier, and, alongside a tour of Bearsley Farms—which was hit particularly hard—and celebrating the hard-working first responders and volunteers across the region, we made a significant announcement of $63 million to support and accelerate the clean-up of silt and debris in both Tairāwhiti and Hawke’s Bay.

Catherine Wedd: Where is the funding going?

Hon MARK MITCHELL: The funding will be split across respective councils: $40 million is going to Hawke’s Bay Regional Council for urgent work to continue to remove sediment and debris across the region, with $3 million of that ring-fenced for debris removal in Wairoa; the Gisborne District Council will receive $23.6 million to ensure urgent work will continue for the processing and removal of woody debris across the region.

Catherine Wedd: What feedback has he had from locals on the ground?

Hon MARK MITCHELL: Well, Hawke’s Bay and Tairāwhiti are two regions that are very well served by their local members of Parliament. They are regularly in touch with me, providing me feedback about the recovery. Additionally, I’ve had lots of positive feedback from communities and people that I’ve met and engaged with in the region, who welcome the funding and have called it a boost for local employment and have said that the clearing of silt and debris is a high priority in terms of restarting the region’s economy and freeing up productive land.

Catherine Wedd: What is the Government’s approach to the recovery?

Hon MARK MITCHELL: We’re firmly focused on delivering a system that delivers better outcomes and gets the recovery happening in a much quicker way. The message to the people affected by Cyclone Gabrielle is that this Government is listening and working as hard as it can to speed up this recovery. We are behind you.

Question No. 12—Prime Minister

12. CHLÖE SWARBRICK (Green—Auckland Central) to the Prime Minister: Does he stand by his Government’s statements and actions?

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes, in the context they were delivered.

Chlöe Swarbrick: Does he agree with Christopher Luxon, who said—and I quote—“there’s no point building back houses if we don’t have flood protection in place.”, and, if so, is he concerned that more than 1,400 homes have been consented in Auckland flood plains since the Auckland Anniversary floods?

Rt Hon CHRISTOPHER LUXON: That is exactly what I believe, and what we need to work hard on is making sure that we can move through property categorisation in a much quicker way. I’ve asked for a weekly update on that so that we can make sure that that job’s getting done across the cyclone-affected regions.

Chlöe Swarbrick: Why, then, did his Government roll back, under urgency, no less, the last Government’s Resource Management Act reforms, which Victoria University economics of disasters and climate change chair Ilan Noy said were “way better” than the status quo he’s returned us to?

Rt Hon CHRISTOPHER LUXON: Because it stultified New Zealand and stopped investment in infrastructure happening, and it wouldn’t have helped this problem.

Chlöe Swarbrick: Is urban sprawl good or bad for climate mitigation and adaptation?

Rt Hon CHRISTOPHER LUXON: We need both city densification and we need to open up new greenfields and new green spaces, too.

Chlöe Swarbrick: Mr Speaker, if I may, point of order.

SPEAKER: Well, are you going to call one?

Chlöe Swarbrick: A point of order, Mr Speaker. The question was relatively straightforward: is urban sprawl good or bad for climate adaptation mitigation? The Prime Minister did not answer that question.

SPEAKER: The member will know that you can’t ask for definitive yes/no or good/bad answers. You can simply get an answer, and the answer was—the way I heard it, they’re both good and bad.

Chlöe Swarbrick: All right, Mr Speaker. It’ll stand on its own, then. Supplementary.

SPEAKER: No, no, don’t make those comments; just ask your supplementary.

Chlöe Swarbrick: Will the Government’s policy decisions increase or decrease urban sprawl?

Rt Hon CHRISTOPHER LUXON: We want to make sure that people who can get houses have access to houses. We have a major problem in our housing market here in New Zealand. It’s linked by the fact that if you can’t own a house, you end up having to rent a house; if you can’t rent one, you end up on a social house wait-list; and if you can’t get on a social house wait-list, you end up in emergency housing. We are determined to solve housing in New Zealand; we’re going to do that job.

Chlöe Swarbrick: Does the Prime Minister agree with Christopher Luxon, who said that climate adaptation is going to require “bipartisan support”, and, if so, will he commit to restarting cross-party work, as started under the former Government, on climate adaptation within this parliamentary sitting block?

Rt Hon CHRISTOPHER LUXON: Yes. Our climate change Minister agrees with me that we want to be able to make sure we can work in a bipartisan way to make sure we deal with climate adaptation, which has impacts over multiple generations, with landowners, local government, central government, insurers, and banks involved. So we’re very comfortable moving forward in the same manner as the previous Minister of Climate Change did.

Urgency

Urgency

Hon SIMEON BROWN (Deputy Leader of the House): I move, That urgency be accorded to the introduction and passing through all stages of the Water Services Acts Repeal Bill and the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill; and the committee stage of the Social Workers Registration Legislation Amendment Bill.

The Government is today according urgency to progress key aspects of our 100-day plan, which includes repealing the last Government’s three waters and indexing benefits back to the Consumers Price Index, and progressing work on the social workers legislation bill.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Motion agreed to.

Introduction of bills

Introduction of bills

SPEAKER: The Government is going to introduce bills.

CLERK:

Water Services Acts Repeal Bill, introduction

Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill, introduction.

Bills

Water Services Acts Repeal Bill

First Reading

Hon SIMEON BROWN (Minister of Local Government): I present a legislative statement on the Water Services Acts Repeal Bill.

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

Hon SIMEON BROWN: I move, That the Water Services Acts Repeal Bill be now read a first time.

This bill embodies the National Party’s commitment to repealing the previous Labour Government’s divisive and unpopular three waters regime. It marks the first step towards implementing Local Water Done Well—our plan for addressing the country’s longstanding water infrastructure challenges. I want to start by acknowledging the commitment and support from our coalition partners, the ACT Party and the New Zealand First Party. I also want to acknowledge a number of mayors who are in the House here today and who have come to Wellington to witness the passing of this piece of legislation.

This bill serves multiple purposes. Firstly, it repeals the Labour’s three waters legislation, thereby removing the 10-entity model which prescribed co-governance, and this will ensure water assets remain under the local ownership of local councils. Additionally, it halts the establishment of the economic regulation and consumer protection regime for those 10 mega, bureaucratic entities. Secondly, this bill disestablishes the Northland and Auckland water services entity, ending the costly and unnecessary activity involved in setting up this body, including significant IT contracts. In December last year, it was revealed that the previous Government’s reforms cost the country an eyewatering $1.25 billion while achieving very little. The termination of this work is anticipated to save a further $343 million, aligning with our Government’s objective to curb irresponsible spending.

Thirdly, the bill relieves pressure on councils that will now need to include water services in their long-term plan (LTP). Councillors are in the midst of preparing these plans and require direction and support to plan for and finance water services that they will continue to hold responsibility for. The bill provides a range of options that recognise that different councils will have different needs and preferences and will be at various stages of developing their long-term plans. The options include having an unaudited LTP consultation document, adopting the long-term plan for up to three months later than usual, or deferring the 2024 LTP by one year and preparing and consulting on an annual plan for 2024-25 instead. This is about providing flexibility to councils. All of the options are voluntary, and councils can choose to use them or not, depending on their local circumstances. Unlike the former Government, which came in and mandated the approach on local councils, we instead are taking the approach of flexibility in terms of this particular issue. The bill provides much-needed clarity about the choices available to councils, in addition to standard processes and what is required if particular options are taken up.

Repealing the previous Government’s three waters legislation is just the first step in our plan. The coalition Government is committed to addressing New Zealand’s longstanding water infrastructure challenges. While some communities operate and maintain efficient, high-quality water services, we cannot ignore the fact that many are struggling to maintain and upgrade critical water infrastructure and fund new investments. There is a pressing need for futureproofed reform in our water infrastructure in the face of aging assets, inflation, population growth, and regulation. With Local Water Done Well, we will enable councils and communities to determine what works best for them while establishing clear expectations and bottom lines. The Government’s plan for water reform will require councils to demonstrate how they will meet strict regulatory standards that ensure safe, resilient, and cost-effective water services. This approach will improve transparency, accountability, and efficiency by identifying where there are areas that can be improved. And, as outlined yesterday, we’ll be doing this through a two-step approach.

The next piece of legislation will be passed through this House by the middle of this year. It will deal with issues in regard to how councils can more efficiently set up council-controlled organisations. Currently, when they set up a council-controlled organisation, each council has to consult separately with its local community. This will include changes which streamline that process and enable them to be able to consult widely across the region or amongst the councils which want to work together. It’ll include elements around the requirements to put forward their financial sustainable plans to demonstrate what they’re doing to be able to meet the requirements, so they have long-term sustainable plans. And it will have the first steps towards ensuring that we deal with Watercare, to ensure that Auckland Council is able to have balance sheet separation for Watercare. This approach will improve transparency, accountability, and efficiency for those local councils in the investments that they’re needing to do.

The second step, in terms of legislation, will be another bill, coming to the House later this year, which will have more detail around setting up specific balance sheet separated council-controlled organisations. It will include full regulation under the Commerce Act for these water entities to ensure that they’re investing responsibly, that prices are set appropriately, that infrastructure is not gold plated but that they’re pricing appropriately, and that investment is done over a long period of time, so that we improve the water infrastructure that we have here in New Zealand. And I look forward to bringing those future pieces of legislation to the House.

Our Government aims to set standards for critical infrastructure delivery, focusing on value for money, investment to drive economic growth, productivity, and quality of life. Taumata Arowai will continue to retain its role as the water-quality regulator and will be tasked with setting safe water standards and overseeing that for local councils in a proportional way which meets their needs. Economic regulation will play, as I said, a key role in ensuring that the necessary investment in infrastructure is made without making charges unaffordable. Clean, quality water is a fundamental expectation of every New Zealander. Changes are needed to build better water services for current and future generations, and this is what Local Water Done Well will deliver. We do not need more centralised and bloated bureaucracies, which is what the last Government imposed on local communities but after six years failed to deliver. Instead, central government will provide the tools for local government to deliver and the oversight necessary to ensure an efficient system.

To those who voted for the National Party, the ACT Party, and the New Zealand First Party, we have delivered on our promise to end the last Government’s co-governed, mega entities, mandated three waters regime. We will now begin the process of implementing Local Water Done Well so that local councils are able to invest in the long-term infrastructure that they are responsible for. I commend this bill to the House.

Hon KIERAN McANULTY (Labour): Thank you, Mr Speaker. The issue facing this country in regards to water services is one to the tune of $185 billion. It is quite telling, I feel, in a speech where the Minister introduces a bill that will repeal a structure that will save ratepayers thousands of dollars a year, come 2051—no details as to how his proposal will save ratepayers the same, no detail at all. Because the issue that the Government has is the same issue that they had throughout the campaign: they’ve promised everyone everything and eventually they won’t be able to deliver.

They promised that local control can be maintained. They’ve promised that local ownership can be maintained, and they’ve promised that balance sheet separation will be a key feature of it. Yet we’ve seen no details as to how that is going to happen. And that is very consistent with the history of the National Party’s position on water reform. Originally, it was: “We will repeal.” When it was pointed out the cost that the status quo would impose on ratepayers, they changed their view to: “Repeal and replace.” We asked them a very simple question: “Replace with what?” And here we are today, with a repeal bill being introduced with no details whatsoever as to what the replacement will be. I feel it is quite simply because they cannot deliver on all the things they have promised—they cannot deliver it.

A very simple question for the Minister of Local Government, which I look forward to hearing at the committee stage, is: how is he going to deliver balance sheet separation when the very advice from his own department says he cannot have direct council control ownership and balance sheet separation? We saw alternatives put forward during the debate—and I will give Communities 4 Local Democracy credit, and I recognise that some of those mayors are in the Parliament tonight. At least they came up with an alternative. Throughout the debate, the National Party had no alternative, and, lo and behold, what they signalled when they announced the repeal is very similar to—almost exactly the same as—what Communities 4 Local Democracy put forward. And good on them, they’ve been effective in their advocacy. However, my concern is that on the Department of Internal Affairs website there is advice for the Minister that says that approach will not work and will not deliver balance sheet separation, which is a critical part of ensuring that water services are done affordably.

Now, I can see this is a confusing, complicated debate. It is very technical, and the solutions are convoluted, but it doesn’t mean that this Parliament should allow the issue to be pushed to the side, downplayed, and left for future councils to deal with. Because that is the reality. What the Minister is setting up is that when unaffordable rate bills come for many councils, he will be able to say “That’s a council issue.” Right throughout this debate, when the original reform proposals were made, the National Party promised councils that they would help them pay for it. They went around the country, they said, “Don’t support the water reforms because we will do it differently and we will help you pay.” Well, that is a broken promise. That is a promise that they never intended to deliver and they haven’t delivered on now.

You only need to look at statements made by senior members like Matt Doocey, who stood up and promised councils in this House—in fact, I believe it was in this seat. He stood up in this House and said to councils, “We will help you pay for it if we are elected.” Well, they’re elected now and there is no help. There is no financial support. And when it comes to affordability for ratepayers, they are being sold a dud. It’s the mayors and it’s the councillors and it’s the ratepayers who will cop it. Because councils cannot do this by themselves. They cannot do it without balance sheet separation. Mayors and councillors will be forced to increase rates, they will cop it from ratepayers, and ratepayers will cop it in the back pocket. All of this could be avoided if the Government was upfront with New Zealanders and said, “If we want balance sheet separation, you cannot have direct council control.”

But even now, in the face of advice from their own departments that said they cannot do it, they are ignoring that fact. This will not work. And when ratepayers face bills they can’t afford, they can look back on this day and see how that came about.

LAN PHAM (Green): Thank you, Mr Speaker. Everyone has a right to—and deserves access to—clean, safe water. Unfortunately, past decisions and political inaction has meant that that is not currently the case for many of our communities across Aotearoa. Our waste water and stormwater networks and systems need to be designed and managed responsibly so as not to damage and degrade our environment, and in a way that is integrated with the actual environment in which the infrastructure sits and in a way that upholds Te Mana o te Wai. Again, past decisions and political inaction mean for so many of our communities and for te taiao—our environment—that is not the case.

These are the basic issues of what the water service reforms were seeking to address. The repeal of these bills today is definitely getting us somewhere. It’s getting us back, but not on track like this Government purport to be doing. It’s taking us backwards away from our water service and environmental goals. The Minister just talked about flexibility for local government. What I see and what we see is that he and his Government are dishing out uncertainty for local government, right at a time when they are consulting on what is often the most important conversation they have with their communities in their entire term: their long-term plans. Ultimately, councils will then be faced with putting in place higher rate rises, meaning higher costs for households who are already stretched to the limit.

Investment in water services matters and it is urgent, especially in this climate-impacted world. As droughts, flooding, and other pressures become more common, water infrastructure needs to be resilient to climate change—again, something that becomes further out of reach with not only this repeal today but with the Government’s reckless repeal of the Spatial Planning Act, which would have provided a much more integrated approach to water service infrastructure and land-use planning that we so desperately need. Water is a taonga, and hapū have always exercised kaitiakitanga over water. As we face the challenge of improving our water infrastructure and a changing climate, iwi, hapū, and whānau should have a governance role that recognises kaitiakitanga and whakapapa connections to wai.

Whatever this Government proposes ahead—and we don’t yet know what that is—we strongly support effective co-governance for management of water. However, given both the Government’s response to these bills passing in the first place and their current proposals that threaten Te Tiriti and the rights of iwi Māori, we have significant concerns about the coalition Government’s fear-mongering approach to co-governance—or, given we live in Aotearoa New Zealand under Te Tiriti, one might more accurately call it governance. The Green Party wants to see us grow up and move forward as a country with a management approach that embraces Te Mana o te Wai and that leads entities that deliver genuine partnership with local iwi and hapū.

The legacy of our under-investment in water infrastructure is significant, not just for our people but for our environment too. This Government’s approach of repealing these reforms under urgency is yet another missed opportunity, taking us further away from community resilience, further away from protecting our environment, and further away from allowing Kiwis access to their most basic rights of safe, affordable, reliable water. The Green Party will once again be pushing to not let these immensely important fundamentals be overlooked. Thank you.

SIMON COURT (ACT): Mr Speaker, thank you. The ACT Party offered to work constructively with the previous Labour Government on developing a sustainable three waters reform model, but what the previous Government did—and why we’re repealing this three waters legislation today—was ignore offers to collaborate with councils and with all of those participants in the supply chain in terms of developing a reform structure that would be durable. Instead, they proceeded to introduce legislation that they hadn’t campaigned on and that the public knew nothing about, which introduced concepts of co-governance over publicly owned water assets.

This concept of Te Mana o te Wai, which is an anti-scientific concept that was going to be embedded in the legislation—when I’ve spoken to councils around New Zealand, what they’ve told me is that under that previous legislation, the legislation that’s going to be repealed today, even if we treated the waste water to drinking-water standards under Te Mana o te Wai, that flawed concept, we wouldn’t be allowed to discharge treated waste water into lakes or rivers. Now, this Government has a different approach. We believe in science. We believe that by making good investments in infrastructure, councils can deliver clean drinking water and deal with waste water and stormwater effectively.

Now, it’s true that some councils haven’t done that, but when presented with the glaring problem such as all the water leaking out of the pipes in Wellington, even a Green Mayor of Wellington has had to accept that councils have a responsibility to invest in underground assets like three waters assets.

Mark Cameron: Plumbing—piping.

SIMON COURT: Plumbing—you could call it the city plumbing. Instead of going after all of these other Green dreams like walking and cycle projects, councils will now be getting back to business and focusing on what’s important, which is managing assets well.

Steve Abel: Where’s the money coming from?

SIMON COURT: Oh, this member here—Mr Abel—asks where the money is coming from. Well, guess what? Who pays for water? The consumers of water could pay. Some councils say that their ratepayers should pay. Under the previous Government’s three waters model, who knew who was going to pay? But what’s important is that if you’re receiving an infrastructure service like water to your home or business, if you’re flushing or you’re sending stuff down the trade waste pipe, it’s pretty clear that the user should be the one who pays, and that is why even some of those who have been almost religiously opposed to water meters in the past have had to accept that metering water is one of the ways of actually working out how to reduce use, how to manage down leaks and wastage, and how to link who uses it with who pays. Now, that makes perfect sense to most New Zealanders—if you use the water, you get a bill and you pay—but it’s been an absolute revelation to the anti-business, anti-capitalist members of the Green Party who sit here in Parliament.

So, if we think about who’s going to pay for water infrastructure going forward, one of the problems that this Government intends to solve is that with this massive deficit, this under-investment in existing infrastructure and in maintenance and renewals, combined with the need to provide water infrastructure to enable growth in our largest cities and in our new, fast-growing metros like Tauranga, the money needs to be raised to pay for these long-term assets, but they are long-term assets. These are assets that have 50-, 100-, 200-year lives. It makes no sense at all to force ratepayers of today to pay over a period of three or 10 or 15 years for an asset that has a very long life.

So, for one of the problems that this Government intends to solve, one of the ways to do it is by establishing council-controlled organisations who can make these long-term investment decisions, raise long-term debt, and make sure that the cost of those assets is spread over a fair amount—

Steve Abel: Privatisation.

SIMON COURT: —of time, and not lumped on current users, Mr Abel. Mr Abel talks about privatisation. Well, what’s been very clear in the commitments made by this coalition Government is that water assets will not be privatised. But if this member wasn’t aware of it, the contractors who turn up to fix the water pipes are, typically, private sector contractors. They’re subcontractors to councils or to larger firms.

If you’re going to insist that this drinking water and all of these water services don’t cost anything, then you’ve got it dead wrong. The users will end up paying whether they’re ratepayers or whether they’re getting a bill based on their water meter. What New Zealanders will have is much better water services as a result.

ANDY FOSTER (NZ First): Thank you, Mr Speaker. Look, I’m delighted to speak to this and support the repeal of Labour’s three-headed taniwha of three waters legislation. Look, there’s no question that there are real issues with water infrastructure around our country; but, actually, that’s true of many other aspects of infrastructure, many of them run by central government, of course. But Labour’s centralisation, “We know best”, was not the right way of doing it.

The last Government, as we know, spent $1.2 billion—if you’re going to be more efficient about doing something, spending $1.2 billion without even having it set up doesn’t strike as being efficient. But trying to bulldoze that through against what they knew was significant opposition around the country—certainly from councils, who owned the assets, but also from the public as a whole. And that $1.2 billion, of course, does not include the costs to other parties, such as councils.

It was Chris Hipkins who acknowledged that “We didn’t take the people with us”—“We didn’t take the people with us”. And no, they didn’t take the people with them. In fact, they built up more and more opposition. I suspect, had they not done what they’d done, they may not be where they are now—on that side of the House.

I also want to acknowledge, as some others have—some of my friends and mayors up in the gallery there—I want to acknowledge you for your brave, courageous, and steadfast fight for what you believe was right on behalf of your communities, to say that we as communities want to be able to have a say over and control the direction of the assets which have been built up for generations and generations of ratepayers and water consumers in your area. So congratulations to you all.

Three waters was mis-sold. We can all remember the wonderful advertising campaigns that the last Government put out. They, basically, blamed local government—there were dying fish all over the place—for poor asset management. It started off as a voluntary opt-in scheme, so councils would be able to choose to opt in if they wanted to. Then it changed to be an opt-out scheme. Then, of course, it became compulsory. That’s really good-faith bargaining! And that’s one of the things that is wrong with this.

Secondly, when the pressure came on around co-governance, there was all sorts of dissembling about saying, “Oh, it’s not about co-governance. This is not a problem at all because look at co-governance of various rivers, various mountains.” This is completely different. This is co-governance of services which serve every single New Zealander. Those New Zealanders have built those assets up, and yet the Government wanted to expropriate them essentially without compensation.

And then we kept hearing about Havelock North being the reason for all this massive change right across the country. Well, with all due respect, if that was the problem, it was a massive overreaction. So what was wrong with it?

Chlöe Swarbrick: People died.

ANDY FOSTER: Well, if that was the problem, then we close our roads down tomorrow, but we don’t do that either, do we. It was ideological, centralisation, one-size-fits-all, the establishment, for of all of four entities, and then 10 big entities. And we heard the Hon Kieran McAnulty talk about all the savings that were going to be made. Well, the reality was that if you put in massive gains in efficiency into one model but you don’t put them into any other, of course you’re going to make it look as though it’s cheaper. But I think that was mythical. We’ve already seen, as I said, $1.2 billion spent on going, essentially, nowhere.

It was also based on massive borrowing: $180 billion—$180 billion—and you think that’s free? Where’s the money going to come from? Well, it certainly wasn’t going to be from some magic money tree. It was going to replace ratepayers with somebody—either ratepayers or water consumers; that hadn’t been decided. Quite clearly councils were still going to have to keep on charging for it regardless, until that had been worked out. Who was going to pay? Probably water consumers in the end, probably through water metering. By and large, those are exactly the same people as were paying for it already: the ratepayers. So there was nothing free. There is nothing free in this life, and there wasn’t there.

Then it was a massive asset grab, essentially—as I said—without compensation. The High Court actually recognised this. Again, I pay tribute to some of the councils who brought a case against the Government, and the High Court said, “Yes, this was expropriation.” Of course, it’s for Parliament to decide whether there was any compensation paid, but the High Court said, “Yes, this is expropriation.”, and I think this is a real concern: that a Government can just reach into and say, “Well, just because it’s local government, we can take your assets away because we feel like it.” That to me is wrong, and the High Court, effectively, said it was wrong as well.

So I’m delighted to see this legislation passed through here. It is the repeal of some very, very poor legislation. And I look forward to having a much more locally responsive way of making sure that we deliver good three waters for our communities up and down the country. Thank you.

TĀKUTA FERRIS (Te Pāti Māori—Te Tai Tonga): Tēnā koe e te Pīka. E ara ake nei au ki te waha i ngā kōrero me ngā whakaaro o te iwi Māori e hāngai ana ki tēnei o ngā panonitanga ture e hāngai pū nei ki te wai Māori.

Kua roa nei Te Pāti Māori e tū ana i runga i te ōhākī o te Tiriti o Waitangi, me te kī ake nō te Māori te wai. I roto i tēnei rā tonu, e tohe tonu ana te Māori kia kake tōna tūranga i roto i ngā mana whakahaere, ngā mana whakarite i te wai. Hei aha? Hei painga mō te katoa.

Nō reira, anei rā ko ētahi whakaaro e hāngai nei ki tēnei o ngā pire, ahu atu i a mātou o Te Pāti Māori. So, e te Speaker, tēnā koe.

[Thank you, Mr Speaker. I rise to convey the statements and thoughts of the Māori people with respect to this, one of the amendment bills that directly concerns fresh water.

For a long time, the Māori Party has stood on the final instruction of the Treaty of Waitangi, that states that water belongs to Māori. On this very day, Māori continue to fight to elevate themselves to positions within management authorities, organising authorities over water. For what purpose? For the benefit of all.

So here are some thoughts about this particular bill, coming from us of the Māori Party. So, Mr Speaker, thank you.]

Te Mana o te Wai—it’s a concept. It’s a concept, and it basically translates to “the importance of water”. Te Ao Māori is extremely invested in the importance of water. We’re completely aware of all of the debate around the delivery of water, around the nature of ownership of water, as quoted by our friend over here—not quite on the money but quoted nonetheless.

I heard today that three waters was quoted as being a “hugely divisive” policy. I think that might be a little bit of an exaggeration. It became a hugely divisive policy after a great big race war centred around Te Tiriti o Waitangi, Māori rights, and co-governance was propagated around the country. But if you refer back to Te Tiriti o Waitangi and understand that all of the rights that Māori had pre-existing European arrival were guaranteed to continue and be protected in article 2, your view might change somewhat.

But nevertheless, Te Mana o te Wai as a standpoint continues to be strong for te Iwi Māori and it will be the basis for Te Pāti Māori’s arguing for Te Mana o te Wai, and te mana o te Māori i roto i te whakahaere i te wai [the importance of water, and the authority of Māori in the management of water].

I might just also add that at this point in time, te Iwi Māori are not contesting the ownership of water, although there are many precedents set around this country already that would lead our friends on this side of the House to consider what they say about who owns water.

So Te Mana o te Wai—te taiao and the importance of te taiao. As the māngai of the New Zealand Māori Council for the last three years, I had the responsibility of presenting the New Zealand Māori Council’s views on Te Mana o te Wai, on three waters, and the nature and the place of Māori—Māori thinking, Māori rights, Māori solutions, in the improving of Te Mana o te Wai, the importance of fresh water to New Zealand. I can unequivocally say that Te Ao Māori has the solutions that our country needs. They are, of course, unfortunately not rooted in making money. They are rooted in delivering clean, fresh water that will sustain this land’s people and sustain this land’s environments. This is a phrase captured in this piece of legislation as “te mauri o te taiao” [the vitality of the environment]. I guess my friends on this side of the House wouldn’t understand a concept like te mauri o te taiao, but I can give you a quick little example. Te mauri o te taiao just requires that you place yourself on a lower rung on the ladder than everything else you rely on to live, nē? So money comes second. Maybe the health of your children comes first. Maybe clean water for everyone to swim in comes first, and delivering water for big business comes second.

These are all concepts that this House will struggle to deal with, will struggle to articulate, and will struggle to frame policies that deliver it. But we will be here to ensure that these messages are held high in this House, that they are delivered clearly in this House, and that this House does not get to continue on and disregard Māori rights in te wai māori.

Well, I might just conclude by directing my friends over here to a simple short clip that’s on social media. It’s Gareth Morgan, one of the leading economic minds of this country, describing Māori rights to water. And I’ll just summarise it by saying he concludes by saying this: “Māori own the water”. Now, as I said, Māori are not contesting the right to ownership of water—kia kaha. We are not contesting right to ownership of water; we are contesting the right to delivering Te Mana o te Wai, the importance of fresh water for every New Zealander, and the rights of te Iwi Māori in Te Tiriti o Waitangi. Kia ora tātou.

Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you, Madam Speaker. It is a pleasure to be talking on the Water Services Acts Repeal Bill. Having endured the 88,000 submissions through a long period on the Finance and Expenditure Committee that some of us endured—and I’m looking at the other side of the House here at Ingrid Leary who also had to endure that dreadful thing—it is an absolute pleasure to be talking today about repealing it. It was evident through the last term of Government what a divisive, dreadful piece of legislation it was—or three pieces of legislation—and what this proposed change, which the Labour Government sought to bring about, was causing in our communities. I acknowledge our council CEOs up in the audience.

The bill raised a whole lot of issues, but of specific importance to me are the issues relating to the Water Services Economic Efficiency and Consumer Protection Bill. My job is to work with Minister of Local Government, the Hon Simeon Brown, to bring about new changes, new rules in terms of economic regulation of the water entities that will be formed under our new proposal of local water made better. What we want to ensure is that New Zealanders do get access to high quality water, but we want to make sure that the decision making for that occurs at a local level.

The big issue with the previous economic efficiency and consumer bill was that it assumes that these entities were all about making profit and ripping off New Zealanders; that, of course, was the wrong approach and that’s why the overzealous economic regulations were totally inappropriate. What we will do is pare it back and make sure that we have adequate economic regulations that do ensure that councils invest properly to meet their minimum health standards, to meet the needs of their consumers. But, perversely, actually, the regulations are about making sure they invest enough, not ensuring that they make a profit—because, of course, they’re separated stand-alone entities; that is why they’ll be ring-fenced. That is not about profit maximisation; it’s about creating better infrastructure. I’m looking forward to doing that over this year and putting the proposals back into the House at the end of the year alongside Minister Brown.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Speaker, for the ability to take the call on this repeal bill. Before I start, I hope to indulge the House for a moment. It has been a year since Craig Stevens and Dave van Zwanenburg from Muriwai fire brigade passed away due to the events of Cyclone Gabrielle, so I want to acknowledge them and their families, and the fire and emergency crews across New Zealand, who are having their flags at half-mast today.

Though, we are here today and it feels very much like déjà vu on this side of the House, and also some déjà vu from when we were on that side of the House, that again we are going through another repeal bill, again another urgency, and again nothing, no solutions, from the other side of the House. The Minister of Local Government earlier today said there is a pressing need to move on these water reforms, and yet the bill that is tabled by the other side of the House is just the repeal of the previous Government’s bill, of the previous Government’s work. There has been no solution tabled today. So if there was such a pressing need, why was the Government who are now in force—why were they not working on something beforehand? Why, all of a sudden, is it that they say that we’ve been doing nothing for six years?

Well, actually, we’ve been doing a lot, and if you look at the Department of Internal Affairs website, you will see that there was a royal commission of inquiry into the Havelock North affair, which started in mid-2017. That needed to run its course. Then there were a number of officials’ papers and discussion documents and consultation that happened in that six years. The Hon Kelvin Davis, who is no longer a member of this House, said if things were easy then everybody would do it. Unfortunately, the problem with water reform: it has been kicked down the road for so long that it came down to the point where a Government, the previous Labour Government, had to take a stand and had to say we need to change this. We cannot have the situation where our children cannot swim in the beaches, in the rivers. We cannot have the situation where people are dying because of water. We need to ensure that our councils have the support in order for them to be able to invest in the infrastructure, because they all couldn’t afford it. They’ve got three council authorities who are within my area of Mana, and they are all in very different situations as to what they can afford. But the three waters reform project, affordable water, basically allowed the ability for there to be balance sheet separation, and, in the end, it’s the money that counts. There’s a Jerry Maguire movie where he says, “Show me the money.” There is no money in this bill.

I do remember the other instance of déjà vu I had was while sitting on that side of the House, watching the Hon Matt Doocey on this side saying, “When we become Government, we’re going to co-invest.”—that is on Hansard—and yet there is nothing in this bill. There has been no commitment since the election that that Government is going to co-invest with councils. Instead, they’re passing the blame now on to councils, and we saw that in question time today, where the Minister said, “We’re going to give it back to councils.”, and, basically, if the rates are going to go up—

Dr Tracey McLellan: Not their problem.

Hon BARBARA EDMONDS: Not their problem, because they’ve given the responsibilities back to councils. That was the whole reason why we did those water reforms, to help ratepayers not see the large increases that they were going to see.

Standard & Poor’s have basically said that you need to have balance sheet separation in order for councils to be able to borrow more. If the Government’s going to go ahead with their current reforms, which, again, is at the moment just repealing a bill, Standard & Poor’s says the devil will be in the detail. There is insufficient detail here for any devil to be able to have a look at, and so it’s going to be really interesting to see how this Government comes up with a plan to save ratepayers’ moneys, because the Minister today said that rates are not going to go up—nevertheless that Far North District Council’s looking at 33 percent rate increases, the West Coast council’s at 30 percent, Hamilton at 25.5 percent, and the Mayor of Porirua just said today 18 percent. These are increases that are going on to ratepayers, that this Government has done none of the work on in order to be able to provide that pressing need, that pressing solution, except for removing an actual policy solution that has Standard & Poor’s stated approval, which allows a balance sheet separation so that those entities can borrow more to bring down the cost of that infrastructure project across the time so that it’s cheaper for our ratepayers.

So, again, we are here in a situation of déjà vu: no solutions, repealing a bill, and again in a situation where there were broken promises, where they said they would co-invest but the Government has not committed to it.

STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. It is a pleasure to speak on this repeal bill. I’d like to begin by acknowledging the mayors in the audience in the Speaker’s gallery, particularly one of my constituents: a mayor in my area, Dan Gordon, who I know needs special acknowledgement for all the work that he did in rallying the rest of the troops—those sitting with him—to get this where we are today and actually delivered a pretty good plan for the future. So thank you very much for the work that you did collectively.

This was a divisive bill—this was mentioned earlier by my colleague Andrew Bayly. In fact, it divided up Marlborough, and Marlborough ratepayers were going to be either on one side of the border and be in one entity or the other. It was incredibly divisive. No communities of interest were considered when these boundaries were set up.

I mean, as the great President of Argentina, Javier Milei, says, collectivism does not work. This was a great example of collectivism that would have spiralled out of control, and it needs to be repealed. I commend this bill to the House.

INGRID LEARY (Labour—Taieri): The one thing that is really certain about the lack of plan that the Government has over its water reforms is that there will be rates hikes. I could almost feel smug about saying that, if it wasn’t so devastating for the people that it will affect, which are ratepayers but, actually, also renters, because those costs will be passed on to renters. It really continues the assault that this Government has on vulnerable members of our community. Here I’m thinking about the people in my electorate of Taieri: pensioners, who at the moment are paying $1 in $8 to their council rates, who over the next 10 years face the prospect of $1 in $4, according to the maths done by Clutha mayor Bryan Cadogan. I’m thinking about families who have maybe just managed to purchase their first home, who are now dealing with the cost of living, who are thinking about insurance, who are thinking about transport costs, and who will suddenly be facing these huge rates hikes. And they will happen. In Clutha, they’re projected to be 20 percent, not just for this year—and I heard the Minister of Local Government say in the House that this is about the short term. This is over the next 10 to 12 years. There will be a succession of rates hikes.

In Dunedin, we’ve had councillors on the front page of the Otago Daily Times urging people to brace, saying that the rates hikes won’t be pretty, that we cannot afford the infrastructure costs—the flood of costs, pardon the pun—that will be coming our way. This is why southern mayors have been pleading for the affordable water reforms to stay. It’s because what is needed is scale and efficiency, and what the Government has said to date provides neither of those. When we think back to what the reason was for the affordable water reforms, it was not only Havelock North but, actually, what played out really significantly and devastatingly a year ago this week, around stormwater damage in Auckland.

Now, when we sat on the Finance and Expenditure Committee, which I had the privilege of chairing, we put a lot of thought into changing some of the gaps that existed in the previous law, not just in the way that the legislation that came to us was formulated, to make sure that there was fairness in the way that stormwater systems were managed. It was a lot of the mismanagement of stormwater and the regulatory gaps that led to a lot of the devastation last year. So I’m looking forward to the committee stage to ask the Minister what he is going to do about managing stormwater now that he is pulling back those reforms and those suggestions that we as a committee made.

In Gore, 13,000 residents face $435 million worth of infrastructure costs with the peel back of the affordable water. That’s according to the mayor, Ben Bell. Tim Cadogan, Central Otago mayor, has described the rates hikes they will face as eye-watering. They’ll need to raise $100 million over the next three years from a ratepayer base of just 26,000 people. Three waters is a mess. The Government’s solution does not respond to the question of who is going to pay, and what the Minister has said is that there will be some kind of regulatory solution. That is a wholly inadequate answer. I’m looking forward to asking him, with these council-controlled organisations, how he is going to make them happen. What about debt-heavy councils? How will they raise more funds? What funding role will central government have? What is the most cost-effective way to raise funds? What are they going to do to deal with stormwater?

I was really surprised to hear Andrew Bayly talk about consumer protections, because he was very invested, in the select committee process, in ensuring that there were good and straightforward and streamlined consumer protections, which we managed to get through in that particular bill. To hear him now saying that he wants to go back to the drawing board is surprising, and I heard no plan from him about what he plans to do for consumer protection under these reforms. What we can see is that there is no plan coming from this Government. It is trying to stick to its coalition agreement to pull back the affordable water reforms. It doesn’t have a plan. It is trying to distance itself from councils.

I feel sorry for the mayors who are sitting in the gallery today, because I don’t think they’ll be around very long once they have to implement the rates hikes that they will be implementing in their councils. This is an assault on homeowners, it’s an assault on ratepayers, it’s an assault on renters, who will have costs passed on to them, and it doesn’t do anything to assure people that this Government has a plan for affordable water.

NANCY LU (National): I am standing here to support the Water Services Acts Repeal Bill. I wanted to make a mention, when the member talks about the visitors that we have in the gallery—our mayors—about watching their back and no longer having a job, that she should probably look up. Because the mayors are really shaking their head and disagreeing with the member’s comments.

But I support this bill because there are many New Zealanders who have had enough of the lack of water infrastructure and the poor water planning locally. The last Labour Government, while they were in Government and in power, had all the time and resources and votes to do something, and they did not.

So I support this bill because many voters have openly called out for the last Labour Government to stop the mega-merge into the three—and then later, 10—services entities. All the talks, but no delivery. So I support this bill.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Motion agreed to.

Bill read a first time.

DEPUTY SPEAKER: This bill is set down for second reading immediately.

Second Reading

Hon SIMEON BROWN (Minister of Local Government): I move, That the Water Services Acts Repeal Bill be now read a second time.

I commend this bill to the House for its second reading. This bill serves as a decisive step in stopping Labour’s unpopular and divisive three waters regime. This Government is determined to do things differently, in a way that recognises the importance of localism and flexibility while ensuring a strong emphasis on investment in infrastructure and that regulatory requirements are met.

As I outlined in my first reading speech of this legislation, our plan for addressing New Zealand’s longstanding water infrastructure challenges, Local Water Done Well, will provide the tools for local government to deliver and the oversight necessary to ensure an efficient system for New Zealanders. The previous Government’s lack of trust in local councils led to the imposition of a mandatory and centralised co-governed 10-entity water model—a model that spent $1.25 billion without even implementing their policy approach. This flawed, one-size-fits-all approach would have burdened councils and it would not have actually delivered what New Zealanders need.

The coalition Government intends to make changes to build better water services for current and future generations in New Zealand, ensuring strict bottom-lines for water service delivery are met without entangling local councils in co-governance structures. We know the status quo cannot continue. The reality is that we need to have a plan which supports local councils to make the long-term investment decisions that they need so they can control the water infrastructure and invest over the long term, and that is exactly what Local Water Done Well will do.

The first bill, which we’ll be passing by the middle of 2024, will set out provisions relating to council service delivery plans and transitional economic regulations. It will also provide streamlined requirements for establishing council-controlled organisations under the Local Government Act 2002, enabling councils to start shifting the delivery of water services into more financially sustainable configurations should they wish to do so.

A second bill, providing for the long-term replacement regime, will be introduced in December 2024 and passed by the middle of 2025. This will set out provisions relating to long-term requirements for financial sustainability, and provide for a complete economic regulation regime and a new range of structural and financing tools, including a new type of financially independent council-controlled organisation. This second bill will also establish regulatory backstop powers to be used when required to ensure effective delivery of financially sustainable or safe water services.

In addition, we will also make necessary amendments to the water regulations legislation to ensure the regulatory framework is fit for purpose and workable for drinking water suppliers. All legislation to support the implementation of Local Water Done Well is expected to be passed by mid-2025, ahead of the local government elections in October 2025.

The Water Services Acts Repeal Bill, which we are passing through the House today, is the first step in restoring continued local council ownership and control of water services and responsibility for service delivery. Local Water Done Well recognises the importance of local decision making and flexibility for communities and councils to determine how their water services will be delivered into the future. We will do this while ensuring a strong emphasis on meeting rules for water quality and investment and infrastructure.

Financial sustainability is a key principle of this Government’s plan to implement Local Water Done Well. Financial sustainability can include revenue sufficiency, balance sheet separation, ring-fencing, and funding for growth. We’re creating options for councils around how they choose to ensure their water services are financially sustainable. Balance sheet separation is one of the ways that councils can achieve this, and, ultimately, this Government will be working alongside councils, not forcing solutions upon them.

This is a Government which actually believes in the importance of local government and in the responsibilities that they have towards their local communities. That is why I just want to acknowledge my colleague from the ACT Party Simon Court and his speech before, which was saying water delivery is a local government issue; they are responsible for this infrastructure. It is our job, as a Government, to ensure that they have the foundational policy and the ability to make the long-term investments in the long-term assets that water is for their communities. They need to ensure that they are funding for the long term, they need to have access to long-term funding tools, and they need to ensure that they are funding this as a must-have, not a nice-to-have. Council-controlled organisations can help make those long-term decisions and raise that long-term debt and spread that cost over the life of those assets rather than upon ratepayers today.

So we commend this legislation to the House. This is about repealing what was a divisive policy from the last Government—policy which wasn’t even implemented despite six years and over a billion dollars spent on it—and we’re actually going to act in pace to get this implemented so local government has the tools and the policies to be able to get on and make the long-term infrastructure investments they need for New Zealanders.

Hon KIERAN McANULTY (Labour): Thank you, Madam Speaker. The first point that I would make is that if this was such a crowning glory for the Government, wouldn’t the Minister of Local Government want to use the whole time that he has—10 minutes—to explain why? Because, ultimately, I think that touches on something quite crucial here, and it touches on exactly why we oppose this repeal bill: we oppose this repeal bill because it won’t work. We oppose this for the very simple reason that this will not help. This will cost ratepayers more and it will not lead to more affordable water services that meet the regulatory requirements. That’s not just us saying that; it is the Minister’s own advice.

It is quite clear that the only way to achieve the level of expenditure across all councils—noting that there are a very small number of councils that are in a particular position, unique to themselves, but on the whole, across the board, $185 billion needs to be spent. Councils cannot do it by themselves. Many are at their debt cap; they can’t borrow more. Many councils aren’t at their debt cap but represent communities that simply cannot afford to pay higher rates. What on earth are they going to do? They have to do the investment because this Government, quite rightly, is keeping the water regulator which will ensure that councils meet the minimum standards. That is something that the local government sector themselves welcomed and, actually, many said should have been in place years ago, and I agree with them. So I at least congratulate the Government for keeping that, but let’s see what that will do in practice.

We have a water regulator that will require councils to meet minimum standards. For some councils, that will require significant investment almost immediately. What are those councils that can’t borrow more going to do? What are those councils, be they in lower socio-economic areas or rural areas with a low rate-paying base, many of whom are on fixed incomes that can’t afford to pay higher rates—what are they going to do? I’ve heard nothing to suggest that the Government has a solution to that other than allowing them to do council-controlled organisations. They already can and it hasn’t worked. Look at Auckland; that’s unaffordable. Look at Wellington; that has not worked. Many councils in the Wellington region, as part of Wellington Water, concede that something else has to be done.

There is nothing new being proposed aside from ring-fencing of funding which will force councils to put rates up. It’s not councils’ fault; they will have no option. I absolutely oppose the language being used by the Minister, saying that this will force councils to spend money on the necessities rather than the nice-to-haves. How offensive is that to hard-working councillors and mayors who are trying their hardest to make sure that they are investing in infrastructure with the limited means that they have? And here we have a Minister criticising their decisions while one hand is being tied behind the council’s back, and once this bill is repealed and the so-called replacement is brought in place then both hands will be tied behind their back.

If we take the Minister on his word that there will all of a sudden be massive council-controlled organisations across the country with councils working together, I would pose a very simple question which I hope that the Minister answers at committee stage: why would a council that is in a relatively good financial position voluntarily agree to work with a council that is at their debt cap, has a very small number of ratepayers, and simply cannot afford to do it? I am deeply concerned about a number of councils in particular. I am especially concerned about the Tararua District Council. The Tararua District Council, which is part of northern Wairarapa and southern Hawke’s Bay, has 12,000 ratepayers. Obviously, there are more people living there, but there are 12,000 rating units in that area. They need to find $600 million over the next 30 years. That’s not our numbers; that’s derived from the council’s own numbers. How the hell are they going to do it by themselves?

The Government might say they won’t be by themselves. So the next question is: who is going to voluntarily join with them? They are going to be left on their own, high and dry, with no capacity to pay for what they need. Now, the Tararua District Council also has the fourth-largest roading network in the country, something that they have to also service themselves, and this was a cyclone-affected area. They have taken on considerable amounts of debt as a result of being hit by Cyclone Gabrielle. They cannot do it; I’ve used this example a number of times and the Minister has never given me a credible response as to how they are going to do what they need to do. They are going to be left high and dry, and I think it’s a disgrace.

There are many other councils who, by 2051, are going to be facing costs that ratepayers simply cannot afford, and it is a legitimate question that deserves an answer: who would join with them? I’m not convinced that the entire Canterbury region would voluntarily join up, as was proposed under the current settings in the affordable water reforms. I can imagine that Christchurch, Selwyn, and Waimakariri might join together, but why the hell would they voluntarily accept Ashburton, where, without reform, each individual ratepayer is facing $8,690 each year, by 2051, just for water? They have massive costs; they have a small population compared to other areas. I am not convinced that the larger areas that are in a better financial situation would voluntarily join with them.

Listen to the Minister’s language today at question time. He was asked whether he will guarantee that ratepayers will save money as a result of his repeal. He said it would be cheaper. Cheaper for who? Not for ratepayers, but cheaper for them. And this touches on this Government’s priorities; they’re more than happy to give money away to landlords but won’t invest in core, key infrastructure. They have broken a promise. They stood here in the House—they went to every single district council in the country and said, “If you back us, we’ll back you.” They said, “We will help fund your infrastructure.” It’s not true. There’s been no announcement of funding. There’s been many a question about funding and at no point has the Government said, “Yes, we will.”

So here we have councils, who are unlikely to have other councils join up with them, left on their own. Some cannot borrow more because they’re at their borrowing cap. The Government, despite promising they would help fund it, have now refused to do so. What are they going to do? Their short answer, unfortunately, is “nothing”, because they won’t have the money. We’ll either have councils going bankrupt or councils not meeting their regulatory requirements in terms of water standards. That’s a disgrace.

The National Party started this process under the Hon Anne Tolley. Anne Tolley recognised that there was a problem and started this work. The Hon Nanaia Mahuta continued it on, and then I took over and made some changes as a result of listening to the local government sector. It is telling that the National Party’s rationale for this repeal focuses on mayors’ comments at the start of the process, not after the changes were made. Once those changes were made and it moved from four entities to 10 in a more regionalised model, the majority of councils expressed support for it, including many councils that had signed up to Communities 4 Local Democracy—who vehemently opposed the proposals—who came out, after the changes, in support.

This repeal is unnecessary, it is irresponsible, and it is lazy. It is lazy because, in politics, you need to show leadership even when things aren’t popular. What they are trying to do is cynical. They are saying—whenever you ask them why they won’t guarantee that ratepayers will save money, the answer is “That’s a matter for the councils.” Because, later on, when rate bills come in and people can’t afford them, they’ll come to the Government and they’ll say, “What are you going to do about it?”, and the answer will be “That’s a matter for the local council”. We hear it all the time; we’re going to hear it in the future. They are setting them up; they are setting councils up, promising them something they know they cannot deliver. Balance sheet separation under their plan is a myth. Councils will be left high and dry, with no provisions for extra revenue, and the Government’s response will simply be, “Well, you’re on your own.”

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. On behalf of the Green Party, access to healthy water is a fundamental right. It’s our responsibility, as lawmakers and representatives of the people of this country, to ensure that everyone has access to healthy water, that it is treated as commons and a public good.

We have learnt, not just in Aotearoa New Zealand but around the world, that when communities work together to manage access to water, it works better. It’s something that—it’s fundamentally part of the commons. Throughout the process of the water services repeal, the Green Party raised many, many concerns and many facts that were coming from the communities most affected, and we sought changes. We won many of those changes, not all of them.

Ultimately, we oppose the bill, which is passing though under urgency today, because it is going to create more uncertainty for councils and communities. While the reform wasn’t exactly what the reform would have been in a Green Government—or even with a Labour-Green Government, because we didn’t have one of those—the reform was, at least, setting a clear direction and, as the previous speaker the Hon Kieran McAnulty said, they listened very carefully to what local communities and their representatives were asking for and they did make many changes. I certainly saw—with people who were lobbying me as an infrastructure and energy spokesperson last term—that there were concerns about certain bills, but most of those concerns were addressed, if not through the select committee process, through the committee stages of the bill. In the final stages of the bill, many, many of those concerns were addressed.

The reality is this Government believes its own hysterical rhetoric that it stirred up around these reforms. It has stirred up absolute hysteria and fear and made it divisive, despite it being a relatively sensible proposal, because, when those parties were in Opposition, they were desperate to do anything to get people to vote for them and to attack the Government of the day. There was not a constructive Opposition; the constructive opposition was from the Green Party.

We got some wins. There’s still huge opportunities to do things better; we maintain that stormwater should rest with councils, not the independent entities. That’s because stormwater is so fundamentally related to decisions around urban planning and transport infrastructure. There are huge opportunities to do things better—like low-impact development, green infrastructure, which not only brings nature into our cities but it works with nature to take the pressure off the pipes, and it ends up being much more cost effective. We need to make sure that our institutions are set up in a position where they can make the right decisions in the planning rules and in the transport infrastructure and in the rules around development, so that we can take full advantage of low-impact development. That’s something that I was hugely experienced with—before I came to this House—as an urban planner, and I’m sorry to see that it hasn’t been more embraced in New Zealand. But it was picked up in the final legislation as something that entities should be looking at, and it’s one of those areas where there’s a win-win. There’s a better environmental outcome and a lower fiscal cost, and when those two things go hand-in-hand—and a better urban amenity for those living in our towns and cities—of course we should be embracing them and ensuring that organisations that are looking after the infrastructure aren’t just totally focused on concrete and pipes, when, in fact, working with nature can get better outcomes and take pressure off those reticulated systems, especially where they are combined.

Of course, there is a need to repair and improve pipes. Let’s go back to the origin of the crisis that we’re now seeing unfold in Wellington, in my electorate of Rongotai, in my neighbouring Green electorate, Wellington Central, and I’ve seen, just today, in Auckland. There is a crisis of under-investment in the horizontal infrastructure. Let’s be honest about what caused that. It is 30 years of a neo-liberal ideology that said we should try to keep taxes low and spend as little as possible. It was subsequent central governments pushing more and more responsibility on to local councils without ever offering the proper funding for them to carry out those responsibilities.

Now, in Aotearoa New Zealand, one of the lowest share of national revenue gathered is actually gathered by and spent by local government. In the countries we like to compare ourselves to, they spend more on infrastructure. They tax in a fairer way. They have capital gains taxes, they have inheritance taxes. They don’t let the wealth accumulate with a small number of people over multiple generations, because they know we all benefit and we’re all better off when we collectively use our resources in a way that benefits us all. I’ve lived in other countries, so I can speak to this with particular lived experience; it’s possible to do things much better. But in order to do that, we have to address the unfairness of our tax system, we have to ensure that local government is receiving enough of the national revenue to be able to invest in the infrastructure and to undertake the responsibilities that we expect them to undertake.

Unfortunately, out there, in the debate, we see a lot of misinformation—a lot of misinformation—where people conflate investment in complete streets that will allow our kids to get around our neighbourhoods under their own steam, that would help reduce congestion—things like protected bike lanes and safer speeds around schools; that somehow that’s really high cost. That’s absurd. That is an absurd statement, because it is the lowest cost, highest value transport investments we can make, and we know this from many, many economic evaluations. On top of it, people are saying, “Well, don’t spend money on the bike lanes, we need to focus on the pipes.” We’re comparing maybe $10 million on bike lanes with $10 billion needed on pipes. Cutting the investment in our transport infrastructure for our neighbourhoods is not going to fund the pipes. It’s not going to address the issue. On top of it, it’s going to make transport worse. I say to those living in rural areas: nobody is asking people in rural areas to take public transport or ride bikes where it doesn’t make sense. No one has said that. What we are saying is spend the money and do the sensible investments in the cities to solve the urban transport problems in the cities, and then we have more money to spend on the roads in the rural areas.

Because what you will find is that the National Party, the National-led Government, is spending the vast majority of the money on highways in the cities, in the very places where they are the most counter-productive. To say that speed bumps and speed management and red-light cameras and bike lanes are the cause of all our problems is just utter, absurd nonsense. It’s coming from a Minister who is extremely inexperienced in life, and who, frankly, believes his own hysterical rhetoric because he is an extremist. The Minister of Local Government, the Minister of Transport, Simeon Brown, is an absolute ideological extremist who would fit in with the Republicans in the United States, campaigning against access to reproductive health for women at university. He doesn’t know. So he says he cares about cost-effectiveness and fiscal responsibility, but it is not there in the priorities of the National Government. It is not there. Show me the numbers. Show us the numbers. If it is true that the Government cares about fiscal responsibility, let us see it in the priorities for transport investment. Let’s see it in the priorities for investment in infrastructure.

Because one thing I know to be true is you get what you pay for. If your focus is not spending money and—oh wait, oh hold on, sorry, returning money to landlords so that they don’t pay their fair share of tax, we are not going to be able to raise the revenue to invest in the infrastructure we need long term. And we can dress it up and talk about council-owned council-controlled organisations and public-private partnerships and all of that, all the different financing mechanisms. Fundamentally, if you don’t raise enough revenue to invest in the infrastructure, we all pay for it. We’re all paying for the short-sighted decisions of the last 30 years, which was very much driven by an environment that said, “We should try to keep taxes on the wealthy low. We shouldn’t have a capital gains tax, we shouldn’t have an inheritance tax. We should let wealth accumulate in a small number of people who become absurdly wealthy and then they can use their enormous wealth and power to influence politicians”.

DEPUTY SPEAKER: Now we are straying from the bill. Back to the bill, please.

Hon JULIE ANNE GENTER: We oppose this bill because, fundamentally, it is creating uncertainty for councils at a time when, potentially, there are tweaks and things that could be made better about the model that was put forward, and the Greens would support that. We don’t need a wholesale repeal of the model. We’d like to see some actual constructive input rather than hysterical rhetoric that’s trying to stop councils from investing in things that communities genuinely need. The reality is that our local government needs much more sustainable and generous funding in order for communities to be able to make the sensible, long-term decisions, particularly to deal with the climate crisis, which is not going away.

CAMERON LUXTON (ACT): Thank you, Madam Speaker. So I guess I am not sure if I’m old enough to make this speech according to the last member, Julie Anne Genter. But, look, the repeal of three waters is not just a relief to many New Zealanders, it’s symbolic of the broader change in direction away from centralised instincts of Labour and back towards empowering local communities.

The claim that the Labour Government was trying to sell to New Zealanders was that a larger water entity would be more efficient. There was no requirement for councils to reduce rates, reflecting the fact that they will no longer be supplying total water services. Not only did some local governments take their eye off the ball when it comes to services and replacement of their pipes, now many ratepayers in towns and cities must contend with the cost that their core infrastructure is now going to impose upon them after falling behind, when supplying and servicing critical infrastructure should be the first job of council.

I would like to acknowledge Minister Brown’s statement that water infrastructure is the responsibility of local government, and this Government will create the environment to enable them to do just that. We all know the status quo isn’t up to scratch, but Labour’s bureaucratic co-governed regime was never the answer. Three waters would have been great for middle-managers but a disaster for water users, with layers and layers of bureaucracy separating decision makers from the people.

The ACT-National coalition agreement delivered stopwork notices to the three waters work stream. We’ve also committed the Government to instituting long-term city- and regional- infrastructure deals, empowering local authorities to use public-private partnerships and tolling and other such mechanisms to fund infrastructure and to look at their pipes.

I would also say to the previous member’s comment, New Zealand actually has one of the OECD’s most centralised tax systems. But this Government will introduce fiscal incentives for councils to enable more housing, including looking at sharing with councils a proportion of GST collected on new residential builds to help fund infrastructure like pipes and encourage councils to get more houses built.

Now, I also reflect on the Minister of Local Government’s answers in question time today. There was an interesting one from the Hon McAnulty which, in the end, exposed the $1.2 billion already spent on three waters.

Hon Tama Potaka: How much?

CAMERON LUXTON: I believe it was $1.2, was it?

Hon Members: Yep.

CAMERON LUXTON: Outrageous, right?

Hon Tama Potaka: It was $1.2 billion.

CAMERON LUXTON: It was $1.2 billion—sorry, $1.2 billion, Minister Potaka, thank you for that. But I’ve got to say I was heartened when it was followed by a question from Katie Nimon which then allowed the Minister to talk about how we will be restoring local government ownership and we will be removing this divisive and overly bureaucratic mega - co-governed bureaucracy. The Minister also spoke about two further bills coming, and I’m looking forward to working with the Minister and the associate—was he under-secretary, or? I’m still new learning all these roles, but Mr Simon Court, who’s doing great work in this area.

Katie Nimon: Getting the job done.

CAMERON LUXTON: Now—yeah, get the job done, that’s right—I’d also like to just relate a story from my experience with water infrastructure. So I live in Tauranga—we have metered water-supply. Now, we’ve heard a bit about what metered water-supply can do when identifying leaks and making sure the people that are actually using water are paying for it. A few months ago, I had a leak at the front of my property, and going and inspecting it I realised that the leak was coming from the other side of the toby. So this is not me paying for the water, because it’s not going through the meter and spinning, so I’m not paying. I call the council and I say, “There’s a water leak.” They go, “Which side of the toby is it?” I go, “Oh, it’s on your side.” They go, “All right, we’ll get there and fix it straight away.”—because they know that these costs are going to load up on the collective ratepayer base who will have to pay for it. Whereas, once it’s on the other side of the toby, the incentive would be on the property owner to fix it. This is the sort of thing that means that a place like Tauranga doesn’t have leaks running down the street, and it’s somewhere that is working well with its water infrastructure.

I’d also like to talk about people who don’t rely on a reticulated water scheme. We heard again: a “right to water”. Now, I agree that every human should have a right to water, but that doesn’t give you a right to infrastructure. If you were living somewhere where it is too unaffordable for a local government to get pipes to, you might have to rely on rainwater. Now, I do not think that we should be stopping anybody being able to gather water how they choose; get it out of the ground with a consent, and also tap into town supply if that’s what’s needed. But this centralising of Government provisions of water cannot stand, and I’m glad that we’re repealing this bill. I commend this bill to the House.

ANDY FOSTER (NZ First): Thanks. We’ve heard from the Green Party member who spoke just a moment ago, Hon Julie Anne Genter, that access to water is a fundamental human right, and I think we would all agree with that. And she also said that when people work together, fundamentally, that’s a really good thing, and, fundamentally, that water is part of the commons.

Yet the piece of legislation that we’re removing at the moment—or the pieces of legislation that we’re removing—actually weren’t seeing water as part of the commons. They took it away from the people, took it away from the localities, and said, “We’re going to put it in these very large entities and we’re going to take it away from any local control or influence.”—any meaningful local control or influence. I mean, it was a massively complicated process that they set up—“and we’re also going to divide New Zealanders into some people who have more influence and some people who have less influence.” That doesn’t sound to me like something that is looking at water as a fundamental human right and something which is part of the commons.

As I said when I spoke earlier, what we actually saw—and the High Court agreed—is that the last Government was going through a process which the courts said was expropriation. Normally, we would say that is theft. It was taking somebody’s asset away without compensating them for it.

Look, what we’re doing today is we are doing exactly what we—the collective coalition here—said we would do. Goodness me! That’s terrible, isn’t it! We’re actually keeping our election promises. In fact, we’re keeping lots of our election promises and we are repealing the legislation which these parties on this side of the House campaigned against.

Now, we’ve been told, “Why do it now?” Well, it’s a very obvious reason: councils are going through long-term planning processes. Actually, I think they deserve certainty. Because if they are doing it on the basis at the moment—and I do know that some of them are doing exactly this; they are planning their long-term plans on the basis of the legislation as it stands at the moment; that is, the legislation which we are about to repeal. But if it doesn’t get repealed, they’ve got to keep on marching ahead on the basis that it hasn’t been repealed. So they’ve got to deal with the law as it is. And it makes much more sense to say, “Look, we’re going to get rid of that so you know where you are at the moment—you know that there’s reform coming.” So that gives them some certainty to be able to plan and to budget.

The other point is—it was about the commons and about taking people with you. Well, we’ve heard that the leader of the Labour Party has acknowledged that people weren’t taken with them. You wouldn’t get 88,000 submissions—the vast majority of them against it. You wouldn’t start off with something where you said, “Councils, it’s your choice. You can opt into this if you want to.”, and then go, “Oh, we’re actually not so sure that the councils are going to do that, so what we’ll do is we’ll change our mind and we’ll say that you can opt out of it. So you’re in unless you opt out.” And then they go, “Oh no, we still haven’t got them on board. So what we’ll do is we’ll force you to come in.” That’s not good faith, but the process of the legislation that we are getting rid of today and over this week did exactly that.

We’ve also heard a lot from the Opposition benches here about rates rises. Now, how was water going to be paid for under Labour’s legislation? It was going to be paid for by the magic money tree somewhere, wasn’t it? Well, no, it wasn’t going to come from the magic money tree. We’ve had this supposition—in fact, again, the Green Party spokesperson said that it’s all about things like capital gains taxes and we could have more money from somewhere to put into the water system. Actually, under what we’re appealing, it wasn’t the Government that was going to pay for it either. Who was going to pay for it? That hadn’t actually already been worked out. When you started off, it was still, in all probability, going to go through the council’s bill. A lot of it would have been rates funded, others of it would have been user charge through meters where those meters already exist. But you can’t just magically magic up a whole lot of meters. So, for a period of time, it would still have gone through the council’s rates bill, so people would still have seen it that way. But even once it was fully implemented, it was going to come from who? The water consumer. And who do you think the water consumer is if they’re not very, very similar people to the ratepayer—many of them are exactly the same people.

We heard Ingrid Leary, on the other side of the House, talk about how this is an imposition on renters. Well, I can tell you one thing: who pays the power bill? Is it the landlord? I don’t think so. I think, by and large, the power bill is paid for by the tenant. So who do you think was going to pay the water bill when it’s separated out and it’s charged on a meter? I don’t think it was going to be the landlord; I think it was going to be the renter. So we’re hearing some rather fragile arguments from the other side on this.

So not only was the transfer not going to be immediate and water service entities would have taken some time to get their billing systems up—and certainly even longer to get water meters in place, because that would have been an inevitability—it’s going to take some years to get water meters in place in some places. It’s a very big and expensive task. There’s no magic money tree there.

Then we’ve also heard about the poor councils—the ones who are not in a good state. Three waters, as it was originally proposed, basically split the country into four areas. Why did it split into four areas? Because it said, “We’ve got big Auckland, they can look after the northern bit. Actually, we’ve got big Hamilton sitting up there in the middle bit. They can look after some of that area. Wellington can look after this area here, and Christchurch can look after the bit at the bottom.” It was based on cross-subsidies. So, basically, what we’re hearing from the Opposition benches there is that some of the councils which are in better condition wouldn’t do it of their own volition, so we’ll force them to do it. So, basically, what we’ll say is, “Your rates, your water charges in an area which had done a good job, are going to end up paying for those who are in not quite such a good position.” That seems to be the logic which we’ve heard from the other side.

So why would those councils want to get together? Well, at least the legislation which we’re looking at allows them to make that choice. But in none of this was there any Government money—Government money was never promised. There was a little bit in the transition process, but nothing after that. So all the issues around tax reform, etc., were absolutely irrelevant.

We’ve also heard that you get what you pay for. I think the reality is you started to see some councils—some of maybe the less responsible ones—where the kind of rhetoric is very much along the lines of, “Well, if we don’t have to pay for water, we’re going to look very much better. It’s still going to hurt the ratepayer, the consumer, in the back pocket, but we’re going to look much better and maybe we can go and spend some more money on something else we otherwise couldn’t have done.” So it actually takes some discipline off some of those councils.

So I’m delighted to support this. If you’re looking ahead at where we go, I think we need to keep on working to drive efficiencies. We need to set sensible standards, and that’s clearly what the intention of the legislation is. And one of those areas where you can be more efficient is the previous legislation—the legislation which is being repealed—went all the way down to two houses constituted a local water scheme; two houses. That makes absolutely no sense—that level of intrusion into peoples’ lives. And it certainly included a lot of those local water schemes where you might have a couple of dozen houses. Those people, they wanted to do their own job. They were doing their own job perfectly well, thank you very much, without the Government intruding on it. So I am delighted to support this legislation going through, and I look forward to further conversation.

DEPUTY SPEAKER: This is a split call. So first I call Hana-Rawhiti Maipi-Clarke.

HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato): Tēnā rā koe e te Pīka, otirā, tēnā rā tātou e te Whare.

[Thank you, Madam Speaker, indeed, greetings to all of us.]

Ka mātakitaki iho au ki te riu o Waikato

Anō nei hei kapo kau ake māku

Ki te kapu o taku ringa

Ka whakamiri noa i tōna aratau

E tia nei he tupu kua hou

[I look down on the valley of Waikato

As though to hold it in the hollow of my hand

And caress its beauty

Like some tender verdant thing]

Ka tīmata ake au ki te tangi apakura nā Kīngi Tāwhiao i te rironga o tana whenua me te raupatu o tana iwi.

Ka tohe au, ka tohe au. Ka tohe au ki tēnei pire e tāmi ana i tōku whakapapa me ngōku tūpuna.

[I begin with the song of lament of King Tāwhiao upon the loss of his land and the confiscation of his people.

I disagree, I object. I oppose this bill that suppresses my genealogy and my ancestors.]

I stand here today to debate and strongly oppose this bill as a mokopuna Māori nō tōku awa koiora o Waikato [Māori grandchild from my living river of Waikato].

This debate doesn’t just start at three waters for me. I know I’ve only been in the House for five minutes, however, this starts 50 generations ago and it starts with our pepeha. Now, some members may be thinking, what does this have to do with this bill? My answer is that this has everything to do with this bill. As a mokopuna of our pepeha, we have a complete conscious awareness of our surroundings and of our taiao. In the event in 2016 in Havelock North, four people died and up to 5,000 people became ill from drinking contaminated water. This resulted in an inquiry which found the contamination was a result of the systemic failure across services, provision, regulation, and source protection. Simply put, the infrastructure of our water is not sustainable and it is a human failing, not an environment failing.

The original intent of this three waters bill was to simply provide drinking water for everyone, every day, and the infrastructure of waste water, drinking water, and stormwater. However, this became a right-wing rhetoric feast for the public. Let’s be real: the issue is not about the water or the infrastructure; it was the fact that an amazing, well-educated indigenous woman with a moko kauae was leading this mahi. Every 500 metres we would see a “stop three waters” sign, and the disgusting race division that was not perpetrated by Māori but was from white right-wing fragility. If we look at the wider context of why—from the perspective of a 21-year-old wahine from Rāhui Pōkeka—I will reply with this:

I rongo a Kāwana Kerei kua tata te tū mai te whakatū o te kīngitanga Māori. Ka mea mai a Kāwana Kerei, “E Pō, tukuna tō kīngitanga ki raro”.

Ko te whakahoki a Te Wherowhero, “Ehake i ahau tēnei taonga, nā ngā iwi katoa o te motu.”

Ko te whakahoki a Kāwana Kerei, “Ki te kore e turaki i tō kīngitanga ki raro, ka whawhai au mō te whitu tau, mō te iwa tau.”

Ka mea a Pōtatau, “Ka whawhai mō te waru tau, iwa tau, e kore au e mate.”

Kātahi ka mea a Kāwana Kerei, “E Pō, he kau tāku. Ka horomi i ngō whenua, ā pau noa. Ka whakapau te kau nei o ō puna wai katoa.”

Ka mea a Kīngi Pōtatau, “Ka hoki au ki te wai a Arona, he mana whenua e kore e mimiti.”

Ka mea mai a Kāwana Kerei, “Ka pau i a koe ngā huawhenua katoa te kai, ka kai koe i te aha?”

Ka mea a Kīngi Pōtatau, “Ka kai au i a koe.”

[Governor Grey heard of the impending establishment of the Māori kingdom. Governor Grey then said, “Pō, let your kingdom come down”.

Te Wherowhero’s response was, “This taonga is not mine, it belongs to all the iwi of the nation.”

Governor Grey’s response was, “If you do not disestablish your kingdom, I will fight you for seven years, for nine years.”

Pōtatau said, “We could fight for eight years, nine years, I will not die.”

Then Governor Grey said, “Pō, I have a cow. It will swallow your land until there is none left. These cows will drink all of your water sources until they are gone.”

King Pōtatau said, “I will return to the water of Aaron, a terrestrial authority that will never dissipate.”

Governor Grey said, “Once you’ve consumed all of the vegetables, what will you eat?”

King Pōtatau said, “I will eat you.”]

In my vision of an Aotearoa hou for fresh water, we as mokopuna of Waikato will not have to wait another generation to swim in our tupuna awa or watch our river be used as a literal toilet dump. We have been hearing all sorts of views on who owns the water. Some say, “We own the water.”, “No, we own the water.”, “The Government owns the water.”—all sorts. But I am here today to say the water owns you. We as Māori believe we are the teina to our pepeha.

Hei whakakapi i ngā kōrero [To conclude these statements], we have heard this Government being called the three-headed taniwha, but for us in Waikato, our taniwha are kaitiaki. So we will not be following these taniwha; we will continue to follow Tarakōkōmako, Paneiraira, and Tūheitia. Tēnā rā tātou katoa.

ASSISTANT SPEAKER (Maureen Pugh): Tamatha Paul.

LAN PHAM (Green): Close—Lan Pham.

ASSISTANT SPEAKER (Maureen Pugh): Oh, sorry—I’m so sorry.

LAN PHAM: That’s totally sweet.

ASSISTANT SPEAKER (Maureen Pugh): The photos are really, really small!

LAN PHAM: Tēnā koe, Madam Speaker. Firstly, I want to thank the member who’s just spoken, Hana-Rawhiti Maipi-Clarke, for putting this bill into the perspective and context that it actually needs: seeing the challenge of this massive under-investment and our road ahead in the context of our mokopuna.

It’s been well-traversed already how significant the legacy of our under-investment in water infrastructure is, not just for us as people but for our environment, and so I’m really pleased to speak again in opposition to the repeal of these Acts.

I had the privilege of serving on Canterbury Regional Council for two terms, and it was rather disconcerting over that time to see the misinformation and deliberate drumming up of race-based rhetoric not only from our current Government now but from local government elected members too. And I believe the public deserves better.

But I really want to use councils as an example here, because councils are typically made up of people from very diverse backgrounds, with different views, and despite these differences in opinion, councils ultimately figure out how to work together. And it prompts me to beg the question: why is it so hard for this Government to work constructively?

The Government’s approach of scrapping the reforms—scrapping the Natural and Built Environment Act, scrapping the Spatial Planning Act, and now scrapping the water services Acts—is a huge missed opportunity to build on the work that has been done so far and is now leaving councils and communities facing years of uncertainty. There was scope for this Government to amend rather than repeal. Starting from scratch on the reform process due to knee-jerk governance means time lost and uncertainty for how the system will operate moving forward. And it’s a huge missed opportunity and one I cannot stress enough.

We could have built on the good things that were in the reform, that we need and we know are so important to making the system effective: aspects like recognising the importance of iwi and hapū at the decision-making table, aspects like mandating for nature-based solutions for infrastructure investment that have multitudes of other benefits—biodiversity benefits, recreational benefits, amenity benefits, and the list goes on.

Kiwis deserve better, because effective governance of water services has to be integrated with good land-use planning and spatial planning in alignment with our actual natural catchments and the actual movement of water through our entire ecosystem, ki uta ki tai, from the mountains to sea, and the repeal of these Acts now takes us further away from that.

Whatever comes next, the wider and longstanding call from local government for better funding models must be taken into account. These reforms must now ensure that shifting the assets and liabilities back to councils does not leave them under more financial pressure, because we know that, ultimately, councils under pressure means flow-on impacts with cuts to other services and wellbeing functions that are so important to communities, and we know that they suffer.

Councils need sustainable funding mechanisms, and central government should be listening not only to local government but to the wider recommendations of the Future for Local Government review that has many improvements that would have aided us in our water services challenges ahead. Good governance over water services and our water resources is inseparable from better land-use planning and genuine Te Tiriti partnership and governance, and the repeal of these Acts simply gets it wrong.

STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. Well, I’m going to be brief on this—I made most of my points in the first reading—but I would like to say that it is quite ironic that we’re debating this bill in the city which is the worst example of good management of water infrastructure. However, the Act that was put in place to deal with it had no impact on that. What we really need is Local Water Done Well, and we will deliver that. So with that, I commend the bill to the House.

Hon PHIL TWYFORD (Labour—Te Atatū): Thank you, Madam Speaker. There’s a quote that’s often attributed to President Lyndon Johnson, and it’s this: “Any jackass can kick down a barn, but it takes a carpenter to build one.”, and that I think is particularly relevant to the legislative record of this Government over the last few weeks. They’re really good at destroying things and kicking things down and not great at coming up with solutions to the big challenges this country faces, and, my goodness, New Zealand has a massive water infrastructure problem.

The country hasn’t invested—well, for decades, and the result is that too many Kiwis don’t have access to clean, safe drinking water. In our cities, the waterways are chronically polluted because we pump waste water into our streams and creeks and harbours, and I hope that the other side of the House agrees with this third point, as well, which is that the entrenched failure to build infrastructure—that is, pipes to carry water—is a major inhibitor of the ability of our towns and cities to grow. It stops houses being built. It stops our communities growing and developing, and that drives up the price of housing for New Zealanders.

The bill to get New Zealand’s water infrastructure up to scratch is estimated to be $185 billion, and at least—at least—this Government is leaving Taumata Arowai in place, which is the regulator that our Government set up to set environmental standards and standards for clean, safe drinking water for our people. But the effect of taking away the affordable water reforms and leaving the regulator in place with no other significant intervention proposed to allow the infrastructure to be funded and financed—the infrastructure that this country desperately needs—can only mean one thing, and that is that the ratepayers are going to pay through the nose. There is no other way for it to happen. This Government is setting up a massive liability for ratepayers. It will come at a cost—a huge cost—and the ratepayers of New Zealand should be afraid. They should be very afraid.

Far from being a genuine effort to fix the problem for the benefit of future generations, this bit of legislation from the National-led coalition is pure partisan politics. It is theatre. It is simply there to say to the people who voted for the National Party and its coalition partners, “We campaigned against these terrible affordable water reforms, and now we’re going to get rid of them.” It’s theatre—that’s all it is—and I think that this country deserves better.

The bill repeals all of the work that was done to set up a new, financially and environmentally sustainable water system for New Zealand, and it puts nothing in place except the bland assurance that councils will have the ability to set up council-controlled organisations. Well, newsflash: councils already have the ability to set up council-controlled organisations.

I want to focus the time that I have on two particular aspects of this issue. The first is the financing problem, and I think it’s widely accepted in this House that the way that New Zealand has been financing water infrastructure is a big part of the problem that we’ve got. Many, many councils are up against their debt limits—debt limits that are, effectively, set by the rating agencies that assess the balance sheets of these councils and their entities—and that says, “This is what is going to be the cost of financing that you have to bear, with the cost of borrowing money to invest in infrastructure.”

One of the great benefits of the affordable water reforms was this thing that we just called balance sheet separation. It was based on the idea that the rating agencies regard revenue from water consumers as a much better, more bankable bet than revenue from general council rates. They apply, effectively, a much lower debt limit on councils and a higher debt limit and lower borrowing costs on water entities, and they do this internationally. So by separating out the balance sheets of the water entities from those of the councils and reassuring the rating agencies that the councils will not bail out a water entity were it to get into financial trouble, the water entities would have higher debt limits. They would be able to borrow more to invest in the pipes at a lower cost to their organisation, and that would, effectively, in the case of Auckland and the new water entity that would have been in place there, have allowed Watercare to borrow two to three times more to invest in the water infrastructure that the city needs than it currently can, because its balance sheet is, effectively, integrated or consolidated into Auckland Council’s balance sheet.

That’s what balance sheet separation means. It was one of the major ways that would have allowed the country to invest for future generations in the pipes that we need, and this Government has taken away that opportunity. It is offering nothing but the blandest reassurance that, actually, the council-controlled organisations will be able to achieve balance sheet separation and will then be able to borrow more, and that is, in my view, a real shame.

The second issue I wanted to touch on is the kind of investment that we need in our water infrastructure. My city—Auckland—is a case study of a city that simply hasn’t invested in the water infrastructure that it has needed for several decades as it has grown, and we saw that in the floods a year ago, when an extreme weather event saw whole communities, whole suburbs, experiencing catastrophic flooding because Auckland Council has not invested in stormwater ever. It has been utterly negligent.

Our waterways—our streams, our creeks, our harbours—are polluted with waste water, with sewage, and this summer, every time there has been a significant rain event, dozens of Auckland beaches have been off limits because they are polluted by raw sewage running into our waters, as well as run-off with heavy metals and contaminants from our streets. This is not rocket science; it is simply because we have failed to invest in the infrastructure.

The affordable water reforms—that our Government put in place and that are being swept away now—put in place a very real and sustainable solution to this problem. For the first time, we would have had a legal framework that would have told the water entities, “Your job is to manage stormwater in this city. It’s your job and the law says it’s your job, and this is what you have to do. These are the kinds of plans you have to put in place, and if you don’t, there is a powerfully tooled-up regulator looking over your shoulder.” We have never had that before, and, on top of those two things, we were giving those entities the power and the freedom to borrow up to three times as much money as they currently can to invest in the pipes in order to spread the cost of that infrastructure over future generations.

I look at Te Wai o Pareira, the creek that runs right through the middle of my electorate. It is so polluted that when kids go swimming in it, they have to go to hospital afterwards, frequently, because they get so sick. Every time it rains, raw sewage flows into that waterway, and manholes pop up on the streets and in the parks and in people’s front yards, and sewage cascades over people’s lawns. We had a solution to this. We had the institution, we had the legal framework, and we had the financing system in place to fix this problem—a generational problem that our country faces—and this bill sweeps that away and puts nothing in its place.

NANCY LU (National): I stand to commend the Water Services Acts Repeal Bill because I strongly believe that Local Water Done Well will enable local governments to have the tools to find funding to make their long-term plans, and to have the flexibility, and to really deliver the water infrastructure that local constituents and users really need.

If the member’s opposite have emphasised so much on what they see locally, I wonder why nothing was delivered in the six years that they had the power and the time and the funding and, apparently, the solution to do anything. But the National-led coalition Government is very determined on the delivery of real changes to restore the council ownership and control of water assets. Our Government, with our plan—the Local Water Done Well plan—will give local decisions and the ability to fix where things are really broken, where things really need to be built, where water infrastructure is really required. So I commend this bill to the House.

RACHEL BOYACK (Labour—Nelson): Thank you, Madam Speaker. I’m just going to pick up from the comments of the previous speaker Nancy Lu around nothing being delivered, because there are examples in my own electorate of Nelson of exactly that—things being delivered. The repeal of this bill will make it so much harder for our council to deliver improvements in water infrastructure. An example in Nelson is the Saxton Creek upgrade which is about to be completed—a $30 million project that was needed because the stormwater was so deplorable. It was such a small culvert in a significant industrial area that when it flooded a few years ago it caused millions of dollars’ worth of damage, and the Labour Government invested $7.5 million dollars to bring that project forward and it’s about to be completed. It will mean the road where that culvert exists does not have to close when we have heavy rain in Nelson, and it will mean that the businesses in that area, like our meatworks, won’t suffer economic loss if we have a heavy rain event.

Now, the reason I raise that example is because one of the challenges that this legislation that’s being repealed was addressing was the fact that it wasn’t about councils not wanting to pay, it was about councils not being able to pay. I think that was a particular issue that got lost in some of the debate. I think there were some councils who felt that they were being targeted for not having invested. The point I want to put on record is it wasn’t about council members not wanting to do that; it was that the system was not designed to enable them to do that, because we all know that councils that put up rates to pay for infrastructure, they do get turfed out. And so, unfortunately, as politicians—politicians do act, and we all have to acknowledge it, at times, in self-interest. At election time in those years, you would see—

Hon Simeon Brown: Is that what you did for the last six years?

RACHEL BOYACK: At least I acknowledge it, Mr Brown—you would see councils choosing not to invest because they knew that the public wouldn’t support it. And so one of the massive challenges we now face is that the repeal of this legislation means we’re going back to the status quo. We’re going to have, supposedly, another year’s worth of policy development. And one of the mayors I’m talking to doesn’t know how this is going to work for the area of Tasman, which is an area in my electorate which has got massive challenges coming its way, particularly the need for a sewerage upgrade out in the Tasman part of the region. That’s going to be expensive. How’s it going to be paid for?

What I see that is so frustrating is this new Government, rather than saying, “Right, we had some concerns around this legislation, we need to actually sit down and look at it.”—just like with Resource Management Act reform, it’s: “We’re just going to toss the whole thing out.” All those years of policy work from independent, neutral public servants actually giving us the best tool possible to be able to invest—it’s just thrown away. I predict that in three years’ time, when we come back to an election again, we won’t have updated legislation that’s working. We won’t have any new council-controlled organisations. We won’t have the investment that we needed, but we would have seen ratepayers having a significant increase in the cost of their rates. Because, as my colleague Phil Twyford so accurately pointed out, the balance sheet separation that would have allowed councils to group together to borrow at a lower rate to invest earlier, therefore saving money—there’s tools out there that you study if you do accounting at university, you can learn about net present value. If you invest now, you save money rather than investing later. These were all the things that the reform was designed to do. But there was a smokescreen put up by the new Government—when they were in Opposition—because they just wanted to go after votes. They just wanted to go after votes rather than have an adult conversation about what was best for New Zealand.

Now, I sat on the Finance and Expenditure Committee that looked at the third piece of legislation where we made some changes, where we elected to turn four entities into 10. Now, it wasn’t going to deliver the best outcomes, but it was certainly going to deliver better outcomes than the status quo. In my area, we would have had Nelson, Tasman, and Marlborough banded together in order to still deliver a benefit. Now, my electorate has suffered significantly from flooding and a huge amount of that was due to poor stormwater infrastructure. In the Tāhunanui Hills, there is none—like, zero, no stormwater infrastructure. So my question to the Minister of Local Government when we get into the committee of the whole House stage is: is he going to front up and actually support the money that’s needed for the Tāhunanui Hills? Because it was an election promise from National to help fund this infrastructure, yet now they’re saying they’re not going to do it. So I do not commend this bill to the House.

CAMERON BREWER (National—Upper Harbour): The unbelievable defence of three waters reminds me of the belligerent, grumpy old man driving up the wrong side of the motorway blaming everyone else: 26 percent of people supported, at its peak, three waters, just as 26 percent supported the Labour Party. They tried to rebrand their three waters from four entities to 10 entities, but the confiscation continued. The Communities 4 Local Democracy—and if you have a look on their website, you’ll see a lot of council logos; keep scrolling, most of the logos are there—commented, “the proposed confiscation of assets funded by generations of ratepayers is not the right solution”.

So it gives me huge pride to be able to rise in support of this repeal bill. It was a lightning rod during the election, three waters—the hoardings were up all around the country for two years. They rebranded; the hoardings stayed up. People could see; people did not want to give up those locally funded, locally owned assets. That was the driving point.

This coalition Government will restore council ownership and control of council assets and of water assets, and so I commend this bill to the House.

Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Speaker. Some say the definition of “insanity” or “stupidity” is doing the same thing over and over and expecting a different outcome. This incoming coalition Government is going to hand back to councils and expect them to solve an issue they’ve not been able to solve for decades.

When we came into Government, we thought “We have to do something different here”, because in 2016 many, many people had been harmed in Havelock North. And there were many other communities around the country that were having water challenges. I have some sympathy for local government leaders. There’s lots of leaders, but there’s not much leadership. It’s very hard to show leadership if you’re proposing to have rates increases. But that is what is necessary—billions and billions of dollars—to deal with the under-investment in crucial infrastructure.

Water, the source of life, arguably the single-biggest advantage that our country has over many of our competitors—we turn it into valuable food products to go around the world, because we have a reliable supply of water, good clean water. And so, when this challenge was before us, we said, “Well, should it be one water?”—drinking water, clearly, where people in Havelock North had been harmed, for their lives, because of incompetence, and many more risky situations. We said, “Should it be just one or should it be three?”

Well, I’m glad to follow the previous speaker Cameron Brewer, who sat on a council that has incompetently overseen the water assets of Auckland, where we’ve had billions of dollars of destruction to private assets—the assets that he would say he protects; those homeowners who, through stormwater non-management, have seen their assets destroyed, and beaches that can’t be swum at after a rain event. And do you know what? We said, “We need to address all three: drinking water, stormwater, and waste water.”

Many local-body leaders around the country have had their heads in the sand, and those same people were the ones who opposed the proposal from us to do it differently, to solve this for future generations. Shame on local government leaders that campaigned against us. You go back to your communities and try to sell a 50 percent rates increase. You go back to your communities and sell a 30 percent rates increase. Good luck to you! I’d suggest you won’t be voted in next time. I understand the challenges a local government leader has. We do have to invest. We as Government were prepared to come in, to sit down and work through this. Yes, it was three waters, not one, because we thought it was important—in Auckland in particular, where we see the interaction and the interface between them all.

Let’s roll forward a little way. Tourism was our biggest industry till COVID came along. The iconic destinations of Queenstown, Fox Glacier in the Speaker’s electorate, and Punakaiki—they have boil-water notices. People spend tens of thousands of dollars to come to our country to see this beautiful, pristine landscape, and they go to these destinations and are told they have to boil the water. What does that do to our reputation? That’s why we need to invest in the future. That’s why the mayors from places like, let’s see—let’s call a few of them out. The Far North District Council: 33 percent rates increase required; Hamilton, 25 percent; Buller District, looking at 30 percent; Porirua, up to 50 percent. Well, good luck when you impose those costs on communities, where there are many, many people who can’t afford the rates at the moment.

We had a proposal to do something different, and that naive Minister of Local Government sits in his seat now with all these wonderful empty promises and says that it won’t cost more. Well, he’s either going to sell the assets or allow the councils to increase their rates. And in the House today, we saw criticism of the Labour Government that we had increased debt to 24 percent of GDP. Well, it’s a bit uncomfortable—still at the lowest level of the OECD countries—24 percent. So then we’ll go and say, “Well, what are we expecting councils to do?” Well, in New Zealand’s fastest-growing area, Selwyn, they’ll have to dramatically increase their debt to 220 percent of their revenue. Good luck! Good luck, if that’s what is required to invest in the future that we need to protect the lives and the health of future generations. Lots of leaders, no leadership, and so too for this coalition Government.

Shame on you for this. And for those people who will be coming to our iconic destinations in the future, maybe there will be new, alternative, or creative ways of paying. Maybe they will have to pay for the meter as they get the water from the tap, to pay for a mini chlorination plant, or whatever. What we were proposing to do in Government was to share the risks and to share the rewards. The rewards were the reduced costs of building this infrastructure into the future. Yes, it is a colossal cost, and there might be some debate around efficiency. There are claims that we spent $1.2 billion and none of it went to council. Well, it did, and if we had some honest council leaders, they’d get up and say, like my predecessor Rachel Boyack, “$30 million was spent on a water plant.” There is hundreds of millions of dollars spent across this country on urgent water infrastructure work, and thank you to the councils that went on and did that, but shame on them for not putting up their hands and saying that money was necessary and we need more and we need to change the structure of how we do this into the future.

So I’m not quite sure how the Government is going to do it, other than, in my cynical view, setting up structures and encouraging councils to sell off their assets. We’ve seen this before from the National Government. Oh, the Minister will pooh-pooh that. Well, wait and see, Minister. We’ll be judging you on the results of this, because what we have—you know, of course, people ask me, “What’s this Government doing?” Well, it’s not what they’re doing; it’s what they’re not doing—not what they’re doing; it’s what they’re not doing. They’re not doing anything. All they’re doing so far is pulling apart the proposals and the progress that we had put in place. Oh, we won’t say they’re perfect, but they were progressive. And all we’ve seen since the coalition Government came together is stepping back. And, in this area, future generations are going to pay a huge price for this. Small communities around the country that cannot afford to put in place safe drinking water, safe stormwater systems, safe waste-water systems, are going to have to go somewhere.

So I say to local government leaders and those who are looking to stand on local government: good luck to you. Please work with the coalition Government and see what progress you can make. But it’s urgent, and the communities like Queenstown, where they had cryptosporidium; places like Fox, which had E. coli; places like Punakaiki, which had an unreliable water supply—those council staff and those councillors will be obliged to provide safe drinking water to people who have come to our country to try to have a great experience. They won’t want to get sick, and if they pick up the paper or go on Google, they will very quickly identify the fact that the councils have not invested to ensure their safety while they’re here, the Government didn’t do anything different to ensure they would support the councils to provide that safety, and so we’re back to the level of stupidity in this country that thinks we can just hand it back to councils, make them become economically sustainable. It dribbles out of the Minister’s mouth—“The councils will have to come to us with financial reports that ensure sustainability”.

It’s really tough out there at the moment. Don’t blame the local governments. The fact is that we have not invested in the past, we need to in the future, and this is a huge lost opportunity, because putting our best foot forward, working with councils and trying to come up with something that would protect future generations, is what we did in Government, and this coalition Government is just reversing that to the detriment of everyone in the future.

DAVID MacLEOD (National—New Plymouth): Thank you, Madam Speaker. I want to start by saying there are some elements of what’s just been spoken that I actually do agree with, but a lot I don’t. First of all, I just want to say that communities across New Zealand—there are some councils that are actually doing a particularly good job in this space, so it’s not every council that we’re trying to find a solution for.

But we have to ask the question: why are we in this position? Literally hundreds of billions of dollars are needed to bring everything back up to speed, and it’s significant because as a result of it we can’t use the normal rating system. We need to look at new financing tools, etc., etc.

But what are we trying to achieve? Ultimately, it’s the supply of quality water for our communities. Ultimately, it’s the management of waste water so that we don’t destroy our environment and affect different communities, and also dealing with stormwater in a way that protects people, property, assets, and our environment. But we’re also trying to do this in a way that maintains local ownership, local control, and local delivery, and for that reason, I commend this bill to the House.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

A party vote was called for on the question, That debate on this question now close.

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Motion agreed to.

Motion agreed to.

Bill read a second time.

ASSISTANT SPEAKER (Maureen Pugh): This bill is set down for committee stage immediately. I declare the House in committee for consideration of the Water Services Acts Repeal Bill.

In Committee

Part 1 Preliminary provisions

CHAIRPERSON (Barbara Kuriger): Members, the House is in committee on the Water Services Acts Repeal Bill. We come first to Part 1, “Preliminary provisions”. Part 1 is the debate on clauses 3 to 7, and Schedule 1. The question is that Part 1 stand part.

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair. This part, as you outlined, is the preliminary provisions of this bill. Clause 3 sets out the purposes of this bill, which are “(a) to repeal the Water Services Entities Act 2022, the Water Services Legislation Act 2023, … the Water Services Economic Efficiency and Consumer Protection Act 2023; [to] (b) to disestablish the Northland and Auckland Water Services Entity … (c) make transitional arrangements for local authorities’ long-term plans”; defines terms used in the bill; provides transitional and savings provisions; provides that the bill, when enacted, is repealed one year after it comes into force; and provides that the enacted bill binds the Crown.

SCOTT WILLIS (Green): Thank you, Madam Chair. I would like to hear from the Minister of Local Government about his plans for engaging with Ngāi Tahu meaningfully on the significant repeal of Te Mana o te Wai. He may recall that I mentioned a river that I could swim in when I was a child before intensive dairy drained that river and did much worse to it. In the Manuherikia, old mining offtakes have now been used for intensive dairy—constant irrigation of what was dry land resulting in a trickle that’s hardly called a river—and it has seriously degraded biodiversity. So Te Mana o te Wai gave a hierarchy ensuring the health of the water came first. Water is life.

I understand that there was a letter sent on 31 January to stakeholders advising them that there would be repeal and change and that stakeholders had until today to respond. My understanding of Ngāi Tahu expectations for Crown engagement, in accordance with the recognition of the rangatiratanga and the principle of good-faith engagement, are that, firstly, that there will be direct engagement with Ngāi Tahu as a Te Tiriti partner. The Ngāi Tahu takiwā extends right across most of Te Wai Pounamu—that’s half of the country. Ngāi Tahu interests across this extensive takiwā shouldn’t be represented through engagement with pan-Māori or other advisory groups.

Secondly, my understanding is that engagement with Ngāi Tahu must begin early and continue through all stages with significant notice and good information so that Ngāi Tahu can meaningfully engage, and, thirdly, that significant engagement must be resourced.

So what is the Minister’s plan for correcting this oversight and ensuring meaningful engagement with Ngāi Tahu? I want to hear what the Minister’s plans are for engaging with Ngāi Tahu on this significant repeal of Te Mana o te Wai.

INGRID LEARY (Labour—Taieri): I’d like to ask the Minister of Local Government whether the purpose of the bill as described in clause 3 is to make small communities that belong to a body corporate pay for their own water infrastructure.

I can contextualise that for the Minister in terms of Waipori Falls, which is in the Taieri electorate. This was a small community that was formed when the Dunedin electricity company changed its legal status in the 1990s—sections were available, it formed a body corporate. They’ve had a lot of water woes, and I would point out to the Minister that only last week in the Otago Daily Times, one of the residents was complaining about vomiting blood, being taken to hospital, because of the bad water infrastructure.

Now, in my role as MP, I had got Mayor Bryan Cadogan from the Clutha District Council to come to a number of meetings with the residents of Waipori Falls to look at what could be done under the previous regime from the Labour side, which was affordable water, where perhaps the Clutha council, even though they weren’t required to look after those residents, would have been able to kind of sweep them in—it’s only 35 households—in order to be able to give them safe drinking water and water for cleaning and so on. Now, since the affordable water reforms have been swept out, that is no longer the case from the Clutha council. They’ve made it quite clear publicly that they will not be in a position to support Waipori Falls because of the projected rate increases. They just would not be able to sell that to their ratepayers.

Meanwhile, the residents of the 35 households have had 130 days straight of boil-water notices. On most days, they’ve had a maximum of around seven hours of water a day. There are people who are really fearing for their health and safety in terms of the contamination of the water that is available to them. In fact, during the previous term of Parliament, I was able to get a ministerial intervention to allow residents to go on to a Department of Conservation bridge and access water from the river, which they could then boil because that was another issue. If that hadn’t been available to them, they would have had absolutely no water—

CHAIRPERSON (Maureen Pugh): Come back to the bill.

INGRID LEARY: Yes, but just for context, Madam Chair, and for the Minister, this community is some distance; it lies between both Dunedin council and Clutha council. It is a body corporate. They do have a ratepayer base and I’d just really like to hear from the Minister what his plans are for small communities like that, where now councils are saying publicly they will not step in to support them and yet we have people from those communities vomiting blood on the way to hospital after having accessed the water.

HELEN WHITE (Labour—Mt Albert): Thank you, Madam Chair. I would like to ask the Minister of Local Government something from really the opposite perspective, one of a big city, because this proposal in Part 1 is to disestablish the Auckland and Northland water entity. In a place like Mt Albert, we’ve had real issues with flooding and we’ve had real issues with the kind of infrastructure just being antiquated. It’s stopping us being able to build up instead of out, but it’s also stopping us building out. So even if that’s the preference, it’s making it really difficult.

Now, the last Government put a lot of money into infrastructure, which wasn’t being done because the councils just couldn’t afford to do it. So when we were building thousands of houses, we were producing money out of the bank balance of the whole country to make sure that we could build there. It wasn’t being done within the current status quo because Auckland just simply couldn’t afford it. I’ve got a memory of the flooding. Where I live, there’s a park, and in the park the whole area flooded, and it flooded right down and through what was there in the sewage system and into the park so there was a lot of sewage flooding into the park. People were swimming in that water. I was really worried about typhoid. That water then goes on right down into the zoo area and it goes underground and then it was actually flooding the zoo, so it was a real issue for the zoo. Then it goes through Meola Reef. So all those areas were particularly affected.

We have a real issue when we combine this with climate change. One of the concerns I have here—and I’d like an answer to this question—is the proposal that we had and the law we had was supposed to create balance sheet separation. So it was supposed to put the entity at arm’s length enough that it could finance infrastructure builds for the long term. It was going to be cheaper in terms of financing it, but it was also going to be done by an entity that was really solely focused on the Auckland and Northland region.

Have you had an assurance that any proposal that you have to go back to the old structure is going to give you balance sheet separation? Because it certainly hasn’t been the case until now. It hasn’t had that magic effect. Have you had that assurance from your officials—and I’d love your guarantee on this—that under whatever you plan to do here, you absolutely will have the kind of balance sheet separation that means that this infrastructure can actually be provided at lower cost by the entity? I can’t see for the life of me how you could, but I’d like to know whether you have. My understanding of the test in these situations is, really, whether the council is backing the entity. So if it fell over, the council would come in and have to support it, because it’s actually not at arm’s length; it’s really part of it.

My own understanding of that situation is that can’t be assured in this case. So can I know from you, in a place like Auckland—that desperately needs to grow up and needs more housing and we desperately have old infrastructure that needs to be replaced—am I getting your guarantee that when I come back here in a year, you’re going to say things are better, that actually there is going to be balance sheet separation and there will be a way that the old entity can actually finance this, or is it in fact going to be a situation where the only option that the council have with the regulator breathing down their neck is to actually put up the rates? I know that Mayor Brown said he doesn’t want to, but it just seems to me, for the life of me, that’s the only thing you could do; you could only put up the rates and you’d have to put them up a lot. It wouldn’t be a little bit.

So are the voters and the constituents of Mt Albert looking at rate increases that are exponential as a result of what you’re doing today? And can you give me an assurance that’s not going to happen, because you’ve already taken away the petrol tax, you’ve taken away all sorts of other props that the council has—

CHAIRPERSON (Maureen Pugh): The member’s time has expired.

Hon KIERAN McANULTY (Labour): Thank you very much indeed. The Minister of Local Government is quite right; we are talking about clause 3 which outlines, amongst other clauses, the purpose of the bill, so I will contain my questions to the purpose of the bill.

The purpose is to, obviously, repeal the three Acts that are outlined. The question I therefore have is: what advice did he seek, and what advice did he receive that repealing was the best way to achieve this Government’s objectives? Did he explore the possibility of amending the existing legislation to achieve those objectives?

The reason I ask that question is because the Minister himself, since making this announcement yesterday, has made a number of assurances, and one of those is that balance sheet separation could be maintained. Now, we all know—those of us that have looked into this in some detail and have followed it throughout its progression—that maintaining balance sheet separation is utterly essential in order to be able to obtain the economies of scale and, more importantly, the separation from councils’ books. The reason that is important is because we know that many councils, potentially most councils, are under financial strain at the moment. Some councils are at their debt cap, so can’t borrow more; other councils represent communities that simply cannot afford higher rates. Those communities might include city councils like Porirua that have a large proportion of people on low incomes; lower socio-economic areas. It could also include other councils that are completely different, like the Tararua District, which have a relatively small number of ratepayers, a massive area, a large number of towns, each with their own treatment systems, and the fourth-largest roading network in the country.

The reason I raise this is because all the advice that I have seen from the department and from those agencies—including credit agencies but also agencies that have reviewed the Government’s proposals, the Government’s preliminary work, the alternative model that was put forward by Communities 4 Local Democracy, which is remarkably similar to what this Government has signalled they are going to do—says that unless balance sheet separation is maintained, none of the things that the Government is claiming they will prioritise will be able to be achieved.

Now, it could be that the advice that the Minister received in order to outline the purpose of this bill is that the only way to do that is to repeal, but I am interested to hear if he received advice that he could have obtained the Government’s objectives by amending what is currently in place. On that note, I would also be interested to hear the advice that he has received from the department, which says that balance sheet separation can be maintained without an entity model, given that council-controlled organisations currently exist and haven’t worked.

Rt Hon ADRIAN RURAWHE (Labour): Thank you. Tēnā rā tātou katoa. E rere kau mai te awa nui mai i te Kā’ui Maunga ki Tangaroa; ko au te awa, ko te awa ko au.

[Greetings to us all. The great river flows from the council of mountains to the sea; I am the river and the river is me.] 

That’s a whakataukī from Whanganui, and I thought it was appropriate for me to start there because, in 2017, this House passed a piece of legislation—the Te Awa Tupua (Whanganui River Claims Settlement) Act. I want to address some of the things in the bill from that perspective, and as an uri of Whanganui. The question that I have is: what discussions has the Minister of Local Government had with the people of Whanganui about the impact of this bill on that settlement? I know that through reading it, there is a change to—because it was considered under the legislation that is being repealed and I know that they were consulted on that. It seems to me only fair that one would consult them if you were now removing that.

My second question is: what advice has he had regarding the impact on the Te Awa Tupua (Whanganui River Claims Settlement) Act that this legislation has?

My third question to the Minister is: will he undertake to have the same level of discussion with the people of Whanganui on behalf of Te Awa Tupua? And as stated within that settlement legislation, will he uphold Tupua Te Kawa as part of his responsibilities within this bill?

HŪHANA LYNDON (Green): Kia ora, auntie. Ngā mihi. Questions to the Minister of Local Government and reflecting and building on what Matua Adrian has already shared in terms of the experience, or the lack of experience, that Ngā Iwi o Te Awa Tupua have felt or not felt in the repeal process.

I want to go to the question or the statements around Te Tiriti o Waitangi in the repeal bill. The repeal bill will repeal the water service entities and restore the provision of water services to local government and their obligations to iwi and hapū under the Local Government Act 2002 (LGA), which are consistent with the principles of Te Tiriti o Waitangi.

May I draw the attention of the Minister to the fact that the way with which the Local Government Act is applied in terms of the relationship with hapū and iwi is inconsistent. In fact, if we’re going back to the future, many hapū and iwi—and I’m glad to see the MP for Northland in the House; we don’t have Whangārei here—don’t even have input in terms of asset management planning. We don’t know where the infrastructure sits, and we make requests, as hapū and iwi, for information share. We are constantly chasing councils, as they exist today, in terms of three waters, asset management, and even the flood responses and Cyclone Gabrielle. And considering the fact that we’re going back to the Local Government Act 2002, I do want to understand on behalf of te Iwi Māori: what does the plan look like for us? And what security do we have that local government will give effect to Te Tiriti o Waitangi in their application of the LGA in this space moving forward?

Building again on what was shared from Matua Adrian, I’d like to ask about hapū and iwi engagement in the development of this legislation, as there have already been questions made. Have the people of Te Awa Tupua o Whanganui been consulted? I would like to know, beyond councils and the engagement that the coalition Government is having with local government right now, what is the hapū and iwi relationship that the Government has with this proposal, and how are hapū and iwi responding to you as you engage with them? You know, maybe I’ve missed the memo, maybe there’ve been hui. Who are you talking to in te Iwi Māori, and how are they responding to the proposed repeals?

In closing, question to the Minister in terms of—thank you, you say that you are honouring existing Treaty settlements. OK, choice. But for those of us in hapū and iwi land who don’t have Treaty settlements to protect our waterways, what guarantee or protections are there for hapū and iwi that our Te Tiriti rights will not be undermined and that, in fact, our waterways will be protected so wai tūtae doesn’t flow out into Whangārei Harbour any more? Or, you know, that we will have the opportunity for safe drinking water in rural communities?

We have been put on notice; it’s the week of remembering Cyclone Gabrielle. Auckland, Wellington, the big cities—we saw the breakages. These are not new things. But also for rural New Zealand, like those of us from Tai Tokerau, we saw the devastation of what Cyclone Gabrielle did to us and our kainga.

As a young woman from the Pipiwai Valley—Te Orewai hapū Ngāti Hine Te Iwi—our families have had 10 months of no fresh drinking water from Te Awa o Hikurangi. Councils have been grappling as to how they can provide fresh drinking water to families apart from trucking in water tankers to the community for 10 months. So I am worried for our people at home in rural communities, that councils will be geared up and powered up to be able to provide local drinking water solutions for those communities in the back blocks of Tai Tokerau, Tairāwhiti, wherever we might be.

So, in closing, Madam Chair, I’d like to share a waiata to remember the waterways that are sometimes forgotten in planning.

Rere ana, rere ana te awa o Hikurangi.  

Huri atu, huri mai te awa o Hikurangi.  

E toru waku maunga: Hikurangi, Mōtatau,  

Huri raro, Manukōrihi, tū i te pō, tū i te ao e.  

[The river of Hikurangi flows, it flows.  

The river of Hikurangi turns away, and turns back.  

I have three mountains: Hikurangi, Mōtatau,  

Turn to the north, Manukōrihi that stands by night and by day.] 

CHAIRPERSON (Maureen Pugh): The member’s time has expired. Can I please ask the member to take her seat.

Hūhana Lyndon: I will sit. Thank you very much. Kia ora.

CHAIRPERSON (Maureen Pugh): Also, I understand that the member is new to the House. It is not appropriate to mention the absence of a member in the House—someone who is not here. Can I just make a general comment, too, that this part is quite narrow; it is the purpose of the legislation or of the bill. So we have strayed a little bit away from the tight preliminary provisions in Part 1. So I’ll just remind the members to come back to Part 1.

Hon KIERAN McANULTY (Labour): Point of order, Madam Chair. Thank you for that, Madam Chair. I’m concerned that there has been a warning about relevancy before the Minister of Local Government has even responded to a single question. It’s very difficult for members to continue to provide relevant contributions when our subsequent contributions rely on the response from the Minister. Now, if the Minister had answered our questions and members stood up and provided irrelevant contributions, you would be absolutely right. But I think, in that instance, it was premature.

CHAIRPERSON (Maureen Pugh): Thank you. Regardless, the speeches need to be relevant to the part that we’re debating at the moment.

Hon SIMEON BROWN (Minister of Local Government): Well, thank you, Madam Chair; I was just about to take a call. I just want to thank members for their questions that they have been raising.

There’s been a question in regards to Te Mana o te Wai. This bill doesn’t repeal Te Mana o te Wai. I think the letter that was being referred to may have been in regards to a different issue.

In terms of Auckland and the issue with Watercare, we’re working closely with Auckland Council around the options they have in front of them to achieve financial sustainability for Watercare, and that work is happening at pace.

The question from Rachel Boyack, I think, in regards to private and mixed-ownership schemes—they are out of scope of this bill. The schemes charge the users as they see fit, and repeal doesn’t impact this.

A question from the Hon Kieran McAnulty: does repealing this bill achieve the Government’s objectives? Well, the Government’s objective is to repeal the legislation and replace it with Local Water Done Well. We campaigned on that, we were elected to do that, and we are now delivering that, as we promised.

There were questions in regards to the amendments in regards to Treaty settlements. I believe those are best dealt with in Part 2, but just to recognise that this legislation doesn’t actually change those; it just simply changes the references in those things, but we can get to those conversations shortly.

Hon PHIL TWYFORD (Labour—Te Atatū): Madam Chair, thank you. I’d just like to ask the Minister of Local Government some further questions about the purpose of the bill in relation to balance sheet separation. We have had some questions about balance sheet separation, but it’s my argument that they haven’t been directly or adequately addressed by the Minister in his response.

So given that much of the design of the legislation that this bill will repeal was put in place with the intent of achieving balance sheet separation in order to unshackle the water entities from the constraints that the rating agencies place on them in terms of the cost of borrowing and their debt limits, I really invite the Minister to directly address the purpose of this bill in relation to balance sheet separation. Is it the purpose of the bill to eliminate balance sheet separation? Or is it the purpose of this bill to facilitate balance sheet separation continuing? There’s plenty of public commentary from members of this Government acknowledging the importance of balance sheet separation.

I was curious that the Minister, in what seemed like a response to the questions about balance sheet separation, talked about discussions with Auckland Council around financial sustainability. Well, they’re two different things. You could argue that balance sheet separation is a means to financial sustainability, but there’s plenty of evidence and plenty of literature out there to show that, actually, balance sheet separation is a very powerful tool in significantly increasing the amount of borrowing against existing revenue or assets.

I’d like the Minister to tell the committee whether he’s had advice from Standard & Poor’s or any of the other rating agencies on the question of, post repeal of this legislation, whether or not the entities will be able to achieve balance sheet separation.

And I’d like also to know whether the Minister’s had advice about whether or not council-controlled organisations, under the existing legislation, can achieve that separation, given that they’re, in fact, subsidiaries that are controlled by the parent entity. I would have thought that’s in contradiction of the necessity of entities that have balance sheet separation and will not be bailed out by the parent entity in the event of some kind of financial crisis. So I’ll leave it there. Thank you.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Chair. Thank you for the opportunity to take what will be a very brief call in this debate because I’m hoping that the Minister of Local Government will engage with me in a back and forth over five questions that I have relating to his previous answer about Auckland. But I’d also like to first say that I have seven amendments to this part which I seek to debate, because I’m sure that the Minister will be interested in some of those which improve the purpose of the legislation.

Can I just draw your attention, Madam Chair, to Speaker’s ruling 124/5. This helps the House to understand our responsibility in this committee stage: “Consideration by the committee of the whole House is the nuts and bolts stage in which a bill is considered as drafted, to decide in effect whether the detailed clauses do properly incorporate the principle of the bill already agreed to by the House.”

So, as we are debating the purposes of the bill, what I’m seeking to do here is to set the committee up for a proper debate in Part 2 about whether my proposed amendments to Part 2—which there are four of—are incorporated into the principles here. So that is why I think we need a substantive debate on the principles, and that’s why I’m going to ask five questions to the Minister now about whether those principles quite capture his intent.

So my first question of five to the Minister is: under paragraph (b) of clause 3, if a purpose of the bill is “to disestablish the Northland and Auckland Water Services Entity and make related transitional arrangements;”, is it implied in that purpose that Aucklanders will be better off because of the disestablishment of that entity, Minister?

My second question related to that—unfortunately, I would be happy to change this approach, but I can’t. So my second question is: if we take it that the Minister’s intention is to improve the conditions for Aucklanders in the service delivery and in the amount that they pay for their water services, is it also the purpose of the bill to improve the situation for South Aucklanders, and particularly those in Papakura whose water is delivered by Veolia? The Minister will be familiar with this particular local quirk where a private provider provides the water services in some areas in South Auckland. It is something that the local councillors who represent this area have spoken a lot about—that the local member for Papakura, the Hon Judith Collins, has also spoken about—and it has a particular effect on South Aucklanders. I’d like to understand how that relates to the purpose described in paragraph (b).

CELIA WADE-BROWN (Green): Thank you, Madam Chair. I have a number of questions for the Minister of Local Government. Many people have spoken about people’s health and the water, and I would like to know if in any of this process of repeal he has considered any care for the other species that depend on the clean water of our awa, or the shellfish that depend on the lack of sedimentation—sedimentation from dealing with stormwater improperly, including that famous road of national significance Transmission Gully and the subsequent degradation of the Porirua Harbour.

Secondly, given the plans to repeal the urban development legislation and move that to the Resource Management Act, does the Minister consider that mandating some kind of water sensitive urban design and helping nature clean up our water would be a cheaper and more effective way than always putting in more expensive infrastructure?

I would also like you to look at your colleagues smearing local mayors—whether it’s Councillor Foster, myself, previous Mayor Prendergast, previous Mayor Wilde—when there were huge millions, whether it was moving from $11 million in 2009 just on the capital expenditure of the water network, through to more than $30 million in the current forecast; whether the attitude that we were not aware of underground damage for earthquakes—we were working on cross-contamination, we were working on a number of things—from some of the members of this House is helpful to a future partnership that will last longer than the next three years.

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair, for the questions that were received. In regards to the issues in terms of Auckland Council, I note that the member’s put a number of amendments on the Table in regards to the Northland and Auckland entity. The Government has stated that we will be repealing Labour’s 10-entity model, which was a co-governed, 10 entity, mandated model. And the Northland and Auckland Water Services Entity, which was the only entity which was actually under way—we are repealing the model, and therefore we are repealing that entity as well. So we don’t support it continuing. So we don’t support the amendments that the member has put in place in relation to that.

But what I would say is that officials are working very closely with Auckland Council and the mayor to ensure that we have a financially sustainable model for Watercare. The mayor has—including putting out a tweet yesterday, saying that it’s great to see the Government repealing this legislation. So I just want to put that on the table.

In regards to the issue—sorry, it wasn’t a tweet, it was an X. I should clarify that for the committee. The issue in regards to the Veolia contract is an issue for Watercare. In regards to the questions around the roads of national significance and the storm water, I understand those issues aren’t relevant to this part. And smearing local mayors, again, I don’t think is relevant to this part, either.

Hon Dr AYESHA VERRALL (Labour): Thank you, Madam Chair. As a list MP based in Wellington and given the Wellington issues portfolio, I’m aware of the significance of these reforms for our city. For those who haven’t had the summer that Wellingtonians have, to update you on the situation that Wellington is in with respect to water, we have extensive damage to drinking-water pipes that has meant that perhaps 45 percent of our water supply leaks onto the roads and gutters around the city. As a jogger around all parts of Wellington City—some places every hundred metres, I might encounter a leak on some of my runs around the town. It is extremely important to Wellingtonians that we have the ability to address this in the long term. We are already under water restrictions and threatened with increasing restrictions in one of New Zealand’s biggest cities.

In addition, the future impact of further diminished water supply is not only that the restrictions become more harsh but that the diminished amount of water moves so slowly through the pipes that it increases the likelihood of bacterial contamination and us being unable to drink the water at all. That has terrible consequences for a town. I know, because, in the last Government, we had the experience of having to support Queenstown through the cryptosporidium contamination of their water supply, which was a terrible incident for such an important city for New Zealand; not only the number of people who were desperately ill with diarrhoea and abdominal cramps and unable to go to work and prepare food in a tourist town but also the fact that visitors to this important city saw that rather than being able to put out a picture of a modern city to our international visitors, they found we were in the Victorian era with respect to the water infrastructure we had.

So my question, with respect to the purpose of this bill is: will this bill enable continued use of balance sheet separation for the water entities that are proposed in the future? Of course, the issue there for Wellington is that our city council is near to its debt limit. Additional debt will need to be taken on in order for the level of widespread repairs that need to be made in Wellington. It is absolutely essential that we get past some of the petty politics that were raised by other members in this Chamber earlier, and actually get on to the issue of how these reforms will support balance sheet separation and the ability for us to be able to get on and pay for the work that needs to be done.

Hon SIMEON BROWN (Minister of Local Government): Thank you to the member the Hon Dr Ayesha Verrall for the comments and the explanation of the issues in relation to Wellington and Queenstown. We’re not repealing the Taumata Arowai legislation. Taumata Arowai plays an important role in terms of regulating safe drinking water in New Zealand. That’s not part of the purpose; it’s not what this legislation does. Our Local Water Done Well policy will ensure that councils are able to have financially sustainable models for water infrastructure in New Zealand, accessing long-term funding and financing so they can make the investments that they need in this important infrastructure.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Chair. My third question to the Minister of Local Government—of five—is: did the Minister consider transitional and savings arrangements while the new entity is created? That is directly in relation to clause 3(b) about the Northland and Auckland Water Services Entity. I ask that, and I hope for an answer from the Minister, because I’ve also proposed an amendment to clause 5, which is a deletion of the words there—because the answer from the Minister will determine whether that’s needed. Because, as you’ll see, if you go to clause 5 and track through to Schedule 1, there are no savings provisions or transitional arrangements proposed under Schedule 1. So either this should be deleted because there are no provisions, or there might be something the Minister can share with us about his intentions around savings provisions.

And I ask it in relation to the purposes, Madam Chair, because it’s helpful for the committee if the Minister could explain why he then hasn’t considered transitional arrangements around the Northland and Auckland Water Services Entity, particularly when there is work under way here that could be saved. There are, say, contractual arrangements, governance arrangements—there are people involved here who are undertaking work who will be affected by this, and this is the kind of thing that we would use the savings provision to protect. So it would be useful if the Minister could help me before I propose that amendment to clause 5.

The next question I will ask the Minister now is: are there no transitional and savings arrangements because the Minister’s intention is to disestablish the Northland and Auckland Water Services Entity and then simply replace it with something quite similar soon?

My question there also relates to the next question, which is: under the status quo, which the Minister is returning to now, is it true that Auckland could not partner with Northland, in the way that it would have been partnered with Auckland, because of provisions in the Local Government Act which would prevent it from doing so?

So what I’d like with this series of questions is for the Minister to explain to the committee what his intentions are around the role of the Northland and Auckland Water Services Entity in the future. Is there an intention there that something similar will be created legislatively, or is the intention for another partnership model to be introduced? Or is it simply that the status quo will return and there will be no support for Northland—in which case it’s very useful for the committee to be clear on that point—and also, could he give me an intention of whether, then, if there are no transitional provisions, he’s quite happy for the committee to make that deletion to clause 5?

Hon KIERAN McANULTY (Labour): Thank you, Madam Chair. It is concerning that there have been three questions asked specifically about balance sheet separation relevant to the purpose of the bill and the proposal to repeal. I asked that question, the Hon Phil Twyford asked that question, and the Hon Dr Ayesha Verrall asked that question—and the Minister of Local Government has not said the words “balance sheet separation” once. Given how crucial this is to the rationale and the purpose of the bill, I think it is important that the Minister addresses that.

So having said that, there is another thing that I think is important for the committee to understand in considering the purpose of the bill. When presenting this repeal yesterday, the Minister said that he had been working with councils to develop this bill, and I think it’s important for the committee to understand what councils he’s not only been working with but consulting. But let’s just focus on “working with”, given those were his words. I would like to know from the Minister what councils he has been working with in the development of this bill.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair, for allowing me to take the call, possibly the last call before dinner. What I needed to ask the Minister of Local Government about was actually a bit more of a technical drafting question. It is very much predicated on what the member for Manurewa, Arena Williams, spoke about around transitional, savings, and related provisions. For those who are not aware, transitional, savings, and related provisions basically allow for the smoothness between the repealing or changing of one law into a new law. What we see in this bill is that Part 1 provides the transitional, savings, and related provisions, and if you look into Schedule 1 it says that there is none. I would agree with the member that, well, if there is none, then you don’t need it.

But my second question then turns to, actually, there are some particular rights which are covered under Part 2 of this particular bill, and I question whether they’re actually in the right spot—whether, really, they should be in Part 1 given that the purpose of this particular bill is to remove those water service entities for Northland and for Auckland. But there are particular rights that pertain to employees of those entities, and that’s covered under Part 2 of this bill—I think it’s clause 17. So my question, really, for the Minister is around just—it’s a technical drafting provision. We have no transitional, savings, and related provisions in Part 1, even though Part 1 has the purposes to disestablish those water entities. Why is it that the rights of those employees who will now be made redundant are under clause 17, not within the Part 1 transitional, savings, and related provisions? It is a genuine question around—they will be having their rights removed, their employment rights removed, because they have contract law, they’ve signed into an employment arrangement. Obviously, this is an event for them and therefore that’s why they have to be—they will be disestablished, their roles will be disestablished, therefore subject to normal employment rules. But it is a genuinely technical question as to why that particular rule for those people, because their rights are really important, which are enshrined in employment law—why they are not in the transitional, savings, and related provisions.

Part of the reason why I do ask this, as to why I’m confused as to why they’re in Schedule 2 of Part 2, is that if you’re going to, in the preliminary clauses, disestablish the water entity—so you’re basically saying the purpose of this bill is to disestablish them, get rid of them; OK, that’s the Government’s discretion. However, then they say in clause 5 there are no transitional, savings, or related provision clauses—there’s none. So it goes back to the first point, which is what the member for Manurewa raised very prudently, which is basically: what’s the point of having that transitional savings? Does this mean, by not having transitional, savings, and related provisions, that those which are in later, in Schedule 2 of Part 2, are no longer valid for their rights?

I mean, I understand it could be a drafting technique as to why the Parliamentary Counsel Office may have thought—perhaps the instructions from the Department of Internal Affairs were that they should be in Schedule 2 because Part 2 and Schedule 2 go through the actual different parts of how they disestablish it, and then the consequential amendments. But my question is: why would you not have them in the transitional, savings, and related provisions, given they are important rights? They are rights and employment rights of these workers, who will now lose their roles because of the disestablishment, which is covered within the preliminary clauses in Part 1. So I would genuinely like to just understand a bit of that drafting mechanism as to why it’s not in Part 1 under the transitional, savings, and related provisions in clause 5 and instead in clause 17 as part of Schedule 2 of Part 2.

CHAIRPERSON (Maureen Pugh): Members, the time has come for us to suspend for the dinner break. We will resume again at 7.30 p.m.

Sitting suspended from 6 p.m. to 7.30 p.m.

CHAIRPERSON (Maureen Pugh): Members, the committee is resumed. We are in committee on the Waters Services Acts Repeal Bill.

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair, and before the dinner break, there were a number of questions posed by members in relation to a number of issues. Arena Williams asked some questions and she has an amendment in relation to transitional, savings, and related provisions. This is the normal part of any piece of legislation to have this in as default, that as the water entities legislation hadn’t actually come into force, there was no actual transitional provisions or savings, hence why the schedule is there.

In terms of the question around changing the date at which the Act is repealed; again, this is a drafting convention to reduce the number of spent Acts. So I hope that answers the member’s questions.

The Hon Barbara Edmonds asked about the employment issues; that is dealt with in Part 2. I look forward to those issues being discussed and debated in that part of this bill.

There have been a number of questions around balance sheet separation. Of course, our policy Local Water Done Well, which we’re developing, will ensure councils are able to have the revenue sufficiency and the ability to have long-term funding and financing for water services and infrastructure in their communities.

Hon DAMIEN O’CONNOR (Labour): Thank you very much, Madam Chair.

Hon Kieran McAnulty: Very good choice!

Hon DAMIEN O’CONNOR: It’s a wonderful choice. Thank you. Part 1 of the bill, obviously, covers the purposes and gives a basic outline of what they might be. One of the areas I’d like to question the Minister of Local Government about is “to make transitional arrangements for local authorities’ long-term plans”. I’m wanting to get some clarity on what those transitional provisions are. It’s all very well to leave the door open but if the purpose actually says “to make transitional arrangements”, then I’m guessing that that is proactive assistance to the councils. But what I have heard from councils and from many is that it’s still a bit unclear.

If we go back to the purpose, which the Minister said is to make things more affordable and to ease the pressure on ratepayers—which is an opinion rather than a fact, I would suggest—then I think we and the wider public of New Zealand, and ratepayers in particular, need to know, firstly, what the transitional arrangements are that will actually assist the councils, not just leaving the door open but actually proactively helping them. And can he guarantee that the purpose, which we are told is to reduce the cost—which, you know, apparently was going to be huge under the Labour proposal; we’d already spent over a billion dollars and it was going to carry on! So we presume it’s going to be cheaper under this coalition Government’s proposals. How can the Minister guarantee that? Just a couple of questions I put to the Minister.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair. My question to the Minister of Local Government is really about the Water Services Economic Efficiency and Consumer Protection Act. That Act is not very old; it was passed last year. My question is: why is it the purpose of this bill to repeal it? That piece of legislation stands quite apart from the three waters affordable water reform itself. In fact, it is a critical part of the competition and consumer protection framework in respect of water generally. The whole idea there is to make sure that any provider of water has both incentives to innovate and to be efficient and to deliver water at an appropriate level of service.

I’m interested to know in particular whether the Minister proposes to have no replacement for this legislation under the proposed new scheme, or whether he’s going to have fundamentally the same framework, with the competition and consumer aspects of water delivery managed by the Commerce Commission. If it’s the former, I would say that that is a yet another gaping hole in our water system. But I suspect that the Minister and the Government appreciate the need for regulation of service delivery in what’s, effectively, a situational monopoly framework.

So, with the Water Services Economic Efficiency and Consumer Protection Act 2023, my question is: why is it that he’s getting rid of it when we know that it will need to be replaced and, essentially, there’ll be something very similar put in its place? I was fortunate enough to be the Minister who saw that through its final stages, and I can accept that there will be some aspects of the Act which this Government will have a different view of from the last Government. It has made very clear, for example, its views on provisions dealing with Te Tiriti. Now, we may not like it on this side of the House, but we accept that the Government has a mandate to change provisions like that.

But that does seem to me to be a huge waste of resources, to have the framework for effective economic regulation and consumer protection there—that, I must say, was very usefully considered by the Economic Development, Science and Innovation Committee, and the National members on that committee had some very useful input, particularly around dispute resolution. There’s a dispute resolution scheme in there as well, which we absolutely need for consumers of water services. The National Party, true to form, was a good advocate for bringing developers into that dispute resolution scheme, and it was tweaked accordingly so that developers could actually arbitrate or mediate where local bodies or water providers weren’t able, essentially, to do connections to unlock development land.

Now, that’s all really critical, and it’s going to be critical whatever framework—in terms of the entities, the ownership model, the financing model, or whatever you have. And this particular piece of legislation is not embedded in it. It is not inextricably linked. So it just strikes me as really disappointing and a little confusing that the Minister has chosen to repeal this piece of legislation, fundamentally a piece of legislation which increases effectiveness, increases innovation, and increases efficiency and increases quality—all things that I think both you and I, Minister, would agree are good things in respect of water. So why is it that this bill is headed for the trash can when, in fact, it’s got to be a really important foundation for any water system going forward?

And I do want to mention, before I close, that the consumer aspect is also really important—that one of the problems we have is that ratepayers pay for their water one way or another, but they have almost no ability to take issue with the quality of the service they get, whether it be the brown water that comes into the bathtub in Geraldine or the water that doesn’t come at all in some parts of Gore, or the water that spills all over the street in Wellington. There’s no ability to complain about it.

Hon SIMEON BROWN (Minister of Local Government): I thank the members for their questions. In relation to Duncan Webb’s question around why we’re repealing the Water Services Economic Efficiency and Consumer Protection Act 2023, we’re repealing that because that legislation was designed based on the 10-entity model. The Government is going to be developing an economic regulation regime that works for councils, and we’re progressing this later in the year.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Chair. Thank you very much for the opportunity. I am absolutely delighted to hear what the Minister of Local Government has said around my proposal to delete clause 5. He’s taken the committee through the transitional and savings provisions and shown us why it is not necessary for it to be there, and so I do hope that the National Party will support my amendment to delete it in the name of good, strong lawmaking. I love a Minister who is focused on making our law readable and easy to navigate.

I just wish to touch on my amendment to clause 3, which is similar but slightly different to the one proposed by Dr Duncan Webb. It is along those same lines, but I would add that there is more for us to consider here. That amendment is to delete the words after “Water Services Legislation Act 2023” in clause 3(a), and the effect of that is for some amendments which I think would be good to discuss in Part 2. So that doesn’t stand alone; that stands with some suggestions that will come later in this debate.

But why it’s important is that in question time today, the Minister said that he would establish a new form of economic regulation, and he has just told the committee that he is pursuing a new model of economic regulation to make sure that consumers of water services are protected in some way and that there is economic efficiency overall within the water provision market. But the good news here—and it’s something for the committee to consider—is that some of these powers that have been granted to the Commerce Commission would be absolutely transferable under whatever kind of new economic reform the Minister is proposing. On this side, we would say that it’s worth keeping those provisions in place now so that we can continue under a model where the Commerce Commission has these new powers to regulate water, and it is drafted in such a way that it has nothing to do with the 10 entities but gives the Commerce Commission a special set of oversight provisions so that we can be sure, as New Zealanders, that there is a recourse for consumers who feel that in the current model—in the status quo model—they have rights that they can pursue if things go wrong.

It’s not just the Commerce Commission’s powers, though—the Water Services Commissioner—but there’s also an extended remit for the Consumer Advocacy Council and the independent consumers’ dispute resolution that that Act provides for. So what I’m proposing here for the committee to consider is that that amendment, which would then come with other amendments to Part 2, would let us keep some of those very useful provisions.

I fully appreciate that it is the Minister’s prerogative to repeal that Act. However, there are a number of things there that have absolutely nothing to do with the 10 entities model. This is economic regulation which the Government is likely to bring in some form of, and so it’s important that during this transitional phase, we have something for consumers to rely upon, when, in fact, going back to the status quo is actually not like going back to the status quo a few years ago. A number of these councils are in a situation now whereas they will be in quite a different financial situation and will have quite a different kind of outlook over the next 30 years because of pressures on their infrastructure. So it is very useful for consumers to be able to raise those issues independently—not with their councils but with a regulator who is set up to do so, and with consumer advocates who are provisioned within the law to do so.

We will not be able to protect consumers in this way if we take this legislation off the books today. It is really important for the House to consider that in moving back to the status quo, these provisions could still exist. It absolutely would not interfere with the Government’s work programme to design something that they say will be better for councils, because to protect consumers within the system, we need to have something that gives the Commerce Commission these extra powers and provides an independent voice for consumers within it.

So that is why I am confident that the Minister will consider this in Part 2. But I’d like to propose the deletion in Part 1 that is necessary so that we don’t have a law that is a bit gobbledegook and doesn’t read very well. Thank you.

Hon SIMEON BROWN (Minister of Local Government): As I said earlier, that legislation was designed for the 10 entities, which were, of course, never set up, and so that legislation is no longer required. We’ll be developing, under Local Water Done Well, economic regulation as part of that policy.

Hon GRANT ROBERTSON (Labour): Thank you very much, Madam Chair, and thanks for the opportunity to make my first contribution in this debate. I’ve been following the debate closely in my office, and I wanted to come down and make a contribution around the “Purposes” clause—clause 3(a), (b), and (c), in fact—because I had heard colleagues, and, Madam Chair, I know the importance of ensuring that we keep new material coming into the debate. However, if a Minister does not answer questions that are raised, that puts Opposition members in a very difficult position.

I want to offer the Minister of Local Government the opportunity to answer the questions around balance sheet separation because by repealing the Acts in clause 3(a), by disestablishing the entity in clause 3(b), and, particularly, the transitional arrangements for the long-term plans, that is placing councils in a position where they will be responsible in one form or another for what happens next in terms of water service entities.

I had the privilege of being in a role where I worked on the Acts that are being repealed under clause 3, and one of the most important conversations that we had during that time were conversations with ratings agencies, and, to be specific, with Standard & Poor’s. Standard & Poor’s were extremely clear that balance sheet separation was critical to enabling the reforms that we were proposing. My question, the first of two or three questions depending on how we go on time, that I have for the Minister is: what conversations has he had with Standard & Poor’s about whether—and he just mentioned it in his answer just now; the new model that he proposes to replace the Acts being repealed in clause 3(a)—or not Standard & Poor’s are satisfied that there will be sufficient balance sheet separation from councils for the entities that will manage their water?

Now, for colleagues in the committee, the reason that this matters is that if there is not sufficient balance sheet separation, then it will be incumbent upon the councils—and, certainly, Standard & Poor’s will believe that the councils are responsible, and the councils, in the event of something going wrong, will have to bail the entities out. As most people in this House will know, most local authorities in New Zealand are up against their debt ceilings. So this is a very important question for the Minister to answer, because the repeal puts those councils front and centre again if it is a council-controlled organisation (CCO) model or some other model in which an agency like Standard & Poor’s would look at that and say, “Prima facie, the councils are responsible.” Therefore, when we’re deciding how this will work, two things will happen: one, they will decide the councils are responsible, and two, it will then be looked at in the context of the councils’ broader debt position. That will be very dangerous for some councils whose debt position is not good at the moment, and also fails the test, as I say, that Standard & Poor’s have set.

So that is my first question for the Minister. He has been asked it, Madam Chair, I do acknowledge that, but he has not answered that question.

My second question for the member in terms of his disestablishment of this, is to ask him to clarify for us whether or not he has spoken to councils about the way they view CCOs in this context and whether or not the CCO-type model that he is proposing actually will be able to deliver this across different jurisdictions. Because there are, in fact, quite different rules around CCOs between different councils; while they are mandated under law, they operate in very different ways. So I would like the Minister to tell us what conversations he has had with Standard & Poor’s about balance sheet separation, and what conversations he’s had about CCOs, and, indeed, with councils in that context of balance sheet separation, because we are here under urgency, without having had a select committee process, without having had an opportunity to actually explore whether or not the repeal of these Acts, under clause 3, is actually not only going to make it more expensive for ratepayers but actually imperil councils in terms of their debt levels. Balance sheet separation is vital to making any new system work. The Minister needs to answer that question.

Hon KIERAN McANULTY (Labour): Thank you very much, Madam Chair. I echo the comments from the Hon Grant Robertson, because one of those questions that is yet to be answered is the one that I’ve posed, and it was right at the start of this debate, roughly an hour or so ago. It was asking the Minister of Local Government for the advice that he has received that doing this would ensure balance sheet separation.

Now, what we heard from the Minister was a repetition of the information that was readily available in the policy document. In answering the questions about balance sheet separation, he didn’t actually say “balance sheet separation”, so a good opportunity there for the Minister to answer that.

But the question that I’m actually wanting to ask again, because it hasn’t been answered, was that that I posed before the dinner break, and it was a question about the councils that the Minister has been “working with” in the development of this Government policy. We are, of course, talking about the purpose, and the purpose is to repeal, and in the process of coming to that decision, the Minister himself, in justification of the position that the Government has taken, has said that he worked with councils to develop this policy. It was presented in a way that made it look like the majority of councils support this, and so I think it’s important for the committee’s understanding of the purpose of this, the rationale behind the proposal to repeal, to know what councils the Minister has been working with, as he claimed, in the development of this policy.

It’s a pretty straightforward question. I was expecting it to be addressed immediately after the dinner break when the Minister stood up. I have a list of 68 councils here. I’m happy to go through them one by one, but it would save the committee’s time if the Minister just answered the question.

Dr VANESSA WEENINK (National—Banks Peninsula): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): The question is that Arena Williams’ first tabled amendment to clause 3 be agreed to.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Part 1 agreed to.

Amendment not agreed to.

CHAIRPERSON (Maureen Pugh): The question is that Arena Williams’ second tabled amendment to clause 3 be agreed to.

Amendment not agreed to.

CHAIRPERSON (Maureen Pugh): The question is that Arena Williams’ third tabled amendment to clause 3 be agreed to.

Amendment not agreed to.

CHAIRPERSON (Maureen Pugh): Arena Williams’ fourth and fifth tabled amendments to clause 3 are out of order as being merely an attempt to criticise the bill.

The question is Arena Williams’ tabled amendment to delete clause 5 be agreed to.

Amendment not agreed to.

CHAIRPERSON (Maureen Pugh): The question is that Arena Williams’ first tabled amendment to clause 6 be agreed to.

Amendment not agreed to.

CHAIRPERSON (Maureen Pugh): The question is that Arena Williams’ second tabled amendment to clause 6 be agreed to.

Amendment not agreed to.

Part 2 Repeals and disestablishment of Northland and Auckland Water Services Entity

Repeals and disestablishment of Northland and Auckland Water Services Entity”, and Schedules 2 and 3. The question is that Part 2 stand part.

CHAIRPERSON (Maureen Pugh): Members, we now come to Part 2. Part 2 is the debate on clauses 8 to 18, “

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair. Members, this part repeals the Water Services Entities Act, which also legally disestablishes the Northland and Auckland Water Services Entity; repeals the Water Services Legislation Act 2023, which provided those entities with powers to carry out water services in place of local authorities; repeals the Water Services Economic Efficiency and Consumer Protection Act and confers powers on Taumata Arowai, the water services regulator related to the consumer protection role; repeals a number of local spent Acts—these are in Schedule 3; the administrating local authorities have confirmed these local Acts are outdated and no longer required to carry out statutory duties and obligations.

There are consequential amendments. There’s a number of provisions in relation, in Subpart 2, to the disestablishment of the Northland and Auckland Water Services Entity—I know there’s a range of questions, potentially, going to come in regard to the employment rights of people employed by that entity. The good news for the committee: there was only one employee, which was the CEO. The bad news was that he had a very high salary. The last Government employed people on $700,000 salaries for those water entities, and that person was employed for that entity. But that is all part of the wasteful expenditure of the last Government. So that is in relation to what is happening in relation to that.

There is also a range of other clauses in this part which provide our local government authorities with a range of powers in relation to their setting of long-term plans (LTPs), flexibility in relation to the time frame that they wish to set them within, and amendments around consultation. There are, effectively, two options for local councils: they can delay setting their long-term plan until 30 June, or they can delay it by one year and just put in place a one-year annual plan instead. These are all choices that we have made available to local councils to help them have that flexibility as we repeal the last Government’s regime and replace it with Local Water Done Well.

I would just point out to members of the House: the vast majority of councils, other than Auckland and Northland, were required to have water on their long-term plans for at least the next two years in terms of setting those LTPs, in regard to the process. What we’re saying here is that they will now have to set a long-term plan which adds that water back on as part of that LTP as we put in place Local Water Done Well.

There’s also a range of definitional changes, obviously updating a range of Acts and legislation, recognising that the last Government’s legislation will be removed and ensuring that the definitions and references to legislation are consistent through legislation which is affected.

HŪHANA LYNDON (Green): Thank you, Madam Chair, and I appreciate your guidance provided in the previous part in terms of how I provide my questions to the Minister. My question to the Minister of Local Government goes back to Te Tiriti o Waitangi principles, and want to query the Minister in terms of his Government’s engagement with the 19 iwi of Tāmaki-makau-rau and the 12 iwi of Te Tai Tokerau and the many, many hapū of that region and the 219 marae of that region for the proposal to disestablish the Northland and Auckland water services entity. Kia ora.

CAMILLA BELICH (Labour): Thank you, Madam Chair, for the ability to take a call on this committee of the whole House stage. It’s my first call—I was unable to take a call in the last part, unfortunately, but I do have a couple of questions for the Minister of Local Government, kind of relating to two separate issues that have arisen out of this particular repeal bill.

So the first one really is: what employment advice has the Minister taken around the most appropriate way of dealing with the disestablishment of the chief executive as outlined in clause 15 of this bill in Part 2? The Minister made some comments before, which I wanted also to know if he thought they were appropriate, in terms of stating publicly the salary of an easily identifiable individual and making a joke about the number of employees at that entity. We’ve heard a lot of rhetoric from the Government in relation to the value that they place on what they call “bureaucrats”, and I just wanted to know—and it’s quite disappointing to see that rhetoric continue in relation to individual people—did the Minister in fact consider it might be a possibility, considering most of the liabilities on this Act are being transferred to the Department of Internal Affairs, to simply transfer the employment to that entity, therefore leaving the issue of redundancy, or redeployment, or otherwise, within the Department of Internal Affairs to properly and discreetly deal with that particular issue? It seems to me that there might be some value in looking at that, and I think these are important questions because I think New Zealanders deserve to know that their Government, no matter what their position and no matter who their employer is, takes their employment rights seriously, and so I’m interested to hear the Minister’s response on that.

The second point, discrete point, that I wanted to raise was in reference to the accompanying departmental disclosure statement that has been provided with the Water Services Acts Repeal Bill. In this, there are—and this follows the usual structure of these types of documents—a number of boxes which simply say “no”. I know that other colleagues have looked at the consultation provisions specifically in relation to the number of potential consultations or areas that the Minister could have looked at in drafting the bill—which includes, obviously, the section that we’re looking at—but didn’t. But the one that I wanted to ask the Minister about is 3.1 of the departmental disclosure statement, which looks at whether there are any other international obligations that might be impacted by this bill. That doesn’t relate only to Part 2; it relates to the whole bill, but it is also relevant to Part 2 because it may be that there are international obligations that may have relevance to those clauses which are contained within there. The ones that I was able to quickly find, in my research into whether there are international obligations in relation to water, are the UN resolution on the human right to water and sanitation that was passed by the General Assembly on 3 August 2010, and also the human right to safe drinking water and sanitation that was passed on 22 February 2016. I wanted to know, does the Minister know: did New Zealand vote for those resolutions, and, if so, did he receive any advice on whether the repeal of this particular law, including the part we are looking at, has any implications on those international obligations? Because I think that would be interesting to find out.

Rt Hon ADRIAN RURAWHE (Labour): Tēnā koe, Madam Chair. I just wanted to say a few words about Te Tiriti o Waitangi and make a statement about it to the effect that if anyone in this Chamber believes that Te Tiriti o Waitangi does not apply to one part of this bill but to another, they’re very much mistaken.

My question in Part 1, and I’m going to repeat it now, because it’s also relevant to this, is that when we are addressing issues of Te Tiriti o Waitangi—and I’ll start by going to 3.2 of the departmental disclosure statement where it specifically asks about the effect of this bill on the principles of the Treaty of Waitangi. Going back to my question that I asked and that was not addressed: was the iwi of Wanganui consulted about the impact on Te Awa Tupua (Whanganui River Claims Settlement) Act or not? It seems a pretty simple question to ask. It could be “Yes, we had a wānanga about it.”, “We had a hui about it.”, “I sent them a letter to say, ‘Hey, we’re changing your legislation.’ ”, or it could be nothing. I’m going to take silence as being nothing, just as I’m sure we take silence on the separation of the balance sheet as “no” as well.

I think the Minister of Local Government, if he truly believes, as I’m told, that they’re upholding Te Tiriti o Waitangi, should actually answer that question. Failure to do so means that they’re not, in my opinion, and I’m going to listen very carefully now. I’ve narrowed it right down to that.

And my original questions also included whether he would continue to uphold—and it’s in the departmental statement as well—Tupua te Kawa in making those decisions. I think it’s critically important for us to know—for this committee to know, for the people of Wanganui to know—whether or not those principles are going to be upheld.

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair, for the opportunity; thanking members for the questions. In relation to the member Hūhana Lyndon’s question around engagement with mana whenua, and it relates also to the Rt Hon Adrian Rurawhe’s question in regard to iwi consultation, officials have been directed to consult with iwi who will have their settlement Acts amended by the bill. They have been kept informed. They understand where the Government’s direction is going, and we will continue to be engaging with iwi throughout the process.

The issue is in relation to the existing Treaty settlements, and the Act simply amends references to the Acts we’re repealing, and because those Acts and the entities hadn’t come into force, the actual impact is negligible, but we will continue to engage with iwi as we work through the policy development. We will also be expecting local councils, who will have responsibility for water, to be having those conversations with their local community, particularly where there are existing Treaty settlements and agreements in place.

In relation to the question around the chief executive redundancy, the issue here was in relation to the salary. That number had actually already been released under an Official Information Act request, and it’s worth noting that three of the four establishment chief executives were made redundant by the previous Government when they shifted to 10 entities, so if they want to complain, they should look in the mirror.

In relation to international obligations, there are no international obligations that are explicitly linked to this bill. New Zealanders will still have Taumata Arowai, which will have a very important role in terms of regulating water quality.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you so much, Madam Chair. My question is specific to Schedule 2, which as we know makes up Part 2, and it is regarding—we’ve got it on page 19 of the bill, and it’s about amendments to the Water Services Act 2021, and of course the Water Services Act remains in place. Now, we have that section 14(1) of that Act is going to be amended. Now, section 14(1) refers to Te Mana o te Wai, meaning application and effect, and it’s defined in relation to the national policy statement (NPS) for freshwater. And then if you go to section 5 of that Act, it talks about the definition of the national policy statement. It’s very clear that that national policy statement is the one that we all know about that was put into force in 2020. That national policy statement has a definition of Te Mana o te Wai. Now, we have heard from this Government—I haven’t been listening to all the speeches today, so I’m not sure if it’s come up, but we’ve heard in questions to the House that there is a desire to change the hierarchy of Te Mana o te Wai. Now, that hierarchy at the moment is that first we care about the health of the water, and we’re doing regulation; secondly, the health of people; and third, consumptive or commercial uses. So we know that this Government wants to change the balance amongst that hierarchy—which can only mean more pollution, in my opinion.

But what I want to ask, relating to this change of Te Mana o te Wai, is that the replacement not only refers to the 2020 national policy statement; it also then says—and this is the change—“and any statement issued under that section that amends or replaces the 2020 statement;”. And why this is important is not only for the political reasons that I’ve just outlined—about how I don’t think it’s a good thing and I don’t think most people would think it was a good thing to change our water laws to enable more pollution; I think most people want healthy rivers—but it also goes to a legislative drafting point. That is because the NPS is a regulation, it is a secondary instrument, it’s spelt out in the current legislation that it just refers to the 2020 version, but now we’re saying it’s any other replacement to the 2020 version. So that is anything that Ministers change—by regulation that doesn’t come through this House—will amend the definition of Te Mana o te Wai in a piece of legislation that we’re not even repealing today. That is very significant, and I think needs an answer because it is generally considered unacceptable—or that you need a very good justification—to have a “Henry VIII” clause.

Hopefully, I’ve spelt out here that it’s different from what the current legislation says because the current legislation specifies the version of that regulation, the national policy statement that applies.

So you can always, if there are other versions of the regulation—which often happens when you’re looking at the primary legislation—go back to the version that existed when the primary legislation came into effect. This clause changes that and I think has both major political ramifications, major policy ramifications, and is also bad lawmaking.

Hon PHIL TWYFORD (Labour—Te Atatū): Thank you, Madam Chair. Speaking to clause 9, the repeal of the Water Services Legislation Act, I want to ask the Minister of Local Government what advice he has had, and what thoughts he has, on what will replace the considerable body of regulation that was included in that Act to govern the way that stormwater services are managed.

What I think was really significant about those provisions in the Act is that, for the very first time, water entities, or now the councils, largely, were required under the law to have a stormwater management strategy. They were required to be the ones who were responsible under the Act for this work—for the first time ever. They were required to adopt a risk management approach to stormwater networks. They were required to work with other entities, like transport agencies and other infrastructure agencies, and include them in their strategies and plans. They were overseen by two regulators, one for the health and safety of the water, another an economic regulator.

That’s significant because we know that there are many councils who simply haven’t done the stormwater management job. They chose not to spend, not to invest, and the anniversary weekend floods a year ago exposed the fact that, in our largest city, which is home to about a third of the country’s population, the council for decades has simply not been doing the job of investing adequately in stormwater networks. So I’m really keen to know what advice the Minister has had on what will be the environment now for councils and what kind of accountability, what kind of responsibility, will they be held to in the discharge of their responsibilities.

Another example of the work that went into the Water Services Legislation Act that there’s now a question mark over—and I would welcome the Minister’s advice on this—is that the select committee actually did a lot of work on the responsibility to manage stormwater networks in our urban areas. In many of our urban areas, it is streams and creeks that make up the stormwater network; it’s not always pipes. And, for many of our cities, particularly the ones that have had a lot of development in the last 30 years, the stormwater networks are not concreted and underground; they are creeks and streams. And in my home, in West Auckland, it’s almost all creeks and streams. When they’re not properly managed, the effects can be catastrophic, as we saw 12 months ago.

This is a problem because Auckland Council has a 2015 bylaw that says that any stream that abuts a private property or runs through it is the responsibility of the private landowner and not the council’s responsibility. So they don’t maintain those streams and creeks, and they frequently get blocked. It’s a problem because it’s simply not feasible for private landowners to spend $100,000 to hire a whole lot of heavy machinery to clear a stream, right? So they don’t do it. And we know from experience that Auckland Council almost never uses its compliance powers to remedy that.

It’s also completely ridiculous when you’ve got a stream that can literally go through hundreds of suburban private properties in a city like this. You cannot hold one landowner responsible for a blockage that is allowed to happen by a landlord a kilometre upstream. So it’s an absolute nonsense. It was one of the significant contributory causes to the catastrophic flooding that happened a year ago in many parts of Auckland, and these provisions, apparently, are being wiped clear by this repeal legislation. I am very keen to hear from the Minister what thought he’s given and what advice he’s taken on this matter.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair. I wonder if I might talk to my Amendment Paper, which is on the Table, because, if I’ve heard the Minister of Local Government correctly, he’s not going to refrain from repealing the Water Services Economic Efficiency and Consumer Protection Act. It’s a pity, because some of the work that the previous Government has done around economic efficiency and competition, the new Government has actually picked up and, I must say, done really well with. I’m thinking of the Grocery Commissioner and the fact that that’s been embraced by the new Minister of Commerce and Consumer Affairs.

If we think about it, food and water are, basically, the two necessities of life. It would be good if the Minister could follow his ministerial colleague in embracing the fact that a Water Services Commissioner with the attendant powers, the dispute resolution framework, and all of those things that are in that piece of legislation, are, in fact, a good thing to hold on to.

But don’t worry, there is a middle ground. Because I can see that if the Minister is thinking that if he repeals the other pieces of legislation, then this will be sitting by itself, lonely and with nothing to do. So my Amendment Paper proposes that we simply put that bill on ice whilst the Minister sorts out his new proposals. It would be kind of awkward to repeal this bill and then have to dream up new ways of doing fundamentally the same thing when the Parliamentary Counsel Office and officials, along with the Government of the day, have done a pretty good job of getting this bill into shape in a workable form, including negotiating and listening to iwi, as the right honourable member mentioned earlier. That work’s all been done and it would be time-consuming and wasteful to do it again.

So it’s a little innovative. And I know the Clerks—I shouldn’t probably refer to them. Not a familiar technique, but rather than repealing it, just place it on hold, which is what my clause 10(1) would do: suspend it. Make it very clear that no powers exist under the Act whilst it’s suspended. There are no rights and obligations which come to play under the Act. There’s no cause of action which exists under the Act whilst it’s suspended, but then allow it to be revived—brought back to life—by you, Minister, by Order in Council. Now, the ability to bring things back from the brink of death isn’t really something I’d want to confer on that particular Minister, but here we have it—giving it to you there. So that is what I suggest. Then making sure that that Order in Council could also adjust the time frames that sit in the Act, because obviously times will have expired for them to have been done.

But what we have here—and this is the real point, and I’m fighting for the Minister to preserve it—is an apolitical, very carefully drafted piece of legislation that fits well within the existing ecosystem of competition and consumer legislation. The Commerce Commission has already begun work on setting up the Water Services Commissioner, and I understand made an appointment of someone who’s expected to assume that role. The expertise is there, the drafting work is there, and it’s a whole lot of investment which will be utterly wasted. But worse than that, it will have to be redone. Because we know that competition and efficiency work is necessary and consumer protection work is necessary.

As I said earlier, this was something which was worked on quantitively, it turns out, in the Finance and Expenditure Committee—I made an error there—but it was a very useful committee. So by suspending this piece of legislation, it will preserve it all in place. We won’t have to come back to Parliament, take up enormous amounts of parliamentary time, go back to the community, go back to select committee, go back to the submissions process to put in place—and I know what it’s like. You won’t be able to just say, “We made a mistake; we’re unrepealing that bill.” You’ll have to come up with a whole new framing of it which does fundamentally the same thing. A wasteful exercise of something that’s good. So I would invite the Minister to look favourably upon that Amendment Paper.

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair. Just recent questions—one in regard to Te Mana o te Wai. This legislation is aligning it with other references to the national policy statement. And in terms of that definition, obviously the Water Services Act or the Taumata Arowai legislation or Resource Management Act legislation would be others that have similar clauses.

In terms of the stormwater issue, obviously stormwater reverts back to councils who have responsibility for making those investments. I noted the member the Hon Phil Twyford was talking about the issues in regards to private landowners and the management of storms and waterways. These are the responsibilities of private landowners, and the regulator in regards to that would be the council in terms of working through those issues in relation to that private stormwater.

In terms of the Hon Dr Duncan Webb’s comments, as I said in Part 1, the Government is repealing that legislation. It was designed to fit the 10-entity model. We are repealing their three waters, co-governed, mega-entities reform, and we will be putting in place our own consumer regulation in terms of those issues that he mentions as part of our Local Water Done Well policy. But the legislation is not worth putting on ice because it relates to a fundamentally different approach to how we want to deal with water infrastructure, and that’s why we’ll be repealing it and replacing it.

Hon KIERAN McANULTY (Labour): Thank you very much, Madam Chair. Those that have been following along will know that I’ve asked the same question twice already and the Minister of Local Government has not answered, and it is the same thing for the question that Grant Robertson has posed, that I’ve posed, and that the Hon Phil Twyford has posed around balance sheet separation that the Minister has yet to answer.

Ministers are obligated to answer reasonable and relevant questions. Fortunately, those questions that were relevant to Part 1 were also relevant to Part 2, so I will ask again a very simple question, and I hope the Minister has time to answer it. He has time to send tweets, I note, whilst he’s in the chair. Perhaps he will have time to answer questions. Ironically—ironically—the tweet may go some way to giving me the answer.

The question I’ve asked twice already, and now for a third time, is in relation to both the purpose and now the proposal to repeal. In declaring the Government’s intention to repeal the water services Acts, the Minister has said that he had worked alongside councils to develop this policy. I want to know what councils he’s worked alongside. The way the Minister presented it was that he had worked with the majority of councils and that he had the majority of councils’ support. I propose that that’s wrong, and this is an opportunity for the Minister to clarify it. It would have been a straightforward answer, but his refusal to provide an answer makes me suspicious.

Whilst sitting in the chair during this committee stage, instead of answering basic, simple, relevant questions, he’s tweeted a picture of himself standing next to the Mayor of Waimakariri, the Mayor of Manawatū, and the Mayor of Whangārei, and I wonder if that was his consultation. Are they the mayors that he’s spoken to? Not quite councils, as he’s presented it.

Hon Simeon Brown: Oh, the member’s feeling lonely—the member’s feeling lonely.

Hon KIERAN McANULTY: Ministers aren’t supposed to heckle from the chair, Madam Chair. Perhaps you might want to inform him of that.

The Minister stood in the theatrette and said to the nation that he’d been working alongside councils in developing this policy. He’s refusing to tell us who. He tweets from the chair a photo of him standing alongside three mayors—is that the only consultation he’s done?

Hon SIMEON BROWN (Minister of Local Government): I thank the member for that question, and I would just like to note that our policy, Local Water Done Well, was announced about 12 months ago. It was worked on while we were in Opposition, and then we took it to a thing called the election and New Zealanders voted for it. So not only did we work with local councils but New Zealanders voted for it, and now we’re delivering it.

LAN PHAM (Green): Thank you, Madam Chair. I really wanted to pick on the transitional arrangements for local authorities, and I mentioned earlier in the previous readings about how important these long-term plan conversations are for councils, particularly as they are often the most significant conversation that councils will actually have during their three-year term. So this is really timely for them, and the uncertainty is a real drain.

So I want to get some clarification from the Minister of Local Government. I want to pick up on the provision for local authorities, where it says that where they have already started their long-term planning consultation under the previous policy settings before this repeal goes through, they are able to do so—put their plan through without reconsulting. I just want to hear from the Minister: what are the potential implications for those councils who expected that the assets and associated debt would be moving and may now be looking at funding those water services improvements themselves? Does the Minister think that it’s appropriate that rates may be significantly raised without adequate consultation, and what does he propose the justification could be that councils use when they’re responding to these disgruntled ratepayers, which is essentially inevitable?

The second aspect of this is with the transitional arrangements, and it’s permitting local authorities to have unaudited long-term plan consultation documents. Now, I’m interested as to whether this pertains to the entire long-term plan consultation document, which we know can cross so many areas because councils deliver on so many wellbeing assets, services, and projects for their communities. Does this just pertain to water services or is this about long-term plan consultation as a whole, presuming that the intention, initially, is just to allow flexibility for the water services part of the long-term plan?

The third aspect that I’m really interested in hearing more from the Minister on is about the provisions allowing local authorities to actually defer their entire long-term plan by a year and be replaced by what’s been called an “enhanced annual plan” for the next financial year. What advice, if any, has he had about the implications for this? Because, again, really important conversations and really important work for councils and it’s just not quite clear where this information—how it will actually be applied in the setting. Thank you.

HELEN WHITE (Labour—Mt Albert): Thank you, Madam Chair. I want to ask about clause 14 and the relationship it has to the rest of the provisions there, because I can see that you’ve talked about how there was only one employee, but I can see that there’s a board there. So I’m assuming that they are not employees in the same way? What we have is a provision relating to employment which says that there’ll be an honouring of terms, but it looks like an entire breach of any terms that relate to those board members. It looks like they get no compensation even if it’s agreed that they will, etc. I’m wondering about the reason for doing something so drastic.

This is a Government that, I understand, talks a lot about property rights. These are contractual rights, and it just doesn’t seem at all necessary to go so far. I presume people who are appointed to a board have turned down other positions—they probably took this very seriously, it’s probably had an impact on them, and they probably have some form of stipend, etc. So I wonder whether that advice has happened. I’m also concerned about the employment. I’m not entirely satisfied with the Minister of Local Government’s answer with regard to the obligations under employment, because usually it wouldn’t be a case of redundancy and rights; it would be a case of good-faith consultation and redeployment and then maybe redundancy and triggering crystallising termination rates. So I’m concerned about what the Minister has said with that, and I’d love some fleshing out of that but also the justification as to why such a harsh approach would be taken.

I also wanted to talk for a moment about the point made by the Hon Phil Twyford and just give the Minister a little bit more fleshing out there. I was also on the committee when we were talking about the strains that were in the urban areas and the lack of, really, a practical solution for people in the floods last year when a lot of debris was brought down those little streams and the streams were blocked. So there were real flooding issues as a result of that. I also had one in my area where the lack of maintenance of the water system meant that there were things over one of the big filters and we ended up with a whirlpool on that street and quite dangerous situations.

So I was really impressed, when we were going through this, at the collaboration of all the parties in terms of coming up with a solution which was a lot more practical in terms of the responsibility being with the councils for those streams. It seemed really unfair and unreasonable to expect a private party who happened to back on to one of those areas to be responsible for the clearing of that when in fact they hadn’t even produced the debris. So why would we be throwing—and I’m going to use a pun here—the baby out with the bathwater?

Why would we leave aside all the things that we got to as a collaborative group, which is exactly what the New Zealand public wants from us? Why would we do that and get rid of everything, when my friend the Hon Duncan Webb has put to you a proposal which was to suspend that piece of legislation so at least you could catch the things that were useful out of it and adapt it? Obviously, that has a huge benefit for the public in terms of not having to reinvent the wheel. This is really helpful when we’ve actually had those discussions, we’ve toughed it out, we’ve talked about those issues, we’ve had the submitters in, we’ve talked about the realities of those floods close to a time when they’re impacting on people, yet the Minister seems to want to chuck that out.

So what I would like to know is: will he consider suspending that bill, which has been so much good work? I do see it as very consumer friendly, very applicable in any situation where we’re redesigning the situation. I’d also like an answer to the question that I have about the board members and the employees and why, when we do these things, we have to cut out rights, which I understood were sort of sacrosanct in the National Party faith, anyway, because Mr Seymour talks about property rights all the time.

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair. I’d like to thank the members for their questions. A number of questions in regards to the transitional provisions around the long-term plans (LTPs) and the choices that we are giving to councils. I just want to note that what we’re providing to councils is a range of options and flexibility in terms of setting their long-term plans, as this change in legislation obviously happens at a time when they’re setting their LTPs. All of the things that we’re putting in place are simply about providing flexibility and choices to councils around the consultation requirements, around the time frame in which they need to finalise their LTPs, and whether they wish to delay that by one year, but also some protections in terms of the annual plan to ensure that if they were to delay by 12 months, their next annual plan would have the right information that it would need to have in place around all of the issues, including water services, roading, and other services that councils provide.

Helen White made a number of comments in relation to what I’ve already answered in terms of the Duncan Webb’s points relating to why we’re repealing that other piece of legislation. I believe I’ve already outlined our reasons as a Government. In terms of the question around the establishment boards, they are not employees, so they are not entitled to redundancy. They are appointed based on normal procedure. In terms of the CEO, the role becomes redundant due to the fact that the entity won’t exist. That CEO had a redundancy clause in the contract, and that redundancy clause has been honoured.

INGRID LEARY (Labour—Taieri): Thank you, Madam Chair. I’d like to raise a completely new point on behalf of people in my electorate, in Taieri, where we have a lot of rural areas and we have mixed rural and urban water supplies. This was something that the select committee, under the Water Services Legislation Act, looked at very closely and had a lot of input from—I’d like to thank the local councils for their input.

This goes to a couple of questions that I had for the Minister of Local Government. First of all, what kind of level of drinking-water standards would he expect in relation to those water supplies, given that their primary purpose is not drinking water? Usually the primary purpose is actually about facilitating the farms—and it goes through multiple farms—which also raises the second question, about ownership and the role of the combined sewer overflows (CSOs). Where does the Minister see those mixed rural supplies being controlled and managed? Under this legislation, we reached a point where we acknowledged the investment that private owners had made—private farmers in particular had made—into these mixed-use supplies over many decades. There was a facility to be able to actually get ownership back to private ownership if a number of conditions were met: if 75 percent of the shareholders of that mixed urban-rural supply—and they were sort of deemed shareholders—were able to agree on it.

Now, under the repeal, I guess that leaves many of my constituents wondering: what does it mean for the investment that they’ve put into those mixed-use schemes? Are they going to be carved out and not be part of this alleged balance sheet separation exercise, or will they become part of CSOs; in which case, if they do, how does that ownership vest in the CSOs? Is there a facility for private owners to be able to have management or control again of those mixed supplies?

There’s another question as well, really, in all of that, which is that many councils have actually invested into these as well. So how are ratepayers who have invested into these schemes also acknowledged for their investment and input?

These are really, really important questions in the Clutha area, and also because many of the farmers may not always use the water for drinking water, but when they do, they don’t want to be held necessarily to the same standards as an urban water supply. So has the Minister turned his mind to a difference, perhaps, between urban and rural; and what kind of standards will be required? Then, secondly, I’d really like to just get his response to those questions around the ownership and some assurance for farmers—and, I’m sure, in other parts of New Zealand—who have invested for decades through their families into these schemes. How is he going to deal with that, given that the schemes don’t just belong to one particular family? Often it’s to communities, and often, as I’ve said, councils have invested into them as well.

Hon Dr DEBORAH RUSSELL (Labour): Thank you, Madam Chair. I was listening to Morning Report this morning as the Minister of Local Government was being interviewed about these water reforms. I took particular note of what he was saying about the options there were for councils going forward. His view was that councils could negotiate with each other to form water entities of some sort, so that councils could determine for themselves, for example, whether the West Coast would amalgamate with Canterbury, and so on. He didn’t answer the interviewer, but I want to put it to him now, and it’s of particular relevance to this—it wasn’t mentioned in the interview this morning, but it is relevant now—the Far North District Council and Auckland.

Now, under the proposed reforms that the Labour Government put in place, the Far North District Council would have been amalgamated with Auckland. The bigger entity, Auckland—we would have helped to socialise the costs of water provision across quite a wealthy area, really, and actually an area that is going to struggle to provide adequate water services in the future. Now, as it turns out, the Far North District Council—we estimate that without water services reforms, by 2051, every ratepayer there will end up paying another $8,690. That’s how much it’s going to cost the ratepayers of the Far North District Council.

You know, Auckland’s had Watercare for a long time and—despite the droughts a few years ago when we were all saving water furiously—in terms of supplying water, by and large, Watercare has worked well enough. There was an absolutely disastrous outcome, really, in the flooding, which my colleague Phil Twyford has referred to, particularly in West Auckland, where the fact that Watercare had neglected its stormwater system—the creeks, the small rivers—really did create a disaster. We had a solution in place for that. The Minister has just casually said, “Oh well, private owners will have to pay.”

But getting back to the Far North District Council, the only solution for the Far North District Council that I can see, and possibly some of the other councils north of Auckland, even if they don’t perceive it that way—

Hon Member: Kaipara.

Hon Dr DEBORAH RUSSELL: —is to attempt—yes, Kaipara, thank you; yep—to amalgamate with Auckland. But why would Auckland take them on? So the Minister said, “Well, we’re going to have some solution in place for that.” But at the moment, he’s just walking away from a solution that we had in place. Now, I note that the MP for Northland has not been here to plead the case of people in the Far North—

CHAIRPERSON (Barbara Kuriger): Order! It’s not appropriate to talk about members that are not here.

Hon Dr DEBORAH RUSSELL: Oh, I’m sorry. No, he’s not—I take your point. I note, however, that the MP for Northland has not argued in favour of his constituents, so I’ll do it on his behalf. Those constituents need to know what solution the Minister has in place. Now, it’s analogous to the case of Westland and Canterbury; it’s analogous to the case of many small district councils and area councils throughout the country. One of the councils I have in mind is Rangitīkei—a rating base of 16,000 entities. How could they afford the water services reforms?

But in particular, in this section of the Act, I want to know from the Minister: how is it that he is going to get Auckland to take on the Far North water provision? Because that’s the solution we had in place; it was the solution that was going to save people in the Far North $8,690. The Minister’s just walked away from it and left people in the Far North in the lurch. So he has some sort of vague, pie-in-the-sky future where there will be some negotiations, but what incentive will there be? What incentive will there be for a larger council to take on the Far North?

CHAIRPERSON (Barbara Kuriger): I’ll just make a note: while I’ve just arrived, I have been watching the debate on TV. I know there are still some Amendment Papers that are yet to be discussed. In urgency, with a lack of select committee, we actually are looking for a bit broader discussion—and I’m going to call Camilla Belich.

CAMILLA BELICH (Labour): Thank you, Madam Chair. I would just like to follow up on a few points that the Minister of Local Government has raised in his responses to some of the questions asked by others in the committee. Kind of covering two areas, the first thing was just to follow up on some of the comments he’s made around employment. The Minister responded that we need to look in the mirror around redundancies because, in fact, the Labour Government was responsible for some redundancies. Of course, I would proffer to the Minister, that was the case. The point is, really, the advice he received around employment, which he hasn’t answered, and treating those that are employed with dignity, not the fact of the redundancies. In a previous reply, he mentioned the effect of clause 15 in relation to the chief executive position, and he said that was, in fact, clear that that would be the position due to that clause.

I then follow that up with a question in relation to clause 17, which hasn’t been addressed: if what the Minister has said in relation to the disestablishment of the chief executive is correct, then doesn’t that mean that clause 17 is redundant? Because it simply states that existing contractual obligations continue to exist despite the passage of this Act, which would seem to me a truism and an unnecessary clause to contain within this piece of legislation. So I’d like to ask the Minister whether he’s actually received any advice on that particular clause, and why it is in fact in there, if his response to the previous issue is in fact correct.

The other major issue that I wanted to discuss is in relation to Auckland, which is where I live and which is the subject of Subpart 2, which we are discussing today. In Auckland, there are a number of issues with water quality that won’t come as news to anyone in this House. One of the issues that I’ve dealt with most in my work as an MP has been issues around Hobson Bay, and there’s an incredibly active group of people working on water quality in Hobson Bay. The group is called Hapua Thrive, and they’ve done a lot of amazing advocacy with MPs around the House on the terrible state of their waterways—when you walk around the coast there, all you can smell at certain times of the year is human excrement, and it means it’s unsafe and unusable a lot of the time.

One of the things that Auckland Council, through Watercare, which is the existing structure that we have—and there’s been a lot of praise of Watercare during the debate on these water reforms, the fact that Watercare exists and is, you know, well organised and has done things under previous councils, under the leadership of Phil Goff, and instituted things like the Central Interceptor to deal with these water quality issues.

Now, the Central Interceptor is a huge investment in infrastructure in order to deal with some issues surrounding waste water, but the question I have is: how will the Minister, with his reforms, which I believe we’re allowed to discuss because he has talked about Local Water Done Well in his previous response to a question—how will Local Water Done Well, when implemented, actually address some of the issues for waste water and the problem that we have with waste in Auckland? How will it in fact ensure that additional spending above what has already been spent—huge amount of investment into the Central Interceptor, which is still not sufficient to deal with the problem of waste water. This is one of the wealthiest communities in New Zealand and they are well organised and they have strong advocates, and they are unable to organise to the extent to get this addressed. They have an active local MP who you know well—David Seymour—he comes to their meetings, but there is no result on the horizon to allow people in Auckland to be able to enjoy Hobson Bay, and no answer that the Minister has been able to give on how his proposal, Local Water Done Well, would actually address this important safety, infrastructure and, arguably, human rights issue in Auckland.

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair. There’s been a number of questions. Ingrid Leary was asking around mixed-ownership rural schemes. Many of these ownership schemes opposed integration into the last Government’s prior reforms, precisely because the schemes have had private owners over many decades for a range of purposes, including stock water, and so many of them will be quite pleased they’re not having to be part of the last Government’s mega-entities, co-governed bureaucracies. But, of course, Taumata Arowai will still continue to play a very important role in regards to drinking-water standards.

Deborah Russell has been asking a number of questions in relation to Northland, and, of course, our plans and our policies which have been announced will deal with those issues in terms of what local councils will be putting forward, and there’s more information that we released yesterday on those questions, but it’s obviously not in the bill.

In terms of Camilla Belich’s questions in regards to the redundancy provisions, the department did have independent legal advice, including employment law advice, in the development of provisions relating to the disestablishment of the Northland and Auckland entity. Again, I remind the committee there was only one individual actually employed, who was the CEO of the entity. Clause 17 is a general clause; it is a due diligence clause to ensure all matters are covered when disestablishing a statutory entity.

Hon GINNY ANDERSEN (Labour): Thank you very much, Madam Chair. It’s a great opportunity to speak to my amendment on Part 2, clause 8. In clause 8, “Repeal of Water Services Entities Act 2022”, my amendment proposes to add “with the exception of the Wellington entity”. Now, I’m well aware that the Minister of Local Government has evidently done some consultation with councils, and so I thought it was only right for me to talk to my own council in Hutt City and to get their read out of what this means for people in the Hutt Valley.

The main concern they have is that with Local Water Done Well, which was announced well over 12 months ago, there is still no plan for balance sheet separation, and that appears to be the same question that has been raised today, time upon time, without there being an adequate answer. The concern is that those ratepayers are now going to see significant increases, and that is in the forefront of the minds of those councillors and also of all those ratepayers. It’s the level of uncertainty about what the future provides.

It’s quite interesting because, during the election, over at a candidates debate, Chris Bishop was pretty happy—he was saying, “Yeah, we’re pretty much all on the same page here. We think that there should be a separate entity and that it’s at arm’s length from council, and we can use that. So we’re all good here. We’re all going to be the same.” The problem is that he points to Wellington Water as being the logical place. He said, “The Wellington region’s fine. We’ve got Wellington Water. That’s already set up as a council-controlled organisation. We’re in the right position.” The problem is that, under Wellington Water, we are seeing 44 percent of our region’s water literally going down the drain. We have local people who are out channelling leaks with funnels and pipes to put them in their gardens to save water.

So, in terms of what the problem is right now, councils have been told—Hutt City has been told—that it’s going to be at least 12 months before we have any kind of solution in terms of how we get balance sheet separation; 12 months of our water trickling down the drain while we’re in water restrictions and needing water meters. This is the problem that is only getting bigger over the 12 months, and we’ve simply had no answer tonight about what the solution is. And I was trying to think what the word is to describe taking away something that’s been proposed to fix a problem and then not replacing it. And I thought, “Is it ‘lazy’?” But no, I don’t think it’s just lazy; I think it’s arrogant. I think it’s arrogant to campaign on fixing a problem and claim to be elected on it without actually having done the work. I think that’s the problem that hundreds of thousands of New Zealanders are starting to click on to now, and they’re starting to realise that this was a gimmick.

What I predict—what I predict—is that many places around New Zealand are going to, sometime in the future, come to the same place that we had arrived at under the previous Government. So the $180 million waste that he’s talking about was actually an establishment, going towards fixing that problem, and the waste that that Government will deliver to New Zealanders is that during a cost of living crisis we will see Kiwis having to pay double, triple, quadruple rates for what would have been achieved through having a simple solution. And the same problem in the Wellington region will apply as in others. Upper Hutt City Council does not want to come in. So how do you get other smaller councils to come in when there is not agreement? How is the Minister going to encourage those entities? Is he going to have meetings? Is he going to just hope they come together and see the benefit of it? That is a significant problem when some of those smaller councils are far outweighed by their debt and some of the bigger ones who have invested have no interest in taking them on.

So I look forward to hearing, and I ask the question again on behalf of the Hutt: what is the proposal to achieve that balance sheet separation that the council in the Hutt City still do not know about? They want too to know, from the Minister, what his plan is to fix the 44 percent of water that is trickling down our drains that our ratepayers and our taxpayers are going to have to fork out for.

CHAIRPERSON (Barbara Kuriger): What I’m just going to say at this point in time is that I have heard, over the course of the evening, the Minister answering questions about consultation and about employment. You may not be happy with the answers that you’ve received, but the Minister has actually answered some of those questions. I’m looking for original questions now.

HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato): Kia ora. Ngā mihi, Madam Chair. As I went to go get this bill, I saw on page 17 that—and listening to Adrian Rurawhe, I am going to ask a very straightforward question. I’ve already said my debate, my tohe. I’m not going to give a long whole whakapapa. A very straight to the point question: can the Minister of Local Government guarantee that this coalition Government will not breach its Treaty settlement with the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act? Knowing that—taihoa—this Government actually settled with my iwi Waikato-Tainui in 2010, with the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act, so it’s a very straightforward question. My people deserve this. My people deserve this answer. Knowing that I’m actually a mokopuna from this settlement, I would like to know: can the Minister guarantee that this coalition Government will not breach its Treaty settlements with our Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act?

Hon KIERAN McANULTY (Labour): Thank you very much, Madam Chair. Well, we got there eventually. We got there eventually—the Minister of Local Government was very clear. In the end, they actually hadn’t talked to many councils at all in developing this policy, certainly not those that are most affected.

So that then leads to my next question, because I think ratepayers, in the likes of Buller, Central Hawke’s Bay, Central Otago, the Chatham Islands—I’ve only got down to “C”, there’s a lot more councils that I could list—

James Meager: Ashburton.

Hon KIERAN McANULTY:—they deserve an answer. Because those ones—someone says “Ashburton”. Ashburton, the council that that member represents—the ratepayers that you represent, under your plan, will be facing bills of $9,000 a year—

James Meager: No.

Hon KIERAN McANULTY: —for water. He says “No”? We’ll wait and see, won’t we? It’ll happen. This is what the Government members are going to have to justify to their constituents, because they’re selling them down a river.

So this leads me to one of a few questions that I’m sure the member for Rangitata would like an answer to as well. Why on earth would the councils in wider Canterbury join with Ashburton when they have a small rate-paying base, a massive roading network, and they have huge costs facing them? Costs of service without reform, in the Minister’s own advice—for James Meager’s constituents—is $8,690 per year, per ratepayer, just for water; and he’s about to vote for this repeal.

I look at other councils, like Chatham Islands. There’s been no talk of the Chatham Islands. What this bill is proposing to repeal is a bespoke guarantee to the people of Chatham Islands that the Government will pay for their water services moving forward. I want an answer on behalf of the people of the Chatham Islands.

What happens to a small council like the Tararua District Council, who, under the existing provisions, will be joined up with those other councils alongside the Horizons Regional Council boundaries—the Manawatū-Whanganui Regional Council? I guarantee that the councils in that proposed cluster won’t want to have a bar of Tararua, a region with only 12,000 rating units— $600 million they need to spend over 30 years. Why the hell would anyone voluntarily agree to join with them? It’s just not going to happen.

It’s exactly the same for the councils in the West Coast. They’re currently proposed to be with those in Canterbury, and you hear the mayor of Buller, Jamie Cleine, a phenomenal mayor, may I say—I’ve dealt with Jamie around the impact of weather on his region and the massive challenges they’re facing. That community has a brilliant advocate in their mayor. He doesn’t know what to do. He knows that if he just joins up with the other West Coast councils, it’s not going to work. He said so himself. He knows, in his heart of hearts, that the Canterbury councils won’t want a bar of them.

What guarantee can the Minister provide those councils? Because he didn’t give one this morning on Morning Report, when he was presented with those concerns from Mayor Cleine. All he got was dismissal.

He was also asked—the Minister, and this is my second question—around cost. The Minister said it would be cheaper under this Government’s plan. When I asked the Minister in question time today, we didn’t get much of an answer. So my second question is quite simple: cheaper for who? Cheaper for ratepayers, or cheaper for Nicola Willis? Because that is the guts of this, I think. They are trying to save themselves money. They don’t actually care about ratepayers, because when the rubber hits the road, they won’t be in Government. They’ll be able to push to the mayors, and the mayors will say, “We have no choice”. The Government will say, “This is local government responsibility”. You can see it being set up now.

So what are those small councils that no one wants going to do? Matt Doocey promised that you were going to help pay for them, but that’s being backtracked. So I want an answer to that. I want an answer around costs. I refer to the Prime Minister’s answer: when asked by Newshub on the news bulletin tonight, “What are your figures?”, he walked away. So I’ll ask the Minister. Here’s your opportunity to justify it in the absence of select committee. The Minister must have got advice. What are your numbers to justify your claims?

Hon SIMEON BROWN (Minister of Local Government): Thank you, Madam Chair. There’s been a number of questions which have been made by members. The Hon Ginny Andersen asked about wanting an exemption for Wellington. Well, the entity hasn’t even been set up. In fact, under the legislation we’re repealing, those entities weren’t going to be set up until mid-2026. So when she asked the question, “What is going to happen over the next 12 months?”, well, the previous Government wasn’t going to do anything over the next 24 months, so she may want to report back to her constituents on that.

The question from Hana-Rawhiti Maipi-Clarke in relation to their Treaty settlement, this Act doesn’t affect that at all, in terms of the question that she asked, and won’t have an impact as she posed that question. That is exactly what this legislation does.

And then, in relation to the question from the Hon Kieran McAnulty, we asked around the Chathams. The former Minister excluded the Chathams from an entity. This did not guarantee Crown investment in the infrastructure.

RACHEL BOYACK (Labour—Nelson): Thank you, Madam Chair.

CHAIRPERSON (Barbara Kuriger): Please keep it original.

RACHEL BOYACK: I’ve got lots of original questions to ask. I want to focus on a couple of matters related to my proposed Amendment Papers, particularly in relation to stormwater. But before I do so, the Minister of Local Government has, a couple of times in his contribution tonight, mentioned the setting up of new entities, and I believe when he’s discussing that—so I’m just responding to the Minister’s comments. I’m interested in his answer to this particular question around the Orders in Council that are included in the most recent water bill that was put through the Governance and Administration Committee last year, because I sat on that committee.

My question to the Minister is: my understanding—and I’d like his clarification on this; it’s a pretty simple question, and I’m sure the officials can help him with this—is that actually those Orders in Council can be put in place by the Minister pretty quickly after the legislation was enacted. I think it was either immediately—so perhaps the Minister could answer that question. Can Orders in Council under that existing legislation that he’s referred to in his responses be introduced immediately, and were they scaled? I can’t quite recall, but maybe he’ll be able to answer, because he obviously knows a bit about the legislation, that it was either every three months or six months.

So maybe he could just clarify that, but I’ll come back to him if he doesn’t answer that question, because my recollection was that we could begin those Orders in Council from this point forward, and the Minister was able to stagger that over three points. So I was a little bit confused, because officials advised our committee that those could be happening throughout 2024, throughout 2025. The Minister seems to be saying tonight that it could wait until 2026, but that wasn’t my understanding of the legislation. So I’m sure he can get that clarification, but I’ll definitely come back and ask again if we don’t get it. Just noting because we don’t have that select committee process for us to be able to ask these questions of the Minister, so it’s just important to me, because maybe I just got my recollection of sitting on that select committee wrong.

But just to my amendments, there is a piece in here where I have some amendments inserting, after clause 8, an exception for the Tasman, Nelson, and Marlborough entity. The reason why I’m raising this and why I want to talk about stormwater—and I raised this in an earlier contribution today, in the second reading of this bill—is we haven’t had a big discussion about stormwater. But for those of you who know Nelson, you’ll know that we have a lot of hills around our inner-city area and we’ve had a significant number of climate change events over the last few years, one of which has been floods. We’ve often thought, “Oh, floods might mean flooding of properties.”

But what it’s actually shown is landslips. Landslips are from council land on to private property, from private property onto private property. One of the reasons this has been such a problem is that in the hills of Tāhunanui there literally is no stormwater—like zero stormwater. So when we hear that people have invested in pipes throughout our city, that is correct, but in developments that are over 100 years old, we don’t have a functioning stormwater system, which has led to a huge amount of land slippage. I know that the Nelson City Council has the investment of a stormwater system in its long-term plan, so I’m interested in whether the Minister’s going to help fund that, because there have been requests from Nelson City Council to Ministers for that support. There have been requests from myself, as the local MP, to Ministers for that support, and I will continue to seek that support as the local MP.

In another area of the city, Stoke, which is where my office is, we have assets that, again, have been invested in, and we keep hearing that councils have done a great job in investing—yes, they invested really well in Stoke decades ago. Those pipes have now come to the end of their useful life. So, yes, the council did a great job a long time ago, but now we know that there’s going to be a replacement cost. So my question to the Minister is: given that Nelson and Tasman and Marlborough have excellent plans, have shared plans across our region, know what we want to do, why can’t we be exempted so that they can actually set up an entity with that balance sheet separation? A council-controlled organisation actually wouldn’t do enough to allow that investment to happen. And if he doesn’t allow that exemption that allows for a greater level of investment—because we have a massive bill coming our way, and anyone who says we don’t, don’t listen to them; we have a massive bill—will he fund the infrastructure needed for Tasman and Marlborough and Nelson over the coming decades that we need for good quality water infrastructure?

RYAN HAMILTON (National—Hamilton East): I move, That debate on this question now close.

CHAIRPERSON (Barbara Kuriger): I’m going to call Hūhana Lyndon.

HŪHANA LYNDON (Green): Kia ora. Ngā mihi, Madam Chair.

CHAIRPERSON (Barbara Kuriger): And it’ll be original, won’t it?

HŪHANA LYNDON: Yes, but I’d like to clarify for the committee, the Minister responded to Adrian Rurawhe’s question and confirmed that he had only advised the Waikato River Authority and Te Awa Tupua of the repeal. My question, which has not been answered tonight: what consultation and engagement hui have been held with the iwi of Tāmaki ki Te Rerenga Wairua, Auckland Northland, in the repeal proposal for the ending of the water services entity for our tribal rohe? That’s 19 iwi in Auckland and 12 in Tai Tokerau. Now, have his officials had any hui with the tribes of that district beyond Waikato-Tainui for the river authority? And if they have, what feedback has he received? Kia ora.

Hon SIMEON BROWN (Minister of Local Government): The question was in relation to iwi consultation. I directed officials at the Department of Internal Affairs to consult with iwi who had their settlement Acts amended by the bill. That process is under way, and we’ll continue to engage with iwi as we do develop further policy.

MIKE BUTTERICK (National—Wairarapa): I move, That debate on this question now close.

A party vote was called for on the question, That debate on this question now close.

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): The 14 tabled amendments to clauses 8 and 9 from Rachel Boyack, Dr Tracey McLellan, the Hon Ginny Andersen, Cushla Tangaere-Manuel, Tangi Utikere, the Rt Hon Adrian Rurawhe, and the Hon Jan Tinetti to insert exceptions for various entities are out of order as not being in the correct form of legislation. The Hon Dr Duncan Webb’s tabled amendment replacing clause 10 is out of order as being contrary to the principles and objects of the bill.

The question is that Arena Williams’ tabled amendment deleting clause 10 be agreed to.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): Arena Williams’ tabled amendment to clause 10 is out of order as not being in the correct form of legislation.

The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 17 be agreed to.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Amendment not agreed to.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Part 2 agreed to.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Schedule 1 agreed to.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Schedule 2 agreed to.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Schedule 3 agreed to.

Clauses 1 and 2

CHAIRPERSON (Barbara Kuriger): Members, we now come to our final debate, clauses 1 and 2, the “Title” and “Commencement”.

Hon SIMEON BROWN (Minister of Local Government): It’s a very simple part of the legislation. Clause 1 proposes that the Act is the Water Services Acts Repeal Act 2024, and this will commence on the day after it receives Royal assent.

Hon KIERAN McANULTY (Labour): Thank you very much, Madam Chair. I have two proposed amendments relating to the title and commencement—I hope to have the opportunity to speak to both. I will start with the proposed amendments regarding the title. The title currently as it stands is the Water Services Acts Repeal Bill. I propose that it be called what it is, the “Affordable Water Reforms Repeal Bill”, because that’s actually what this is. The reforms, when they were redesigned, were called the affordable water reforms. And it’s interesting that the Government hasn’t actually referred to the title of the thing that they are proposing to repeal. I don’t think it comes as any surprise to any of us as to why—the clue is in the name. What this Government is repealing is the affordable water reforms. What they are going to replace it with will not be as affordable. The departmental advice demonstrates that.

Now, I asked the Minister of Local Government earlier to provide his costings, in the absence of a select committee process. He refused to do so. There was a bit of a theme this evening of the Minister picking and choosing which questions to answer and hoping that time would run out. It proved to be a relatively successful strategy because there are questions—and his colleagues in the Chamber are gloating about it now; they’re laughing and smiling about it. But there are serious, relevant questions that remain unanswered. Perhaps question time tomorrow is an opportunity to go through that. Perhaps the media who are watching may follow up on that tomorrow.

But, at the moment, right now, we are discussing the title, and I think it’s only right that the New Zealand public see exactly what this is. It is, after all, repealing the affordable water reforms. So I think it’s only right that the title of this bill is the “Affordable Water Reforms Repeal Bill”. Parliament rules are really clear around debates on the title of the bill: debates on the title of the bill cannot be used as an opportunity to critique the contents of the bill. I’m not doing that. I’m proposing that the bill be named to reflect what it’s doing. The thing that this bill is proposing to repeal is called the affordable water reforms, because it reformed water services in a way that will make it more affordable for ratepayers. And just because the Minister doesn’t want to talk about costings, just because he didn’t want to talk about what councils he consulted with or worked with—because it turned out to be not many, if any—and just because he didn’t actually want to touch on balance sheet separation, which is a crucial, fundamental element to whether or not this is going to work—three things that are pretty crucial that the Minister refused to talk about—doesn’t change the fact that the thing that he is proposing to repeal is called the affordable water reforms. I think the title should reflect that.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Whilst, of course, I agree with everything that my colleague the Hon Kieran McAnulty just said, I’d also note that the title is the Water Services Acts Repeal Bill 2024. Of course, you then think, “Oh well, this bill is to repeal the Water Services Act.”, but, in fact, it’s not. It’s to repeal the Water Services Entities Act, the Water Services Legislation Act, and the Water Services Economic Efficiency and Consumer Protection Act, but it’s not to repeal the Water Services Act 2021. So the name does not say what, in fact, it should be doing. It would be much clearer to name the Acts that are listed in clause 3, the “Purpose” clause. So I’m wondering if the Minister of Local Government can comment on that and how this could cause a great amount of confusion.

CHAIRPERSON (Barbara Kuriger): The question is that the Hon Kieran McAnulty’s tabled amendment to clause 1 be agreed to.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Amendment not agreed to.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Clause 1 agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 2 be agreed to.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Hon Kieran McAnulty’s tabled amendment to clause 2 be agreed to.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Amendment not agreed to.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Clause 2 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Barbara Kuriger): Madam Speaker, the committee has considered the Water Services Acts Repeal 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 SIMEON BROWN (Minister of Local Government): I move, That the Water Services Acts Repeal Bill be now read a third time.

Today, we stand at the final stage of deliberation for a crucial piece of legislation: the Water Services Acts Repeal Bill. This bill, which repeals Labour’s failed three waters legislation, is now before Parliament, ready to be passed into law, ending their misguided policy of stripping locally owned water assets from councils. I want to start by extending my gratitude to our coalition partners—the ACT Party and the New Zealand First Party—for their support in bringing this legislation through Parliament.

This bill moves the responsibility for water services and ownership of water assets back to local councils, where they belong. Councils know what is needed for their communities and should not be forced or mandated to take a one-size-fits-all approach. This bill provides much-needed clarity about the choices available to councils now that they must include water services into their long-term plans (LTPs).

We’re aware that councils are in different stages of completing their long-term plans, and some have already begun consultation. This bill provides flexibility to councils by enabling a range of voluntary options that help councils complete and adopt their long-term plans. We want to help councils meet their statutory obligations.

The bill provides a range of options that recognise that different councils will have different needs and preferences and will be at various stages of developing their long-term plans. The options include having an unaudited LTP consultation document, adopting their long-term plan up to three months later than usual, or deferring the LTP by one year and preparing and consulting on an annual plan for 2024-25 instead.

This is about providing flexibility to councils, not just simply telling them what to do or mandating them, like the former Government did. All of the options are voluntary and councils can choose to use them or not, depending on their local circumstances. This bill provides much-needed clarity about the choices available to councils in addition to the standard processes and what is required if particular options are taken up.

As reiterated in my previous speeches on this bill, the policy implemented by the prior Government was not only fiscally irresponsible but deeply divisive across New Zealand—costing $1.25 billion but not even able to implement it after six years in Government. It pursued an unpopular co-governance model that lacked the foresight and lacked working with councils to find out what worked for them. The extraordinary amount of money did not result in the improvements needed to our water infrastructure in New Zealand. Hundreds of millions of dollars were spent by the last Government, but they failed to actually achieve the reforms they said they were going to set out and do. As with many aspects of the last Government’s reforms, this reform was top-down and not driven by local communities and local councils who best know their communities. This Government is not in the business of simply stipulating to local councils how they should be investing in their water infrastructure. We are ensuring that councils are able to put forward their own plans.

From its inception, the previous Government’s reforms faced opposition from councils who rightfully felt their ownership of water assets built over decades by their communities would be forcibly removed. This policy stands in stark contrast to the principles upheld by our side of the House. Our plan, Local Water Done Well, recognises the importance of local decision-making and flexibility for communities and councils to determine how their water services should be delivered in their communities.

Ensuring water services are financially sustainable and rules for water quality and investment infrastructure are met are core parts of our approach to ensure that New Zealanders receive high-quality drinking water and water services at a fair price. We’re intentional in ensuring that councils are in control of this process. Local Water Done Well recognises councils and requires councils to provide the Government with plans to set out how they will deliver financially sustainable water services and water services infrastructure for ratepayers. If a council is unable to provide such a plan, the Government will have access to regulatory backstops, and we’re developing that policy and implementing it over the coming year.

As the Government confirmed in our post-Cabinet press conference yesterday, the Government intends to set out the first part of the new regime in a second bill by mid-2024 which will establish the transitional arrangements for the new water services system. This bill will set out provisions relating to council service delivery plans, transitional economic regulation, streamlined requirements for establishing council-controlled organisations under the Local Government Act, and it will also support Auckland Council to determine how they wish to create a financially sustainable model for Watercare.

A third bill will be introduced in December and be passed by mid-2025. This bill will provide for a long-term replacement water services regime. This bill will set out provisions relating to long-term requirements for financial sustainability, provide for complete economic regulation, and a new range of structural and financing tools, including a new type of financially independent council-controlled organisation. With Local Water Done Well, we will enable councils and communities to determine what works best for them while establishing clear expectations and bottom lines.

The National Party, the ACT Party, and the New Zealand First Party stand united in repealing the three waters legislation. We campaigned on this policy, we were elected on this policy, and we are now delivering on what the voters of New Zealand voted for. We’re committed to addressing these issues differently, prioritising localism and flexibility while ensuring robust investment in infrastructure and adherence to regulatory requirements. We believe we can work with councils and provide them with a level of autonomy to set out their long-term financially sustainable water service plans with the tools that we will provide.

Today, we are in the 12th week of our Government’s first hundred days. We are proud to report that we’re on track to fulfil another commitment to New Zealanders as part of our 100-day plan and to introduce and repeal the previous Government’s three waters legislation. I’m pleased that we are achieving our 100-day plan and we’re achieving it with this bill being passed as well tonight. Repealing this legislation paves the way for the introduction of a new regime, one that emphasises local delivery and ensures financially sustainable delivery of water services across New Zealand. I commend the bill to the House.

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

Hon KIERAN McANULTY (Labour): Thank you very much, Madam Speaker. Today is a significant day because we will be able to point back to today when, in the future, people receive rates bills that they can’t afford, they can look back to the decision that this Government has made to repeal a provision that would have prevented unaffordable rates bills but they repealed it anyway.

They went to the electorate at the election, and the Minister of Local Government crows that they were given a mandate at the election, that this was what they campaigned on—and, technically, that’s true. But they also campaigned on the basis of funding councils to do this work. They also campaigned on the basis of reducing rates. They campaigned on the basis of having council control, council ownership, and balance sheet separation. And that is dishonest, because you can’t do them all—the advice says so. Their own advice says so: the Department of Internal Affairs has on their own website, even today, advice that criticises the analysis that the Government has based their policy decisions on. This won’t work, and I think deep down they know it but they don’t care. They don’t care because this gets this issue off the table.

It also gets the issue off their books. When the Minister, on Morning Report today, declared that this will be cheaper, he didn’t say it will be cheaper for ratepayers; he said it will be cheaper for them. This makes it easier for the Government to pay for their tax cuts because they don’t have to continue to support councils to go along with this reform process. They promised councils they would help them pay. Many of the councils that opposed the original three waters proposals did so on the basis that the National Party promised they would help them pay for it. I know because I sat down in front of every single rural and provincial council in the country and looked them in the eye and walked them through what it was we were trying to do, and they got it. But they said, “The National Party, if elected, will help us pay for it so that we can keep council control and have our water services paid for.” They have broken that promise, and they have the gall to stand up and crow about being elected to do this. They told the electorate they would do one thing, and now they’ve done another and they’re patting themselves on the back—I think it’s disgraceful.

I didn’t come to this House to talk about water pipes, and I’ve listened to a lot of maiden speeches in the last six years—

Hon Rachel Brooking: I did!

Hon KIERAN McANULTY: —and no one else except Rachel Brooking has mentioned water pipes—and, actually, Rachel, I don’t think you did in your maiden speech, if I’m honest—but at the end of the day, this is the issue facing the country. I came to Parliament to advocate for working people and for fairness and equality. How is it fair and equitable, and how does it look after those that work for a living, when what the Government is about to pass will lead to rates bills that they cannot afford? It is not unfeasible to say that there will be some councils that go bankrupt without a financial guarantee that this Government promised them when they were campaigning. It is not unfeasible to say that there will be people on fixed incomes, many of whom are retired, that will have to sell their homes because they can no longer afford their rates bills. It is a sad fact, but this is what happens when a Government in Opposition promises something and doesn’t deliver it. There is a list of councils that, unless they join into an entity that has genuine balance sheet separation, will only have one option, and that is to increase rates.

Now, I live in Wairarapa, and in South Wairarapa that council has had no choice but to increase rates by 20 percent for two years in a row, and that doesn’t account for water services. But with the water regulator requiring councils to meet a minimum standard—which is a good thing—but without the economic efficiencies and the ability to borrow and the ability to remove the associated debt from councils’ books, they are hamstrung.

There will be councils that want to join with others but can’t because those others don’t want to, because why on earth would they voluntarily agree to sign up to take on the debt and the burden that the other council brings? They will be left in the lurch, and many of those regions are represented by the members sitting opposite today.

So when you think of places like the Wairarapa electorate, which has five district councils and each and every one of them is predicted to have bills in the thousands, per ratepayer, per year, just for water, and then you vote in favour of something that’s going to make it even more expensive, that’s going to be a difficult thing to justify in a couple of years. It’s not just limited to Wairarapa; it’s also every region in the country. The West Coast is now left stranded. There is no way that Canterbury will join them—no one will. I feel sorry for people like Jamie Cleine, who’s fought hard for his community, but has absolutely nowhere to go now—nowhere to go.

The Chatham Islands had a bespoke arrangement for them. They’re now out in the lurch with no promise of how to pay for it. The most isolated community in the country is left out in the cold, yet again. There are communities from the Far North down to Southland who will now be wondering what on earth they are going to do.

Now, let’s remember that the original proposals of four entities did indeed meet a lot of opposition from local councils, but there hasn’t actually been any talk from the Government about the reaction to the proposals once they were amended. Those amendments took on board the feedback that councils gave, and, actually, a majority of councils supported that because it was regionalised and because it achieved balance sheet separation. Because every council had a seat on the regional representation group, they had input and they had influence, but they were able to remove the debt from the books, and that is the crucial point.

The Minister refused to answer questions about balance sheet separation. I suspect that’s because, deep down, he knows that he can’t deliver it. They promise financial sustainability when answering about balance sheet separation, but they don’t talk about balance sheet separation.

The Prime Minister today was asked by Newshub about his numbers to justify their predictions. He walked away. It is shameful—he walked away. He didn’t want to front up. Why would that be? The Prime Minister fronts up on any topic and on any question and he does so, on most parts, with a smile, although the smile’s not as wide as it once was these days, I might say. But you don’t just walk away when a question is inconvenient. He walked away because he didn’t have an answer, and they have never had an answer.

We have been asking the National Party to provide numbers to back up their claims right from when they first announced this policy 12 months ago and they have refused every single time, and now they’re in Government and they’re refusing again because they know it doesn’t stack up. They know that their claims can’t be met. They know that ratepayers will pay more under their plan than they would have done under the affordable water plan, and it is a concerted effort to the point where they won’t even refer to the actual name of the thing that they’re repealing, because they know that if they utter the words “affordable water”, people might click to the fact of what it is that they’re trying to repeal here.

They’re talking about presenting this as if it is the thing that was originally proposed, not the thing that they’re actually repealing, and I think that’s disingenuous. What they are repealing, and what the members of the National, ACT, and New Zealand First parties are about to vote to do, is repeal the affordable water reforms—the reforms that the Government’s own advice shows would save ratepayers thousands a year by 2051. It’s not a $9,000 saving in 2051; it is a $9,000 a year saving then, and it doesn’t jump up in 2050. This is an accumulative cost every year—rising every year because councils have no option but to raise rates.

They opposed the thing that would save ratepayers money on one clear promise from the National Party—that they would help them pay for it—and they have broken that promise. They have walked away, and I think they’ll rue this day.

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Madam Speaker. This repeal, this evening, is reckless, irresponsible, and absolutely a sign of the direction this new three-headed Government is taking us.

It is a lot of marketing spin in the Minister of Local Government’s speech which, by the way, totally contradicts his attitude in many other areas. Supposedly, he cares about local decision-making; let’s see that happen in transport. Absolutely not. Supposedly, he cares about local communities, but, in fact, as we know, that is all just marketing spin put around a repeal. In fact, there was a lot of good work done; there was a lot of consultation done with local councils, with iwi, with hapū, to present a collective and informed approach for us to deal with the historic under-investment and under regulation of our water services.

This is a problem that built up over decades, starting probably in the 1980s and 1990s when we had the neo-liberal reforms that asset-stripped local councils and Government, and led to downward pressure on the contribution towards our infrastructure from people who live in our communities, and now we’re paying the price. Here in Wellington we’re paying the price, the Chatham Islands will be paying the price—I’m the representative for the Chatham Islands as well as Rongotai, south and east Wellington. The reality is that even if the reforms put forth by the last Government were not perfect—and the Green Party had a lot of constructive feedback and worked constructively and we were able to improve a lot of things—I think, towards the end, the process actually delivered quite a good outcome.

What we heard tonight from the Minister in the committee stages was a whole lot of nothing. Who did he actually talk to? What councils has he actually consulted with? What iwi and hapū have actually been consulted with? Almost none. No, they believe their own rhetoric. That is the scary thing; that is very clear. When that Minister talks, he believes, zealously, the rhetoric of the campaign, yet the things they campaigned on—as the previous speaker, the Hon Kieran McAnulty, quite astutely put—were contradictory promises. So they’re somehow promising that it would cost less under their plan, that ratepayers wouldn’t be receiving this huge rates burden to deal with the decades of under-investment, and, you know, they promised the world and we’re going to see very soon that it’s not come to fruition.

In fact, local councils now are being put in a very difficult position because they had already planned for the transition to these other entities and now they’re being told that they have to put all the water services back into their long-term plan right at the last minute. Yet another example—classic in New Zealand; this has been happening for a couple of decades—of central government just putting more responsibility on to local government without the funding to support it and then blaming local government when things start to fall apart.

So that’s what we’re seeing; we’re seeing a reckless, irresponsible, and shallow approach to policy making that is chucking out years of work that was actually going to start to address something that everyone in New Zealand, I think, right now, agrees is a serious problem. Because I know we’re seeing the problem in Auckland, we’re seeing it in Wellington, we’ve seen it in Havelock North, we’ve seen it in Queenstown: insufficient investment in the infrastructure that’s needed for clean, healthy water, and insufficient regulation on the part of the Government to make sure that councils were meeting their obligations. Now they have to meet those obligations, but they need to be given a funding mechanism.

Any time this National Government runs into a funding problem, they promise that there will be some sort of private interest or some private source of funding. Well, we’re going to have to pay for it at some point. Somebody has to pay for it. I think it would be fair if we acknowledged that as a community we all benefit from investment in this infrastructure and we should be using general taxation to pay for some of it and we should be using user charges where that makes sense. But I don’t see how repealing this legislation tonight is going to result in the kind of responsible, practical, pragmatic solution that we need to have. So I’m really disappointed.

I think that the voters of Aotearoa New Zealand are going to be disappointed when they realise that they voted in some people who are not very serious about solving problems but are very serious about tax cuts for the incredibly wealthy and their corporate donors—a lot of action on behalf of the corporate donors, but not a lot of practical problem solving when it comes to long-term infrastructure. There is a whole lot of rhetoric, and I know that the Minister believes it, but it is just that—it is just rhetoric. I look at the members opposite. I don’t know; they want to trust their leaders, but I think they’re looking a bit dubious now. They’re suddenly realising that, actually, the people they represent out in the rural areas are going to be hit with bigger rates bills because of the National Government’s irresponsible approach.

Let’s just be honest: there was nothing divisive fundamentally about the approach of the water reforms, because it was started under the previous National Government after the incident in Havelock North, where people died due to lack of safe drinking water. That process started under the Department of Internal Affairs. Now, what happened under the last Government was very clear: there was an organised political campaign from the right, from the classic divisive politics, the sort of John Ansell—what are they called? Hobson’s Pledge?—types. They’re the ones who bring the division. There’s nothing divisive about co-governance, because the previous National Government actually used co-governance and introduced it, but as soon as they’re not in Government they will stir up anger and division and they will use that to disrupt a constructive process. There’s no such thing as constructive opposition from the National Party or the ACT Party. Maybe a little bit from the ACT Party—I apologise. Mostly from the National Party. It’s not constructive opposition; it’s not serious policy making, and we’re not going to have the solutions we need.

The really scary part of all of this is that we need it now more than ever, because as climate change hits—and it’s coming in fast now, as we saw last year with Cyclone Gabrielle, as we saw with multiple flooding events—we’re going to be hit by this stuff year after year, and it’s going to get worse and worse. And there’s no plan to reduce the climate-heating pollution that New Zealand is contributing to the atmosphere. There’s no real plan to put in place the infrastructure and the community resilience, because the priority is to let the rich get richer, let the tobacco companies make more profits at the expense of our youth—

DEPUTY SPEAKER: Back to the bill. It’s about water.

Hon JULIE ANNE GENTER: It is—it is. And it’s all related, Madam Speaker, because it’s all about priorities and what the real priorities of New Zealanders are and whether it is possible for us to work together to solve our collective challenges, like climate change, which is going to affect water, which is going to affect the way we grow food, which is going to affect the way that we move around our country. All of these things are interrelated, and the Green Party is standing here saying this repeal is irresponsible, it is reckless, and the country will have to pay for the lack of investment at some point in our infrastructure. So goodnight. Pō mārie.

DEPUTY SPEAKER: Members, the time has come for me to vacate the Chair. The House is suspended until 9 a.m.

Sitting suspended from 10.03 p.m. to 9 a.m. (Wednesday).

TUESDAY, 13 FEBRUARY 2024

(continued on Wednesday, 14 February 2024)

Bills

Water Services Acts Repeal Bill

Third Reading

Debate resumed.

CAMERON LUXTON (ACT): Thank you, Madam Speaker. The three waters reform was a highly bureaucratic, divisive, and unfair policy that appropriated assets from communities which had diligently built them up for generations. ACT has been consistent in our opposition to these three waters reforms, which we are now repealing. Our spokesman Simon Court said, during the first reading on 9 June 2022, that “ACT opposes … [Labour’s] three waters reform, and should we be part of a future Government, we will act to repeal it.” ACT stood against the original passing of the Water Services Entities Bill. ACT campaigned on repealing it during the election.

I am proud to be here today, by the will of the people, speaking in favour of the bill which repeals the original legislation. I commend this bill to the House. Thank you.

ANDY FOSTER (NZ First): Just made it in time. We are doing exactly, as a coalition, what we said we will do, what we campaigned, as you just heard, on repealing this legislation, which was, I think you would have to say, deeply unpopular and deeply divisive. We’ve heard a lot of different things from the Opposition benches about why this shouldn’t be repealed, and I have to say that none of them, if I may use the pun, hold a whole lot of water. [Interruption] Ha, ha! That one didn’t take any research at all.

But the first one, I think probably the core one that’s been talked about, is that rates will go through the roof. Now, we know that councils are going to be responsible under the legislation which is being repealed for at least the next two years for water. So talking about what’s going to happen to water bills, the rates bills, in the next year is kind of meaningless, because councils are still going to have water on their books for the next two years.

Then there is this thing about, well, rates are going to get much, much higher over a period of time, and it’s as though there’s a magic money tree that somebody is going to be paying for the water services. We know that there’s a lot of investment that is going to be needed in water. That’s very, very clear. The question is how much. But we know also that all of us are taxpayers, most of us are ratepayers, and all of us—I can guarantee all of us—are water consumers.

What we’re repealing is something where the bill was ultimately going to be changed. In fact, at the beginning, councils were still going to have to collect it, because the billing systems weren’t going to be set up. So it was still going to have to go through councils, and the original proposition was: councils, you’re going to have to bill people for something that you have absolutely no control over. It morphed into: councils, you’re going to have to bill people for something which you can have some sort of modicum of influence over. But they’re still going to have to bill people until billing systems are set up.

I think you could take it as read that water was going to have to be paid for through meters at one point in time, because otherwise you can have an unelected body, effectively, setting up some kind of rate. That’s not a very attractive proposition. So we’re going to have water meters in, and in some areas delivering water meters across the board is going to take probably a decade. It’s a very big investment proposition. But the key point is that people were going to have to pay.

We’ve heard some really big numbers talked about over there, and I can’t remember all the numbers—I think it was $9,000. Was it more—$9,000 more per household that I think Kieran McAnulty was talking about. But he did talk about one of them, which was Tararua District, and he said that over a period of 30 years it was going to cost, I think he said, $600 million, 12,000 households. You work that out—that is $1,666.67 per household per year. Well, actually, people are paying rates right now for water. Many of them are not paying much short of that. So that’s not actually a particularly astronomical sum.

The question you would always ask with these things is: what are the assumptions that you’ve built into the numbers that you’re talking about? One of the problems with the model that we’re repealing is that it was predicated on saying if we do this, if we make these things bigger, they’re going to be more efficient. Bigger is not always more efficient. We know that. Sometimes it is, sometimes it isn’t, but it’s predicated on that. And if you put a model in place which says we’re going to put in, I think it was, 4 percent improvement in efficiency every year in this model, but in the status quo or any other model we’re not going to recognise any possibility of any savings or any efficiencies, of course it’s going to look better. Garbage in, garbage out—and that’s basically the level of analysis that was done in that area.

Then, of course, is the very, very convoluted model of governance, which I think is part of the reason that they are over there and we’re over here today, because people didn’t like that. What that set up is two different classes of New Zealander. Some people—Willie may well like that, but I think most New Zealanders didn’t like that, and that’s why they voted accordingly. That’s one of the reasons that this Government said that it didn’t want to continue with that and is doing the repeal as it is doing the repeal today.

Hon Willie Jackson: You should hang your head in shame. You were a disgrace as a mayor.

ANDY FOSTER: Very kind of you, Willie, to say so. We were actually getting on and—

DEPUTY SPEAKER: I think we’ll cut the personal attacks, thank you.

Hon Willie Jackson: I’m just saying he was a disgrace as a mayor.

ANDY FOSTER: Well, at least I’m not a disgrace as a member, Mr Jackson, which you have been and have been all along.

Hon Willie Jackson: Sit down, you mug.

ANDY FOSTER: Madam Chair, I think that is unparliamentary language.

DEPUTY SPEAKER: Yeah. The Hon Willie Jackson, I would ask you just to tone down the language, please. Otherwise I’ll have to get you to stand, withdraw, and apologise if it happens again. Thank you. Continue.

ANDY FOSTER: So let’s be clear. There is no magic money tree in this. Somebody is going to pay for the water system. Do we need more money invested in water? Yes, we do. But, again, there’s this issue of potentially gold plating. So the legislation that we are removing went all the way down to literally: two houses made a water system—a small group of houses together. By and large, my understanding is that those people did not want the Government in some way or other intruding on their provision of their water services. Was the standard of water that we are looking to deliver reasonable?

I’ve also heard about getting water off the council’s books—getting water off the council’s books. Now, for councils that’s pretty attractive in some ways, because it means there’s a lot less discipline on them. But what you really need to make sure is that councils don’t say, “Well, we don’t have to pay for water now. So now our rates have gone down, we look much better, so now we can go and spend money on something else.” But the reality is, while it lets councils off the hook in that area, what it doesn’t do is let the ratepayer, the water consumer, off the hook, because that money is still coming out of their back pocket. and that’s what matters to people. If you’re looking at a cost of living crisis, the important thing is the total cost of living, and that includes both rates and water. We heard a little bit about what councils—

Hon Willie Jackson: Do you have an alternative? Do you have an alternative? I’m just asking, Madam Speaker, very respectfully. Do you have an option—do you have an alternative?

ANDY FOSTER: Madam Chair, I’m actually enjoying the interjections, because it actually gives me time, having just come from select committee to here, to actually look at the notes that I’ve got and get the computer working there.

So I also heard from the Opposition—I actually always listen very carefully to the people who are worth listening to on the other side. There’s this assumption that setting up the entities which were set up in the legislation that’s about to be removed—that somehow that was magically going to fix the pipes. Well, no, it wasn’t. You still need people to get out there and fix the pipes. So Ginny Andersen was talking about saying, “Well, you know, it’s going to take us 12 months to set these organisations up.”, but there’s still going to be water coming out of the ground in the meantime. The reality is that you still need people to fix those pipes. Setting up the organisations was not going to do that. All it was going to do is simply move—have I run out of time? Did the clock not work?

DEPUTY SPEAKER: Keep going.

ANDY FOSTER: OK. Right. You still need the people to do that. You still need to build the workforce. And one of the things that we’ve heard—and this is right across the board, not just in water provision, but right across the board—is that we need a lot more people. We need to upskill our workforce to be able to do that infrastructure work. It doesn’t matter whether it’s roads, whether it’s housing, whether it’s water—all of those need trained people. So we need the workforce to be able to do that.

We’ve also heard a lot about balance sheet separation. Now, the proposition which we are repealing was based on borrowing an absolutely astronomical sum—something like $160 billion to $180 billion. So what that was doing, basically, is to try and kick off the cost of delivering our water system to future generations, and I don’t think that is particularly responsible. I mean, councils already borrow for the CAPEX to build and to fix and to upgrade water systems, so there might have been a marginal benefit there, but it would have been a relatively marginal benefit.

I’d also like to mention that for most councils, there will already be a significant amount of money in their long-term plans (LTPs) to upgrade water systems, and they are much more focused on that and they will continue to be more focused on that. As LTPs have rolled out this year, I’ve got absolutely no doubt there will be more money put in by councils right across the board to do that.

We’ve also heard from members across on the other side, from Julie Anne Genter. She talked about councils needing to replan because of this. I think the repeal of this was really, really well signalled by the coalition Government coming in. People could look at the polls and say it’s quite likely. In fact, councils have had to go through the whole process over the last little while of going: is the previous Government going to put their regime in place? What’s that regime going to look like? And, of course, it kept on changing.

So I think that this is quite appropriate now to repeal this and then to get on with doing the replacement legislation. We’ve had the timetable for that and we will get on and do that as the incoming Government. Thank you, Madam Speaker. I commend this bill to the House.

DEPUTY SPEAKER: This next call is a split call, and I call Mariameno Kapa-Kingi.

MARIAMENO KAPA-KINGI (Te Pāti Māori—Te Tai Tokerau): Mōrena, Madam Speaker. Kia ora e te Whare. I like to think I’m going to be one of those who is listened to this morning. Mōrena tātou.

I’m going to frame my kōrero from Te Tai Tokerau in terms of our experience of three waters—and the rohe spans, if you’re not aware, from Te Rerenga Wairua tai te Atatū ki Tāmaki, so that’s a pretty big piece of dirt and that’s where I roll.

Te Tai Tokerau is particularly ticked off with this repeal and, actually, all the other repeals that are just rolling over us without any real debate and discussion, particularly with Māori and particularly with Māori from Te Tai Tokerau. If this continues, things like what happened at Waitangi, with 68,000 people rolling in—there’s probably more to come.

Te Tai Tokerau is ticked off, to be honest, and unhappy, mistrusting, and yet again isolated by this repeal process. Poverty in paradise—I want that to sink in. Poverty in paradise is where I live. This is not a pity party conversation; it is simply a fact. And when I listen to some of this discussion it just astounds me—the lack of reality. I don’t know where the privileged live, but let me tell you, it is not where I know, it is not where I live, and therefore, unless it’s appreciated in a real way, we will continue to be ignored and treated with the disregard that we already feel and have felt for a very long time.

Hapū, whānau, marae, iwi, Maōri businesses, Maōri providers, and Maōri entities are always prepared. We’re always prepared to take a risk because this is the opportunity—are they actually going to understand us? Do they really care and know about us? The general answer is no, because privilege blinds and literally you can’t hear us, and it blinds you to the real reality of what it is for whānau in the Tai Tokerau.

Yet again, we’re still prepared to take risks. We still think, “OK”, and ironically three waters was one of those. Three waters was one of those and so much so that we gave ourselves a name, Waipuna aa rangi. We got ourselves organised, we got ourselves from Tāmaki to Te Rerenga Wairua. So you had senior, senior Maōri leadership getting together and saying, “OK, is this the time? Is this the time that as Māori senior leadership we get together and we get ready, despite the delay on the other side in some other parties? Don’t know whether they want to—the other parties.” We as Māori leadership got together with our iwi leaders, our hapū leaders, and we decided to get a structure together, and we got that. And we called it Waipuna aa rangi. So we were feeling pretty pleased with how we were progressing this three waters programme.

Hon Willie Jackson: How dare you do that!

MARIAMENO KAPA-KINGI: I know; the audacity, right? So we took the risk by agreeing to work together, to fight together, to organise and design together the state of infrastructure for water across the entity A rohe, which reaches from Tamaki to Rerenga. We set up our structure. We even dared, Willie, to meet the likes of the Department of Internal Affairs team on several occasions.

Hon Willie Jackson: Māoris are getting out of hand!

MARIAMENO KAPA-KINGI: Exactly. I don’t mind these interjections; they’re quite nice.

But it makes sense to me, and the reason it makes sense to me is that it is understood in a very Māori way, and that’s the point that I often hear and heard particularly last night and the nights before—that it’s not getting understood. So I want to make those points.

We met with hapū, we met with marae—many marae; not all 219 but a whole bunch. We didn’t meet with all 31 iwi but as many as we could as we got ourselves organising together. Cyclone Gabrielle just came along and rolled us over and yet we continued to be ignored.

Let me just mention the Far North District Council. There is a $660 million infrastructure deficit and no one’s coming, except this repeal—to just land right on the top of it. So mayor Moko Tepania wasn’t in here yesterday, and he wouldn’t be because we met with him and we understand the reality of that Far North District Council. So when I hear this privileged conversation about, well, you know, “There’s someone throwing lawn cuttings over my gate; please, somebody sort that out.”, we are nowhere near that. We are a rohe that is devastated by floods. We don’t have enough water. When it’s summer it’s a drought, and all of those issues. We deal with those on a daily basis.

DEPUTY SPEAKER: Just a note to the member that her time has expired. Would you like to make your closing comments?

MARIAMENO KAPA-KINGI: Yes. In Whangaroa we still have to buy and boil our water—we have to buy it and boil it. We don’t have the privilege of many others. We buy it in our shops, take it home, pour it into our jugs and we boil our water. What is that about? So in that regard and in all of my discussion this morning, we simply cannot support this bill. We reject this bill and do not commend it to the House—please; if anyone’s listening. Kia ora tātou.

LAN PHAM (Green): Tēnā koe, Madam Speaker. As the member Mariameno Kapa-Kingi has just pointed out, it’s about clean, safe drinking water; it’s about waste water that isn’t discharged directly into our waterways; it’s about stormwater that doesn’t contaminate the places where our kids swim. These are the outcomes that we and our communities so desperately need and want, and I want to thank the previous speaker for grounding that reality in Te Tai Tokerau as an example.

These are the things that are now further away thanks to the passing of this Government’s Water Services Acts Repeal Bill. I found it quite incredible to hear one of the Government members refer last night, during the previous readings, to the reforms of the previous Government as “an overreaction” to the Havelock North tragedy, when thousands of people got sick and people lost their lives from the water simply coming out of their taps.

The inquiry conducted, as a result, estimated that as many as 100,000 Kiwis get sick from drinking contaminated water every year, and more recently the Ministry of Heath’s report on drinking water found 21 percent of our population here in our purportedly clean, green Aotearoa received drinking water that was not demonstrably safe. We don’t have to look any further than what happened in Queenstown in November and December, with cryptosporidium poisoning and months of boiled water notices, to face the reality that (a) these issues still exist—and this was a very well reported one, but we know that they exist around the country every day—and (b) these failures of political inaction and decades of under-investment impact not only the health of our people but our environment, our economy, and our international reputation.

So, no, I don’t agree with the member that these water service reforms of the previous Government were an overreaction. But the repeal of these bills certainly is: a knee-jerk, misinformed overreaction that takes us further away from effective water services that deliver for human health and don’t pollute our previous te taiao along the way.

My fellow members and I asked a multitude of important questions throughout the prior readings and committee of the whole House, and they were still left unanswered. And they were really basic, reasonable questions about Te Tiriti rights being protected, and the implications for councils who were right in the middle of their long-term plan consultations—the most important conversation they had with their communities in the entire term, when ratepayers suddenly find this Government is saving money by passing the cost on to ratepayers.

The Minister was asked many important, relevant questions, and had very little to nothing to say in his answers. And I suspect they’ve gone unanswered because this Government simply doesn’t have the answers—because their entire policy platform is based on empty rhetoric with no substance. Well, luckily, the way forward, which this Government is welcome to pick up—nau mai—is pretty clear. It’s elements like governance structures and the delivery and implementation of services that uphold tino rangatiratanga of iwi Māori and hapū under Te Tiriti. It’s things like enabling strong local voice to have meaningful influence on decisions, and giving local government the tools for funding and financing to actually avoid raiding their communities into oblivion. It’s about nature-based infrastructure solutions, integrating it all with good land-use planning and spatial planning, and, hey presto, you’ve got a long-term way forward.

The Aotearoa that I and so many Kiwis want to live in is where we don’t have fear or doubt about the water coming out of our taps, or question whether our kids or pets will get sick from just coming into contact with our waterways. This repeal keeps this Government on track for getting us back to nothing but the same old political inaction and indecision, leaving our kids, grandkids, and future generations to ultimately pay the price, and the Green Party wholeheartedly opposes it. Thank you.

STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. It’s a pleasure to speak on the Water Services Acts Repeal Bill. One thing about democracy is it is a contest of ideas and we’ve heard that playing out in the debate this morning. This is only a few months after the election where all of the coalition parties campaigned on doing what we are doing right now. The people spoke, and the people gave the coalition an overwhelming victory, and we’re delivering on our promises. That’s something that the National Party, the ACT Party, and New Zealand First will do: we’ll make promises and we will deliver on them. So, with that, I commend the bill to the House.

Hon WILLIE JACKSON (Labour): What a disgraceful, shameful day for this Government. This is such a shameful day. Particularly these Māori members—

Jenny Marcroft: Pick another word.

Hon WILLIE JACKSON: —they should hang their heads and shame. Jenny Marcroft, you’re a disgrace. You’re a total—do you laugh away? But this Government only knows how to tear things down rather than build New Zealand up.

Now, what was this all about? What was this all about? This National Government doesn’t even know. Why are they repealing the Water Services Act? Well, that’s right: because all the Māoris are going to steal the water and that’s why they’re repealing the Act. That’s what they’re responding to: they’re responding to all the Māoris are going to steal the water and they’re responding, sadly, to their racist supporters who were running these lines, running the issue up, they were running these lines in the region. It’s shameful. Jenny Marcroft knows this better than anyone. She was part of Labour at the time—and trying to join Labour at the time. So she knows of the racism that was happening out in the regions. It’s a spiteful policy from the right. It’s a reactionary response.

Now, Labour, we foresaw this—we foresaw this. We embarked on a water reforms programme. As the Opposition will know, John Key’s Government sold 49 percent of our hydro water assets and triggered a Māori claim on water that the Waitangi Tribunal ruling told the Crown that Māori did have an interest in water and that it was the Crown’s obligation to work it out. So that’s what this Labour Government was attempting to do, and I want to mihi to our tuahine Nanaia Mahuta for her courage in driving this kaupapa. What was Nanaia Mahuta’s big sin, everyone? Oh, that’s right. She wanted a partnership with Māori and the Crown. Oh God, it was so—that was so scary. It was so shameful. How dare Nanaia go down that track—

DEPUTY SPEAKER: Full names.

Hon WILLIE JACKSON: —of trying to get a partnership with Māori and the Crown and trying to balance things in terms of water. Oh, why wouldn’t you have Tainui and Ngāi Tahu involved in trying to solve this water problem? They’ve got quite big asset bases. This bill was always going to be huge and Māori do have a relationship with the water that the Opposition had forgotten—particularly the Māori members, as I said, who should hang their heads in shame—and so how dare this Minister go down that track. And what did Nanaia Mahuta get for that? I ask Māori members here today: what did she get? She got the most shameful, racist attacks in the history of this Parliament—in the history of this Parliament. She was attacked, personalised, compared to apes—gorillas—it was a bloody disgrace. This Parliament should hang its head in shame in terms of the attacks on our tuahine. So today I want to mihi to her. I want to mihi to her for her courage, for her bravery, for her strength.

E mihi ana ki a koe, e te tuahine, mō tō kaha ki te kawe i tēnei kaupapa, ki te kōkiri i tēnei kaupapa i ngā wā katoa, ahakoa he nui te whakaparahako ki a koe, Nanaia, e tika kia mihi ki a koe mō tō kaha ki te tautoko i tēnei kaupapa mō ngā iwi katoa.

[I acknowledge you, sister, for your strength to carry this initiative, to progress this initiative at all times, despite the scale of the discrimination of you, Nanaia. It is appropriate to acknowledge you for your strength to support this work for all people.]

It is appropriate that we remember that, particularly members on this side who saw what she went through and had to put up with this rubbish from the other side. We saw the three waters billboards—it was a bloody disgrace. They can laugh about it or whatever, but I want to mihi to her and mihi to Kieran McAnulty, who took up the challenge and tried to explain partnership, tried to explain co-governance; that it wasn’t going to bring the nation to its knees like the disgraceful former Mayor of Wellington tried to say earlier today.

In terms of National, it’s a punch in the face for Māoridom and a slap in the face to domestic water users. The National Government, with support from ACT and New Zealand First, live in a magical fairy world where a lack of new funding for water infrastructure and no Government guarantee on the new entities will all be unbelievably solved by local councils. The Auckland Council has already said it’s impossible for Watercare to be carved off without a Government guarantee, which is something the Prime Minister and the wonderful local government Minister has ruled out. They want to set up a system, but they don’t want to pay for it. Instead of protecting domestic water users from enormous jumps on user-pays this right-wing Government is promising them. That’s where we’re going: it’s all user-pays. The Prime Minister refuses to tell Kiwis how much his expensive water policy is going to cost, alongside the inevitable legal action from Māoridom. We know there’s no alternative.

Where will the Prime Minister and local government Minister be when the local elections are on? I think we’re all going to get the popcorn there because we’ll know that we’ll be debating a water crisis that this Government has manufactured. Will the Prime Minister and the local government be explaining to ratepayers—here’s the big question: will they be explaining to ratepayers how their rates have just exploded? I can bet you right now that the PM and local government Minister won’t be anywhere near this deeply flawed water policy once ratepayers and renters see the spike in prices.

How on all earth is this Government going to convince bond investors and rating agencies to lend to these new water assets without a Government guarantee? These are some of the questions that we put through committee. So why are we on the left having to lecture our friends on the right about capitalism? I mean it’s amazing, really, how the left have to look after the right—

Hon Phil Twyford: That’s all this comes down to.

Hon WILLIE JACKSON: It’s incredible, isn’t it, Phil Twyford? We already have to lecture them on race relations. Now we have to talk to them about the basics of capitalism. But the left, I suppose, will always have to do that to people on that side. There’s no new money for investment, and without any Government guarantees you can’t get an investment. It’s pretty simple.

That side of the House doesn’t care because, as we all know, they’re all rich cats on the other side who can afford to pay their water rates—all rich cats. They don’t want to know about the average person and they don’t care if the rates go up because, politically, they can say, “Well, it’s all the council’s fault. It’s not our fault, it’s all the council’s fault.” We know the kōrero that’s coming. They’re screwing the scrum—they’re screwing the scrum, the former disgraced Mayor of Wellington. They’re smearing—and the former disgraced Jenny Marcroft from Labour.

DEPUTY SPEAKER: Order! No personal—keep the standards up, please.

Hon WILLIE JACKSON: OK, Madam Speaker. Thank you. But they’re screwing the scrum, Madam Speaker. They’re screwing the scrum against ordinary Kiwis. In terms of this, it’s more important for the right to repeal the Water Services Act and cause all the damage that it will do, just to placate their far-right thinktanks and their redneck supporters out in the regions.

Hon Member: That’s most New Zealanders you’re blaming.

Hon WILLIE JACKSON: No, it’s not most New Zealanders. Most New Zealanders don’t care. Most New Zealanders care about water, and we will be found to be on the right side of history.

That side of the House sold this water reform as stealing the water for Māori and they’re now left with a system that will not work. You mark our words: this is a Government that only knows how to tear down, and when they do build it’ll cost Kiwis an arm and a leg. We know this. We know that this will be true.

I think that it’s been one of the saddest campaigns that I have witnessed in many, many years. The irresponsibility from that side, it will all come home to roost because we know the three-headed monster on the other side just will not be able to cope and manage the type of criticism that will come their way once the rates go up. The people will not put up with it. They will realise the real agenda of the right was always to privatise the water. We know that that’s where it’s going. We know it’s going; their whole front was “Boot the Māoris, boot the Māoris, the Māoris are trying to steal the water.” But we know what the real strategy is, and it’s about those rates going up. It’s about placating their rich right-wing thinktanks. A shameful, shameful day for this Government, who should hang their heads in shame.

NANCY LU (National): I commend the Water Services Acts Repeal Bill to the House, because we don’t agree that the only option is to take assets away from all the ratepayers. We believe that there is no one plan for all, especially not coming from the central government here at Parliament. So let the local councils do the work to service their own people. I commend this bill to the House with my full support.

DEPUTY SPEAKER: This call is a split call—I call Ingrid Leary.

INGRID LEARY (Labour—Taieri): One thing that’s really certain about what this Government is doing is they are putting up rates for ordinary New Zealanders; they are putting up rents for people who will be at the brunt of those costs, ordinary New Zealanders; and they are setting up councils to fail. It is such a shameful day. I echo the words of my colleague Willie Jackson: this is such a shameful day.

If we look at why the affordable water reforms were set up, we had people dying from contaminated water in Havelock North. There were four deaths in 2016; there were 5,500 people who got sick. This is a matter of fact; it is a matter of record. We’re not making these stories up.

Then we had, last year, stormwaters in Auckland. A lot of the waterways were blocked. We had 10,000 properties affected. We had $1.5 billion worth of private insurance payouts so far—that’s just so far. People saw cars swept down the road. Lots and lots of displacement, lots of anxiety, lots of mental health issues as a result of those storms. And guess what? With the repeal of this bill, much of that problem is not going to be resolved. In fact, the Auckland Council predicts that another 50,000 properties are at risk if there is going to be another weather event like that. With climate change, you can guarantee that is going to happen at some point.

What Labour did was follow up on years of planning. There was very careful stewardship, there was careful analysis, there was data gathering, there was legislation that was written up. There was a lot of thought and planning into scale and efficiency—how we could resolve this problem using scale, using efficiency, using mechanisms such as balance sheet separation that worked—so that we could get an intergenerational solution to the problem.

We had Te Mana o te Wai, which was explained simply in this House as just putting the importance of water at the centre of the legislation. There is nothing scary about that. We had a management system for stormwater in Auckland. We looked at the special needs of rural communities, of farming communities that had invested into some water supplies that had different needs from urban communities. We had a consumer protection system in place which meant there would be inclusion; that people would not be left out and be unable to afford water; that there would be a fair pricing and charging system; that there would be an element of user-pays. This was done through very careful management, and what happened last year was an election and there was a cynical, racist strategy from the parties on the right—a misinformation campaign. Because there is nothing easier as a way of scaring New Zealanders than to pull out the old race card and start to have a personal vendetta against the Minister who was leading the charge, the Hon Nanaia Mahuta.

We had thousands of submissions. I sat on the select committee—I had the privilege of chairing the Finance and Expenditure Committee for some of the process—and we had very thoughtful and considered submissions. But we also had thousands and thousands of form submissions basically promoted by the New Zealand Taxpayers’ Union. But we listened, and on that committee we realised people wanted more local voice. So the system was changed in order to be able to facilitate that local voice. That is what good governance is. Instead, what happened is the right got in, they had a coalition agreement which said, “We will agree to repeal this even though we have no idea what we’re going to do to replace it.”—no idea, no plan. “We’ve got in, winning at all costs.”, which is the strategy that the right has used. Suddenly they realise they’ve got to do something, so what are they going to do? Ram through this repeal bill with no select committee stage.

Hon Member: Outrageous.

INGRID LEARY: Outrageous, after all the years of work that went into it; no select committee stage and no plan and, now, setting up councils to fail.

We’ve seen it from the Minister. From the moment he met with Tory Whanau from the Greens, the Mayor of Wellington, to try and show that he was a strong Minister, he was going to blame the council already. The writing was on the wall: this Government is setting up councils to fail. We’re already seeing the rates response; double digits. That is going to affect pensioners in my electorate, it is going to affect first-home buyers, it’s going to affect ordinary New Zealanders, and most of all, in my view, it’s going to affect renters because those costs will be passed on.

This is an assault on ordinary people. It’s an assault on the vulnerable. It’s a shameful day and I am so disappointed in the process this Government is using.

CAMERON BREWER (National—Upper Harbour): “Stop three waters! Stop three waters!” Can’t we remember those signs? Can’t we remember those signs on the gates of farms all round New Zealand, on the fences of Auckland flats, on the overbridges of our provincial cities and towns? “Stop three waters”—it was a huge campaign. Only 26 percent of New Zealanders, at its peak, supported three waters, and, ladies and gentlemen, Madam Speaker, three waters is gone by lunchtime. This is a Government that’s delivering in its first 100-day plan. This is a Government that’s listening to democracy. This is a Government that believes in localism. We have worked with local government and a number of people across this country to get to where we are at, and local control of water assets, local ownership of water assets, is coming home.

The confiscation of local water assets continued despite their rebranding—and we remember their rebranding, but this three waters policy of theirs was very unpopular. It took out two local government Ministers. It took out two Prime Ministers. It took out one Government. It also took out the local government Ministers’ seats—they also lost their seats at home. That’s how unpopular it was. New Zealanders did not want it, and this Government is going to deliver on a much better option, with a technical advisory group that is going to blow Mr Jackson’s mind. I commend this bill to the House. Thank you.

Hon PHIL TWYFORD (Labour—Te Atatū): Madam Speaker, thank you. Our system of water infrastructure in New Zealand is utterly broken. Too many New Zealanders simply don’t have access to clean, safe drinking water, and colleagues in the House have given examples of that this morning.

In our biggest city, the failure over multiple decades to invest in waste water and stormwater infrastructure means that our streams, our creeks, our bays, both of Auckland’s wonderful harbours are chronically polluted with the sediment and the heavy metals that run off our streets. Whenever it rains—whenever it rains—beaches are declared off limits. You can go to the council website and see it. The red flags go up. It’s not safe to swim in the harbours around which our biggest city is built. There’s something really shocking about that.

The other big problem that we inflict on ourselves as a country because we don’t invest in adequate water infrastructure is that the lack of pipes for drinking water, for waste water, for stormwater is a handbrake on the building of new homes. It’s one of the main reasons that our towns and cities do not grow in response to demand. Houses don’t get built, and every time that happens, the price of housing goes up and our families get poorer and homeownership rates go down and more people are homeless. There’s a direct connection between these things.

Labour’s affordable water reforms offered a solution to these: publicly owned organisations with the scale to be able to make the investments and run systems and network infrastructure to deliver water; balance sheet separation that would have increased, by a factor of two or three, the amount of money the water entities could borrow to make the $185 billion investment and spread that cost over generations; a legal framework that, for the first time ever, would have provided accountability and a mandate to water entities to do the job that so many councils simply haven’t been doing because they’ve been unwilling to invest; and two regulators: a regulator to set standards—environmental standards and standards to keep the water safe and clean—and an economic regulator to make sure that these entities actually behave in an efficient way, handle public resources with responsibility, and were responsive to the people in our communities, to the consumers of the water.

But this National-led coalition with ACT and New Zealand First is sweeping all that away with no credible alternative put before the people of New Zealand. It is the most cynical example of short-term, petty, partisan politics at the expense of what’s good for our country. That side of the House should be embarrassed by that. They should be ashamed.

They are keeping the regulator, Taumata Arowai, to set those standards, but they are giving councils no tools, no ability to meet those standards. So what’s going to happen? There’s only one thing that’s going to happen—or two things, perhaps. The first is that councils will be forced to put the rates up. Double-digit rates increases, year after year—that is what’s coming, folks, and in many cases we will not see the progress that is needed towards cleaning up our waterways, delivering safe drinking water for our communities, and futureproofing our cities against the floods that we will increasingly see as a result of climate change.

This Government will simply shrug and say, “It’s the councils’ problem—nothing to do with us. Oh, yeah, water, and rates to generate the revenue that’s needed to build pipes—that’s the councils’ problem. Don’t come to us, it’s not central Government’s problem.” That’s what they’ll say, and the poor old ratepayer and the communities all over this country who don’t have access to safe drinking water and live alongside polluted waterways and suffer extreme flood risk—they are the ones who will carry the can. It’s so cynical.

Let’s talk about balance sheet separation. It was the key to unlocking financing so that that $185 billion could be invested in bringing our water infrastructure up to scratch: separating out the water entities’ balance sheets from councils so that the rating agencies would not punish them with lower debt limits and higher borrowing costs.

How many times did we ask the Minister—in the committee stage last night, how many times did we ask him what his advice was, what his plans were, about balance sheet separation? At least six or seven speakers got up and directly asked the Minister. He was evasive, to say the least. He was not forthcoming with the House, in spite of being asked more than half a dozen times, what his advice was about balance sheet separation.

We’ve got a number of senior National Party figures on the record saying that they would deliver balance sheet separation as part of their plan. We’ve got Chris Bishop, the infrastructure Minister, now saying that. But yesterday, both the Prime Minister and the local government Minister ruled out any kind of Government guarantee for councils. That Government guarantee to say that if a council or a council water utility was in financial strife, the Government would back it up and help it out—that guarantee is a prerequisite to balance sheet separation. If they’re ruling it out, there is no balance sheet separation, but the Minister would not say that in the House last night, although we gave him multiple opportunities to answer that question.

The result of this bill being passed will be huge ongoing increases in the rates for the next generation or two. That is the reality: massive increases in rates. I predict that there will not be the progress that our country needs on fixing the broken infrastructure that we currently suffer from. In my community, I fear we will not get the investment and the improvement in stormwater infrastructure that is needed to prevent a recurrence of what happened a year ago where a thousand people in my electorate, a year ago, suffered catastrophic flooding—water inside their homes—and many of them have spent the last year living in sheds and sleepouts, suffering financial hardship because of that. We all know—the data is very clear—the climate is changing and that kind of occurrence is going to happen more and more.

Auckland Council has not and is not making the necessary investments to futureproof our city against that kind of flooding. It is only the kind of financing and institutional framework that our Labour Government put in place last term that would allow us to meet that. The current Government is offering nothing—nothing—in the way of funding and financing that will futureproof our cities for climate change.

I fear that under the repeal of this legislation and under this Government’s policies, we will not see the investment in waste water pipes in our biggest city to avoid what constantly happens where we see raw sewerage pumped into our streams and our creeks and our harbours. The community that I represent is sick to death of raw sewerage floating around into Wai o Pareira, the waterway that runs through the middle of West Auckland.

Jenny Marcroft: Why didn’t you do something, then?

Hon PHIL TWYFORD: It’s an absolute shocker—and we did do something about it. We put in place the financing, the funding, and the institutions to fix this; that side of the House is repealing. They have no plan to replace it. It is purely an example of cynical partisan politics at the expense of this country’s future.

DAVID MacLEOD (National—New Plymouth): Many councils will be breathing a sigh of relief. Many communities will be breathing a sigh of relief. They can now feel assured that the control, management, and ownership is retained where it should be: local. We campaigned on this bill, which repeals the three waters legislation that the other Government introduced, a piece of legislation that was unpopular to many, including many councils.

We are now on the way to providing a solution to our drinking water, our waste water, and our stormwater challenges. This bill, along with the two other proposed bills being introduced later on this year, will provide all the tools and legislation required to finally get our water infrastructure up to scratch and back on track. And, Cameron Brewer, you’re absolutely right. Look at the clock: gone by lunchtime. And for that reason I’m very happy to commend the bill to the House.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Motion agreed to.

Bill read a third time.

Bills

Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill

First Reading

Hon LOUISE UPSTON (Minister for Social Development and Employment): I present a legislative statement on the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill.

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

Hon LOUISE UPSTON: I move, That the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill be now read a first time.

The bill that we are considering amends the Social Security Act 2018 to ensure that income support responds directly to the increases in the cost of living by indexing main benefits to changes in the Consumers Price Index (CPI) for inflation. This change will revert the amendment made by the previous Government in 2019 to index main benefits to net average wage growth. In line with this change to the rate of indexation, the bill also amends the Income Tax Act of 2007 to adjust the minimum family tax credit threshold to ensure that it remains aligned with changes to the rate of main benefit. This ensures that low-income working families remain better off financially in full-time work than they would be on a main benefit.

These changes will protect the real incomes of benefit recipients and low-income working families in the years to come while also ensuring that the costs associated with the benefits system remain sustainable and manageable in the long term. In the short term, New Zealanders enduring the cost of living crisis can expect that main benefit rates will remain broadly similar. Over the longer term, New Zealand will gain from savings in benefit expenditure while benefit recipients retain a consistent level of real financial resources, and their purchasing power will be protected.

Making this simple change forms part of the coalition Government’s wider commitment to prudent financial management, and it is being progressed under urgency to ensure that the rate of main benefits will reflect inflation when the yearly indexation is implemented on 1 April 2024. It will also support our Government’s relentless focus on getting people who can work into work by improving the incentive to move off benefit in the long term. We know that having a job is the best way for New Zealanders to get ahead, and we want to make sure that the rates of main benefits reflect this.

Easing the impacts of the cost of living is also a priority for our Government which will benefit both people in work and those receiving benefits. The lower than forecast CPI figure of 4.7 percent for the year ending December 2023 shows that inflation is slowing, but it still remains outside the Reserve Bank’s target range of 1 to 3 percent. There is still more work to do, and this Government is committed to returning to within the target range to make sure that we ease the cost of living crisis for all New Zealanders. In recognition of these pressures, our Government has committed to providing income tax relief, increasing tax credits for working households, and introducing a new childcare tax credit to help address the cost of living pressures.

This bill fulfils the Government’s commitment to return the rate of indexation of main benefits to inflation, a measure which has also been used for 31 of the last 35 years. In doing so, it takes a responsible and common-sense approach to the ongoing maintenance of the income support system. As such, I commend the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill to the House.

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

Hon CARMEL SEPULONI (Labour—Kelston): That was a very difficult speech to listen to, because the Minister for Social Development and Employment stood up and spoke as if she was doing a favour to beneficiaries by making this change. It is not a favour. It is an absolute disservice to all of the beneficiaries that are accessing welfare now and to all of those New Zealanders moving forward who may need to access the welfare system at some point in time—and, let’s face it, that is actually most New Zealanders.

I’m going to start with a narrative for this change that concerns me. I want to then move on to the implications that the Minister failed to actually discuss, and I want to speak about the groups that will be disproportionately impacted by this change. The narrative behind this, and that that Minister has pushed out there during her interviews and when talking about this bill, has been mean-spirited and actually has gaslit beneficiaries. There is an assumption that there is a class of undeserving poor that that Minister continues to perpetuate, and we on this side of the House will not put up with it.

When we made the change, the change was an evidence-based change. We had been told by a number of key stakeholders, experts—people like the Children’s Commissioner—that this is one of the most important things that we could do to actually address child poverty and reduce child poverty in the medium to long term. And here we have a Government who are now reversing that change and putting us at risk for having increased numbers of children living in poverty moving forward. That Minister and those members on that side of the House should be ashamed of themselves.

One of the things that I was most relieved about when I was Minister for Social Development over those six years is that we had a shift in the public perception around beneficiaries in the welfare system. The polarisation of some of our poorest people seemed to reduce over that time. Some of it was because of the way we spoke about welfare and beneficiaries. Some of it was because of the circumstances we were faced with—things like COVID, where all of a sudden more New Zealanders were faced with the reality that they may actually lose their jobs and end up in the welfare system. That created a natural empathy and understanding of how difficult it actually is to be on the benefit and in the welfare system. We focused not only on the welfare system but we had an absolute priority set on reducing child poverty in this country, and New Zealanders care about that. Whether you’re in a family that experiences poverty or you live in a community where you see that poverty, or whether you just exist in Aotearoa and don’t want that to be something that is the reality for New Zealand or New Zealanders, it matters to New Zealanders.

Point of order, Madam Chair. How long do I have for this speech? Is it not 10 minutes? It’s five minutes.

ASSISTANT SPEAKER (Maureen Pugh): Yes. It’s the first reading.

Hon CARMEL SEPULONI: OK, thank you very much. Returning to my speech, we will be opposing this bill. I do want to point out that the supplementary analysis of this bill makes very clear that the people who will be most disproportionately impacted are actually going to be women, disabled people, Māori, and Pacific. This analysis points out that this will result in more children in Aotearoa living in poverty.

Let’s be clear about why the Government is doing this. They are doing this to make fiscal savings so they can pay for their tax cuts. Over the forecast period, by doing this, they will save $670 million, or thereabouts. That will go to the tax cuts, but they are taking from the poorest New Zealanders to pay for those tax cuts, and as far as I’m concerned, that is morally reprehensible.

We have instigated, whilst we were in Government, a number of measures that came about from the recommendations of the Welfare Expert Advisory Group on what our welfare system should look like, what is fair, and how people can be treated with dignity in the welfare system. This move runs completely in opposition to that approach, and what we’re seeing is the “same old, same old” approach of the right wing of National Governments, where they put the boot in to some of the poorest and most vulnerable New Zealanders to pay for things like tax cuts to actually serve their mates that have voted them in. That is the reality of what we’re seeing here.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Speaker. Let’s make it really clear that this is a Government that is ramming through a bill that will result in lower increases to benefits. Let’s cut through the spin of the Minister that this is about alleviating cost of living pressures, because the evidence shows that this bill will result in lower increases to benefits. What this means is this is a Government who wants to push people to need hardship assistance and put pressure on our front-line services at a time where people are doing it really, really tough.

The Minister has shown no regard for the evidence that has been presented to her, whether it was through the media interviews over the weekend or through the process in this legislation, despite all the language in the coalition agreement around being driven by evidence and best available information. That is just lip service, because this Government seems to completely disregard the fact that at a time where benefit levels have been set by successive Governments below the poverty line, all we are doing is slowing down the catch-up that enables people to be able to make ends meet. When we slow down the increases to benefits, all that we are doing is we’re sending families who are struggling to get by to get into debt, to go for hardship assistance, to go to the charities and front-line community organisations that are already under the pump.

So this is a Government that wants to punish those people doing it the toughest. To what? To provide tax cuts that will disproportionally benefit those on the highest incomes. This is a Government that is waging a war on the poor. To what extent? To just create more suffering. Not to support people into employment because, actually, there is nothing in this bill that actually proves that reducing the increases to benefits will result in more people being in employment. All that it does is it traps families in a cycle of debt and hardship, and that does nothing to support people meeting their aspirations.

So when they say that lower increases to benefits will result in more people being in employment, it’s nonsense. Quite frankly it’s spin, and it is not grounded in any of the evidence nor the papers that are in front of us. This idea that making it tougher for beneficiaries results in more people being in well-paying jobs has not proven to be true by successive Governments. The reality is that the political football around how we increase benefits and how we treat people on income support needs to stop.

This bill could have been an opportunity to actually ensure that whether economic conditions are good or bad, we do the right things for those who are receiving income support. We could have indexed benefits to inflation or wage growth—whichever was higher—to ensure that we stop this political football about the formula that we use to increase benefits on a yearly basis.

And the Minister also failed to admit—when she spoke about the bill, she spoke about the short-term impacts on people on the benefit, and those are well-documented and the papers are in front of us, but, again, she failed to acknowledge that over a period of four years, people on the benefit will be cumulatively $2,000 or so worse off. That $2,000 makes a whole difference for those who are already behind on their bills, on their rent, on being able to afford food. That cumulative $2,000 that people will lose over the period of four years will result in higher debts, less ability to engage in their communities, more toxic stress in those families, and more children growing up in poverty—all to be able to afford tax cuts for the rich.

So, again, the Minister needs to front up to the communities and be honest about what her intents are, which are to make peoples’ lives harder. She does not want to improve peoples’ lives—those who are doing it the toughest—because she has not presented anything to this House that would achieve those outcomes. She just thinks that there’s a correlation between punishing beneficiaries and therefore people entering employment. She needs to turn her face from the ivory tower that she resides on to the street and speak to people impacted by the legislation that she is ramming through the House under urgency, preventing people who are impacted by this bill to be able to speak about their lived experiences, rather than the Minister making assumptions and scapegoating a whole group of people who she has no connection to. Enough is enough of politicians talking about for decades all the experiences of being on the benefit, just to come to the halls of power and turn—

Hon Carmel Sepuloni: She’s been on the benefit.

RICARDO MENÉNDEZ MARCH: She’s been on the benefit, and yet she turns her back on the people who she’s supposed to serve. That lived experience is lip service; it doesn’t represent the communities who are doing it toughest right now.

Dr PARMJEET PARMAR (ACT): Thank you, Madam Speaker. On behalf of ACT, I’m taking this call to support the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill. We believe that this bill doesn’t only bring a sensible approach but it also brings a very practical and equitable approach to this intent of the policy that the bill wants to bring—that is, to adjust main benefit by linking it to the Consumers Price Index rather than net wage growth. We believe that this is the right approach, because, ultimately, the main benefit or family tax credit is given to people so that they can afford those goods and services. So this is about affordability, this is about the purchasing power of people, this is about the real value of money.

We know the Consumers Price Index is the acceptable measure of inflation. So that is the average price change of goods and services that households consume. So it’s ultimately about making sure that people are able to afford those goods and services that they need to have a reasonable or efficient life.

I would like to remind members—those who spoke before me from the other side—that in 2022 when we experienced a steep increase of inflation, at that time the previous Government responded by providing a one-off top-up payment to main benefit to meet the percentage increase of Consumers Price Index for the April 2023 adjustment. So they have accepted, when they were in Government, that linking it to net wage growth didn’t work, so that’s why they had to make that adjustment to link it to the Consumers Price Index—not directly; just a one-off payment, but still they accepted it. So that is why we want to bring this sensible approach to this.

We have heard from so many people that the increase in inflation that we experienced in the past couple of years, it has been really brutal. I have spoken to so many people, and, obviously, when I’m talking to these people, I’m not asking what they earn, but I can tell from these conversations that some of these people must be earning above average or some of these people even own a house. Even those people, despite factoring in for fluctuations of inflation, have been experiencing a lot of financial difficulty. So it’s not just the current financial situation of these people that is being disturbed but their financial future as well, because they don’t know how many years it will take to regain where they were before the steep increase in inflation that we experienced.

So it’s about making sure that people are able to afford things that they want. We don’t want to see that people are taking a big bundle of currency to bring a small bag of grocery items back home. I know in some countries it happens—you take a big bundle of notes, a big bundle of currency, but in return you get only a small bag of maybe a couple of grocery items.

It’s about making sure that people are able to afford things, that the value of money is there, and that is what I think is important for members on the other side to understand. It’s because of this reason the ACT Party supports this bill. Thank you.

Hon MARK PATTERSON (Minister for Rural Communities): New Zealand First also rises to support the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill.

I’d just like to take issue with the Green member Ricardo Menéndez March who made the exact point in defence of this bill. He talked about how it lowers increases to benefits, the key word there being “increases”. We are not slashing benefits; we are protecting benefits in indexing them to inflation, protecting purchasing power. These are still increases. This is a Government that has a core focus of getting people off benefits and into the dignity of work. There has been almost full employment for the last number of years. Employers are screaming out for workers there but on the other hand we have seen an explosion in the number of people on the jobseeker benefit. Those things do not make sense.

People, certainly at the moment, are not without the opportunity to change their own circumstances. For those whose own circumstances mean they need the security of the benefit, we are ring-fencing increases to inflation and indexing it within the benefit system. So the safety net is absolutely still there; it will be ring-fenced and protected for inflation. But New Zealand First, as we are absolutely famous for, take a balanced approach to this. While we see the merits of indexing to inflation and protection that purchasing power, we also see the absolute imperative of encouraging people to change their own circumstances, to get into employment, to have the dignity of work, and provide for themselves, and not rely on the State. So New Zealand First has pleasure in supporting this bill. Thank you.

TAKUTAI TARSH KEMP (Te Pāti Māori—Tāmaki Makaurau): Matua, Tama, Wairua Tapu me ngā Anahera Pono me te Māngai, āe. [Father, Son, Holy Spirit, and the Faithful Angels and the Holy Mouthpiece, amen.]

Tēnā koe, Madam Speaker. Tēnā tātou e te Whare. I’m taking this call as Te Pāti Māori spokesperson for social development. This bill should tell you all you need to know about the character of this Government. It should tell you who they are here to represent and who they are willing to sacrifice. Because instead of treating poverty as a matter of urgency, the Government is using urgency to make people poorer. We cannot policy people out of poverty. Indexing benefits to inflation will not solve the cost of living crisis; it will contribute to it. Let’s not pretend this bill is anything more than a benefit cut dressed up as a solution. It is just the beginning of this Government’s agenda to gut our welfare system and throw people off the benefit on to the streets.

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. And this Government’s strategy to get people into work should not be to make life on the benefit hell. Over 100,000 people are homeless in Aotearoa and 60 percent of them are Māori. Food prices are the highest they’ve ever been in three decades. One in 10 children and one in five tamariki Māori are living in poverty. Nearly 2 million earn less than 30,000 per year. Meanwhile, 2 percent control 50 percent of the wealth in Aotearoa. If you’re serious about addressing the cost of living in this country, those are the people you should be targeting, not our most vulnerable. People with disabilities should be able to live with dignity instead of having to constantly prove their condition to this Government so they can keep their benefit. Being on a benefit should not mean living in poverty.

We will no longer accept any excuses from the two major parties, who are fighting to keep people poorer, because it isn’t this Government who set the baseline. Benefit levels have been below the poverty line for decades. Labour were also complicit in condoning our whānau to poverty. It’s just that National are making it worse. The one thing I will give the previous Government credit for, though, is that it brought in the change that National are taking away with this bill. By indexing benefit increases to wages, they brought 5,000 tamariki out of poverty. However, they still left the 120,000 behind.

We are putting our pou in the ground. Now is the time for radical change. Our tamariki are literally hungry for it. I ask this Government: have you seen whānau struggle? I have seen whānau struggle. As the previous CEO of Manurewa Marae, every day I saw whānau, all day, every day, lining up for kai. There are so many whānau that are struggling. This bill will put more of our people in need and there is more hardship to come. And we’ve seen it. Manurewa Marae, they had no food bank. COVID came and 60,000 whānau they were feeding, and now, in the last 12 months, 12,000 kai packs are going out to whānau in need every day. That doesn’t include those that also come to collect a hardship entitlement through the Ministry of Social Development.

Te Pāti Māori, we campaigned on this and we will double our baseline benefits. We will raise the minimum wage to the living wage, remove income tax for low-income whānau, remove GST from kai, and we will invest in our mokopuna, in our tamariki. That is an Aotearoa Hou for Te Pāti Māori.

PAULO GARCIA (National—New Lynn): We are all aware that we are all living in a cost of living crisis, a very high inflation that many of us have not experienced before. The bill aims to index the main benefit to inflation, because indexing it to average wage growth has actually already failed. We want to make the main benefit predictable so that people can make plans and understand their way forward. We also, corollary to that, want to increase the minimum family tax credit, so when the main benefit increases, the family tax credit also increases.

We hear a lot of heart-tugging words about rich and poor. We’re talking about benefits and we’re talking about having a long-term plan to be able to implement in a predictable manner so that people can expect what they have in hand as they live on through this crisis that actually is a result of some very poor policies and decision making in the previous Government.

So what we want to do is actually give help. While there is no easy solution for people who have been unable or disabled to work, we on this side of the House and in this Government believe in helping people come off the benefit—there’s science behind that—and into full-time employment, which is good for the integrity of everyone. I commend this bill to the House.

Hon WILLOW-JEAN PRIME (Labour): Thank you, Madam Speaker, for the opportunity to take a short call on this bill. As the spokesperson for children, I am particularly concerned about what the Minister is proposing today, because we know when the previous Labour Government made changes to the indexation of main benefits to wage growth as opposed to inflation, we heard the Children’s Commissioner commend that move, saying it was one of the best things that we could do to address child poverty in this country. Labour has a proud record of lifting over 77,000 children from poverty in our time. I am worried, deeply concerned, that this change is going to put more children in poverty.

And why is this change being made? The change is being made so that it can fund the tax cuts that this Government campaigned on. That is shameful, and I challenge the Minister, and she should be challenged on it because she is saying that people will be better off because of this change. Yet in the information that we have before the House, it says that the long-term impacts of this, based on the predictions that inflation is actually, in fact, going to be lower than wages, means that beneficiaries—those on main benefits—are going to be receiving less. That means that more people are going to be in poverty. In a cost of living crisis—with a Government who apparently says that this is its number one focus, but I haven’t seen them do much in terms of that at all—they are proposing to make these changes, which are going to make it more difficult for our families.

As the information which we have before the House says today, those who are going to be disproportionately impacted by these changes are going to be women, are going to be people with disabilities, and it’s going to be our children who are part of these households who receive these main benefits. I am concerned that the information that the Minister has been giving is not understood by those who this is going to impact. They are, effectively, going to have a cut to their benefit, not an increase to their benefit. And I heard the Minister say—

Tim Costley: No, they’re not. No one’s having their benefit cut. You want to talk about misinformation—be honest!

Hon WILLOW-JEAN PRIME: I heard the Minister say that her main goal is to get more people into employment. Yet the prediction shows that there is going to—

Tim Costley: No one’s having their benefit cut. Come on, be honest—be honest! Who having their benefit cut? Who’s having it cut? No one.

Hon WILLOW-JEAN PRIME: Read the detail! Read your own rushed statements that have been presented to the House, because this has been done under urgency, and there hasn’t been sufficient time to provide more robust advice. But what the advice does say is that it is going to have an impact, and a disproportionate impact, on women, people with disabilities, Māori, and Pasifika. There was no consideration of the Treaty, they didn’t have time for that, and there was also rushed reporting and information provided to this House on these changes that has been made because this has been done under urgency. So there was no consultation taken either.

These are significant changes that are going to impact our families, our children, significantly in a cost of living crisis, and I join with our spokesperson for social development and child poverty reduction in opposing this bill to the House.

DAN BIDOIS (National—Northcote): It’s a pleasure to rise and take a brief call in support of this bill, the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill. This side of the House supports the social safety net approach that has been longstanding in this country over many generations. That’s why we support an increase in main benefits by Consumers Price Index, which is, actually, quite high at the moment, as we know from the cost of living crisis. The cost of living is actually quite high and therefore beneficiaries will be better off under our changes.

But just let me remind this House that on this side, we don’t believe that being on a benefit is the end game. We actually want people in a job because we have a strong belief in the dignity of work. Under that side of the House we saw 67,000 more people on a jobseeker benefit—67,000. That’s more people than fit in Eden Park stadium. So we’ve got a huge task to get those people into work, to make their lives better off, because that is, in fact, the real way we make these people’s lives better off by getting them into work and letting them take charge of their lives. I commend this bill to the House.

Hon GINNY ANDERSEN (Labour): Thank you very much, Madam Speaker. I’d just like to take the opportunity to clear up a few points to make sure we are keeping this debate on track. With the changes proposed in this legislation, officials do expect that indexing main benefits to inflation will result in benefit rates potentially being increased marginally in the short term—so the 1 April 2024 adjustment—than if they remained indexed to the net average wage growth. However, and this point is incredibly important to those members opposite, main benefit rates will be lower in the long term, with smaller increases expected from 1 April 2025 and adjusting onwards.

So long term, beneficiaries will be worse off and the estimated savings of that is $670 million. That is where this Government’s programme comes in place because we know there’s a significant shortfall. The gambling overseas tax has fallen through, they’re struggling with the smoking stuff because no one in New Zealand likes that. So there’s not enough money in the pot to pay for the tax cuts that they have promised middle New Zealand. So this is where they’re finding these savings, by making those people in New Zealand who are struggling the most have even less to look after themselves and their children.

So since this Government has come into power, they’ve scrapped free prescriptions. They’ve also scrapped free early childhood education for two-year-olds and under; they’ve given a tiny 2 percent increase to the minimum wage; and now, with three waters legislation out the door, we’re going to watch our rates go up and up and up across the country. So for a Government that so strongly campaigned on addressing the cost of living crisis that Kiwis are having to deal with, all I see is measure after measure after measure to make life tougher for those people struggling to pay their bills every single day. This bill is just another one on the pile to make life even more difficult for those New Zealanders.

So to go back to that point I was making in terms of how the long term for beneficiaries will be worse. For example, the rate for the job seeker over 25 years old is expected to increase an additional $2.60 a week under this change, under this legislation for the 1 April 2024 adjustment under the Consumers Price Index (CPI). However, by the end of the forecast period in 2028, the rate is expected to be $18.15 less per week than if it was indexed to net average wage growth. So in the face of a cost of living crisis, you are going to make it different to the point that there will be $18.15 less per week than if it was indexed to net average growth. That $18 a week is significant for a family who want to buy bread and milk and put lunches in the school kids’ bags and make sure that kids are looked after. That makes a significant difference to families who are already struggling to make rent or to pay mortgage repayments.

The forecast indicates that from 1 April 2025 onwards, the average wage growth will be higher than the CPI, therefore indexation to wage growth would have seen beneficiaries having more money in the longer term. We agree with those members opposite that people should have opportunities to get off benefit and into work, and that is exactly why this Government put a whole lot of investment into great programmes like Mana in Mahi. That’s why we have more people in work; whether they’re part time or full time, what we did was to pay that employer the equivalent of the unemployment benefit and provide support to both the worker and the employer to make sure those people who were in long-term unemployment got off that benefit.

Another key area that is very important is making sure that young people have their driver’s licence. One of the key inhibiting factors for a young person being able to be employable is to make sure we are providing that right support, and that’s exactly what this Government did. So instead of beneficiary bashing, instead of trying to score some quick points by saying that people are not helping, they should be focusing on those mechanisms that get people into work and show them the benefits of bringing home a higher wage and a higher minimum wage so that New Zealanders are better off. Sadly, this Government is more fixed on tax cuts.

RIMA NAKHLE (National—Takanini): I rise to speak to this bill, the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill.

I just want to say that there’s no magic going on here. Essentially, one of the main things we’re doing is we’re going back to a true and tried method of indexation where we’re basing it on the Consumers Price Index. We’re not doing any experiments with the New Zealand people. We’re going back to what has been tried and true under successive Governments, including Helen Clark’s.

As the Minister Louise Upston said, this Government has a relentless focus on a few things. First, what we campaigned on, on prudent financial management; second, that working families are going to be better off, because we want to support our working families with our family tax credit and with our childcare tax credit. Again, we want to make sure that people that can work do go to work, but at the same time there’s that approach where we understand there are always people that are in those difficult positions that cannot work and they are supported, but we also support people that can work. I commend this bill to the House.

A party vote was called for on the question, That the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill be now read a first time.

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Maureen Pugh): This bill is set down for second reading immediately.

Second Reading

Hon LOUISE UPSTON (Minister for Social Development and Employment): I move, That the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill be now read a second time.

As I said earlier, ensuring the fiscal sustainability of the income support system while still protecting the real incomes of beneficiaries and low-income working families is a priority for this Government. This bill will help to achieve this goal by again indexing main benefits to inflation, a measure which has been used for 31 out of the last 35 years. This will revert the previous Government’s action to index main benefits to net average wage growth. In line with ongoing policy, it also adjusts the minimum family tax credit—which tops up incomes to ensure that people are better in work than on benefit—to ensure it remains in step with benefit rates.

Our Government is relentlessly focused on getting New Zealanders into work, and these amendments will help align incentives to achieve this goal. We want people receiving a main benefit to continue to have enough income to meet their basic needs, but also to ensure that the best way to get ahead is through a job.

It is important that this change be made as soon as possible to allow the rate of main benefits to be indexed to inflation when the yearly adjustment of rates is implemented on 1 April 2024. This will both ensure that the benefit system starts upon a path to greater fiscal sustainability and contributes to changes that emphasise the importance of work in New Zealand. For this reason, I commend this bill to the House.

Hon CARMEL SEPULONI (Labour—Kelston): I have 10 minutes now to speak, which is wonderful. I want to specifically speak to some of what is contained in the supplementary analysis report for this particular bill, because the bill does not outline all of the implications. I think it’s important to note the limitations and constraints on analysis, given that this is going through in urgency. It is stated really clearly in a section in this particular report that “The scope of analysis in the Supplementary Analysis Report has been restricted in the commissioning where Treasury advised to only analyse the impacts, risks, and other elements of the Government’s chosen way forward for this legislative proposal. Options other than those chosen by Cabinet are not analysed in depth.”

This runs counter to that Government’s early narrative and line about wanting to be an evidence-based Government. We have heard from them that they want to make decisions based on evidence, and yet everything that we have seen, including what we see in this report, says that this is not the right thing to do in terms of the impacts that it will have disproportionately on certain groups and the impact that it will have on child poverty.

I was most concerned about a number of sections in this report, and it is important that the general public are aware of the supplementary analysis report because of the fact that this bill is going through in urgency and because not all of the detail is contained in the actual bill.

The report is really clear that “The change in indexation settings is likely to directly affect main benefit recipients, who are low-income New Zealanders.”, and that the change is most likely to impact on “population groups of women, Māori, and Pacific peoples, and disabled people”. In reference to disabled people, the report also goes on to state very clearly that some of those disabled people that are on benefit are actually not able or do not have the ability to enter into the workforce. Indexing to wage growth, which we know is generally higher—not always, and we’ve seen it in recent years—is the fair thing to do for those that are already on the lowest incomes and for those including this particular group, some of whom are not able to work at all or some of whom have many barriers to being able to get into employment in the first place.

The thing that really concerns me that we’ve touched on, and many of the speakers in Opposition have touched on today that the Minister has not spoken directly to, is the actual impact that this bill will have on child poverty targets and the reduction targets moving forward. As a Government, we made reducing child poverty a target. We actually took it so seriously that we enshrined it in legislation. That side of the House, when they were in Opposition, actually supported that legislation, and they now need to be held accountable to actually meeting those targets. So when they introduce a bill like this, where there is evidence that clearly states that it will actually reduce their ability to meet those child poverty reduction targets, then they should be ashamed of themselves.

If we look at the supplementary analysis report and we turn to paragraphs 30 through to 32, the actual forecast impacts on child poverty reduction should be of concern to everyone in this House and should be of concern to the general public. It states really clearly that “Preliminary modelling … shows that indexing main benefits to inflation leads to an estimated increase in the number of children in poverty under the ACH50 and BCH50 poverty measures over the forecast period, in the absence of other changes.” Well, we haven’t seen any other proposed changes from that side of the House that are going to mitigate the risk of child poverty continuing to grow under that Government.

It also states forecasted numbers for what that increase in child poverty is likely to look like. It states that “By tax year 2028, there would be an estimated increase of 7,000 … children under the ACH50 poverty measure, and an estimated increase of 7,000 … children under the BHC50 poverty measure. … Beyond the forecast period we would expect this change may have a particularly significant impact on the primary, before-housing-costs measure of child poverty.”

So when the Minister stands up in the House and says they’ll continue to increase benefits, it will continue to rise with the cost of living, we know that that Minister is being disingenuous, because the change that we made would have seen benefits go up slightly more each year than what we will see now because of that Government’s decision to revert back to the Consumers Price Index (CPI).

As I said earlier, Judge Andrew Becroft, who was the Children’s Commissioner at the time, made it really clear that changing of indexation of benefits to wage growth as opposed to CPI is one of the most significant things that we could do to actually support with reducing child poverty over time. And yet that Minister and that Government continue to ignore the advice that we have been given.

What is saddest is that the only reason that they are doing it is because they went into an election campaign promising tax cuts that they had no actual plan for how they were going to be able to pay for and then were reduced to having to turn to the most vulnerable, poorest New Zealanders to look for the cash to be able to prop up the tax cuts that they had committed to funding. So over the forecast period, yes, the Government is going to get an extra $670 million to support them to pay the tax cuts. But who is that money coming from? It is coming from the poorest New Zealanders who are struggling more than anyone else in this country during a difficult time with the cost of living, and they feel no shame about the fact that they are doing that.

I have to say it’s not just this—however, this is, I think, something that we should be turning our attention to with some urgency. It is the fact that alongside that, the Government has taken away the free prescriptions; the fact that the Government has also taken away the free public transport for children and half-price public transport for young people. All of these things have an impact mostly on those families that are already struggling. And where does it come from? It comes from an absolute no duty of care to the people that are the poorest.

I want to say, you know how hard it is for these families living in poverty? I’m not sure whether that side of the House really does—and how much harder it is to pull yourself out of poverty when you’re actually living in those circumstances. What I’ve observed over the course of my life is that those who have the most continue to get given the most. Those who have the least continue to go down this downward spiral and to get the least. And how is that fair? How is that fair for Aotearoa New Zealand, in a country where actually we have been quite egalitarian over the course of our history and our time, where we actually have had a propensity to care about the most vulnerable, the poorest, those that need us to turn our attention and support to them? Yet what that Government is doing through this very significant change, actually, runs counter to what I believe is the spirit of New Zealand, one that cares for and tries to provide support for and puts a ladder out for those who are struggling to be able to climb out of the situation that they are in.

It isn’t just this that I’m concerned about. I’m actually concerned about what we’re going to see on top of this moving forward, with the proposed cuts across the public sector, including to the Ministry for Social Development. We know that they have no qualms in actually taking the funding away from the most vulnerable. So what else will be cut?

We heard from the Minister that her response to addressing child poverty is to make people get off benefit. In fact, she’s planning on setting a target for the number of beneficiaries. Well, can I just say that that will only create perverse incentives for the system to push people off benefits and will not support with us as a country being able to reduce the number of children that are living in poverty.

That Government, I have to say, should be ashamed. And I’m looking around at some of the members who I think are actually being quite considered with this debate and listening to what is being said. I am not making up the things that I have said. They are clearly outlined in the supplementary analysis report for this bill. I encourage all members of the House to read that and to actually think about whether or not this is the right course forward. We do not believe that it is. We think that they need to do a big turnabout on this. I don’t have hope that that will happen, but we are here to debate this and we will push this to the very end.

RICARDO MENÉNDEZ MARCH (Green): Let me add some contributions that, hopefully, shouldn’t come across as controversial in that I think people should be treated with respect and dignity, including people on the benefit. Everybody should have a right to participate in their communities, and everybody should have a right to a warm, safe home and enough kai to put on the table. Yet despite seeing the “nots” from members on the other side, what this bill is intending to do is to undermine all of these things by lowering the increases to benefit levels that have been already set by successive Governments below the poverty line.

Benefit levels, as they stand, do not enable people to do any of these things, and the system does not treat people who are receiving income support with respect or dignity. And it is not good enough for the Minister to say that because things have always been this way, because for 30-plus years we’ve just indexed benefits to inflation, we should keep things as they are. That statement is so, so indicative of the approach of this Government and in fact too many Governments. They believe that the policies introduced by neo-liberal approaches in the 1980s and the current status quo is good enough. They omit the fact that we have seen record inequality as a result of these policies introduced during that neo-liberal period, and they do drive intergenerational poverty.

So to pretend that just because things have always been this way, they work, is to completely ignore the evidence that we’re living in a period of heightened inequality with our front-line services, charities, and community organisations being under the pump. So the Minister once again needs to turn her face to the street to actually engage with the realities that people who are going to be impacted by lower benefit increases are going to be subjected to.

Our communities deserve more than crumbs. Our communities deserve more than us debating for the crumbs that indexation will cause and will deliver for our communities. Our communities deserve benefit levels that enable them to fully participate in the community, enable them to put enough food on the table, and enable them to feel like they’re treated with respect and dignity.

And to that last point, when we have members of the Government making speeches and talking about people on the benefit as if they’re just numbers and people that can fill in a stadium, that contributes to the dehumanisation of a whole group of people. When we don’t engage in relation to the lived experiences, when we don’t engage with the realities that when someone is on a benefit, they’re subjected to conditions that do not enable them to even participate meaningfully in the workforce, when we have a social security system that cannot even quantify the kind of jobs that people go into, or the wages that people go into, then the arguments from the Government around how lower increases to benefits will lead to better employment outcomes is nothing but spin and omits the hardship that this bill will contribute to. The hardship that already exists will be compounded by a Government that, out of sheer cruelty, wants to lower those benefit increases.

There is no balance to be struck in relation to the outcomes of this bill. The savings the Government supposedly will make by lowering benefit increases will be incurred in costs by people needing to get hardship grants and people needing to take on more debt just to survive. They are simply passing down the costs, either to the hardship assistance that is already being delivered and is already at record-high levels, or to the front-line services that are already struggling to make ends meet.

So let’s make it clear: this bill is just shuffling the costs that would have been incurred by increasing baseline benefits to other parts of the system and other parts of our community. Having baseline benefits that allow people to live with dignity actually takes pressures off the system. It takes pressures off staff who are delivering food grants day in and day out and who probably want to more meaningfully engage with people on the benefit in relation to those employment outcomes that the Government talks about.

The reality is that the Government members have not actually accurately described the realities that Work and Income staff members experience or the realities that people on benefit experience. They think that it’s simply a matter of making life harder for people so that they feel more encouraged to find work when the system doesn’t even enable people to participate meaningfully in employment.

Picking up on those first reading comments is really, really important because they’re indicative of the broader debate we’re having in relation to this bill but also to the welfare system more generally and this assumption that we can just push people further into poverty and that doing so will further encourage them into employment. But all it will do is, again, contribute to toxic stress, poverty, debt, homelessness, and criminalised communities that are already struggling to make ends meet.

The paper that other members alluded to helps illustrate this picture as well, particularly in relation to a group that will be most disproportionately impacted. When I did some parliamentary written questions to the Minister, the answer I got painted an even clearer picture in that disabled people, those without those work obligations, are going to be the ones who will lose the most compared to jobseeker beneficiaries. For example, cumulatively over a period of four years, somebody on the jobseeker benefit will be worse off and will not see about $1,800 as a result of these changes, whereas for somebody on the supported living payment that difference will come up to $2,200.

These are people who we identify and recognise as needing support, and we know that full-time work may not be suitable. But, actually, independent of somebody seen to be fit for full-time employment or otherwise, it doesn’t mean they don’t have a right to life with dignity or that they should not be treated with respect. And for those who are on the jobseeker benefit, we don’t account for all the other contributions they do. The system in fact has very little way of accounting for that—for example, the care that they may be providing to family members, particularly those that may not be part of a nuclear family, or the volunteering work they do. In fact, our volunteer workforce is in large part made up of people on benefit, yet the system does not take that properly into account.

The Government members paint a picture as though people on a benefit don’t deserve to live with dignity and as though they’re not making contributions of their own outside of employment. When members talk about the dignity of work, they’re basically implying that there is no dignity when somebody is not in paid employment—that there are no other contributions that bring about dignity. And when members of the Government talk about the poor outcomes that people on a benefit experience—for example, lower incomes—they fail to admit that those members are the ones who set those incomes. Those poor outcomes are decisions by successive Governments. The paper that the Minister keeps referencing in terms of those outcomes are just outcomes out of the decisions that people like her have made for decades. They didn’t just appear out of thin air. We decided to enable those poor outcomes by setting our welfare policies in a way that is punitive and doesn’t contribute meaningfully to employment.

Again, when the Minister talks about how lower increases to benefits will incentivise employment, she may want to reflect on the fact that we don’t actually even keep a record of who goes to these work seminars. We don’t keep a record of the type of wages that those people get when they do enter employment. She has no information about this. She has no evidence of what she’s talking about. She’s going off on these assumptions, and on Q+A when being questioned about the evidence that she was using to base this bill, she talked about, “Well, there’s a different range of views. There’s a different range of research.” Actually, she’s not even able to substantiate the type of research that would back this, once again breaching her coalition agreement and the supposed approach of basing legislation on the best available data.

In fact, we have the opposite. We have available research from here and from overseas jurisdictions with similar income support systems that show that benefit sanctions and low incomes contribute to many things but not to good employment outcomes. We have people on the benefit who have generously for years shared their experiences, whether it’s in the We Are Beneficiaries report or the Welfare Expert Advisory Group report, or constantly in the media talking about what it is like for them.

And we cannot pretend—Ministers or any of us—that our lived experience is indicative of the hundreds and thousands of people who may be on the benefit. We cannot go into this place and assume that our sole experience of people who are now in a privileged position reflects the hundreds of thousands of people who are going to be impacted by lower increases to benefits.

So I look forward to engaging with the Minister on the facts, not just on her vibes on why she wants to drive lower increases to benefits in the long term, effectively pushing people into hardship and into debt.

Dr PARMJEET PARMAR (ACT): Thank you, Madam Speaker. That was a very interesting contribution. It seems like the member, Ricardo Menéndez March, thinks—they, because we don’t think like that—that the system doesn’t treat people on benefit respectfully. We do treat people, everybody, with respect, and this is their thinking, not our thinking.

The other thing which I understood from that speech that the member was giving just now is that the member thinks there is a problem if people—those who are on benefit—get into employment. We don’t see that to be a problem. We want people to get into employment because that is how people will have better lives. But we do support the benefit system because we want to see that people are getting enough, sufficient to survive, and also we don’t want to see people slipping into poverty. So these are the two—if I have to simplify—main reasons for our benefit system.

So it is not a system that people can take for their whole life. If they can go out and work, they should be going out and working. And that is what this Government is focused on and ACT is focused on. And the arguments that I’ve heard so far from members on that side is that just because they had this approach of linking main benefit to wage growth, that is the right approach, and any other approach is going to be a wrong approach. We don’t agree with that. I haven’t seen any logical reason from their side. The ACT Party supports this bill. Thank you.

Hon MARK PATTERSON (Minister for Rural Communities): New Zealand has been unmoved by the protestations across the House during the first reading, and we’d just like to reiterate, for those watching on telly or those trainspotters that will read through the Hansard, that we are actually talking about guaranteeing increases indexed to inflation to our main benefits.

One of the things about getting a bit older is I’m old enough to remember a time when the Labour Party stood up for workers. We know that the Greens get all their votes from leafy suburbs and have never stood up for workers. But what hasn’t been said in this debate is: what about the moral hazard here? What message are we sending to those hard-working Kiwis that get up every morning, get in the traffic, or go out, roll their sleeves up on a farm, or whatever they might be doing, in the meat works or down the mines—what are we saying to them? When they have their hard-earned wage increases, that’s something they’ve done off their own backs, through their own productivity, and those hard-working Kiwis have to pay their taxes, and increasing taxes.

If we simply just say that that increase should flow through to people that are not doing that—and we’ve heard from Dan Bidois: nearly 70,000 extra people on the jobseeker benefit. There is a degree of people that are choosing not to go to work, and we heard that from employers up and down the country. I think where there is some merit, we’re talking about people with disabilities and getting them into work, and I agree that there is an untapped pool of resource there. I know, through this full unemployment period, that employers are looking more to tapping into that workforce, and I think that is a trend we’ve very much got to get in behind.

But it’s more getting to the root and branch of it—stuff like what we’re doing around economic development, around the fast-track legislation to absolutely unleash and turbo-charge economic activity, particularly in our regions, and create high-paying jobs. That is the thing that will move the needle for these people that are on the benefits and getting them in the dignity of work. It is this Government’s role to create the opportunities for employers to employ and pay good jobs. So it’s more about getting the regulatory settings—this is how we’re going to approach this problem over here—for business so that the country as a whole can be successful, drive higher incomes, drive more employment, get some of those extra 67,000 New Zealanders that are on a jobseeker benefit into the dignity of work. That will be our approach on this side of the House. That is what New Zealand First will support, so we commend this bill to the House.

ASSISTANT SPEAKER (Maureen Pugh): This is a split call. I call Takutai Tarsh Kemp.

TAKUTAI TARSH KEMP (Te Pāti Māori—Tāmaki Makaurau): What we are seeing from this Government is that they are making life harder, and to be honest, I know exactly how hard that is because I’ve seen it every day, all day, at Manurewa Marae. They do not leave, and our whānau are going to continue to line up requiring benefit support, requiring kai on the daily, and it is going to be our people that are struggling the most and hit the most. First they came for workers’ rights, then they came for workers’ pay; now they are creating a beneficiary State. The only people that will benefit from this bill are their rich mates. Māori always bear the brunt of these bills. First in the door, last to leave at the Ministry of Social Development—and, in fact, first in the door at the marae, last to leave the marae with the support that they need, because they need manaakitanga.

Here’s a real solution: Te Pāti Māori are not here to reduce poverty; we are here to eliminate it. Get a wealth tax, put on land tax, remove GST from kai. Whānau can get seven weeks’ free kai. Raise the minimum wage to $25. This will be better for our whānau. Double baseline benefits. I encourage this Government to get out and actually, from behind your chair, go and see the organisations that are front-lining and seeing our whānau get hit the hardest. Go to Manurewa Marae, go to Papakura Marae, go to the Manukau Urban Māori Authority. There are many Māori organisations. Actually, Auckland City Mission is another one—go there and see the whānau that are struggling.

This bill will continue to make it harder and our whānau worse off. You know what? I can still see the struggle on the faces of our whānau. I see the whakamā in their eyes, I see the sadness in their āhua, in their wairua, and this is going to make it even worse for our whānau. Our whānau deserve better, and that’s why we will not be supporting this bill. Kia ora.

Hon MARAMA DAVIDSON (Co-Leader—Green): Thank you very much. It’s quite hard to sit in here—not surprising, but difficult to sit in this place and hear the cruelty, still not surprising, of the Government members in this very House making the worst dehumanising assumptions: boring, old assumptions, decades old unproven assumptions, clearly with evidence against these assumptions, about people receiving income support. It is difficult because it flies in the face of humanity.

I want to pick up on what my Manurewa whanaunga has said—Tarsh Takutai—in terms of what is actually the reality on the ground. All people—surely we can agree in this House—must be able to live with dignity.

Now, I might just take us back to some incredible work that was done by the Welfare Expert Advisory Group from the former Government. The goal and the vision of that group was that we have a welfare system that ensures people have an adequate income and standard of living, are treated with and can live in dignity, and are able to participate meaningfully in their communities. Now, that group which went around the country and sat in front of the very people at the front line experiencing the realities of decades of political decisions that have kept the lowest incomes below the poverty line. They sat with the front-line organisations who then have to come in and clean up the mess that successive Government decisions have made by entrenching intergenerational hardship and struggle.

And that welfare group included, for example, that well-known lefty, Phil O’Reilly, previous chief executive of Business New Zealand, who was very clear and full-throated in his own analysis, after having worked at the highest levels of business and community, who was clear: they are simply not receiving enough, because he felt the essence of people doing their best.

Now, I have to be very clear about people doing their best with what little they have, because I have just heard the last two Government members of this House attempt and actually use the words to say hard-working New Zealanders, and inferring then that people receiving income support are not, that people receiving income support are not hard working. That absolutely upholds an age-old, stupid, boring stigma that they are lazy.

Now, the Welfare Expert Advisory Group that travelled the country and listened to people affirmed that people are doing their best with what little they have, and that what is needed is, actually, to increase properly all benefits above the poverty line. Actually, those are political decisions that we have the choice to make. We have the choice to end poverty overnight. We have a choice to redistribute wealth.

Now, have a think about this: the Welfare Expert Advisory Group was pre-COVID, it was pre the impacts of climate change that have just happened, it was pre a period of COVID lockdowns that saw those with assets and wealth who, by doing nothing, had their assets and wealth, what, triple—by doing nothing. And those living on the hardest incomes were put into more material hardship. So who on earth are we calling lazy in this House? How dare we—how dare we.

The Greens were clear: we can end poverty overnight, redistribute the wealth—wealth tax, capital gains taxes, land taxes. Redistribute what was not earned in the first place, and how about even just put foodbanks out of business? The people serving food to our communities, they don’t want to be doing it. They want the families to be having enough to maintain their own mana motuhake and dignity and increasing the incomes for those on the lowest is absolutely the way that we can do that and is absolutely the way we stop intergenerational poverty and it’s a decision that we can and must make. Thank you.

PAULO GARCIA (National—New Lynn): I have to take a deep breath. The 31 years of indexing the main benefit to the Consumers Price Index (CPI)—31 years—says that a lot of effort has been put into attacking the challenge of balancing what beneficiaries can be given, what the country can afford to give, and encouraging beneficiaries who have the choice to work, to be out there and working.

Much has been said to disparage the statement “dignity of work”. Dignity of work does not constitute saying to someone else who may be working less, or not working at all, that they have no dignity. There is dignity in poverty as well. You know, I’m a father of four daughters, and the primary reason for not using labelling in the household is that it has real grounded benefits, and I think that while we can speak about labels and use words that attack other people, that has no place in a discussion like this. The bill that we have is really meant to achieve that balance that the 31 years of indexing the main benefit to CPI has been trying to do, across parties, and that is what we are trying to do as well. I commend this bill to the House.

Hon WILLOW-JEAN PRIME (Labour): E te Māngai o te Whare, tēnā koe. Thank you, Madam Speaker, for the opportunity to take a further call on this bill. Given that we have 10 minutes in this contribution, I will take a little bit more time and won’t be so rushed with my comments, because I think it is important to get on the record the evidence that we have before us and the information that we have before us, which comes in the form of the supplementary analysis report on the indexing of main benefits to inflation, and also the departmental disclosure statement.

In the earlier contributions in the first reading and some of those today, I think people may assume that we are speculating or making these things up. But, in fact, on our side of the House, we have been referring to the information that has been reported to this House, and I think it’s important that I take the time to point some of those things out. I do, though, want to start by actually pointing out that there are limitations and constraints on the analysis that we have on the bill before us, and that is because this is being done under urgency and it is being done so that it can be in place in time for the 1 April changes.

In the report, it says, “Because of the time sensitive nature of the proposal, it was progressed through the mini budget in December 2023. … Due to these tight time frames, it has not been possible to conduct external consultation on this proposal.” So I refer to the contributions from Takutai Tarsh Kemp, where she said to go and meet with the people at Manurewa Marae and to go and talk to those in the sector. Well, as we can see from the report here, that has not been possible because of the time frames in which those members want to implement these changes. It is noted in this report that there has been no external consultation on these proposed changes.

Further to that, it says, “The scope of the analysis in this Supplementary Analysis Report has been restricted in the commissioning where Treasury [were] advised to only analyse the impacts, risks, and other elements of the Government’s chosen way forward for this legislative proposal. Options other than those chosen by Cabinet are not analysed in-depth.” So, in short, there were no other options explored in terms of this.

I turn to the departmental disclosure statement, and, as I mentioned and spoke about in my first contribution, my concern was that there was little or no Treaty analysis done, and why that is important is because, as is stated in the supplementary analysis report, Māori will be disproportionately impacted by these proposed changes. So in the departmental disclosure statement, which asks, “What steps have been taken to determine whether the policy to be given effect to in this Bill is consistent with the principles of the Treaty of Waitangi?”, it says, “As Māori are disproportionately represented in the population receiving main benefits, the amendments contained within the bill to the indexation rate of those benefits will, in turn, particularly impact Māori. Due to the nature of this proposal as a manifesto commitment and the compressed time frames associated with its implementation, there has been limited opportunity to conduct Treaty analysis of the proposal.” That concerns me.

Turning now to other points identified in the supplementary analysis report, the main conclusion of the report is that this will result in beneficiaries, over the long term, actually receiving less income. We heard from the Minister that this is about addressing the cost of living crisis and that this is about providing beneficiaries with more income. However, what the supplementary analysis report says is that while for one year that may be the case—and it is a very small increase—over the long term, there will be less income, and they conclude that it “may result in slower progress in achieving child poverty targets as set by the … Act in 2018.”

In the supplementary analysis report, it says, “What is the problem or the opportunity?” I would like to focus on what I think is the opportunity for the Government. The opportunity for them is that indexing main benefits to inflation presents an opportunity to create fiscal savings in the longer term, leading to a more sustainable cost to the Government, and what would they need fiscal savings for? Well, they need it to pay for their tax cuts, and they are going to take from the poorest. They are going to take from the poorest and from the most vulnerable—from women, Māori, Pasifika, and people with disabilities—to pay for their tax cuts.

What it says in the supplementary analysis report is that the total net savings over the forecast period comes to $669 million—almost $670 million. We are going to take that from our poorest—from our beneficiaries and from our children who live in these households—to pay for tax cuts, so let’s be very, very clear about that. As I said in my earlier contribution, as the spokesperson for children, this concerns me. This proposal that we are debating today is going to mean that we have more children in poverty.

Now, I have heard in the debate so far that for 31 years, all Governments indexed it to the Consumer Price Index (CPI). When the Labour Government made this change in 2020, what we saw was the largest increase outside of one-off adjustments in nine years. You know, we take a similar approach to adjusting superannuation, so that’s fairer and more consistent and it will help reduce poverty amongst our most vulnerable. Adjusting rates to increases in the average wage ensures that we share the benefits of a strengthening economy, and it means that those on benefits don’t fall further behind.

I now want to turn to the part in the supplementary analysis report which says what the direct impacts of this bill will be on main benefit recipients. It is clear in the report that “The change in indexation settings is likely to directly affect main benefit recipients, who are low-income New Zealanders.”, and that the change in main benefits “will disproportionately affect people who identify with the population groups of women, Māori, and Pacific peoples, and disabled people, who are overrepresented within the main benefit population.” Women, for example, make up 55 percent of those receiving a main benefit whilst only being 50 percent of the population. It says that “Māori are overrepresented in the population who receive main benefits in comparison to the wider population.” For Māori, “Approximately 39 percent of people receiving the main benefit are Māori, [compared to their only being] 17 percent of the general population.”, and for Pacific people, they are also overrepresented, by “making up 12 percent [of the population receiving main benefits] compared to [their being] 8 percent of the general population.”

I want to reflect on the contribution from the New Zealand First member, when he said—I wrote it—about disabled people that “they’re an untapped workforce”. The supplementary analysis report, at paragraph 29, says, “Disabled people and people with health conditions will be affected by a change in indexation settings. … Beneficiaries that are not able to work will also be impacted by this change, but will have no ability to enter work to change their situation.” These are people with disabilities. These are people with health conditions that prevent them from being able to work. Shameful!

In the last minute that I have available to me, I say that I am really proud on this side of the House of the progress that we made under the Labour Government. When we made this change, it was recommended by the Welfare Expert Advisory Group. It was welcomed and commended by the Children’s Commissioner at the time—Judge Andrew Becroft—as the single biggest thing that would impact on child poverty. We had, under Labour, 77,000 fewer children in poverty. I am concerned for our tamariki who live in the households of those receiving main benefits. They are going to be the ones who are going to suffer as a result of this mean-spirited change where we take from the poorest to pay for the tax cuts that the National Government, supported by ACT and New Zealand First, is hell-bent on providing.

DAN BIDOIS (National—Northcote): I’d like to focus my brief contribution on one number: 67,000. That’s how many extra people on a jobseeker benefit there are under the last six years of Labour—67,000. That is the challenge that we face to turn things around. In fact, the number of young people on a benefit is up 50 percent under the last Labour Government. So I’d like to just reflect on a couple of comments. The first is from Marama Davidson, how we end poverty overnight. We can end poverty overnight by getting these people into a job and things like Mana Motuhake. This is about actually getting them into a job. Tino rangatiratanga is about getting them into a job. Dignity is about getting them into a job. Progress is about getting them into a job. That is the focus that we have on this side of the House: to move those people into jobs so they can make their lives better; they can live independently. That is going to be our focus. I commend this bill to the House.

DEPUTY SPEAKER: This is a split call. I call the Hon Jan Tinetti.

Hon JAN TINETTI (Labour): Thank you, Madam Speaker. I’m absolutely sad, to be fair, to be speaking here today, because this is a terrible piece of legislation, and as someone who used to be the child poverty reduction Minister, I’m heartbroken that we are even discussing this. Child poverty reduction is an incredibly hard goal, but this Parliament came together to vote for that legislation, and it was a world-breaking piece of legislation that we have had in this country. Then, as our Government moved towards those targets, we looked at ways, with our welfare advisory group, of how we can best meet those really ambitious targets that we had, and all nine of the child poverty reduction targets were trending downwards.

What is really sad is that what this bill is turning around is that indexing of those benefits. We’ve heard here from so many speakers on this side of the House that one of the main aspects of that child poverty reduction happened in 2019, when, through that Budget, benefit abatement thresholds were increased and main benefits were indexed to align with net average growth rather than inflation. This is particularly important and critical for maintaining the progress towards the before-housing-costs 50 target. If people on the other side of the House aren’t really sure what those targets mean, look it up and make sure you absolutely understand what is happening here today and the difference that it will make, because in the supplementary analysis report—and, particularly, I heard my colleague the Hon Carmel Sepuloni talk about this—in paragraphs 30 and 31, it talks about “In isolation, indexing main benefits to inflation may impact progress towards child poverty reduction targets. Preliminary modelling … shows that indexing main benefits to inflation leads to an estimated increase in the number of children in poverty [in] the [after-housing-costs 50] and [before-housing-costs 50] poverty measures over the forecast period”.

What does that actually mean? That means 7,000 children put into poverty under those measures, each of those measures—7,000 under each measure. What does that look like? That looks like an impact on women, who are predominantly situated within those benefit recipients but also sole parents as well; 80 percent of our sole-parent population are women. That is a huge impact on them and therefore a huge impact on those children. That is absolutely shameful that we see so many young people that will be put back into poverty just by the stroke of a pen and by the passing of this piece of legislation.

What does that actually look like in reality? That means food insecurity. That means young people that don’t have enough clothing. If you look at the measures that make up those particular measures, you can see children that don’t have more than one pair of shoes, if any pair of shoes at all. That means children who are living in trauma because of the impacts that poverty has put on them. That is 7,000 more children on each of those measures of reduction that will be put back just because of the passing of this legislation.

But alongside that, we see some other measures as well. The impact of the scrapping of the 20 hours’ free childcare for children aged two years—now, that was something that I was particularly proud of, because it meant that more young people could go to childcare and more people would have the flexibility, more women would have the flexibility, to be able to choose to go back into the workforce. We hear the other side saying, “Oh, we’re interested in people getting back into the workforce.” How do they expect women to get back into the workforce if childcare’s being taken away from them? You know, I haven’t heard that answer here in any of this. What they are impacting on is they’re impacting upon young people going into poverty and their parents not having access to that childcare. This is not a Government that is interested in lifting children out of poverty; they are interested in funding their tax cuts.

GREG FLEMING (National—Maungakiekie): E te Māngai, ko tēnei te wā tuatahi i tae mai au i tēnei Whare whakahirahira, mai anō i tāku kōrero matua ki tēnei Whare, nō reira tēnei te mihi ki te Whare.

[Madam Speaker, this is the first time I have arrived in this magnificent House since my maiden speech to this House, and so I acknowledge the House.]

This is my first time speaking in this House since my maiden speech. In my maiden speech I sought to lay out my desire to want to listen carefully, to āta whakarongo. If the people of Maungakiekie were going to send me here to serve them and the wider the people of Aotearoa, then surely I would have much to listen, so I have listened carefully this morning to this debate.

Can I say to the members opposite that I do not believe that we disagree in terms of our motivations. The reason that we have all come to this House is because we want to see all people flourish, and that includes helping those people who genuinely need help, and we know that there are thousands. We know that there are tens of thousands of people in New Zealand who need our help, and that is why we have our benefit system. So what is not on trial today is the motivation for what we are doing.

What is on trial today is our different approach to how we help those people, and one of the fundamental differences here—and the point was acknowledged by the previous speaker, Hon Jan Tinetti—is the focus that this side of the House has on work. We do acknowledge, absolutely, that there are many people, for various reasons, who are not able to work. But it is important that we have a distinction in income between work and benefits because it provides, amongst other things, an incentive.

When I speak, Takutai Tarsh Kemp, to your invitation—and I share your wero ki ngā tāngata i tēnei Whare [challenge to the people in this House]—to go to the front line and to meet the whānau that you serve admirably there at the Manurewa Marae. I would say that that is what I have spent much of my career doing, with an organisation there called Te Whakaora Tangata. And of all the work that we do with those whānau, there is virtually nothing that brings more hope and more dignity to those whānau’s lives than when we help them find a job. I commend this bill to the House.

Hon GINNY ANDERSEN (Labour): Thank you very much, Madam Speaker. Now, sitting back and listening to both the debates in the first and now the second reading, to sit back and take it all in, I really have to ask myself, what type of a society is this Government trying to build? What type of a country are we building in our future? The answer to that is a divided one.

The argument for this bill, which will reduce all main benefits—the only argument I have heard over the first and the second reading is that there’s too many people on the benefit and we need to get them off. I have not heard how we will get more jobs; I have not heard how we will support more education and training; I have not heard how we will support parents to get better childcare, to be able to start work when kids have been born; I have not heard about how there is a plan for young people to get them in training and employment and education. I have not heard any of these answers.

Sadly, what I have heard is that there are enough people on the benefit to fill a football stadium, and then snicker and laughter. That is what makes me sick, that this is some kind of a cruel joke to divide our society, to say there’s enough people on the benefit to fill a stadium, and that’s somehow a joke. That is a joke to this Government; that we have people who are struggling to pay for food, who are struggling to feed their children. This is a Government who campaigned on addressing the cost of living crisis in New Zealand, and they laugh at those people who are struggling to feed their own kids on a daily basis.

That is why this Government represents “let them eat cake”, because they don’t care. They do not care about those people who are doing it tough in New Zealand. They are duplicitous and they are two-faced and they front up and they say things like—Louise Upston says, “But beneficiaries will be better off under our Government because we will be dealing with the cost of living crisis. We will be growing the economy to support more job opportunities as well as improving health and education.” But also Louise Upston said on Newstalk ZB when asked “To be clear, will beneficiaries be, under the changes, better off under the changes you’ve made and receive more or less money this time on the current projections than they would under the previous system?” The answer from the Minister was they are likely to get less, marginally, yep.

Hon Louise Upston: Two dollars! Two dollars!

Hon GINNY ANDERSEN: So the reason—$18, actually, over a long-term projection. So, when you’ve got a Government that is fronting up and telling New Zealanders that they are here to fix a cost of living crisis and they are saying that this is going to work but you’ve also got Ministers on the record admitting that under this bill the amount of money going to beneficiaries will decrease, that is two-faced and that is duplicitous.

So when we look back and see what we’ve got to do, there’s a problem in that there is no plan to address how we shift people off the unemployment benefit and how we provide them with dignity and meaningful employment. There is no plan in that space and that is what this Government is lacking. They have come in, guns blazing, and wiped out legislation like three waters, like this, again with no plan in place. There’s no plan to fix the problems that we are still facing as a country, and that is incredibly concerning.

I really wonder, sometimes, whether some of the members opposite have actually dealt with people on the benefit or met them or engaged with them. The mum with three kids who is trying to—they want to cut that benefit. So how do we provide for the next generation of New Zealanders and provide them with the skills, the training, the education, and the support? When we look at the regulatory impact statement from their own officials, who have provided the information for this bill, they say that changing the indexation will have a direct benefit and it will in fact disproportionately affect people who identify with population groups such as women, Māori, Pasifika, and disabled people; people who are already overrepresented in the main benefit population.

So we know for a fact that those people doing it tough are going to do it even tougher. Yet, still, this Government states that they are here to fix a cost of living crisis. I wonder whether their fiscal discipline that they have spouted, their fiscal discipline which will save them $670 million from this legislative change in the House today—$670 million taken out of the pockets of those people struggling to feed their children—will be now carved off and put into tax cuts? Now, if I ever saw reverse Robin Hood, it’s this bill. It’s stealing from the poor and giving to the rich, and it’s disgusting. The fact that they can sit there and laugh about it, draw a ring around those people and say that they can fill up a football stadium and find that amusing shows just how out of touch this Government is.

I look forward to hearing what their solutions are to the problem of having enough people on the unemployment benefit to fill a football stadium, because I think that there needs to be some more information provided by the Minister and by those members as to what the solution is to this problem. Just by, as the New Zealand First member said, you know, firing up the economy and having a bit more excitement going on there, that’s somehow going to trickle down and give those people who can’t feed their kids a bit more money in their pocket. Well, we all know that’s a failed experiment. We all lived through the 1980s and we all know that those people who saw that austerity delivered under Ruth Richardson and previous National Governments just made those at the bottom suffer even more.

That’s exactly what will happen again because there are no new ideas from this Government. They are simply repeating the same failed mistakes of previous National Governments. They simply look back over what was done and they do it all over again. What we’re seeing is those people who do it tough, those people who only get a 2 percent increase on the minimum wage, those people who are on unemployment benefits, those mums who are struggling to pay for childcare, those people who want to get their free prescriptions; all those people do worse under National.

So I look forward to seeing how they’re going to pay for these promised tax cuts. We all look forward to this Budget to see what kind of disaster will be wreaked upon the rest of New Zealand, what times of deep Public Service cuts we will see with a 6.5 to 7.5 percent cut right across all our public services. Again, it will be those people struggling that will do the worst out of this.

I’d like to close with a bit about what was done under Labour’s track record because I think it’s important that we put that on the record. Our families package helped 330,000 Kiwi families in its first year, increasing the accommodation supplement and through the family tax credit, and by also introducing the Best Start payment and also the winter energy payment. As a first step of the review of Working for Families, we implemented changes that meant 346,000 families were better off by an average of $20 a week. That’s better off, not worse off, which is what this Government does.

We made generational increases to the main benefits and indexed them to average wages, ensuring that they increase over time, and it’s so sad to see that taken away and step backwards, because the opposite is going to happen with this legislation: they will decrease over time. So those who are already doing it tough will be worse off in New Zealand in a cost of living crisis under a Government who promised to tackle a cost of living crisis and was elected on that basis. Duplicitous. We increased main benefit abatement thresholds to $160 a week, boosting beneficiary incomes by ensuring they keep more of what they earn from part time work. And mark me, this will probably be the next thing to go; we’ll see abatement thresholds come down as a way of decreasing and getting more money carved off to the side to fund tax cuts that were unaffordable when they first did their numbers.

This will be a scramble of a Budget for National. They will be looking at any way possible to carve off money from those who need it the most. I’m sad and dismayed, not just by this bill but by the general attitude of not caring about what kind of a society we build in New Zealand. The absolute disregard they give to those people in our community who need support and assistance to do better for themselves and their children.

If National hold themselves up as the party of opportunity and for everybody being able to make their way in the world, then they completely go over and back on their word by putting through bills like this that simply cut Kiwis where it hurts the most during a cost of living crisis. I do not commend this bill to the House.

CAMILLA BELICH (Junior Whip—Labour): Point of order, Madam Speaker. Apologies, I tried to take this point of order at the end of the member speaking so as not to interrupt them. I just wanted to draw your attention, Madam Speaker, to the Speaker’s rulings around interjections—that they should be rare and reasonable. And specifically, to Speakers’ ruling 65/2, which talks about “The practice of members engaging in a constant barrage of interjections amounts to heckling; it is intolerable in a debating chamber.” Just to draw your attention to that, because I felt that at times during this debate that practice has been occurring.

DEPUTY SPEAKER: Thank you for your feedback. My gauge was that we could all hear what the speaker was saying at that time. If it does get too noisy we will ask the noise to be down. We’re in a tense period where the legislation is actually quite tense in the House, and so I think we just need to be mindful of the noise. The interjections, I think, are going to keep coming and we’ve had them from both sides of the House this morning. So, thank you.

RIMA NAKHLE (National—Takanini): Throughout the course of the debate so far, I’ve heard words thrown around like “cruelty”, “dehumanising”, and “cruel joke”. And I just think back to a few months ago when the Minister in charge of this bill, Minister Louise Upston, made her way to Takanini, visited us over there in South and East Auckland. We were about to get in the car to go visit some other people and a gentleman approached us, knowing who we were, a gentleman that shared his story that he has been suffering with bipolar and schizophrenia for most of his adult life. This gentleman was in his early 50s and he shared that he always has wanted to work. But there are difficulties around his health condition—because I hear that term thrown around as well; do we reflect on the health conditions of some people. He spoke about the health conditions that he has that makes it difficult for him to maintain a regular, sustainable job. He went on to share—and it really touched me—that for that election last year, he really took the time to look at policies. And he said for the first time in his life he’ll be voting National because he saw that National gives people a chance in the sense that we believe in people.

So I’m not going to accept that we are not maintaining dignity. I’m not going to accept that our policies are dehumanising, and I’m not going to accept that we’re shameful. Because what’s shameful is the woeful record in child poverty that happened in the last six years. So, no, Madam Speaker, we have aspiration for our people and I commend this bill to the House.

DEPUTY SPEAKER: The question is—[Interruption] Votes will be taken in silence, please. The question is that the motion be agreed to.

A party vote was called for on the question, That the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill be now read a second time.

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

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 Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill.

In Committee

Part 1 Amendments to Social Security Act 2018

CHAIRPERSON (Maureen Pugh): Members, the House is in committee on the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill. Members, we now come to Part 1. This is the debate on clauses 3 to 8, “Amendments to Social Security Act 2018”. The question is that Part 1 stand part.

Hon CARMEL SEPULONI (Labour—Kelston): I’ve got a number of questions. Some are quite broad, some are very specific to the clause. But I’m going to start with a broader question for the Minister that is relevant given the debate and the number of times that child poverty reduction and child poverty in general has been brought into the debate with respect to the implications that this particular bill may have on child poverty.

Given we don’t have much time to scrutinise it, the actual supplementary analysis report, Indexing Main Benefits to Inflation, is really important to refer to when discussing the bill. The areas that I’m particularly concerned about are the paragraphs of 30, 31, 32, that talk about the preliminary modelling and the likely impacts that this change, from indexing benefits to wage growth to inflation, will have on child poverty in this country. It makes really clear that in the forecast period, we could be looking at an estimated increase of 7,000 children under the AHC50 poverty measure, and an estimated increase of 7,000 children under the BHC50 poverty measure. The fact that we have a bill where the advice is telling us that this will increase child poverty in New Zealand is of course of concern to us on this side of the House, and I think it should be of concern to the Minister as well.

What I want to know from the Minister is whether or not there are any legal ramifications for this bill in light of the legislation on child poverty reduction and the targets that have been set, given that the advice clearly states that, actually, this bill is going to increase child poverty in Aotearoa. Now, we all signed up here to the child poverty reduction legislation, and therefore I would think that any Government has a commitment to ensure their policies across Government are constructive with respect to reducing child poverty. If we were to receive advice on a bill that said it will actually increase child poverty, then I’m worried that, actually, it is running counter to other legislation that we have already put in place. So I’d like to know from the Minister whether or not there are legal ramifications for this bill, given the implications for child poverty reduction targets.

Also, I have some questions for the Minister around how the determination is being made for the inflation measure and also wage growth measure. There is a paragraph in this particular supplementary analysis report that says we should have got the official figures that will determine how this is going to be set, because we don’t know what the difference is going to be at this stage between the general adjustment on 1 April. In this report, it says, “we [will not] know for certain until Statistics New Zealand releases the official figures on 24 January 2024 for CPI”—we know what those are—“and 7 February 2024 for net average wage.” What is net average wage, how has that been determined, and what can we expect in terms of the difference between the Consumers Price Index and wage growth so that we can actually see for ourselves how much worse or better off, potentially, in this first year beneficiaries might be?

I’ve got lots more questions, particularly about the long-term impacts of this legislation on child poverty and the disproportionate impact that it has on groups, but I’d like to start with that first one being around the legal ramifications for knowingly making a change through legislation that will take us backwards and increase child poverty in this country. Then, secondly, I need to understand how the Minister has determined net average wage. We can’t find anything from 7 February 2024 when we were looking for that number online from Statistics New Zealand, so where is that and what is that?

Hon GRANT ROBERTSON (Labour): Madam Chair, I was just hoping that the Minister might get up and answer those two questions from my colleague. My contribution is actually to extend out the second set of those questions, which is a very specific set of questions around the calculation and the methodology. So just to work our way through that, obviously the change that’s being made—proposed by the Government, which clearly, on this side of the House, we do not support—is to return to the adjustment via the Consumers Price Index (CPI). So just so we’ve got everything really clear on the table, my first question is: is that CPI as calculated by Statistics New Zealand? I know that there is a clause, potentially, here in the bill for that to be changed to another measure as indicated by the Government Statistician if CPI were not to exist. But I want to be really clear that it is CPI as defined by Statistics New Zealand, and to be really clear on what date CPI is being used for each year.

Because what has traditionally happened is we’ve tended to use perhaps a December annual number or the December quarter number. This is extremely important because it does dictate where those on the lowest incomes in New Zealand are going to find themselves when this change goes through. The Minister has, in the House, stood up and told us that they will be better off this year. We know they won’t be better off in the future—in fact, they’ll be demonstrably far worse off in the future—but we can’t make those calculations accurately unless we have an understanding (a) that it is CPI, (b) what period of time that is for, and then we move to the ability to make an accurate comparison.

Now, building on what my colleague Carmel Sepuloni said, my understanding is that the figure that was being used with the change that our previous Government made was a figure on, net of tax and ACC earner levies, the average ordinary time weekly earnings. That was the figure. Now, the issue that my colleague Carmel Sepuloni has raised is in the supplementary analysis report (SAR), it mentions that we would find out on 7 February what the net average wage increase was.

So my questions for the Minister here are: can she please clarify for the House that what I have said is correct—that the calculation that has been used for the last few years by the previous Government is this one of, net of tax and ACC earner levy, the average ordinary time weekly earnings? If that’s true, what is that figure now, in turn? So we can make that direct comparison between the CPI and what we have previously used. Then, if it’s not, what is being used here?

I do suspect—and I’m not particularly having a go at the Minister about this particular issue because it’s actually quite complicated—what’s in the SAR might not be exactly right. Because what it does is it uses the term “net average wage growth” as the comparator with what CPI is. I don’t actually think that’s the calculation that we’ve been using up to now because it misses out this question of being net of tax and the ACC earner levy.

This is important. I know it sounds like a matter of detail, but that’s what the committee of the whole House stage is for: to be able to identify this. Because we have a table on page 4 of the supplementary—well, it’s actually called the “regulatory impact statement” but it’s actually a supplementary analysis report, which would purport that in the year to April 2024, CPI was projected to be 5.13 percent. It actually didn’t turn out to be that; it turned out to be 4.7 and then a net average wage growth figure of 4.74 percent. Now, if that had been the case, we’re right at the margins of the difference. Then, of course, we see the projections for the later years where inflation comes down. Bear in mind that’s a goal of the Government—to bring inflation down—and so therefore wage growth significantly outstrips CPI in those later years.

But, you know, that’s the political argument which we’ve been hearing in the first two readings. I now want us to get into the technical side of this so that all New Zealanders are absolutely clear about the comparison here and the position that will leave people in. So I note for the Minister she may need to get some advice on this, but it is a very important matter and I would appreciate her answers to those questions.

Hon LOUISE UPSTON (Minister for Social Development and Employment): Thank you, Madam Chair. So I want to address the member the Hon Carmel Sepuloni’s question first, around the impact on child poverty. Obviously, it’s been a subject of earlier readings in this debate, and I want to be very clear about the fact that our Government is absolutely committed to continuing reductions in child poverty. When you look at individual advice on a piece of legislation, it is just that; it doesn’t take into account the broader commitments that we have already made and that we will deliver on in this coalition Government around child poverty. So if you look at our work around the cost of living crisis, that will have a direct impact; addressing issues around housing will have a direct impact. Actually, the thing that will have the biggest impact is reducing the number of children growing up in benefit-dependent homes, because 60 percent of them currently grow up in benefit-dependent homes.

I wanted to just confirm for the member that in terms of our Government’s focus on child poverty, while the statements are related to very narrowly just this piece of legislation, our Government is committed to reducing child poverty, and the other measures that we are working on—which include things like income tax relief and the tax credits for working households—will have an impact on child poverty.

This is a very narrow bill, and the change isn’t a significant one in terms of how this practice has been delivered in the past. So I do want to just indicate, in answer to the Hon Grant Robertson, that in terms of the way the calculation is worked for the Consumers Price Index (CPI) and wages, there is no change—there is no change from how Governments previously have calculated it. The time frames, as per previous Governments: CPI is taken from 31 December of the year previous, and at 7 February the date of the wage rate was 5.3 percent, and that’s publicly on record.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. Just wanted to pick up on the previous comments in relationship to the impact of child poverty in relation to this bill, because I hear the Minister comment that there’s other commitments, but can we just get clarification about the impacts of this bill?

Will this bill worsen child poverty? I think that’s a pretty simple question, right? I know that I can’t demand a yes/no answer, but I would like an answer in relationship directly to the impacts of this bill. Further to that, I was wondering whether a child impact assessment had been done in relation to this bill, and, if so, can she provide us with details of what that had produced? Because that is an important tool that we have, to actually assess the impacts of policy and legislation on children. So wanted to get a sense whether there had been one made as part of that and what it resulted in. If not, I guess I’m just concerned as to why that would have not happened, considering that there’s already been acknowledgements of the impact of children because of this policy.

The other thing that I wanted to pick up is that during the first and second reading speeches from the Minister, she talked about how this bill—and part of the intent of this bill—was to get people into employment. I just want to get the Minister to help us draw the causation around that, because the lower benefit increases—is there any evidence that she got around how lower benefit increases would lead to better employment outcomes? Because, so far, I haven’t seen any evidence around this presented by the Minister, and I wanted to get a sense around those that come in.

To the Chair, I’m mindful that we didn’t have a select committee process and this is why some of those questions are being asked right now, which we would have had the chance to unpack from officials or the Minister herself during the select committee process—and from beneficiaries themselves. So, to recap so far, it’s whether this bill will worsen child poverty; whether a child impact assessment had been done; any research about lower benefit increases leading to better employment outcomes.

The other thing that I wanted to understand is whether she had done any analysis around, for example, whether lower benefit increases would lead to a higher demand on advances and hardship grants, and what are the costs that would create. So we know that hardship grants are really high at the moment. The need for them is at record levels, and one of the ways that we can mitigate the pressure on front-line staff would be by increasing baseline benefits so that people don’t fall behind that need those hardship grants. But if we’re increasing benefits in the long term at a lower rate, does she expect there to be additional costs being incurred in the Ministry of Social Development in the delivery of hardship grants? Because then it seems to me like the cost savings that she’s making with benefit increases could be passed on to the delivery of advances and hardship grants. Those have flow-on impacts as well, both in terms of the debt that those beneficiaries incur and also the weekly repayment that they have to make to those agencies.

If she hadn’t done that projection and assessment around the impact on hardship grants and advances, how can she be confident that the cost savings she’s projected and hoping to make will be accurate? Because that’s, I guess, another consideration in terms of what’s been presented here and then how the system is in reality. Because it may be narrow in terms of the number of words in the piece of this legislation, but the flow-on effects—and we know that because the welfare system is so complex that the flow-on effects of even making small changes to the to benefit levels are huge. So that’s why I’m asking about advances and hardship grants. Keen to get answers to those questions—I know that they’re quite broad-ranging—and if those questions are not addressed, I’ll just try to get them addressed later down in the debate. Thank you.

Hon LOUISE UPSTON (Minister for Social Development and Employment): I don’t intend to repeat answers to questions that I’ve already delivered in the House, so I’ll move on to the questions around employment.

So one of the things that the member may well be aware of is, you know, there has primarily been a gap between those receiving welfare payments and those who are on, for example, a minimum wage. When that gap is too narrow, the incentives for people to move off welfare into work reduce. Previously it’s been the Ministry of Business, Innovation and Employment, for example, that provide that advice. So the first issue is there is absolutely a link between benefit rates and incentives for people to move off welfare and into work, which is why when we talk about one of the intentions of the bill—about putting the welfare system on to a more sustainable footing—that is absolutely it.

So what we do know, and I note members on our side of the House have referred to welfare numbers. To be blunt, I’m shocked and horrified at the recent Taylor Fry report that indicated some of the average lengths expected for people currently on welfare. That is a direct result of welfare dependency, and I’m not willing to tolerate that. A young person under the age of 20 who comes on to welfare is expected to spend, on average, 24 years. So members opposite may have a different view about our side’s motivation to support people into jobs, but I’m really clear about it. That is a part of this legislation—it is a minor one.

To come to the member’s second question around hardship grants, it’s really important for those watching this debate to understand our Government’s focus on the cost of living. We don’t expect that will be something that is solved in five years or 10 years. That is a matter of urgency. So in terms of dealing with the cost of living crisis—and, yes, hardship grants have been going up—we have to deal with the cost of living crisis, and that will have a direct impact on hardship grants, as will supporting people into employment.

My colleague Rima Nakhle earlier referred to a gentleman that we met in Takanini. For him, working two hours a day is potentially sustainable for him. So when we are talking about people being in employment, it is also recognising that not everyone will be able to be in work full time. So I don’t want any member in this House misrepresenting the perspectives of the coalition Government in terms of this. So that answers those two questions. Again, Madam Chair, I don’t anticipate repeating answers to things I’ve already answered.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. Just following on those answers. So she talked a bit about—I think I heard correctly—the Ministry of Business, Innovation and Employment advice in relationship to that gap between benefits and the minimum wage. Can the Minister provide further details? Again, we could have probably gotten those papers at a select committee stage to evaluate them in detail. But can the Minister provide more details about that individual piece of advice, actually, for example, being based on research around the gap between benefits and minimum wage contributing to employment outcomes and whether widening that gap actually contributes to better employment outcomes and whether that advice was also formed out of the experiences of people receiving income support, as well, who could provide lived experience feedback around whether that gap actually contributes to—and I guess I draw a line around not just employment but good employment, right? Because we know that there’s such a thing, and the Ministry of Social Development has provided research around how people, if they don’t enter employment that is well matched, can go back on to a benefit, and so we can end up with this, like, feedback loop of people going into employment and back on to a benefit, because there’s not good enough work at matching people into adequate and good employment as well. So I’m just wanting to seek clarification, because my question was around research, less so advice. And while I recognise officials do their best in providing advice, I do draw a line around when research is being used, as opposed to just, I guess, ideological assumptions around whether that gap actually contributes to employment outcomes.

One of my questions that wasn’t addressed altogether was around whether a child impact assessment had been done. Again, I’m really, really curious to see whether those tools are being utilised, because it is a critical tool that is used in relationship to how children will be impacted by pieces of policy and legislation. And if there was a child impact assessment being done, I’m keen to get a sense of what that told us. And if not, I’m really concerned about why that wouldn’t be used as a tool, because it’s not—yes, it’s the child poverty impacts that have been talked about that, but there’s also other impacts that it could have on children, right? I mean, we know children living in poverty and increased poverty also have high risk of experiencing poor health outcomes, for example, and that is captured in other elements, like a child impact assessment, rather than just simply child poverty figures and kind of just treating them as stats.

The other thing that she mentioned that I’m keen to unpack and have addressed is she spoke about the average length that people spend on a benefit. I know she, kind of, keeps citing this report around some of those outcomes that people on the benefit experience. One of those was low incomes. But I guess my question is: well, isn’t it the case then that people experience poor outcomes and lower incomes because those have been set by Governments, including by setting lower increases to benefits? So I guess my question is: isn’t she contributing to the poor outcomes in that report that she’s talking about by setting lower increases to benefits? Because there seems to be a contradiction between the report she keeps citing and, then, what she’s doing, which is contributing to lower incomes, because this bill, as far as I’m aware and in relationship to what Part 1 does in terms of the indexation, doesn’t address employment outcomes at all, explicitly, or there’s no research here that would back this up. So that’s why I’m really keen to unpack the recent report that she keeps citing.

Then going back to the question I had around the costs of hardship grants and advances, this was more about fiscal implications, right? And why I’m fixating on this is because several members of the Government, including the Minister, have talked about that balanced approach in our finances, but, again, when we have cost savings because of lower increases to benefits, those costs can be passed on elsewhere. And if she cannot outline what those projected additional costs will be, then what is the purpose of this exercise? I think it’s kind of not good enough to just say, “Well, look, we’ll deal with it later, and we’ll address it in other parts.” But we’re talking about the impacts that this specific piece of legislation will have and other flow-on effects, such as hardship grants and advances. And I don’t feel like that has been addressed altogether.

Hon CARMEL SEPULONI (Labour—Kelston): I asked a question earlier about the rate of average wage growth, which was then followed up by the Hon Grant Robertson. And the way I heard it—and forgive me if I’m wrong, Minister—was that it will be set at, or it is, 5.3 percent versus the Consumers Price Index (CPI), which is 4.7 percent. If the general adjustment is, therefore, going to take place with those numbers in mind, I just want to make the point, then, that the supplementary analysis report modelling is not right, because it has been done at a time where, actually, there was potentially going to be a window where, this year, the CPI would marginally outstrip wage growth. But given the numbers that the Minister has said, it sounds like that is not the case. What concerns me about that is then that means the negative impact on beneficiaries kicks in immediately as opposed to from next year. So I need to hear from the Minister and get some clarity about whether that is the case. Now, if that is the case and the general adjustments are going to be based on the CPI figure of 4.7, which falls below average wage growth as I heard it, then that must mean there will be much larger fiscal savings in the forecast period. In the supplementary analysis report, it stated it to be $670 million. I want to know what the updated fiscal savings are going to be, given the figures around average wage growth and CPI, because, effectively, if there are increases in fiscal savings, then that means there is less money that would have potentially gone to those on benefit. And I’m also concerned that means there may be an increase in the number of children, compared to what is in the supplementary analysis report, who will experience poverty because of this change.

Hon LOUISE UPSTON (Minister for Social Development and Employment): Thank you, Madam Chair. To answer the member from the Greens, Ricardo Menéndez March, no child assessment was done on this legislation. In terms of answering the Hon Carmel Sepuloni’s question, there’s been no different process followed than previously. So in terms of the annual general adjustment, it will follow the same process as it has previously. And the supplementary papers were prepared earlier, and we are now having legislation that we committed to in the election where we would change the annual increases to benefits based on CPI. That is what we are delivering today. It is quite straightforward, and it is a commitment that we—

Hon Carmel Sepuloni: Point of order, Madam Chair. I wasn’t asking about a change in process; I was asking about the figures that we have now been presented within the House that we didn’t previously have. We didn’t know the comparison between CPI and wage growth.

Hon LOUISE UPSTON: Which is what happens usually when the annual general adjustment (AGA) is set, because as the member will know as a previous Minister in terms of the time frames, the AGA work is prepared well in advance of 7 February when those wage figures come out. So fiscal savings or not, the point that I just made to the member was to be very clear about the fact that we made a commitment ahead of the general election that all increases to benefit would be indexed to CPI. That is exactly what we’re doing. It is exactly what’s been done for 31 of the last 35 years. It’s not that difficult to understand what we’re doing. I accept that members might disagree, but we are delivering on an election commitment.

Hon MARAMA DAVIDSON (Co-Leader—Green): Oh, it’s me? It was me. Thank you very much. I was just making sure I heard the right name. Thank you, Madam Chair.

Look, there was a speech given by my colleague on the Māori Affairs Committee from the Government bench, Minister, that I think I want to pick up on, because I actually authentically believe that there are people on the Government benches, particularly in the new crop, that do understand the importance of upholding dignity and questioning the fact that this legislation proposes to reduce increases across the broad benefit groups that will disproportionately impact on women, Māori, children, disabled people, Pacific people, and so on.

Then I have a look at this—what’s this thing called, the supplementary analysis paper?—and it’s clear that there has not been any current review, evaluation, or research to inform this bill, Minister. So I know that’s what it says in the paper, but I do ask directly, on certain groups: has there been discussion with the incredible work of organisations like Child Poverty Action Group, with any of the former Welfare Expert Advisory Group members?

I feel that you have openly, just in a previous answer, declared that this is simply a general election commitment. Is the Minister, then, saying that this is simply ideology with no basis in evidence or research or evaluation from especially those groups who will be most impacted in a negative way by this bill?

RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. Sorry, I just had to get up quickly because I didn’t see anyone. I was worried we were going to pass Part 1.

But just picking up on the comment around no child impact assessment being done, the Minister never really touched on why. So I’m keen to actually get an understanding on why there was a feeling that there was no need to have a child impact assessment being done, or more analysis or robust analysis, on the impact of lower increases to benefits on children.

Because while we just have the figures around whether this could or wouldn’t increase child poverty, as I mentioned earlier, there’s other impacts just beyond the material, like in terms of health, housing outcomes, etc. How can she be confident that those outcomes won’t be worsened? I know that she talked about employment outcomes, but this is not what the bill is actually doing, right? What this bill is doing is simply reducing increases to benefits. So I’m keen to get a sense of why she didn’t feel it was needed to do more robust analysis on the impact this policy would have on children beyond just a simple figure on child poverty levels, and actually just other outcomes such as health, housing, etc.

I’d really like to get a comment on the passing costs and whether she had done any analysis and, if so, what that is and how she’s going to ensure that people are not just receiving more hardship grants.

Then the other thing that I wanted to get an evaluation for was has she done any thinking of the fact that the way we provide hardship assistance hasn’t been reviewed in quite some time, and if this bill was to lead to a direct increase over time of the need for hardship assistance, whether she thinks that this bill has flow-on effects on, for example, the need to review how hardship assistance is provided to ensure that, for example, we don’t put undue pressure on front-line staff because people have to continuously show exceptional circumstances because the hardship assistance hasn’t been reviewed in quite some time?

So, again, just seeking that in-depth—beyond the surface level conversation we’re having—analysis on the impacts and the ramifications of this bill, because I do dispute the comments from this Minister, as I’ve said, that it is a simple bill. The flow-on effects on any changes to baseline benefits are deep, and it touches on a lot of other supplementary assistance.

The other thing that I wanted to address is: she talked about the gap between wages and benefits, and I know that I talked about and tried to unpack any evidence around and research in relationship to whether she thinks keeping that gap as wide as it is is contributing to employment outcomes. But the other thing that I wanted to unpack from her is whether she thinks that the gap which she will make worse in terms of wages and benefits could contribute to the ethnic and gender pay gap. Because, actually, when that gap is wider, all that we’re doing is actually contributing to wage scarring, and therefore that gap contributes to people then, because of the severe poverty they enter when they lose employment—and we have to remember that people on the benefit are also people who have lost employment, who were previously in work—and if they have such a steep jump between wages and benefits, that poverty that is created as a result of that puts people in a situation where they may feel compelled to take employment that would have paid less than they previously were in, out of sheer survival. That in and of itself, because of the profile of people who are currently on the benefit, can contribute, actually, to the wage gap and ethnic gap.

So I’m interested to know if there was any analysis being done about whether the widening gap between wages and benefits would have an impact on the ethnic and gender wage gap, as well as the issue of wage scarring altogether.

Hon Carmel Sepuloni: Madam Chair?

CHAIRPERSON (Maureen Pugh): The Hon Carmel Sepuloni. Can I just say I’m looking for new material in this debate.

Hon CARMEL SEPULONI (Labour—Kelston): The reason I have to keep asking this question is because it has not been answered. I asked, specifically, now that we have the numbers around what wage growth is going to be versus Consumers Price Index (CPI), how that changes the modelling in the supplementary analysis report indexing to main benefits. It is important because the Minister in charge of this bill, Hon Louise Upston, has said publicly that in the first year they will be better off, and in the long term she has acknowledged that they would get less than what they would do when benefits are indexed to actual wages. So it’s important that she clarifies.

Now, I understand that these figures sometimes come out late and she may not have received them until recently. And it could be that the officials have not had time to update the modelling. It could be that the officials have not had time to revisit what the long-term fiscal savings are going to be for the Government, and then the inverse of that is, of course, how much beneficiaries are going to miss out on. It could be that they haven’t had a chance to update the modelling with respect to child poverty impacts. If that’s the case, then that is what the Minister should tell us here in the House, and we would expect to get that at some point when the ministry have had time to update their figures. But the Minister can’t just answer the question in a way where she’s not actually responding to what I’m asking. I’m asking, now that we have the actual comparative figures of CPI and average wage growth—now that we have those, those are going to determine what the general adjustments are—so what does that do to the modelling in terms of the cost savings for the Government and the implications for child poverty? I think the question is really clear. I’m going to give the Minister a little bit of time to think about that. Maybe the officials want to slip some advice to the Minister.

The other thing is I asked earlier around whether or not there were any ramifications—legal ramifications—on the Government passing a bill that clearly states, “We will have increases in child poverty.”, given we have legislation that enshrines child poverty reduction targets in this House. And I didn’t get a response to that question right at the beginning. I have other questions to ask, but I need to get appropriate responses to the questions that I’m asking, otherwise I’m going to have to keep asking them. And I think that they are fair and reasonable questions. This is our only opportunity to interrogate this bill during committee of the whole House stage, and we want to do justice to the general public by doing that properly.

GRANT McCALLUM (National—Northland): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): The question is that the debate on this question now close. All those in favour please say Aye, to the contrary No—[Interruption] The votes are taken in silence, please.

A party vote was called for on the question, That debate on this question now close.

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Motion agreed to.

RICARDO MENÉNDEZ MARCH (Musterer—Green): Point of order, Madam Chair. Thank you. I just want you to reflect on—several questions hadn’t been addressed. Several members haven’t had the chance to ask a question, and there was that acknowledgment that because of urgency, we didn’t have a select committee process. I’m really, really concerned about the undermining of our democratic processes by nature of cutting this debate short when people actually are asking still substantive questions. And I believe that we’re not being repetitive in the nature of questions that we’re asking. We’re asking for those questions to be addressed and we’re asking about the broad-ranging impact.

CHAIRPERSON (Maureen Pugh): Understood, thank you. Continuing to ask the same questions and not getting an answer is not a matter for the Chair. I have been very careful to make sure that the people who have amendments on this debate have had ample time to address them. And I have also kept a very close watch, prior to coming in and while I’ve been here, on the topics that have been addressed. Repeating the questions expecting a different answer is not something I can—

RICARDO MENÉNDEZ MARCH (Musterer—Green): Speaking to the point of order?

CHAIRPERSON (Maureen Pugh): Is this a different point of order?

RICARDO MENÉNDEZ MARCH: So, for example, there were questions—

CHAIRPERSON (Maureen Pugh): Is it a different—

RICARDO MENÉNDEZ MARCH: It is. Because I would like to challenge the Chair on the fact that, for example, there were questions around wage scarring, the gender wage gap. Those are not repetitive. So, like, if we’re not going to be allowed to continue having a debate on a bill that impacts thousands and thousands of people, I would like to find a way to recall the Speaker to get this result.

Hon GINNY ANDERSEN (Labour): Point of order. Thank you very much, Madam Chair. I appreciate that you identified that there was potentially the same question being asked again and again, and there’s a debate obviously whether or not that had been answered or not; we believe that it wasn’t answered. But I’d just like to point out that as associate spokesperson for social development for Labour, I did not have the opportunity to speak on this bill. You took a number of calls in terms of the committee stage of this bill, the committee stage which we’re in now, not the first or the second reading—[Interruption] As the committee stage—

CHAIRPERSON (Maureen Pugh): We’ll hear a point of order in silence, please.

Hon GINNY ANDERSEN: At the committee stage, I, as the associate spokesperson, did not have the opportunity to speak to this bill. So the Government—you are passing this through urgency, you are bypassing any democratic process through having members of the public being able to submit at select committee, and you’re denying the associate spokesperson for the Opposition the opportunity to speak at the committee stage. I believe that is wrong, and I believe that’s something the Speaker should be alerted to.

Hon Members: Point of order?

CHAIRPERSON (Maureen Pugh): Excuse me, I’m going to call these points of order to a close and take some advice on this. However, I would like to say that I did make clear that I was looking for new material and did not get that. So that is why this debate was closed, and I’m just going to take some advice, please.

I am going to continue and put the questions regarding the amendments.

TANGI UTIKERE (Chief Whip—Labour): Point of order, Madam Chair. I’ve heard points that have been raised by members. We had a number of speakers and only one was permitted to take any calls. I noticed that Mr Menéndez March has suggested a recall of the Speaker. On behalf of the Opposition, that is what we would like to do. We would like to recall the Speaker. We are moving the recall of the Speaker to raise this concern.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Point of order. We would also like to have reflected that we haven’t had a chance to speak at all. And we would also like to recall the Speaker. As the smallest party, we do make sure that we have something to say at every part of the stage. This is an important, critical bill that has been rushed through and our communities need to know that we’re doing all that we can to make sure their voices are heard.

CHAIRPERSON (Maureen Pugh): The question is, That the Speaker be recalled. All those in favour, please say Aye, to the contrary No.

Hon Members: Party vote.

CHAIRPERSON (Maureen Pugh): My advice is that when there is a question that the Speaker be recalled, that is not a party vote. We can vote, but the convention is that the Speaker be recalled. So we will put that in motion, thank you.

House resumed.

Speaker Recalled

CHAIRPERSON (Maureen Pugh): Mr Speaker, we have been debating Part 1 of the bill. There has been some challenge around the fact that I took a closure motion. I had listened to the debate in my office. My colleague prior to me in the Chair had taken detailed notes about the content of speeches. I had alerted members that I was looking for new material. There had been quite a lot of repetition in the information that I was hearing, and, on that basis, I took the closure motion.

TANGI UTIKERE (Chief Whip—Labour): Thank you, Mr Speaker. I first acknowledge this is an extremely rare situation that often members refer to. The position of the Labour Party is that this is the only step that was made available to us in light of a number of calls that were being sought by members that were not taken up. There was an instruction or a view of the Chair that she was looking for new information. We took one call following that instruction, where the member, the Hon Carmel Sepuloni, made some rather salient points and suggested that the Minister in the chair may wish to take advice around that, after which there was no further opportunity for any other member of the Opposition to take any calls on a bill that is currently progressing through the House under urgency, without any select committee scrutiny. So on that basis we felt that there was no other option but to seek to recall the Speaker to ensure that members of this House have an equitable opportunity to raise the questions as part of scrutiny that many New Zealanders would expect us to be doing on this side of the House.

RICARDO MENÉNDEZ MARCH (Musterer—Green): Acknowledging the comments by Tangi Utikere that this is not done lightly, I would invite you to review the Hansard record, because part of the challenge that I had, particularly with the point around new questions, is, for example, I asked a question around wage gaps and the impact of wage scarring, and that was subsequently used to labour the point that there were no new points being asked. I find that concerning because, like I said, those questions were in good faith—it was not filibustering. So I just would invite you to look at the Hansard record to review the nature of the questions being asked to evaluate whether we were being repetitive or not.

Hon MARAMA DAVIDSON (Co-Leader—Green): Thank you, Mr Speaker. My inquiry is a genuine one into the well-established tradition of ensuring that points are covered and that when there is dispute as to whether things were getting repetitive—but even so, what is the convention about ensuring equitable speaking across members? Because then it becomes about not just traversing new material but also equitable speakers across a really crucial committee stage of the House. We are impacting on people’s lives here, and I would have thought this House can give it the fullest committee stage that we possibly can.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Kia ora. From our perspective as the only tangata w’enua party here and the way that Māori are going to be impacted, we did expect to be able to have some speaking time. We weren’t able to be heard at all. To be fair, we also are rushing as a small party to try and collect ourselves on everything that’s coming down in a state of urgency. So, with respect to our Chair, we were hoping to ask questions. We weren’t repetitive; we weren’t heard at all. Kia ora.

Hon CARMEL SEPULONI (Labour—Kelston): Given that my contribution was the last one before the Chair attempted to close down or closed down the debate, I think it’s important for me to stand up and speak to that. I did repeat questions because—and you can revisit the Hansard and check whether you feel this is the case—I very genuinely do not think that the questions I asked, which were very important, were answered. We received new information in this committee that contradicted the modelling that follows the actual bill. So I asked very specific questions about the implications of that on certain things and I didn’t receive that information. But I didn’t even receive a response to say that the modelling had not been updated. It wasn’t addressed at all, and so I was trying to get those questions answered. I actually had other questions. Again, not an attempt to filibuster, but trying to wrap up that particular area of questioning was difficult. And to have that closed down by the Chair, actually, is not fitting with what committee of the whole House stages should allow us to do when scrutinising a bill in the way we’re expected to during committee stages.

Hon GINNY ANDERSEN (Labour): I’d just like to reflect on the fact that while there’s two arguments being put forward—one, that we felt that questions were being not answered. But the second point I think it’s important for you to be aware of is that we genuinely felt that debate was prematurely concluded. As an example of that, as the associate spokesperson for Labour, I did not have an opportunity to speak on this bill, and I think at the very least it’s important that you give key spokespeople an opportunity to ask questions of the Minister on this bill, particularly given we don’t have that opportunity at select committee.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Speaker. The point I want to raise is that I did seek the call on more than one occasion from the Chair, and I had new material. So the key point seems to be here around that new material. There were members on this side of the House seeking the call, and I sought the call twice and intended to continue to seek the call, because I did have questions to put to the Minister that had not been asked by any other member on this side of the House. As other members have pointed out, we did not have a select committee process. And so I actually came to the House specifically with some questions, for the Minister, to ask, and I would still like to have the opportunity to ask them. So, Mr Speaker, I do urge that you take into consideration the fact that multiple members from the Labour Party and from other parties of Opposition sought to take the call and did not receive an opportunity to even take a call. So it’s difficult to ascertain how you could make a judgment that we were being repetitive when members with different items that they wished to interrogate weren’t even given the opportunity to take the call.

SPEAKER: Well, I’ve heard enough, thank you. Look, while, firstly, I have been watching this debate throughout the morning—watching the parliamentary proceedings throughout the morning—and while my opinion in this case about repetition or other such is obviously of guidance, it’s not particularly relevant, because the Standing Orders have for a very long time made it clear that the sole judge of relevance and whether or not there is repetition or new material or otherwise is the Chair of the committee of the whole House. And I’m not about to overturn something that has been in the Standing Orders for a very long time.

This is, interestingly, an argument that—well, the arguments that I have heard this morning, interestingly, are arguments that I have made myself on a number of occasions over a long number of years. So Speaker’s ruling 81/1 stands. The closure can be taken.

Hon KIERAN McANULTY (Labour): Point of order. Thank you very much, Mr Speaker. We accept that ruling. There are two things I’d like to raise and we’d appreciate if you would reflect on that. Conscious that last night during urgency and today there have been a number of occasions where spokespeople haven’t had the opportunity to make a call, and there were questions that were simply not answered by Ministers—other questions were, but there were certain questions that weren’t; I suspect deliberately to play for time. I’m conscious that presiding officers are required to take into consideration a number of factors, one of which is if Ministers answer questions. I think it would be useful for the House if you were to perhaps look over that and report back.

But the other thing that I would like to pose to you is the situation where we have a formal Opposition but two other parties, all three of which are contributing to a committee of the whole House stage debate. I haven’t seen it done before, but I would like your view—perhaps after some reflection—about the possibility of presiding officers indicating that a particular party have had their fair share, while the other two parties in the Opposition can continue. The reason I raise this as my concern is that the Labour Party, as the formal Opposition, could potentially be deprived of an opportunity to contribute constructively at a committee of the whole House stage if other parties, theoretically, aren’t contributing and meeting the requirements of a presiding officer. Given the particular make-up of this Parliament, I think it would be useful for the House if that was something you reflected on.

SPEAKER: I thank the member for that contribution. I think it’s quite a valid point and it is a matter that I think would be best delt with by the Standing Orders Committee. At a number of junctures in the parliamentary process this situation where you not only have a three-party Government but a multi-party opposition is something that we are obviously having to wrestle with. If there needs to be guidance through the Standing Orders or Speakers’ rulings, that’s something that the Standing Orders Committee can suggest and I’m very open to.

RICARDO MENÉNDEZ MARCH (Musterer—Green): Thank you, Mr Speaker. I appreciate the opportunity to unpack this as well in other spaces. But just for the place in which we are now, the Speaker’s ruling that you mentioned, I mean, it does cover relevancy and repetition, but, for example, for my colleagues from Te Pāti Māori who didn’t get a chance to ask, that’s not really covered in terms of that proportionality element. So, while I totally understand that according to Speakers’ rulings you will not reverse or interfere with the Chairperson’s rulings on those matters, I don’t see anything that speaks about that other element around other parties being able to contribute to the debate. So I guess, what I’m pointing to is would you be able to guide me if there are Speakers’ rulings that allow you to, on the basis of those arguments beyond the relevancy and repetition, that you would be able to intervene to enable, actually, that fair contribution of parties that (a) for example, didn’t get a single call in Part 1, and others who only had one spokesperson.

SPEAKER: No, I’m not hearing any more on this because I have ruled. So I appreciate the point that Ricardo Menéndez March—look, I’ll tell you what, Debbie Ngarewa-Packer, I’ll hear what you have to say.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Kia ora. Thank you, e te Pika. I just want to remind in the Business Committee section of Standing Orders, 78(3) that “Before determining … the Speaker must be satisfied that, having regard to the party [and parties] … does not discriminate against or oppress a minority party or minority parties.” In this case, we didn’t get a word said, and I think that’s really unfair.

In respect to what’s before us, it’s so important—it’s so critical for our communities that I do ask that the Speaker consider that ruling.

SPEAKER: I will have a look at the Hansard record. I understand that there were 12 speeches before this closure motion was taken, and I will see exactly how those were distributed and make a decision from there. But, for now, the ruling stands and the committee is resumed.

In Committee

Part 1 Amendments to Social Security Act 2018 (continued)

CHAIRPERSON (Maureen Pugh): We will resume the committee stage. We are up to the questions.

The question is that Ricardo Menéndez March’s amendments to clause 5 set out on Amendment Paper 14 be agreed to.

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

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Amendments not agreed to.

CHAIRPERSON (Maureen Pugh): The question is that the Hon Carmel Sepuloni’s tabled amendment to insert new clause 5A be agreed to.

A party vote was called for on the question, That the amendment be agree to.

Ayes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Noes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Amendment not agreed to.

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

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 55

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.

Part 1 agreed to.

TANGI UTIKERE (Chief Whip—Labour): Point of order, Madam Chair. I seek leave to reopen debate on Part 1.

CHAIRPERSON (Maureen Pugh): Leave is sought for that purpose. Is there any opposition?

Hon Members: Yes.

CHAIRPERSON (Maureen Pugh): We will now move to Part 2.

Part 2 Amendments to Income Tax Act 2007

CHAIRPERSON (Maureen Pugh): We will now move to Part 2. This is the debate on clauses 9 and 10, amendments to Income Tax Act 2007. The question is that Part 2 stand part.

Hon CARMEL SEPULONI (Labour—Kelston): Obviously there’s more that I’d like to traverse over Part 1, but I will move to Part 2. I want to specifically ask questions around the minimum family tax credit.

As the supplementary analysis report for this bill states—which we keep referring to because there’s no proper impact statement—approximately 3,200 low-income families are receiving minimum family tax credit, which is an incentive to ensure low-income working families remain better off financially in full-time work than they would be on a main benefit. The minimum family tax credit thresholds are linked to main benefits. If the lower thresholds of the tax credit are not increased in line with main benefit rates, low-income working families are likely to be better off on a benefit than in full-time work. Inland Revenue is apparently addressing this and changes were progressed through the mini-Budget, alongside this proposal.

Could the Minister explain the implications of this bill on the minimum family tax credit and the general summary of that particular area or concern that’s been raised in paragraph 40 of the supplementary analysis paper. I’m quite keen to know if there are any impacts on those receiving the minimum family tax credit; what are they? The intent was always that it would provide an incentive for people to be in work. Does it still do that with the changes that are proposed, including, of course the ones that are proposed in Part 2? I’ve got a number of other questions but let’s just cut to the chase and answer that one.

Hon GINNY ANDERSEN (Labour): Thank you very much, Madam Chair. I’m interested to know, just leading on from what was already identified in terms of the impacts on the minimum family tax credit, my question for the Minister is specifically in relation to those people who are social housing tenants. It’s specified that there’s currently 43,700 social housing tenants receiving a main benefit who will be specifically impacted by this part of the bill. I want to know from the Minister what type of analysis has been done that she can give us. It’s very briefly covered in not the regulatory impact statement but the supplementary analysis report. Given the fact that the housing crisis particularly impacts people who are on main benefits, I want to understand what level of analysis has there been specifically for those 43,700 New Zealanders who are in social housing and who are also receiving a main benefit. What are the impacts on those people in terms of this change?

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Kia ora. Just a couple of questions we want to put out and consider, and our apologies as we have new MPs; not everyone’s as zealous at rushing up.

One of the things that we want to ask the Minister is why hasn’t the family tax credit been adjusted? Indeed, if it is the intent of this Government to go back to resorting to the actuary approach—the future liability model approach that we’ve seen National use, I think, maybe in the Paula Rebstock days—it would be really great to understand at what stage the interventions are being done, and if you are tracking and monitoring some of the adjustments that are not being made, how indeed you are looking to, I guess, track those interventions at the varying stages of the transitioning of those who are on benefits. I guess, within that, there’s two or three questions that we’d like to seek clarity on.

RICARDO MENÉNDEZ MARCH (Green): Just following on the comments from Debbie Ngarewa-Packer, I’m just interested, particularly, in the abatement rates.

I note that they’re staying the same and that hasn’t been adjusted for almost two decades. So what does she think that having an outdated abatement rate does for employment opportunities and prospects and income security for people entering employment; just that kind of income shift? Because at the moment, it’s $42,700.27 and we think that if it’s adjusted to inflation, that would go all the way to $66,000. So I guess I wanted to unpack why there wasn’t an opportunity being taken to evaluate how we do the abatement rates for this kind of support, which is in the second part of the bill.

That is ultimately salient to what the Minister was talking about earlier, and the previous debates, including the first and second reading speeches. Because of that focus around employment and other types of support, as people’s incomes change, the abatement rate is outdated. That actually can create a perverse outcome where people may not be as better off financially in employment as they would have been otherwise. So I’m just interested in any considerations that would have been taken in relationship to inflation-adjusted abatement rates.

Hon LOUISE UPSTON (Minister for Social Development and Employment): Thank you, Madam Chair. I’m going to keep my answers very clear within the scope of Part 2, which is the Income Tax Act 2007 changes.

The first member asked about the changes to the minimum family tax credit threshold, and that increase will be from $34,216 to $35,204 after tax. So that is the increase in the threshold that would be effective with the passage of this legislation. That is what is used in the formula to work out what the minimum family tax credit would be that the person is entitled to.

For those that don’t understand or have detail about what this minimum family tax credit does, it guarantees a minimum income or minimum level for sole parents who are working at least 20 hours a week and a couple or parents who are working at least 30 hours between them. So the current approach hasn’t changed. Really, all this is doing in Part 2 is changing the threshold so that sole parents are better off working and receiving the tax credit than they would be receiving a benefit on an annual basis. So the only change in this legislation is the threshold.

CHAIRPERSON (Maureen Pugh): Members, the Government has indicated it wishes to end urgency, so the time has come for me to report progress.

Progress to be reported.

House resumed.

CHAIRPERSON (Maureen Pugh): Madam Speaker, the committee has considered the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill and reports progress. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: As has been mentioned, the Government has indicated to me that it does not wish to continue in urgency. Therefore, this debate is interrupted and set down for resumption next sitting day. The House stands adjourned until 2 p.m. today.

The House adjourned at 12.58 p.m. (Wednesday)